Trade cannot do what Charity does

Fascinating times lead to interesting conclusions, some warranted and some not warranted. Consider Ronald Bailey's article in Reason 29 MAY 2008 (H/t: Instapundit) about the need to increase free trade and the benefits that would come from it looking at a recent Copenhagen Conference on this issue by Kym Anderson:

Anderson looked at a number of econometric modeling scenarios and calculated the cost and benefits that would obtain from full trade liberalization under realistic assumptions derived from the current World Trade Organization's Doha Development Agenda negotiations. Anderson estimated that liberalization of global merchandise trade would mean an annual increase of $287 billion per year in global GDP, of which $86 billion would go to developing countries. This compares very nicely with the $104 billion in development assistance that the governments of industrialized countries gave to developing countries in 2006.

In other calculations, Anderson found that the long term effects of trade liberalization would be that global income in 2098 would be up to 10% greater than it otherwise would have been. The associated net present values from freer trade range from $50 trillion to $424 trillion. Consider that in 2007, total gross world product was $53 trillion. In other words, both the immediate and long-term benefits from free trade are enormous. Anderson reports benefit cost ratios ranging from 269:1 to 1121:1.

Unfortunately this only looks at government assistance to developing countries, which is by far not the whole story. Consider the following from the USINFO site on charity for the year 2006 written on 26 JUN 2007 by Jeffrey Thomas:

Americans increased their charitable donations significantly in 2006 to more than $295 billion -- a record, according to a study released June 25 by the Giving USA Foundation, which reports on charitable contributions.

The overwhelming majority of this money was donated by individuals, not corporations or foundations, according to the chairman of Giving USA, Richard Jolly. Donations from individuals, including bequests, accounted for 83.3 percent of total giving last year, or $245.8 billion, he told USINFO.

[..]

Americans long have preferred to donate their money through the private sector or to private charities. Of the $122.8 billion of foreign aid provided by Americans in 2005, the most current data available, $95.5 billion, or 79 percent, came from private foundations, corporations, voluntary organizations, universities, religious organizations and individuals, according to the latest annual Index of Global Philanthropy, which is published by a Washington research organization, the Center for Global Prosperity at the Hudson Institute.

The Giving USA report does not take into account the value of contributions Americans make in terms of time and labor. More than 61 million Americans volunteered for charitable and national service organizations in 2006, and about half of all Americans participate in volunteer activities each year, according to Brooks. Volunteerism is “a major cultural phenomenon in the U.S.,” Brooks says.

Consider that the annual charitable donations in foreign aid, $122.8 billion, is roughly 43% of the proposed estimate of what increases in global trade would accomplish. Even better is that this aid is targeted and accountable by individuals and private organizations who ensure that money spent on projects that they solicit funds for are, indeed, well spent. The amount of American after-tax income that is donated to achieve such levels? 2.2% via the USINFO article, with a substantial portion of that coming from households with sub-$100,000 per year income.

When I took a look at the FY 2007 budget for the US in relation to foreign assistance, the amount the US puts forward via its government is interesting: International Assistance Programs came to just under $17 billion, and there would be some portion of the State Dept budget also devoted to this, but would be a fraction of their $14.4 billion budget. There are other 'freebies' tucked into places like Dept. of Agriculture, Interior and so on, but that total should be well under $20 billion per year, across the federal government, and certainly under $30 billion. So US charitable giving outstrips US government foreign aid by at least 10 or 15 times, or a 10:1 to 15:1 ratio.

Over at Charity Navigator a 31 MAR 2008 article by Arthur C. Brooks looks at the donations of money and time:

Q. Are Americans more or less charitable than citizens of other countries?
A. No developed country approaches American giving. For example, in 1995 (the most recent year for which data are available), Americans gave, per capita, three and a half times as much to causes and charities as the French, seven times as much as the Germans, and 14 times as much as the Italians. Similarly, in 1998, Americans were 15 percent more likely to volunteer their time than the Dutch, 21 percent more likely than the Swiss, and 32 percent more likely than the Germans. These differences are not attributable to demographic characteristics such as education, income, age, sex, or marital status. On the contrary, if we look at two people who are identical in all these ways except that one is European and the other American, the probability is still far lower that the European will volunteer than the American.

Much of the foreign trade increases only come about because of such things as micro-lending systems and charities actually able to go into poorly developed areas and provide targeted aid beyond humanitarian assistance. There is a problem with depending on government solely as a way to develop trade via foreign assistance, and it is clearly pointed out by the Charity Navigator article:

Q. Monetary giving doesn’t tell us much about total charity, does it? People who don’t give money probably tend to give in other ways instead, right?
A. Wrong. First of all, there is a bright line between people who give and people who don’t give. People who do give time and money tend to give a lot of it. According to the Center on Philanthropy, the percentage of givers donating less than $50 to charity in 2000 was the same as the percentage giving more than $5,000. Similarly, the same percentage of people who only volunteered once volunteered on 36 or more occasions in 2000.

Second, people who give away their time and money to established charities are far more likely than non-givers to act generously in informal ways as well. For example, one nationwide survey from 2002 tells us that monetary donors are nearly three times as likely as non-donors to give money informally to friends and strangers. People who give to charity at least once per year are twice as likely to donate blood as people who don’t give money. They are also significantly more likely to give food or money to a homeless person, or to give up their seat to someone on a bus.

