Government Beats The 'Free Market' With Simple Tariff

(EUGENE, Ore.) - “Free trade” has never been truly “free”. Even its most vocal and varied corporate-interest propagators have always bowed to the potency of government.

They well know they have no choice so long as sovereignty trumps globalization. Those worldly potent-power representatives invited to Washington this week by a “retiring” President Bush know the true nature of the game.

Many have famously (OR notoriously) played the tariff-card whenever “national interest” could somehow conceivably be cited. Bush’s impassioned pleading in defense of ostensibly “free trade” rings false and even foolish in the ongoing rush into globalization now underway worldwide. But then, why is that a surprise ? What else has his regime been providing, pandering, and proving so potently and promiscuously for its full eight years?

In 2002 Bush was “screaming bloody murder at foreign steel mills for ‘dumping’ their products on the American market, thereby forcing down prices for American industry”.

Bush was already then seeking rapid pump-up of presidential votes in our steel-making areas --with production overshadowed and reduced by price-cutting. “Comparative advantage” thus was flowing away from the U.S. via globalization too close to vote-time. So he used the tariff tool for political purposes with little regard to its other consequences, on our economy or that of other nations.

The rest is history, paid-for by potent forces unleashed and shaping the steel industry eversince.

The true costs were paid-for by the potent further impacts on the workers, their families, their residence states --and the true “national interest”. What was immune and immutable was the profit potency still remaining with the industry, demonstrated by its continued Wall St. welcome; and by continuance as a major exporter of product and performance know how to developing nations.

So long as the simple tariff lies within governmental power, a truly “free market” remains only a monetarist myth, promoted primarily for private profit interests. So long as governance operates with its powerful mandate --no matter how obtained-- just so long will “national interests” be rapidly protected by the simple act of control so defined. By definition, “tariff” proves up that foundation fact irreversibly and universally: tariff (as in "duty") n. : a government tax on imports or exports.

Whether added-on coming-or-going, tariff-take is an added burden on business, defining a “comparative advantage” for some over others. Those in control via other than democratic choice have no qualms whatsoever to manage their economies precisely for their own purposes alone. Why NOT ? Who can catch, caution, or control them “in the act?” That act-of-control, justified as for ostensible “national interest”, can “play holy-hob with the entire world economy --and has long done just that.”

Inevitably such action by some can alter and addle natural trade-flow and its resulting dollar-tides, thus affecting credit, confidence and national cooperation worldwide.

World trade “is not truly a zero-sum entertainment where someone must lose for others to gain.” But it can be made-so and manipulated, --even if only temporarily-- as too many developing nations have learned to their sorrow in the past two decades.

That’s what makes it a mode of massive government intervention whenever applied, no matter what operative level or how manipulated --OR for what purpose. That’s why there is a World Bank, an IMF, and other ostensible “control organizations” --also up for testing, probing, deeply, desperately earned examination and probable change in Washington, too.

As experts on globalization have pointed out, “the single thing that the developed world could do to help the third world most is to remove its own deeply unfair barriers to trade.”

That’s what truly defines --and also denies and defies--so-called “free trade”, demonstrated every day in very diversified situations, as demanded for “national interest”, always defined by politicians for their own purposes.

That’s why corporate interests concentrate so comprehensively on “trade policy” and expend corporate campaign contributions so lavishly in lush lubrication for what they seek.

They well know “national interest” and how to help define, shape, manipulate and profit from its providence. The most magnificent defense of “monetarism” can never offset the simple facts of world trade set forth by that potent instrument.

Everything involved in world trade makes its success by “comparative advantage” --usually confirmed in the price-- from whatever competitive source, be it lower wage-costs, natural-resource at hand for low-cost plunder, or even open or covert governmental subsidy.

Long employed worldwide to manipulate and manage any characteristic involved in any national economy, the fact of “tariff” immediately, irrevocably, shapes and changes the “comparative advantage” for any product, process, service or other sellble good. By that simple act any government can change any import/export trade-situation as desired, even over objection by anyone.

Often the chief executive can impose or remove a tariff by independent action. Short a revolution, that act will stand and control product cost in that nation --directly affecting others.

Political as well as economic pressures obviously can negate and even destroy this unavoidable affect, the consequential effects, and any other impacts of any trade treaty at any level. They often are so used, despite standing strong agreement and even signed, solidly-negotiated trade treaties.

