Free trade a myth, U.S. executive says

[Algorem]

http://www.cleveland.com/search/index.ssf?/base/business/115951885668580.xml?bxbiz&coll=2

Policy has hurt manufacturers, he contends
Friday, September 29, 2006
Peter Krouse
Plain Dealer Reporter

Dan DiMicco, chief executive officer of U.S. steel maker Nucor Corp., railed against U.S. trade policy during a speech at the Union Club in Cleveland on Thursday, saying the time is now to reverse a trend that has aided other countries, namely China, while hurting U.S. manufacturers.

He said the concept of free trade practiced by the United States is a myth because we allow other countries to manage trade to their advantage, creating an uneven playing field.

"We are a slave to theory in the face of reality," DiMicco said. ". . . In short, we have lost our minds."...

The erosion of manufacturers is hurting Nucor's customer base. DiMicco touched on several instances in which he believes the U.S. government has failed its own manufacturers. One glaring example is the lack of forceful action as China manipulates its currency, making Chinese goods at least 25 percent cheaper than U.S. goods as a result...

[AndyA]

1. I am shocked! Another myth perpetrated by Bush/GOP that

isn't really good for America after all.

Yet another reason for impeachment. He's damaging America's industries and corporations. (At least, some of them. Depends on how much they donate to the GOP, I guess.)

[ThomCat]

4. Bill Clinton has been a Huge supporter of the myth of

Free Trade. NAFTA was his baby. It's one of the things about his administration that always angered me.

This isn't a republican/GOP issue. The dems support this garbage just as much.

[TechBear_Seattle]

6. "NAFTA was his baby..."

Don't forget the WTO.

[RaleighNCDUer]

18. NAFTA, under Clinton, was still just theory when it was approved,

and in approving it the Repub congress flattened some of the protections built into it that might have prevented just what did happen with it. I think if Gore had gotten in in 2000 NAFTA would have been revisited, having seen how it effected in the real world. I do fault Clinton somewhat for it, but the greater fault lies in what the repubs have done with it since.

[Uncle Joe]

33. I agree with your post NCevilDUer n/t

[jwirr]

26. I think if you check it out NAFTA was handed to Clinton from the

bush I administration and Clinton got it passed. He was a fool to play poppy's games.

[lonestarnot]

28. NAFTA is my only bitch about Big Dawg. It's still a raw spot and chaps my

ass!

[hollowdweller]

29. NAFTA + Gun Control= Dems- Blue collar vote= GOP Majority

[lonestarnot]

30. Sorry the fucking label doesn't fit. Put in on a target and I'll shoot a

hole through it bigger than your head.

[newspeak]

40. yes, NAFTA was handed down from the Bush administration

that's why it shocked me that Clinton signed it. Most of our congress critters didn't even read it in its entirety. NAFTA-GATT was a bad trade agreement for all citizens involved. It only aided corporations against the will of communities!!! It took more of our voice away, while allowing corporations to pollute, practice unfair labor, and predatory business tactics.

[reprobate]

36. Not a republican/GOP issue. republican/GOP/DLC issue.

Clinton/Clinton are DLCers. They always voted with the corporations on economic issues.

[meganmonkey]

5. Um...to be fair

NAFTA passed under Clinton. Clinton and Gore both pushed it as a major priority. CAFTA barely passed last year, and if all the Dems had voted together against it would have been defeated, because quite a few Repubs voted against it too.

Granted, this article is specifically about China, but it could just as easily have been about Mexico or Central America.

And no, I am not Clinton bashing or whatever else crap people want to say. I simply think we really need to look at the source of our problems if we want to fix them. And the source goes much deeper than party politics.

:shrug:

[HughBeaumont]

24. To be even fairer . . .

NAFTA was lurching around during Poppy's administration and was authored by congressional Repukes. Not that Clinton is perfectly innocent; NAFTA was one of the biggest mistakes he ever made. It totally killed the environments and the middle classes and poor of all nations involved while making the corporations richer and richer.

[AndyA]

10. The GOP is still perpetrating the myth. I didn't say the Dems were

innocent. Far from it.