The problem with seeking government solutions to problems such as building economic structure in poor nations is that it must go through the highly bureaucratic structure that, itself, takes up anywhere from 35% to 55% of the funds just to ensure accountability of those funds and pay for government overhead. Private and institutional charities instead compete on the lowest amount of overhead so that the most relief is provided, and charities that spend more than 10% on overhead are seen has having a problem. Trade, going through commercial channels, can and does develop minimal means of manufacturing or labor markets, but the support of society to ensure that things like a 'work ethic' are developed and that the poor have an opportunity to gain jobs from such commercial activity is a charitable concept.

Trade liberalization in and of itself does not build institutions of liberty, freedom, self-worth or ensure that societies are reinforced by it. China is better since 1972 not for trade but for the removal of Mao, and yet the authoritarian and fascistic state that has grown up since his death has not improved the actual ability of individuals to express themselves freely, take part in an open government via democratic means or even have better health. China, today, is one of the world's largest polluters in carbon dioxide and sulfur dioxide, has a 20% nation wide unemployment rate, has nearly 17% of its population below the poverty line, has 25 to 50% of all loans being Non-Performing Loans which puts the amount of GDP depending on that poorly structured debt at between 30 and 60%. Due to pollution *alone* the city of Beijing loses an estimated $1.5 billion/year due to health effects and poor sanitation. And it has LOTS of trade with the US and the rest of the world! Just one of its companies supported by the State, Huawei Technologies, has infringed on intellectual property rights to undercut competition and sell knock off equipment of reputable manufacturers. In the US. And then seeks to buy its way into the market via a leveraged buyout. It has also been cited for competition practices depending on blackmail and coercion. It, too, is part of that 'global trade' system, and yet its mafia style tactics and willingness to break international copyright laws is abundantly clear.

That is the problem with gross growth numbers for global outlooks: it ignores the problems that have come in with current 'trade liberalization' in the way of ensuring accountable enterprise activities on a global basis. This is a problem with the modern view on trade, deriving from the Wealth of Nations view, which I have looked at before. It is a nasty bit of learning that trade is to support National interests, and while more trade is better, when it undermines the National interest and degrades the ability of a Nation to manufacture or support itself in key areas, it becomes a negative factor. The division of labor on a global scale argument only goes so far as it does not address liberty on a global scale. We have three major places where trade was placed as the key to creating liberty, and yet in each of those places it has failed: President Wilson would not attack the Ottoman Empire which was allied with Germany and placed US trade and corporations as the reason and trade as the means to increase liberty in the region in 1917, President Nixon proposed the same for China starting in 1972, and Presidents Carter and Reagan proposed the same for Yugoslavia in the late 1970's and early 1980's. In each of these instances of large scale trade views to increase liberty and increase security for the citizens of those Nations, it was a failure.

On the overall scale of things, looking at the Reason article's $53 trillion level for the global economy, the US accounts for nearly $13 trillion of it (Source: indexmundi) for the year 2006, or nearly 25% of it. Now, if US charitable giving were emulated by the REST of the top 10 nations in the world, we might have a system of global interaction that would support societies by individuals and private concerns addressing the needs of poverty, hunger and basic education on how to keep oneself fed. In fact US charitable giving at $295 billion places it, GDP-wise in 2006 as the 34th largest nation in the world between Malaysia at $309 billion and Sweden at $285 billion out of a list of 210 nations. The foreign aid amount via charity falls lower, of course, at 122 billion between the 57th placed UAE at $130 billion and 58th New Zealand at $106 billion. Throw in $20 billion from IAP and other government sources and that pops it up to right after 54th Morocco $147 billion.

If China, Japan, India, Germany, UK, France, Italy, Russia and Brazil had private charitable works equal in percent of post-tax income to the US, that personal contribution would not only foster commitment to international growth but have accountable systems via private institutions to go with it. The argument that external government donor aid plays a larger factor is belied by this the results seen at indexmundi for external donor aid where the US comes in fourth ($6.9 billion) after the UK ($10.7 billion), France ($10.1 billion) and Japan ($8.9 billion).

That $6.9 billion comes out of the IAP, State Dept and other federal funds sources as donor aid and note that the fraction missing is quite high even just taking the IAP *alone* ($17 billion) the overhead is in the 40% range. If you are hot for international trade, then, the idea is to get governments out of the way for promotion and development of it. What National governments are given TO DO is to protect their Nations and ensure that trade does not undermine their societies or their Nation. Wealth and wealth production is not the same thing as liberty expressed through human freedoms: it is a measurement of buying power, not human liberty. China is going great guns on unstructured debt, lowered life spans, suppression of political and religious organizations, and utilizing its workforce for national power vested in the government, not its people. Also notice where China sits on the giving side of the equation from its government.

It is in this area where we confuse the ideal of Wealth of Nations with the hard-headed reality of the Law of Nations, where National gain and prestige is not necessarily equivalent to human liberty and freedom. The idea that mere cash 'empowers' an individual is belied by a place like China that is slowly grinding its people, no matter how wealthy, for its national ends for its government. One cannot decry Tibet and then support the idea that increased trade is helping the people of Tibet due to the goliath that controls it being able to do what it wants without respect to human liberty and freedom. And with the Chinese poverty line set far below that of the US, indeed looking more like the poverty line for a rural based economy, that 16% below that line points to a major problem in China beyond what trade can accomplish.

