Politirazzi

Political chatter from DC and NYC, the amNewYork way

A case for NAFTA

By Jeff

Hillary Clinton is not winning the Democratic nomination. No way; no how. I soooooo need a break from the Democratic primary.

So instead, and since it appears as though I’m one of the few Politirazzi voices on “the right,” I’ll champion something that both Democratic candidates have been speaking out against: NAFTA, which has been a substantial benefit to all parties involved. But before I get into the stats, there are two major errors people make when demonizing NAFTA.

First, they assume that manufacturing jobs are all lost to “outsourcing,” when in fact many of them are lost due to either job obsoleteness or increased productivity. It’s not a bad thing to lose jobs. For instance, the buggy whip industry is dead — and isn’t everyone glad automobiles replaced horse transportation? The assembly line obsoleted even more jobs while dramatically increasing productivity. Microsoft has been the cause of mass job obsoleteness. Is there ANYONE who would argue that the technological revolution starting in the late '70s hasn’t been a historic boon to the global economy and society in general? Jobs are lost. Industries die. Economies adapt. Not only is it natural, but it’s good. The loss of manufacturing jobs is a secular change. China, where we are supposedly shipping all of our manufacturing jobs is shedding manufacturing jobs at a higher rate than the U.S., but their productivity is increasing.

(continued) Second, people talk about jobs lost to China and India in the same breath as blaming NAFTA — which just shows a striking amount of ignorance of what NAFTA even means never mind its impacts. However, even when jobs are outsourced to Mexico for cheaper labor, why is that bad? Why is the company evil for doing so? No company (or society) should be obligated to keep a job forever. A company pays a salary as long as it is worth it for them to do so. It’s no different than the fact that I accept a salary from my company as long as it is worth it for me to keep doing so.

When either of us receive a more economic offer; we end the agreement. Why are companies evil when they terminate an obsolete job, yet individuals are living the American dream by taking a better-paying job? Why is “loyalty” a one way street?

While admittedly correlation does not prove causation, there is no mistaking the fact that the years post-NAFTA have been substantially better economically than those pre-NAFTA. Unemployment averaged 5.1 percent the 13 years after NAFTA compared to 7.1 percent the 13 years prior; U.S. manufacturing output increased 63 percent after NAFTA compared to 37 percent before. Manufacturing salaries (adjusted for inflation) increased 1.6 percent annually compared to 0.9 percent. So, there’s less unemployment, higher manufacturing productivity and higher manufacturing wages in the states. It’s benefited us. What about Mexico?

A report from the World Bank on the 10-year anniversary of NAFTA said that NAFTA has also been an economic boon for Mexico.

Money quote: “The report’s main conclusion regarding NAFTA is that the treaty has helped Mexico get closer to the levels of development of its NAFTA partners. The research suggests, for example, without NAFTA Mexican exports would have been around 25 percent lower than the actual numbers, foreign direct investment would have been around 40 percent less, and the country's per capita income in 2002 would have been up to 5 percent lower. Also, the amount of time required for Mexican manufacturers to adopt U. S. technological innovations was cut in half.”

So while the Democratic politicians pander to blue-collar voters and those struck with liberal guilt by citing NAFTA as one of the main reason for the weakened economy, and claim that it’s benefited nobody but evil, greedy corporations, the facts just do not back it up at all.

Tags: nafta , jeff akston

Add new comment

advertisement | advertise on am New York

advertisement | advertise on am New York