We Need Government Leadership, Not Free Market Failures
“Free trade” provides uncontrolled, unrestricted access to our economy for cheap overseas goods, tariff- and duty-free. By opening our borders through free trade, we are opening our economy to the whims of the market on a worldwide scale. Our jobs can freely leave and, allegedly, other jobs might take their place. This was once an economy that built things. Now it provides “services” and nothing more.
Unfortunately, the service economy is not providing the kind of economic well-being we need. Some individuals are calling for America to find a way to compete in manufacturing and technology. They are calling for these changes without recognizing that we cannot compete in these areas while pursuing strict “free trade” and free market policies. The government needs to provide leadership, or we will be stuck in the perpetual sinkhole of a service economy.
Disastrous free trade deals and bad policies are destroying our productive capacity. These bad policies are the result of an ideology that is failing America. Economics textbooks may say that the free market is best, but the free market also has many documented shortcomings that have led to bad social and economic outcomes. We have seen these failings in action in cases such as the recent financial crisis, and the problem is only getting worse.
We were once the manufacturing center of the world, but now we have no goals or direction.
The government has effectively provided economic leadership in the past. In the early days of this country, tariffs protected our fledgling industries and provided the revenue necessary to run the government. The government has also effectively guided industry–a good example of this is the heavy press program of the 1950s.
In the 1950s, the United States undertook a plan to build 17 heavy presses across the country. Heavy forging and extrusion presses allow for complex parts to be forged from lightweight materials. Without these machines, the high-tech, lightweight aircraft we now take for granted would not be possible. This program was created in response to the Soviet Union’s possession of what was then the world’s largest heavy press. Fearing that this would give the Soviet air force a great advantage, the American government financed the creation of bigger and better presses than those possessed by the Soviets.
The heavy press program met Cold War military needs, but today we face economic threats rather than military. In the 1950s, our government recognized a major weakness in our manufacturing sector and took direct action to address it. The dire state of our manufacturing sector demands government intervention, but critics voice opposition using tired arguments, saying that the government should not be in the business of picking winners and losers. Indeed, the government should not be playing favorites based on political favors and backroom deals, but the government is more than capable of identifying needs and addressing them. One can only speculate on how far behind the U.S. aviation industry would have fallen without government assistance.
This is the kind of leadership we need. Our government once recognized threats to our economy and took action to address them. It did not lean on the infallibility of the free market. Free trade is the great threat our country faces today, but our government is doing nothing. If this continues, the consequences could be incredibly dire.