“Special circumstance” --read lobbyist success-- thus becomes the powerful reflection of self-interest often offsetting the most painfully negotiated treaty or the very wisest and cooperative of trade agreements.

Remember that simple operational truth now well demonstrated in the continuing global economic crisis. Those gathering in Washington this week will be well advised to take very strong stock in whatever can be done to control, minimize, remedy and democratize the world economic system.

What they may not fully understand is that if they do not work out wise pattern, protocol and process for that now-essential set-of-actions, the overpoweringpressures for globalization long underway will do it for them.

Henry Clay Ruark is the one of, if not the most experienced, working reporter in the state of Oregon, and possibly the entire Northwest. Hank has been at it since the 1930's, working as a newspaper staff writer, reporter and photographer for organizations on the east coast like the Bangor Maine Daily News.
Today he writes Op-Ed's for Salem-News.com with words that deliver his message with much consideration for the youngest, underprivileged and otherwise unrepresented people.

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Sanchez November 17, 2008 6:27 pm (Pacific time)

Hr you seem to read a lot into my statements that I am not making. Possibly you are seeing something that is just not there, or thinking it was stated? I believe that prudent people know when we are under attack, whether it be from within or from an outside force. I believe we are under attack and re-action is going to take place before long. Governments role as per the Founders was based on "protection" while we pursue Life, Liberty and Happiness. It appears that this is now under attack by those people who simply do not like our Constitution and our Bill of Rights. Plus they surely don't like how our voting system works as recent evidence clearly acknowleges. Our government has simply gotten too big, and it's growth is out of control. When you have people who say let a simple majority of state supreme court judges (4 to 3 in California's recent case) ignore the democratic process, then it's time to impeach those judges. If the vote say in one issue went one way and the radicals liked it then that would be the "will of the people". For them it will always only be okay if there issues pass, no matter how! Well you can't have it that way, especially in a situation when the people change their constitution. So whose out there rioting and assaulting people? If it went the other way, then I believe cooler heads would prevail and a different approach would be taken. When the current judges once again throw out the passage of Prop 8, then that will be the start of the end for the radicals. This country was founded by people who got fed up with a small group of people telling them how to live. It is happening once again. Note: 30 out of 30 states have passed similar laws as Calif. Prop 8. Say how come no one is upset about the gross invasion of privacy that happened to an Ohio citizen? Even one of their government dept. heads was put on leave by the demo. governor there. Just a thought.

Henry Ruark November 17, 2008 5:24 pm (Pacific time)

For Sanchez: David Korten worked in Manila for some years. His text can give you some insights into realities in your own homeland and might just help to open your eyes to realities there reflected around the world. Didn't list pages since he shows several key situations in the index.

Henry Ruark November 17, 2008 2:35 pm (Pacific time)

To all: Here's "see with own eyes" link for your convenience in reading what a leading writer states relevant to this Op Ed: www.xcommondreams.com Published on Monday, November 17, 2008 by YES! Magazine Beyond the Bailout: Agenda for a New Economy by David Korten The financial crisis has put to rest the myths that our economic institutions are sound and markets work best when deregulated. Our economic institutions have failed, not only financially, but also socially and environmentally. This, combined with the election of a new president with a mandate for change, creates an opportune moment to rethink and redesign. President-elect Obama has promised to grow the economy from the bottom up. That would be a substantial improvement over growing the top at the expense of the bottom. The real need, however, is a bottom-up transformation of our economic values and institutions to align with the imperatives and opportunities of the 21st century. It involves a five part agenda: clean up Wall Street, play by market rules, self-finance the real economy, measure what we really want, and convert to debt-free money. ----------------- David Korten wrote WHEN CORPORATIONS RULE THE WORLD, ISBN 1-887208-04-06, an international best-seller, 2001, cited here frequently. His new report in Common Dreams provides timely fact in depth and excruciating detail.