Trade liberalization when it is not hard and deeply coupled with the expansion of teaching human liberty and the price to secure it does not promote EITHER. A fine and dandy 'global labor pool' devolves towards the lowest, poorest common denominator for liberty and rights as those are the most available for the highest profit margin on output. And when pay gets too high in one region, the transnationals shift to others leaving those who had jobs without them. My article on NAFTA looks at this and the results for a place like Mexico with 'free trade' with the US. The local job pathways out of poverty and for self-sustainment by agriculture were broken by cheap, industrial crop production in the US (any high capital expenditure system becomes an industrial enterprise, as opposed to a manual labor one). Jobs along the northern border for low end manufacturing in textiles and other goods shifted jobs from the US south east and midwest to northern Mexico. Labor headed north for those jobs and to the US as higher paying work with no penalties worth mentioning was available there, which depressed local pay scales and increased pressure on social services. The manufacturing sector then saw the Far East as the next place to go (Philippines, Malaysia, China) and soon the factories in northern Mexico were idling down or shutting down. The US then went for its 'biofuels' binge and increased food costs in Mexico which now had no local agribusiness due to the hard competition it suffered from the US for nearly a decade. Those people had to seek jobs northwards, also. The last employer of opportunity became organized crime which is now supported transnationally and that is leading to a criminal based insurgency backed by foreign organizations on the other side of the US border.

Trade liberalization may have put more money into the pockets of Mexico in general, but it is now getting them killed at a higher rate than ever before due to the economic effects on the poorest there. This is really not the harbinger for a rosy world of the future with a non-accountable 'global labor pool' and 'global business climate' that has no adherence to Nation based societies and cultures. In treating labor as a commodity we ignore the human aspects of labor to be creative and have free reign via liberty for self-expression and support of society. It is possible to get both richer and no more free, because money does not buy liberty and freedom. The US should understand that because we have the saying that tells what *does that* and money cannot buy it:

The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.

- Thomas Jefferson

Looking at 'bio-fuels' and long term policy

This has been a topic I have gone over before, and will now extract the basics from previous articles and commentary given to address the problems of 'bio fuels'.  First, however, my background links to previous work:

First the outlines of an Energy Independence Policy for the US.  This gives the first glossing over to 'alternative energy sources', looking at the variety and types of production involved.  Wind, tidal, solar, Geothermal, biomass, and traditionals like coal, oil and natural gas all get looked at.  I then set the criteria for what a good energy source would look like:

1. Renewable. Self-renewing is better and somewhat efficient in conversion capability.
2. Continuous. 24/7 is optimal.
3. Low maintenance cost. You don't want to have to keep worrying about the conversion area and tinkering it all the time.
4. Do-able with modern technology. No additional wheels need to be invented.
5. Low cost per conversion unit. You want a nice low cost to power ratio.
6. Relatively low up-front cost for startup. To get at any renewable you will need to push hard to get an industrial base going to support it for large-scale deployment.

Each of the 'alternatives' suffer in 1-6 as compared to the sunk cost of the infrastructure for traditionals and cost of conversion.  This does tease out, however, areas that are not readily considered when looking at the energy formula.  The general end result is that of Gerard K. O'Neill's Princeton group from 1968 which utilized then known technology to proposed a space based solar power satellite system, along with orbiting manufacturing and lunar mining industries.  That is a long, 30-50 year transformation, but offers the ability for very low cost energy gathering with the bonus of getting industrial capacity out of the biosphere and into the vacuum of space.

My second article utilizes the purely mechanical view given by Popular Mechanics on the transformation of biomass to useable energy source.  Each of the major biofuels examined have costs and problems in production efficiency, transport, storage and needing to either add in a new infrastructure for such things or having to seriously upgrade all parts of the old one.  The startling conclusion is that any biomass system converts, at best, 10% of sunlight into useful end energy product. 

The problem is that this high overhead system of crop production, transport, reduction to fuel and such is negatively comparable to something like solar cells:  solar cell arrays have low maintenance cost and the work (currently unexamined) of nanosolar utilizing roll-fed offset presses, is changing the cost of production and ability to place large amounts of solar-electric systems cheaply. 

Each of the bio-alternatives of methanol and ethanol require large investments in production and delivery systems, particularly as both are highly corrosive in the current gasoline/diesel pipes.  Your vehicle won't notice it much, but the fittings in ships and pipelines will all need to be overhauled for this work. 

Natural gas is a little better, having a set system for compression and transport... save for the problem of driving around a fuel-air explosive vehicle, it isn't that bad.  Biodiesel looks better but here, again, the conversion ratio is still under 10%, even with better per-unit energy storage as compared to the ethanol/methanol systems, the actual output percentage is still low.

Direct electricity is running out of the large scale production areas (hydroelectric) and can be usefully changed over to third or fourth generation nuclear plants which have none of the problems of first and second generation plants.  That is a multi-year to multi-decade investment, depending upon current environmental laws and the NIMBY/BANANA problem.

