Tuesday, February 19, 2008

KC Southern, Banking on NAFTA

Local open borders adovacate and fellow blogger Tony of Tony's Kansas City is heralding a USA Today article that is calling KC Southern a "major beneficiary of surging trade between the USA and an increasingly prosperous Mexico" as proof that globalism, free trade, and open borders work.

While it is true that KC Southern has seen their revenues and profits increase as US imports increased, this in no way proves that globalism and unbalanced trade is good for the economy or good for Americans. "In fact, between 1997 and 2006, only five of the 114 industries examined in a U.S. Business and Industry Council report gained market share against import competition." 1 From 2001 to 2006, the US lost 2.9 million manufacturing jobs according to Paul Craig Roberts and analysts Charles McMillion and Ed Rubenstein.

In addition, a study by Borjas, Freeman, and Katz found that "almost half of the 10.9 percentage point decline in the relative wage of high school dropouts observed between 1980 and 1995 can be attributed to immigration." 2

Currently US consumers spend the majority of their money on foreign imports. "Imports account for 92 percent of our non-athletic footwear, 92 percent of audio video equipment, 89 percent of our luggage and 73 percent of power tools," 3 just to name a few.

But the problems with NAFTA and other so-called free trade agreements don't end in America. Mexico's standard of living is lower than it was in 1993, before NAFTA went into affect.

While Tony thinks that less jobs, lower wages, and less economic growth are positive indicators that free trade is working, the truth is that the only ones prospering are affluent free-traders, whose wealth rests in the stocks of multinational companies, that are growing that wealth at the expense of the American worker.

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