Wednesday, September 14, 2005

Eliminate Trade Barriers Now

President Bush finally makes a strong statement about the urgent need to eliminate trade barriers to trade between nations.  Trade barriers serve to distort efficient investment and serve to keep too many people locked outside the formal economy and in poverty.  The United States currently subsidizes its farmers, many of whom are millionaires.  These farm subsidies hurt both consumers in the United States, through higher domestic food prices, and farmers in the third world, through lower international food prices.  This is truly shameful behavior on our part.  

Agriculture has consistently fallen in relative importance to our national economy for the past one hundred and twenty years.  It is certainly a significant portion of our past but will never regain its former prominence.  For those that continue to farm, significant technological advancements combined with better risk management approaches allow farming to remain profitable in the absence of depression era subsidies.  It is time for these subsidies to end.  

Likewise, other industries, such as garment production, are currently at competitive disadvantages relative to their foreign peers.  In these industries domestic firms will never catch up let alone regain their competitive edge.  The money and effort that we currently expend in protecting these industries would be much better spent retraining employees for positions in growing industries that will become a major part of America’s future.  Allowing dying industries to die and moving their employees to growth industries will enhance our nation’s economic growth, but more importantly release those employees from the stagnant wages and allow them the opportunity to move into an industry where they can greatly improve their standard of living.  Sometimes harsh medicine actually makes the patient better.  

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