Henry Ruark November 17, 2008 2:17 pm (Pacific time)

Friend Sanchez: Nothing personal in continued dialog with issues YOU raised since may clarify for others so bemused, too. You wrote: "Back to reality, our government's chief prioity is to protect the citizenry, any deviation from that will promulgate a need to remove any and all leaders who fail in that mission. This protection is not just one based on invaders (foreign and domestic), but also economic attacks." This limits governance in precisely the way libertarian and neocon dogma declare must be done, obfuscating the real world and its complex confusions. WHO is to decide on "economic attack" ? At what level does competition cease and "attack" begin ? Is fact of economic perversion in Mexico held to account for the "invasion" alleged by the "illegals" --OR do we simply ignore our own moral and economic guilt in allowing and inviting and even subsidizing such "attack" by U.S.-owned corporations vs the then-dispossess farmers and workers driven to seek life somehow, somewheres ? You should have no problem with that. Simply declare that only "small government", confined to military defense of our actual land-areas, is ever needed. Then you can carry on dialog with Social Security, Medicare and Medicaid, worker security, and multiple other participant persons seeking survival once those roles for your restricted government are now enforced. Toodle-oo and happy Defense and Pentagon to you... !!

Henry Ruark November 17, 2008 2:08 pm (Pacific time)

Sanchez: I wrote:"since it is law --unmistakably provided by government--which protects private property and makes possible any and all entrepreneurial action. It is entrepreneurial-action that builds wealth, and the worker is the essential other-participant, since very few enterprises operate only on the strength of one." No question that places government in monitoring and facilitating position as one of three participants in any wealth-building, with rest of statement making clear that the entrepreneur cannot ever operate without both that action by government and the essential cooperation of others in the enterprise. SO, yours falls by its own weight of clear comparison with meaning of mine and your distortion of its message --which you chose to disregard and pervert for your own political-cover purposes. Tht's sure symptom of the bad phiosophical error widely attributed to both libertarian and neocon characteristics of society and its essential domain of entrepreneurialism to create wealth. Just wished to clarify for all here, and to ease your own re-examination of this crucial reality, thus clearing your understandings for further progress into actuality obvious to many millions now.

Henry Ruark November 17, 2008 10:40 am (Pacific time)

Sanchez: You wrote: "created wealth without the labor and creativity of it's citizens (unless of course one is advocating for a socialist government?)." (Its one-word) You thus reveal your real task here by distortion of straight simple-English as written. Mine clearly combines effort of entrepreneurs AND workers, with government playing its Constitutional role of facilitating to make possible that cooperative effort. Any summary of major economist evaluation will indubitably confirm that factual statement despite any political-pander statement by masked man at door with shoddy, erroneous product to sell for selfish reasons. (HCR-made summary offered here previously, made for ongoing LMA purposes.) Yours re role of government in taxing seems to clearly negate precisely what you contend otherwise --that's a form of democratic wealth-sharing not recognizable in the shaping context you set diminishing what government does. It also creates the problem for you of where such power to government cometh, if indeed the people wish to limit its essential impacts on life process defined for centuries by civilization itself. Thus, again, you trip over your own distortions, which is sure symptom of misinformation and misinterpretation caused by unavoidable now-revealed fact, placed in evidence by your own statement here.

Sanchez November 17, 2008 9:10 am (Pacific time)

To assert that government creates wealth is a pretty bold statement to make or maybe it means something else? I would be curious to hear of some current government or one in the past that created wealth without the labor and creativity of it's citizens (unless of course one is advocating for a socialist government?). Government does print currency, disburse funding and allocates contractual work, but it does so via the taxing of wealth created by the citizens. I have heard of people who try to say something else regarding this matter, but they simply confused and unknowlegeable. I would suggest that creating a perpetual energy device would be an easier task. Back to reality, our government's chief prioity is to protect the citizenry, any deviation from that will promulgate a need to remove any and all leaders who fail in that mission. This protection is not just one based on invaders (foreign and domestic), but also economic attacks. Those who demand an open border and open economy, then run for office and get going on passing some Constitutional Amendments, for that's the only lawful way that can happen. If one tries to usurp the Constitution unlawfully, there are prescibed penalties on the books and methods for enforcing those lawful penalties.

Henry Ruark November 16, 2008 2:39 pm (Pacific time)

To all: For any remaining doubters re the real reliance of entrepreneurs on government for the essentials in which they must operate, send ID to editor for direct contact. Long ago, motivated by the constant neocon din re wealth creation ONLY by private interest, with absolutely no essential protection and other provisions and supports from government, some of us writing compiled a list of what any government does to make wealth creation possible. It now numbers some 50 listed characteristics of actions and processes and protocols and provisions and proceedings, and includes list of links for further information, too. Available on request to Editor with ID, if eMac will disgorge it. Must qualify offer with note of intermittent rebellion in being within eMac and getting worse, but will extract PDF and store elsewhere asap.