Hydrogen would be excellent if it didn't have to be cracked from water and that energy input is high as compared to resultant energy of hydrogen itself.  Fuel cells are very efficient and need newer capabilities to scale up for industrial use, which currently is a 'slow-go' arena.

In an add-on article to look at Iowa's subsidies for corn to ethanol conversion, I cover the algae to oil concept in the commentary.  While it is sound technology, the company that bought the patent, DeBeers, is not known for its industrial might in the energy sector but for diamonds.  It being on patent, the company can do as it pleases for the length of that (with any extensions) short of government fiat to take the patent away.  The main problem with algae-oil production is the high cost of manufacture and the slow rate of manufacture.  Even at the steepest ramp up of production one can imagine, cross-licensing it to every major industrial concern on the planet and getting these systems retrofitted into industrial plants, the ability to get the US *current* oil needs met is measured in DECADES.  While it sounds like wonderful technology and it *is* those production concerns along with comparison of amount of output to current input needs yields a curve well beyond 2030 for a purely terrestrial and continued polluting oil source.  Short of Communist or Fascist take-over of that industry, and the resultant problems with that, nothing will get that done faster than the best possible timeline for it.

The third article of mine is a Stop-Gap Energy Policy that addresses the gap between current systems and the future one proposed in the first article.  Here government plays little role in subsidizing industry and plays a larger role in setting up goals and objectives for industry to get to, along with incentives and guaranteed short-term contracts.  It is this system that was used to help offer incentives to the aircraft industry back in the 1910-1940 timeframe.  There government offered contracts for air mail delivery with bonuses for timeliness over given distances and for bulk carrier operations.

Utilizing that outlook, then, government can offer things like 'X-Prizes' for each of categories of need for long term energy self-sufficiency.  This is also not a 'first past the post' system, and encourages multiple organizations to reach goals via different means and even incentivizes *that*.  America cannot be stuck with a sole-source method of energy production, transport or storage and in each of these realms there is a high need to shift from current, costly infrastructure, to one of low cost and easy deployability.

The incentive areas include: Biomass, Solar Conversion, Space Based Power Generation and Transmission, Superconductors, Nanotechnology.  Each of these is given incentives and guaranteed contracts for the creation, transport and storage of energy, plus incentives to form the foundation of a purely space-based private industry.  The goal of moving polluting industries out of the biosphere and to economically transition to an majority electric system will be neither easy nor fast, but by offering incentives and rewards the government can play the more traditional role of standards-setting and reward for performance that gave us the modern aviation industry.

The second area of the stop gap is current production and refining of petroleum based fuels.  The US has not allowed a new refinery to be built in the US since 1976, which beats Iran in that area.  One of the main bottlenecks for refined fuels is doing the actual refining and the US has been slacking in that area.  Production, too, has been slacking, and the new Bakken formation in the Dakota's along with the oil shales of the Colorado to Montana realm, both offer opportunities now that new technology has made those conversions economical.  Also, the continental shelf has had no new wells drilled for decades, even though Cuba, which shares North American shelf space, has had a viable industry of getting foreign concerns to drill for oil on the Shelf.  As modern systems are cleaner, safer and more efficient than those railed against in the 1970's, the concerns of environmental groups should be lessened.

To address refining the US Government can offer polluted lands under its custodial care to those companies willing to pay a pittance for rent, in return for a guaranteed 99 year clean-up.  By adhering to State regulations and waiving federal regulations for land that is *already polluted* companies can be given an incentive to quickly stand up new infrastructure and research while doing a public good of environmental clean-up that the US Government has been unable to do.

That outlook is to shift away from a majority petroleum based infrastructure and to one of electricity based infrastructure.  Advances in electrostatic contained fusion, also offer a strong way forward for this, and New Mexico will be building the first ever reactor of that kind with help from public and government funds.  This does not obviate the need, however, for better storage and transmission of electricity, itself, to slowly shift away from chemical based systems to ones aligned with superconductive or nanoscale electrical storage.  Nor will fusion or 3rd to 4th generation fission plants address the concerns of industrial production in the biosphere, which has been a constant problem of mankind since the first tanneries were set up in ancient times.  With X-Prize systems already in place for the space based side, the US can augment those and add new prizes for set cargo and turnaround time to Low Earth Orbit all the way to Geostationary Orbit and Lunar deployment and return.  In many areas of basic manufacturing, adding in robotics and removing gravity both remove the need for human based labor for production and as the sunk cost of orbital plants is spread over decades if not centuries, due to lack of environmental damage and maintenance (replaced with lower ones of solar radiation repair and maintenance) the overall system cost is low with the start-up cost being high.  As O'Neill's class postulated, once the basic infrastructure is in place the cost of expansion is miniscule compared not only to the original sunk cost, but to the same marginal cost on Earth.

What is seen, then, is not an argument about 'climate change' but the long-term sustainability of the US and the entire human species by shifting industry, power generation and, more slowly, habitat, to off-planet foundations.  A forward and future looking energy policy must address the fundamentals of not only the use and storage of energy, but its prime motivator, which is industry.  Human administrative needs can be addressed at lower impact if the worst part of the systems no longer impinge upon the common biosphere and are allowed to grow to meet economic needs.  That does require a basic shift away from the dichotomy of 'industry bad/environment good' to one of addressing what it is that industry *does* and seeing if it needs to be in the environment at all.  That is not, however, a yell and scream campaign about carbon dioxide but a rational discussion of what is the best way to get these things at the lowest cost to humanity while providing the maximum opportunity for human liberty.