I am so sick of our current leadership. We need to replace all of them (preferably with new Democrats, of course). They are not doing their jobs.

[ProfessorGAC]

2. BRAVO!!!!!

Good job, Mr. DiMicco, Of course, this "the theory dictates" stuff is what i've been railing against in print for over 20 years. And what's most galling for folks in the analytic school of economics, is that many of the "theories" (mostly from the Austrian School) are PROVABLY incorrect. While they indeed work in theory, they would only do so if the world worked in two dimensions. It, of course, does not, making most these theories useless.

This is terrific stuff by a biz exec from the U.S.
The Professor

[Schema Thing]

7. I'd like to read some of your stuff

I get into arguments with lazy (un)fare :D freeps on occasion, and while "We are a slave to theory in the face of reality," DiMicco said. ". . . In short, we have lost our minds."... resonates with me, I often find myself w/o facts to back up what I know from my own facing of reality.

Anything online?

[ProfessorGAC]

8. You Might Be Able To Find It

It's mostly in arcane academic journals in economics or applied mathematics, but i've some published in JUSE.

Actually, there are lots of academic journals that regularly have articles published by analytic sorts (in many fields) that take on conventional wisdom. I can barely remember ever reading an edition (most of these are quarterly editions) in which at least one person wasn't published describing analytical techniques used to debunk conventional theory.

Any university library should have these sort of journals.
The Professor

[Cleita]

14. Maybe you could get some of your like minded economists

to start spreading the truth in print and media. I know nothing of economics myself except what I had to learn from day to day dealings with my money and businesses I have run and owned and I figured out pretty quickly that what I learned in economics 101 other than the terms didn't really apply in the real world.

Maybe you guys could start a movement to put out historically and in the present economic systems those practices and theories that work for everyone, not just the monied elite and not those that rely on slavery, near slavery and serfdom to be successful.

I think it's time for professionals in all fields to start disseminating the propaganda and lies that many people even on the left think are true.

[robcon]

3. That guy just wants favorable treatment for his company.

I wouldn't trrust his motives.

If other countries are willing to subsidize their steel so that the U.S. can pay less for it, let 'em.

[ProfessorGAC]

9. Grossly Missing The Point

Glad i'm not paying you to be a sniper. You'd hit the wrong person.
The Professor

[Elwood P Dowd]

11. Self delete

nt

[pampango]

19. Not so sure that he did

"(T)he time is now to reverse a trend that has aided other countries, namely China, while hurting U.S. manufacturers." (I wonder if he has any specific U.S. manufacturer in mind?) It really galls me that the world could follow a trade philosophy - free trade, fair trade, no trade - that benefits other countries (many of them poorer countries like China) and hurts U.S. manufacturers and workers. We need protection from those conniving poor countries.

[Elwood P Dowd]

12. You are the perfect example

of someone who is a slave to theory in the face of reality.

[mainegreen]

16. If we're going to play favorites, let make sure it's an american.

It is our jobs and economy after all.

[pampango]

21. But we are the rich guys in the eyes of most of the rest

of the world. You want us to favor the "rich" guys?

[mainegreen]

23. I just want our government to look out more for us as a whole.

I expect foreign governments to look out for their own citizens as well. Whether or not that happens is another story. Either way, the whole free trade raising standards of living everywhere thing is pretty much rubbish. Standards of living are rising in countries where the government of that country is a)stable and b)taking an active role in raising standards of livings. As near as I can tell 'Free Trade' = Feudal Economics.

[donco6]

35. Why does trade have to favor either side?

In reality, I suppose there will ALWAYS be an imbalance, but shouldn't the goal be balance? And what happens to the people in the "poor" countries who end up manufacturing all goods? Can you imagine the pollution they have to endure? Shouldn't manufacturing be spread around so that everyone has to face their share of the byproducts?

[donco6]

34. Actually, Nucor has an interesting history.

I'll let you read up on it. You might change your mind about motives.

And you are missing the point, as the other posters have pointed out.