Henry Ruark November 16, 2008 1:42 pm (Pacific time)

Sanchez: You wrote:"...government only steals wealth they do not create it, and they must minimize their intervention." That reveals very strikingly distorted reality, since it is law --unmistakably provided by government--which protects private property and makes possible any and all entrepreneurial action. It is entrepreneurial-action that builds wealth, and the worker is the essential other-participant, since very few enterprises operate only on the strength of one. To blithly claim otherwise is to reveal a libertarian-neocon mythical and very musty major massage of manifold mystifications meant always to obfuscate and protect private profit over all else involved in any societal relationship. So now you clearly demonstrate your further intentional distortion, stemming from that most fundamental, foolish and futile misunderstanding. Re your three-count academic preparation, that should take you to grad-level, strikingly ominous in reflection of your strikingly ominous distortion of reality. IF you worked for it and won it, why not share it for what it may be worth ? There ARE insitutions granting degrees worth as little as their own initials, so prove up your words or provide essential other-source links to somebody we know and can trust, or you still fail the basic test of trust via proven credibility. ANYone, behind any mask, can write on Comments. Those who act in good faith and the demanded humility do not hesitate to show their true credentials. What's hampering your stating essential points ? Those who conceal unfailingly have good reason to do so --else why so act in open, honest, democratic dialog as provided here, with "see with own eyes" for our own statements, sent so all can then "evaluate with own minds". What do you fear ? Ridicule ? Your own stance bringeth that down on you rapidly. Retaliation ? HOW possible ? By whom ? With what method ? Tat's chimera used by those who dare not whip away that mask, for whatever reason.

Henry Ruark November 16, 2008 11:21 am (Pacific time)

R.C.: Yours re "open society" shows interest in that concept. Suggest you define what you see as characteristic of that society, and we'll go from there. Your participation welcome and this is issue worthy of full dialog now, with O-regime just starting, and world leaders finally demanding change of longtime oppressive economic myth of "free trade", privatization, deregulation, and the "small government" long ago outmoded --as Reagan to Bush II proves by their own demonstration.

Sanchez November 15, 2008 6:13 pm (Pacific time)

I seem to remember many journalists over the years who have gone to jail because they would not give their sources up. Do you think some of those sources were akin' to "Harvey the Rabbit?" Maybe ol'Justin Blair of the dinosaur NY Times has an answer? My former university (actually I have #3) still have "blackboards!" Possibly you're referring to your high school or grammar school that has the greenboards? And, so what! All those 3rd world leaders at the current summit was a nice gesture but in the real world the "heads of states" primary responsibility is to their citizens. Bush failed in that responsibility as did that clown McCain (and congress in general) and that's why history will hold them in low regard. Obama has a chance to do some great things and to do that he must put America first, then, negotiate from a position of strength. Having energy independence will allow us to do that. Our country (the "individual American") has created more wealth and lifted more people out of poverty than at any other time in the history of the world. Allow our people to go forward and prosper with limited government intervention and we will be able to help all of earth's people. Anything that hampers that future development will only bring us very dark times. We get out of this financial morass by unleashing our best and brightest, government only steals wealth they do not create it, and they must minimize their intervention.

Henry Ruark November 15, 2008 1:05 pm (Pacific time)

Sanchez: You wrote: "...most certainly those who cut and paste from socialistic economists who never controlled anything beyond the piece of chalk they make chicken scrathches on blackboards with." FYI, classroom boards have been green since the late 70's; your view of that too, seems to be outdated, no surprise. BUT yours re cut/paste is real low-blow, intentionally so. Defy you to find and show here any such copy infringement, actionable for damage to professional reputation. Meanwhile you provide no look at man/behind/mask, or any evidence of credibility for bigwords, or source of any data you claim...which, unless you are economist testifying at government hearing, leaves you to seek from those who really DO something what they will share with you to relay to others. All without responsible ID any ethical journalist supplies immediately on request ! Mine on public record long ago... SO where's yours, now ??