Activism will not get you from here to there.

And you cannot get to a future that is better for everyone on the planet by trying to forever retain the things that are most criticized when they can be shifted into an arena where they will stop being a problem.

This is a program about industry, economics, energy production and consumption and the best place to put these things in a sustainable way.  Even better the US can do this without consulting ANY OTHER NATION ON THE PLANET and just DO IT and show the best way to go, which is the traditional role of the United States of America.

Stop shouting and get back to work.  Not protests, not forms, not speechifying to edify grievances, but hard, long work that will yield fruits slowly but continuously to make life better for all involved so that a longer term goal can be met.  Go out with a sign and protest and I know you care more about yourself than the planet or your fellow man.

That will be your choice this election and every election that is left until you die: give more power to government and make the problems intractable, or restrain government to a few things and let it endorse good ways to go without controlling them.  NASA is the new Amtrack, and the ability of either to innovate on the scale needed is miniscule and their outlook towards employing bureaucrats, not doing something for the common good.  Which do you want?  Government 'help' like after Katrina or the help of the American people like after the 2004 Christmas Tsunami where individual giving by the people of the US outstripped any other single giver including the US government? 

I can see where the power is in that equation.

Can you?

Not Free Trade but Accountable Trade

Today (04 OCT 2007) The Wall Street Journal hosts an article by John Harwood: Republicans Grow Sckeptical On Free Trade. It isn't shocking that a business news outfit like WSJ would cover this, but it is of great note that the placement of it on their paper side is A-1. The front page. This is of high interest as the WSJ is unabashedly not to keen on any prospect of controlling illegal immigration supporting, instead, that businesses and foreign individuals have the 'right' to commit to labor contracts outside of Treaties and international law. That said this is also a division between the more Left leaning 'news' segment of WSJ and the more 'right' side on the editorial pages. That dichotomy is a fascinating one to see as time goes on, and having it put into stark contrast on the front page is quite profound: the attitude of Americans towards how business operates is slowly shifting.

On to the article itself, which examines polling data and some of the main things showing up not in those that consider themselves Republicans. First off in the article is taxation, a continual Republican applause maker in the cutting end of things. And without question that remains exactly where the Republican voter is today, by 60% favoring tax cuts. As is pointed out, however, a significant minority think it is time for disproportionate taxation shifting upwards in the earnings column, also known as 'tax the rich'. Something that could result in this on the Republican side, is the floating of tax 'cuts' that are 'graduated' to give larger percentage cuts at lower earnings brackets, so the overall trend, while that of tax cutting, is to cut more out at the bottom earnings segment of the population than at the top.

To date I am unaware of any Republican move to take advantage of this view amongst their voters, but do note that it would have some acceptance across-the-board as it would be seen as having the wealthiest Americans paying more in a terms of porportion of taxation. This first point is not a shocker, really, although the 'across-the-board' cuts folks and the 'trickle down' folks are slowly finding their views falling out of favor by that significant minority shift. While the majority can still put through such pro-business or 'fair' across-the-board cuts, the slow alienation of that minority should be a large worry to the Republican party.

That pro-business view of the Republican party takes a hard hit on the greatest marketing slogan put forward of: 'free trade freeing people'. To examine that I will now put a quote in from the article on this topic:

Six in 10 Republicans in the poll agreed with a statement that free trade has been bad for the U.S. and said they would agree with a Republican candidate who favored tougher regulations to limit foreign imports. That represents a challenge for Republican candidates who generally echo Mr. Bush's calls for continued trade expansion, and reflects a substantial shift in sentiment from eight years ago.

"It's a lot harder to sell the free-trade message to Republicans," said Republican pollster Neil Newhouse, who conducts the Journal/NBC poll with Democratic counterpart Peter Hart. The poll comes ahead of the Oct. 9 Republican presidential debate in Michigan sponsored by the Journal and the CNBC and MSNBC television networks.

That same 60% that is for lower taxes shows up *again* on the 'free trade' issue. This single issue pushed at least since the Reagan Administration and pushed hard by academics, pundits, and various business media outlets, including the WSJ, have not 'made the sale' on free trade. Quite contrarily, after seeing it NOT work for decades in China and having Mexico abuse NAFTA and export its unemployed northwards to the US and Canada, the Republican base is no longer supporting the concept of 'free trade'. The stated view is that this is bad for US local production, but some part of it is also attached to the illegal immigration issue caused by the relaxed views of NAFTA and the slow dissolving of US National Sovereignty because of free trade. Ross Perot, in 1992, indicated that NAFTA would create a major downward trend in US production of goods, but it has, instead, seen US firms penalized on various environmental issues that are NOT as strict in Mexico and has so attacked the US on its ability to regulate immigration and product standards that the Republican base is sending a clear message: enough is enough.

