NAFTA all, this is politics

What a terrible pun. Anyway I've been quite amused with all the anti-NAFTA campaigning going on with the two Democrats. Funny isn't it, how when one of, oh about 4 states that would benefit from us pulling out of NAFTA, is at the forefront of the nominating process both candidates make it seem as though problems isolated to the rust belt, located primarily in Ohio and Michigan, are in fact, problems facing the entire nation? Daniel Gross of Slate, nails it.

There's something outdated and Kabuki-like about the whole NAFTA drama, which was manufactured largely for consumption in Ohio and probably won't be going on a national tour.

Nationally, China has long since displaced Mexico as the bugaboo on trade issues. And it's increasingly difficult to argue that NAFTA has been a national tragedy. Yes, U.S. imports from Mexico have risen sharply since 1993, from $48 billion to $216 billion in 2006. But U.S. exports to Mexico have tripled in the same period, from $52 billion to $156 billion.

Wait, you mean to tell me free trade between two national economies is beneficial to both of them!?! Why, I thought when NAFTA was passed 14 years ago with largely bipartisan support it was going to damn our economy into the ground and turn Mexico and Canada into super powers. It goes on:

The fact that Mexican firms now export large quantities of goods to Canada and the United States means they are creating jobs—and incentives—for Mexicans to stay at home. In some ways, NAFTA has been a boon for nativists. Just think how much higher the northward flow of work-seeking immigrants from Mexico would have been in the absence of NAFTA.

This is such an obvious point, I don't really know how to go into it without being redundant. This is something Obama hinted at in one of the debates. By helping the Mexican economy, we curb some illegal immigration. Unfortunately he attacked NAFTA later in the debate, an agreement which has certainly helped the Mexican economy.

The rest of the article goes into how free trade with China has been one of the factors in the job loss in the rust belt. Thomas Sowell exposes the main factor.

Like the United Automobile Workers union in its heyday, unions in the steel industry and other industries piled on costs, not only in wage rates having little relationship to supply and demand, but in all sorts of red tape work rules that added costs.

State and local governments in what later became the rust belt also thought that they too could treat the industries under their jurisdiction as prey rather than assets, and siphon off more of the wealth created by those industries into state and local treasuries with ever higher taxes -- again, without considering repercussions.

This is possibly the most accurate assessment of the decline of industrial America I have read in a while. The sole responsibility of corporations is providing a safe product to consumers, while maximizing profit without breaking the law. The unions, when they carried the most political power, hiked up wages and benefits for the workers and lobbied government for employee friendly reform. What this has ultimately led to is the lack of motivation of corporations to employ people in these areas, because the cost of labor is too high, the taxes too extensive, and frankly, the government too union-friendly.

Ironically enough, the closest analogy I can come up with is global warming. Because we've worked so hard for our short-term magnificent benefit, we may end up suffering the consequences of our action in the long run, much like dead industrial sectors in Ohio and Michigan, among others.