[Algorem]

13. guess he's got a lot to say-

http://nucor.com/indexinner.aspx?finpage=gov_frontpage

http://chapters.sme.org/220/Schedule1.htm

To all Americans concerned about domestic manufacturing,

The global market, in which we compete both today and into the future, is far more complex than ever before. At the same time, our company has grown considerably. The effects of government actions and policies have a bigger impact on Nucor than in the past. Our business is influenced heavily by global events and government actions over which we have little or no influence other than through our own government.

Our presence in both Washington DC and at the state level has increased. Yet, all politics still comes down to vocal local voters. The efforts to amplify Nucor’s voice as a company, needs to be strengthened by the voices of our 11,000+ employees, shareholders, suppliers, customers, and community partners. We have heard more than one political expert tell us that all politics are local. Contact with elected officials is an important factor in the formation of their view on issues. Though we can do much as a company, we can do more as the Nucor Team.

The issues that are discussed on this site are not only about trade. We all have a stake in issues ranging from health care costs, tort reform, tax policy, environmental issues, regulation, and more. Some of these issues are complex but we will try to explain them simply and clearly. We will consider these issues from Nucor’s perspective, and we will be clear as to our recommended position on the issues. The “to do” list could range from writing legislators on specific bills, urging bi-partisan cooperation, explaining our views on issues, and more. The voting records of your legislators will be presented for key issues. I want to be clear that this effort is not about partisan politics. The actions we will be suggesting are issue oriented. The criterion on which you vote for a candidate is strictly your choice. What we recommend regarding Nucor’s position is just that – a recommendation based upon our company’s view of those issues.

With that in mind, part of doing more involves education on issues of importance to Nucor and thus to all of our jobs. It also involves becoming active and vocal on those issues. The new Government Affairs site is designed to facilitate both. We will post the background on current issues that merit your attention. This site enables you to communicate directly with your legislators..."

[MrPrax]

15. Cry Baby...

So it's other countries trading unfairly...funny on a whole range of trade disputes, it's everyone from the EU to China saying the same thing about the US and especially DiMicco's own steel industry.

The real problem is that trade is no longer defined by the US for the US market, and so guys like DiMicco have spent more time lobbying politicians for protection than making the necessary changes to compete in the new international markets. The WTO and preferred trade status doesn't work to the advantage of US interests anymore.

DiMicco's comments simply feed the usual mythology about US trade; the fact that the US has manipulated the value of it's currency is seen somehow as a positive, while if the chinese or EU dare to pursue this strategy then it's consider a threat to the US and ONLY the US.

Can't have your cake and eat it too by insisting that things like US copyright laws should follow US copyrighted materials regardless of local national laws -- especially if the period of protection is vastly more extended than anyone elses. The US could negotiate something reasonable and get out in front of the new technologies and applications, but no it much rather try to convince the world to follow laws originally struck to protect sheet music publishers in the 19th century -- fine, the owners of US media will call the shots to the disadvantage of Americans...just like people like DiMIcco called the shots for the owners in the steel industry, much to the disadvantage of Americans.

When it doesn't work, they whine, smear and demand. If there is a country that has MORE than enough resources and people to predict where the market is heading globally, it's the US. If over the years those naysayers were ignored, then that's just too bad.

[Doremus]

22. But they are making changes -- getting rid of American jobs & taking them

to third world countries so they can "compete in the new international markets."

That's kinda sorta the whole point, no? How DOES a manufacturer become competitive when everybody else has labor willing to work for 16 cents a day and aren't encumbered with costly environmental laws, etc.? You call that whining? I call that a last-ditch effort to save what's left of our once-thriving manufacturing base, and consequently, the middle class.

I don't know a thing about your copyright beef, but its applicability to DiMicco's beefs is a stretch at best.

[MrPrax]

32. Yes I do call it whinning...

You seem a bit confused. Allow me to fill you in...

There is a place called earth that has approx. 180 countries and NONE of which give a rat's ass whether an American is employed or not; they ALSO have people they want to employ.

They also have goods they want to sell.

They also have politicians that need to satisfy and develop their OWN middle classes in order to get elected...none of those people have to check with you or worrying about America's "once-thriving manufacturing base".