This is one of the few areas that some of the Democratic presidential candidates are actually *ahead* of their Republican counterparts: free trade. After initial sign-on to it, by President Clinton, the Clinton camp and a few other Democrats are feeling the free trade winds slowing. All the verbiage put forth by various academics, economics pundits and political supporters are not dealing with the paucity of freedom in China, or in other parts of the world where the view of trade being the balm of all things has not yielded significant results. The shift of Nations to democratic outlook is spearheaded by the vast Nation of India, and that, alone, would skew global demographics. Even worse, is the failing of democracy to address social ills across Africa, South America, and SE Asia, along with the newly formed Central Asian States. Democracy, even when present, has not dealt with organized crime, the narcotics trade, terrorism or money laundering due to political graft and corruption present even in democratic nations.

Increasing trade has, indeed, brought more *goods* to more people in India and China, but only where liberty and freedom have backing by the people and their governments can such goods be secured against government. That is the case in India, but not the case in China where increasing goods are an attempt by the regime to bribe its own population so as to keep its economic bubble inflated. The goods put out from China and parts of SE Asia that undercut the US domestic market via cheap labor and sub-standard goods is now seen as a detriment to the economy of the US.

This has been a shift over the last eight years as WSJ points out:

In a December 1999 Wall Street Journal-NBC poll, 37% of Republicans said trade deals had helped the U.S. and 31% said they had hurt, while 26% said they made no difference.

While this year's choices are somewhat different (59% con/ 32% pro/ 9% UNK) against the 1999 figures (37% con/ 31% pro/ 26% no change/ 5%UNK) the strong shift when the 'no change' is removed to the con side of the equation gaining all but 1% of the shifting 'no change' and unknown groups is startling. Out of the 31% on that latter in 1991 9% go in the UNK territory (+4%) and the rest move almost without exception to the con side on free trade. After long decades of pushing by the business portions of the Republican party, to see that equation of overseas production leading to greater prosperity is not resonating in their party. The shift of America to a majority 'services' based economy, now beating out industrial production, is a primary concern here. The can-do, pro-workforce of Americans making things is not having a high match-up with the services based economy.

This push-back is examined by the WSJ and using anectdotal evidence, examines those that have joined the Republican party:

Post-9/11 security concerns have also displaced some of the traditional economic concerns of the Republican Party that Ronald Reagan reshaped a generation ago. Asked which issues will be most important in determining their vote, a 32% plurality cited national defense, while 25% cited domestic issues such as education and health care, and 23% cited moral issues. Ranking last, identified by just 17%, were economic issues such as taxes and trade.

John Pirtle, a 40-year-old Defense Department employee in Grand Rapids, Mich., said he drifted toward the Republican Party in large part because of his opposition to abortion, but doesn't agree with the free-trade views of leading candidates.

"We're seeing a lot of jobs farmed out," said Mr. Pirtle, whose father works for General Motors Corp. Rankled by reports of safety problems with Chinese imports, he added, "The stuff we are getting, looking at all the recalls, to be quite honest, it's junk."

The conservative, working family that likes the Republican party for its support of traditional values (the religious conservatives and family values conservatives) do not like the movement on industrial outlook and values. In my own family this has been seen as the case with a family member working for a small aerospace firm farming out work to the Philippines: the work coming in needs large amounts of QA, re-work, acceptance and some being sent back as rejected. This is not only time consuming and adds into overhead, but it removes the feeling that 'Made in America' has any meaning at all: the workers who used to do the work farmed out know they can get it done on-schedule, to high quality standards and minimal time for re-work.

Unfortunately the Republican party does not understand the message being sent to it:

Economic advisers to Republican presidential hopefuls acknowledge the safety scandals have made defending free trade more difficult. "Americans are right to be angered at companies that take shortcuts" in importing goods, said Larry Lindsey, once the top economic aide in the Bush White House and now an adviser to Mr. Thompson's presidential bid. "The next president has to promote free trade by playing hardball, and to be seen doing so."

In the Republican campaign so far, elevating populist trade concerns has been left to the long shots. "The most important thing a president needs to do is to make it clear that we're not going to continue to see jobs shipped overseas....and then watch as a CEO takes a $100 million bonus," Mr. Huckabee said at a debate earlier this year. "If Republicans don't stop it, we don't deserve to win in 2008."

This is not a question of 'playing hardball' but of removing the workforce of America from industrial work and letting low-cost, low-quality competitors remove jobs overseas. By utilizing low cost foreign labor and placement, American quality work and ability to create efficient means of production are de-legitimized. Further, beyond the safety issues from China and other parts of SE Asia, both in products delivered and working conditions abroad, the idea that free trade is a sacrosanct part of how the capitalist system works is false. Americans deeply understand that trade is accountable to the needs of society, and that often does not mean just the lowest price on goods. For commodities price is a factor, but for such things as individual self-worth and having finished products made by Americans for Americans, this is a major support of the social structure of the Nation.

America has, at its basis, a deep understanding of this topic from the very start of the Nation and the main cause of the Revolutionary War starting with trade policy in the colonies. A rallying cry of 'No Taxation Without Representation'. America well understands that trade can be taxed, as it was, by the King, but the proportion of taxes to pay off debt being decided by the King was reason to raise up in arms against him. The rights of subjects to have a say in such things had already passed to parliament, and by not giving subjects that right, a basic and foundational part of how society was to operate was broken. The question was not 'free trade', as a concept, but social control over trade and the burden of society to be supported by trade.

As a concept this has been restated a number of times in America, mostly by its Presidents, as is seen in the following:

It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth can not be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society the farmers, mechanics, and laborers who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their Government. There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing. In the act before me there seems to be a wide and unnecessary departure from these just principles.