Henry Ruark November 15, 2008 10:53 am (Pacific time)

Sanchez et al: Nothing inscrutable re this "see with own eyes" link. Visit to evaluate with own mind what the newcomers will and can do, with that threat now driving their inclusion: www.wpost.com As Summit Starts, Emerging Nations Weigh New Clout Brazil, China, India Step Up In Diplomatic Power Shift By Anthony Faiola and Glenn Kessler Washington Post Staff Writers Saturday, November 15, 2008 "When world leaders gathered last night for a White House dinner on the eve of a major economic summit, the faces around the table were not just those of the Europeans and Japanese who normally mix in the highest circles of diplomacy. This time, heads of state from the across the developing world, from China to Brazil to India, had a seat at the table." --------------- Report details ways in which newcomers are already acting via various economic tools, including tariff, with threat of independent action now the driving force to offset its damaging consequences if again sovereignty trumps onrushing globalization,however briefly.

Henry Ruark November 15, 2008 10:31 am (Pacific time)

R.C.: Your inquiries constitution an invitaton for a whole book. Best possible answer may well be review of last twenty or so Op Eds, available via Staff access and Written by...-line. OR ID self to Editor for open and welcome direct dialog.

Henry Ruark November 15, 2008 10:27 am (Pacific time)

Sanchez: How inscrutable that Congress and Bush did not seek out your self-proclaimed wisdom re the precise amounts for tariffs and other complex decisions. "Why we need them" surely well described in Op Ed: To protect sovereignty via politician choice vs commonweal need. You remain only masked man at door seeking to sell shoddy goods from unknown sources. IF you have anything beyond your own words, why not share here for honest, open, truly democratic dialog rather than simple self-aggrandizement ? That way proveth up your providence and prescience, if any such exist in reality. Without it you really only beat the drums for Sanchezdom.

Richard Carlson November 15, 2008 9:55 am (Pacific time)

Henry R do you believe that societies derive their cohesion from shared values, religion, history, and tradition? Then when a society does not have boundaries where are the shared values to be found? The concept of the open society itself? So do you believe that an open society on a global level is the only way we can bring about fairness to all? Therby eliminating the need for tariffs?

Sanchez November 15, 2008 8:40 am (Pacific time)

China engages in essentially slave labor (check and compare Walmart prices with any other retailer that buys products elsewhere). Japan long ago subsidized their auto industry. When we put a tariff on imports (either by executive or congressional order) we have not put it at the right amount to offset the advantages of the above listed two countries (there are many many more). Currently the most dangerous long term averse impact to our economy is not the "tariff" , but future executive orders from Obama that will deal with developing energy independence (of course state-subsidized policies got us here, along with labor thugs). Things may improve if Obama states that until the world economy starts to stabilize, new tax rates will be off the table. My guess is that as OPEC keeps lowering production, the whole world will get wise to their transparent scheme and Obama will have to make a no-win choice, which is what real leaders must do. If you see more area's made into "no" drill/energy development designations (like a national park that no one has easy access to, like tourists!), figure that 2010 will be a bad year for him. "Tariff's" really don't mean much when compared to available energy sources, and obviously some people are clueless on why we need them to begin with.

Henry Ruark November 14, 2008 8:26 pm (Pacific time)

Sanchez: Thank you for your inscrutable wisdom, friend S. I have several friends you should meet, with their work on national economies well understood by Nobel Prize committees. Where's your Nobel, friend S.? In fact, what have you to show for working record to back all those sharply-pointed words ? Are you one of those professional unprofessed by OPEC ? If so, show your preparation and where obtained, along with any record of publication, teaching, involvement in corporate planning, national agency work, etc. Don't recall your stuff, but that might be my lack of solid information and sources, which I'm sure you can now correct with links to others with known record to substantiate what you wrote. Words are cheap, unfortunately especially so from those who have naught else to show. SO where's YOUR show-stuff ??

Sanchez November 14, 2008 6:10 pm (Pacific time)

Good example of this misdirected economic analysis: the price of oil and the multi-faceted processes that made it become multi-national in nature (along with many American energy producers years ago). Note--OPEC is a symptom that happens when non-professionals get involved in economic policies. A bit above the pay grade of most economists, and most certainly those who cut and paste from socialistic economists who never controlled anything beyond the piece of chalk they make chicken scrathches on blackboards with. Then later someone puts these people on national economic policy-making committees, and now we see what happens when inexperienced individuals like the above interject their policies onto the free markets of the world. Just watch Russia start to turn the screws on Europe. Those of you who were buying gas in 1973 realize how quickly prices will go up. The best way to improve the global markets is through competition coupled with plenty of energy. Having a tire gauge and a no drill policy will not cut it, nor will any tariff. Hard work and creativity should always be compensated and slackers deserve what they earn as well and not a penny more.

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