Mind you I can't think of a western country that didn't have a once thriving manufacturing base. But that's been the trend of capitalism for the last 200 hundred years to burn out one country after another in pursuit of global profits and power. The owners simply move on to the next 'favourable' conditions.

Now as far as driving wages down -- are the chinese running Wal-Mart or American shareholders?

Are the Indians telling Congress to fuck up something as simple as a federal minimum wage or was it the rich corporate lobby buying a 'low wage' climate?

The argument that 'those guys' are forcing us to do this or that is similar to what those guys are telling people in those countries; we can't pay you more because rich Americans won't open their borders.

See how the scam works...

[pampango]

37. If Toyota want to build an auto plant in the US to export

cars to Europe, I am all for it. That means more jobs and income for American workers. Before you say that can never happen, because American workers make 10 times what anyone else does (that damn unfair world trading system), imagine that any factory in the world could only produce for its domestic market. No unfair trade in that scenario, since there would be no trade at all.

Boeing would be laying off most of its workforce. Farmers would have to settle for much lower prices with no export markets. I am not sure where that would leave Venezuela with its oil (only for its domestic economy?), the soy beans from the US (sorry Japanese no exports to you), China with no export markets (sorry guys it's back to a billion people in abject poverty). Producing only for domestic markets, by definition, means that the rich countries will stay rich and the poor countries, which do not have much of a domestic economy (that's why they are poor) will stay poor.

[tfrancell]

17. Kick n/t

:kick:

[AX10]

20. No kidding. I am for trade, but these trade deals,

especially CAFTA are a bunch of shit. NAFTA is a mixed bad. Sadly, the rules are not being properly enforced on NAFTA.

Our trade deficit with China is stagering. And as Dan said, our country is losing it's manufacturing base. I will add that we our losing our entire employment base.

[nealmhughes]

25. ""We're capable of competing with any steel company in the world:

it's competing with another government that's the problem."

http://www.nucor.com/

Their background is too good to be true: Chinese laborers on bikes with masks with smoke and exhaust oozing upwards...

It really is a great company, with an environmental affairs dept. at its headquarters....

This is what American industry is supposed to be at the corporate and intl level.

[Kurovski]

27. K&R!

:kick:

[Lydia Leftcoast]

31. I'm all for trade agreements among countries of

similar economic status, like ASEAN in Southeast Asia or MERCOSUR in South America. The original EU was a good idea, but adding the Eastern European countries is already causing Eastern Europeans to flood into the West to get higher pay for themselves (causing a brain drain as, for example, Polish professionals find that they can earn more money packing fish in Scotland or waiting tables in London restaurants than being a schoolteacher or pharmacist in Warsaw) and act as cheap labor for Western employers.

If you have a "free trade" agreement between a rich country and a poor country, you are practically begging jobs to move from the rich country to the poor one. Furthermore, the countries that are participating in those unequal agreements are experiencing a bifurcation of their economies, so that the rich grow immeasurably richer and the poor grow poorer. This happens in both the rich and poor partners.

[Algorem]

38. Speaker urges new dialogue on trade

http://www.cleveland.com/search/index.ssf?/base/business/1159605836268331.xml?bxbiz&coll=2

Saturday, September 30, 2006
Peter Krouse
Plain Dealer Reporter

The trade debate has become so polarized that it's "not working for anyone," Roger Altman, a former deputy Treasury secretary under President Clinton, told a City Club audience on Friday.

"On the one side we find traditional free traders who don't notice that for millions of Americans, dislocation and wage reductions are the most significant effects of free trade," he said.

"On the other side we have traditional protectionists who are so opposed to global trade that they would accept slower growth and a weaker economy." Altman believes a new dialogue must borrow from both camps.

He said traditional free traders must recognize that emerging countries are offering incentives to attract production and employment to their shores, usually at U.S. expense, including the loss of research and innovation that goes with those jobs. Furthermore, Altman said, many of our trading partners erect trade barriers that damage us...

[Massachusetts]

39. "We are a slave to theory in the face of reality," DiMicco said. ".

Duh!!!!