Nor is our Government to be maintained or our Union preserved by invasions of the rights and powers of the several States. In thus attempting to make our General Government strong we make it weak. Its true strength consists in leaving individuals and States as much as possible to themselves in making itself felt, not in its power, but in its beneficence; not in its control, but in its protection; not in binding the States more closely to the center, but leaving each to move unobstructed in its proper orbit.

Experience should teach us wisdom. Most of the difficulties our Government now encounters and most of the dangers which impend over our Union have sprung from an abandonment of the legitimate objects of Government by our national legislation, and the adoption of such principles as are embodied in this act. Many of our rich men have not been content with equal protection and equal benefits, but have besought us to make them richer by act of Congress. By attempting to gratify their desires we have in the results of our legislation arrayed section against section, interest against interest, and man against man, in a fearful commotion which threatens to shake the foundations of our Union. It is time to pause in our career to review our principles, and if possible revive that devoted patriotism and spirit of compromise which distinguished the sages of the Revolution and the fathers of our Union. If we can not at once, in justice to interests vested under improvident legislation, make our Government what it ought to be, we can at least take a stand against all new grants of monopolies and exclusive privileges, against any prostitution of our Government to the advancement of the few at the expense of the many, and in favor of compromise and gradual reform in our code of laws and system of political economy....

That is an American President, talking not only of the value of work and self-worth,but the control exercised by the Nation on trade. Indeed, when rich industrialists and vested interests push 'free trade' as good for their own interests and the interests of the Nation are skewed to them and against the working man, the Nation becomes unbalanced to the profit of the few over the many. Government has no place in 'leveling the economic playing field', as the skills and abilities of each individual differ. Government has no place in over-rewarding the rich and successful, either, so as to create a priveleged class with their own separate laws.

The author of those words was President Andrew Jackson on 10 JUL 1832 on the Bank Veto, which he enacted so as to remove money interests in the National Bank concept out of the hands of foreigners. The more general point of the message, however, has resonated throughout America since then, and would come to be known under the concept of social and industrial justice. This viewpoint would continue on in America and be restated by a Republican:

A democracy can be such in fact only if there is some rough approximation in similarity in stature among the men composing it. One of us can deal in our private lives with the grocer or the butcher or the carpenter or the chicken raiser, or if we are the grocer or carpenter or butcher or farmer, we can deal with our customers, because we are all of about the same size. Therefore a simple and poor society can exist as a democracy on a basis of sheer individualism. But a rich and complex industrial society cannot so exist; for some individuals, and especially those artificial individuals called corporations, become so very big that the ordinary individual is utterly dwarfed beside them, and cannot deal with them on terms of equality. It therefore becomes necessary for these ordinary individuals to combine in their turn, first in order to act in their collective capacity through that biggest of all combinations called the Government, and second, to act, also in their own self-defense, through private combinations, such as farmers' associations and trade unions.

[..]

Of course, in labor controversies it was not always possible to champion the cause of the workers, because in many cases strikes were called which were utterly unwarranted and were fought by methods which cannot be too harshly condemned. No straightforward man can believe, and no fearless man will assert, that a trade union is always right. That man is an unworthy public servant who by speech or silence, by direct statement or cowardly evasion, invariably throws the weight of his influence on the side of the trade union, whether it is right or wrong. It has occasionally been my duty to give utterance to the feelings of all right thinking men by expressing the most emphatic disapproval of unwise or even immoral notions by representatives of labor. The man is no true democrat, and if an American, is unworthy of the traditions of his country who, in problems calling for the exercise of a moral judgment, fails to take his stand on conduct and not on class. There are good and bad wage-workers just as there are good and bad employers, and good and bad men of small means and of large means alike.

But a willingness to do equal and exact justice to all citizens, irrespective of race, creed, section or economic interest and position, does not imply a failure to recognize the enormous economic, political and moral possibilities of the trade union. Just as democratic government cannot be condemned because of errors and even crimes committed by men democratically elected, so trade-unionism must not be condemned because of errors or crimes of occasional trade-union leaders. The problem lies deeper. While we must repress all illegalities and discourage all immoralities, whether of labor organizations or of corporations, we must recognize the fact that to-day the organization of labor into trade unions and federations is necessary, is beneficent, and is one of the greatest possible agencies in the attainment of a true industrial, as well as a true political, democracy in the United States.

This is a fact which many well-intentioned people even to-day do not understand. They do not understand that the labor problem is a human and a moral as well as an economic problem; that a fall in wages, an increase in hours, a deterioration of labor conditions mean wholesale moral as well as economic degeneration, and the needless sacrifice of human lives and human happiness, while a rise of wages, a lessening of hours, a bettering of conditions, mean an intellectual, moral and social uplift of millions of American men and women. There are employers to-day who, like the great coal operators, speak as though they were lords of these countless armies of Americans, who toil in factory, in shop, in mill and in the dark places under the earth. They fail to see that all these men have the right and the duty to combine to protect themselves and their families from want and degradation. They fail to see that the Nation and the Government, within the range of fair play and a just administration of the law, must inevitably sympathize with the men who have nothing but their wages, with the men who are struggling for a decent life, as opposed to men, however honorable, who are merely fighting for larger profits and an autocratic control of big business. Each man should have all he earns, whether by brain or body; and the director, the great industrial leader, is one of the greatest of earners, and should have a proportional reward; but no man should live on the earnings of another, and there should not be too gross inequality between service and reward.

