Thursday, November 29, 2007

NAFTA Did Work

I occasionally like to bring the specter of NAFTA up now and again because so many people dismissed it as this horrible thing and the agreement hadn't even been signed yet. A reminder that international trade is indeed a good thing;


Anonymous said...

You're right about NAFTA, but look at the growth figures. In the 70s every region of Mexico had positive growth and now there are regions with -7% ??! What went wrong?

Anonymous said...

I would like to see NAFTA extented through the hemisphere, including Cuba. I was taught in economics that when goods and services are allowed to freely flow across borders armies don't. The entire region would benefit from free trade.

Cuba will be the special region of American concern. For once the US should get in front of the learning curve woth regard to this country. If we would have had normal diplomatic relations and trade with Cuba for the past 48 years Castro would have been gone decades ago. The way it stands now when he final expires the US will have to contend with the loading dock of the South American crinimal at our door step and try to bring a country back into the modern world based on 1950s technology, siimilar to what West Germany had to do with a reunitified East Germany in the 1990s. Also watch for Florida real estate values to plummet when Americans are allowed to live and travel freely back to Cuba.

I believe that Cuba will once again be the largest trading partner, tourist spot, and closes allie of the US in the next decade, and we should start preparing for it now.

Danny L. McDaniel
Lafayette, Indiana

Anonymous said...

What I don’t understand is how the defenders of free trade can be anti-immigration. Shouldn’t men’s labor, the most fundamental and basic unit of trade, also be free? Milton Friedman is quoted as saying, “You cannot simultaneously have free immigration and a welfare state.”

I say, “What an incredible opportunity.”

It is why Ronald Reagan said, “Mr. Gorbachev, tear down this wall!” He knew that social welfare cannot co-exist with open borders. The difference between Al Franken and Jason Lewis is of course, Franken is honest about his desire to perpetuate and aggrandize the American social welfare system while Lewis lies about his opposition. (Or else maybe he is just a racist and bigot)

Anonymous said...

I hope you didn't mean you don't understand how people can be pro-free-trade, but anti (illegal) immigration. I have never seen any defender of free-trade be anti immigration, but I can very easily see being anti-illegal immigration.

You want to immigrate to the country, do it the legal way, come in, learn the language, WORK!, don't expect the taxpayer to support you, contribute to GDP, and respect the country you've decided to move to.

BTW, this is a little un-related, but I don't know where else to ask, but to Captain Capitalism and anyone else who might know, did Reagan cause the recession during his period? And if so, how? I thought he was supposed to be responsible for implementing free-market reforms, lower taxes, etc...and so forth into the American economy. How did this lead to a recession?

Captain Capitalism said...

Hey Dtrum,

I think that when you change systems or implement a large economic change there are going to be winners and losers, especially if you implement a free market type policy from a socialist one. All of the sudden the entrenched government economy loses growth and shrinks and the hard working or entreprenurial gain. Capital is allocated more efficiently, pulled out of inefficient ventures and put into profitable ventures. Thus the north grows and the south shrinks (I would also say in the case of Mexico a large drug trade benefits the north economically, though that wouldn't show up on national accounts).

Captain Capitalism said...

Hey Capitalist Pig,

Well, long story short with the Volcker Recession is the economy was inflationary. People will say because of oil prices, but I say that AND lack of hard work and labor productivity.

In anycase it became more important to fight inflation than stave off what was going to be an inevitable recession. SO they jacked up interest rates and forced the economy into a rather big recession. More info here;

Not really a REagan recession since it's origins had been growing since the 1970's and Carter, plus Reagan wasn't inargurated until 1981.

Anonymous said...

I see Capt, thanks for the information. Two other questions, one, who was the bigger taxer, Reagan or Carter? I keep seeing arguments about this, you know:

Carter was a massive taxer!

No, Reagan was the massive taxer!

Well my mom could beat up your mom!


The other one is I have read that Chile was made much more prosperous from free-market policies, but I have also read some stuff saying that the free-market policies of Friedman when implemented in Chile at first, just made the economy a lot worse, and it wasn't until government intervention was brought in to some extent that the economy improved (unemployment rate went down, inflation went down, etc...).

Is it that trying to implement a very free market economy that quickly sent the economy into the toilet completely, and some government intervention was needed to improve the situation, but overall the free-market policies still let the country be more prosperous, or did the free-market policies work fine by themselves?

I am wondering because I know trying to just change the former Soviet Union to a capitalist country quickly resulted in disaster, is that what at first happened in Chile?