That author is from Theodore Roosevelt's autobiography, taken from CHAPTER XIII SOCIAL AND INDUSTRIAL JUSTICE. Here and again, the concept of individuals keeping as much as they earn and yet not bowing unjustly to larger organizations (which in our latter day would now include Big Labor as fitting into that category) to the detriment of the society and the social structure. There is a deep moral sense of America on this, and social and industrial justice in these terms is far from the Leftist terms of Marx, Lenin, Mao and others of that stripe. More properly this is societal justice to keep industry and large organizations fettered to the needs of the entire Nation so that all may be treated equally before the law.

It is in this realm that the Republican party and its presidential candidates are drifting from their 'base' that were invited in by the 'Big Tent' philosophy. Those American workers who see no accord with socialist doctrine or basis for legislation. This is the base that started to withhold contributions to the Republican party over the illegal immigration bills, and continues to rally to that cause to thwart those in the monied interests on Left and Right who wish to undermine the society of the Nation via that. The 'free trade' bloc aligns with the view of illegal immigration being just fine with them, so as to undermine the labor force of America via illegal labor.

This is social and industrial justice slowly coalescing not only in the Republican party, but in those parts of the Democratic party that remain pro-defense, but also pro-social justice on the terms of Andrew Jackson and Teddy Roosevelt. These individuals have not been convinced of the value of unfettered trade and, indeed, see that 'hardball' is necessary: not against illegal activities, although that is a part of it, but against the anti-working class conservative outlook that it fosters in America. That is industrial and manufacturing work, not 'services'.

So many have been turned off by this dichotomy of the Left and Right on this, both seeking to put a National imprint via the Federal Government to demean the industrial working class of America, that the working class no longer look to the two parties as capable of representing them. The Left stepped far away from those people starting with Franklin Roosevelt in the post-New Deal era, and the centralization of things to government that had never, ever been the purview of government before. Prior to that, however, the moralistic views of a religious segment of the population started to criminalize procedures that had been left up to doctors and patients previously, and to generalized trade agreements thereafter. Those first intrusions as part of the coalition of socialists and religious moralists, shifted the basis of government upwards to the benefit of the Federal Government and out of the hands of States and local organizations.

On a historic scale, starting in the mid-1960's, the trend has been clear and ominous of Americans slowly becoming unaffiliated with the two party system and seeing none of the 'alternative' or 'third party' organizations as supporting them. Those third parties have tended to be so ideologically pure that they cannot represent the diversity of America. This is troubling for a democracy when it has no alternative party organization that can represent even a minor plurality of opinions. When a two party system *itself* heads towards ideological purity on the part of both parties, the result is lowering of individuals voting as they no longer have connection to the limited views represented by the two parties.

At this point in time it would not be surprising to see a cross-coalition of social and industrial justice outlooks along with strong National Security interests start to form up over the next decade, and settle outside of the two party system. These are individuals feeling disenfranchised and put upon by the two party system, who are no longer willing to support the New Deal social compact and are unwilling to see invasion of the individual's private life by the Federal Government on much of anything. These individuals see that fairness in tax doctrine also has a progressive element to it, and also see that taxations should be limited, restrained and paid by individuals and corporations up front. Taxes on purchases are not a cause of rejoicing, but a cause for long term fears of encroaching Federal power. Better to have the States do that as they can be held accountable far more easily than the Federal Government can.

On a values basis this group is more pro-family and pro-work, with religious affiliation backed but not to extremist views. The moralistic wisdom of invading people's decisions on narcotics has, as a direct fall out, the attempts to place further strictures on individuals via the Federal Government in other areas, like abortion and the high cost of legal medications. By centering decisions on families and individuals, the view that government can 'insure' them on anything from retirement to health care is also diminished as it is now seen as a money 'sink' from which no one rightly expects a return equal to what can be gained by individuals investing and purchasing such things on their own.

Trade, the sore point in this, is not seen as a beneficence to all peoples, and 'free trade' and 'dumping' of cheap products an actual harm to the US worker. Tariffs are not only not 'out of the question' they are definitely 'in the realm of respect' for holding foreign Nations accountable to the activities of their companies. Illegal alien workers are also seen as a drag and detriment to this class of people, and they see no reason to have free trade with a Nation that abuses such and breaks its treaty agreements with the US.

That does not describe either the Democratic or Republican party of today, does it?

And yet it is exactly where those that felt left out from the Democratic party went to with the Republican party and now are disillusioned with it, along with many of their friends who have just stopped voting for either of these parties. Add in the 40% or so of Americans that don't vote (and still leaving plenty of space for the 5% perennially disaffected), put in 60% of the Republican party and perhaps as much as a 10% residual left in the Democratic party and you have a 'New Majority' in America.

It would not be without reason to see the Red/Blue divide in America gain the third color of the flag: White. Neutral white that wants to keep both the progressives and industrialists and monied interests on a short leash.

Small government, low but graduated taxation, pro-defense, pro-family, pro-individual and movement of any societal need of government down to the local venue.