Freer Trade Makes Us Richer. Protectionism Makes Us Poorer.

Many of my friends and acquaintances disagree with Donald Trump's "trade war" antics. His constant, inexplicable flip-flops and 180-degree turns make them nervous, and they can see that his unconstitutional tariff policy (the US Constitution gives only Congress the power to tax) is already costing them money.

But many of my friends, including those on the putative "left," also support tariffs and "protectionism" in general. They dislike the constant uncertainty that comes with having Trump in charge of the matter, but they've spent decades complaining about how "free trade" has "hollowed out the middle class" and "sent American manufacturing abroad" ever since the 1994 implementation of the North American Free Trade Agreement (NAFTA).

They want SOMETHING done, usually couching that desire in calls for an "industrial policy" that brings factories back from Latin America and Asia, offering them the same low prices on the same cheap goods, only with "Made In America" on the labels.

Before addressing their complaints, let's get one thing straight: NAFTA was not "free trade." It was government-managed trade, just like before, only on freer terms. It cost some Americans their jobs, and created other jobs for some Americans too.

Example: Once NAFTA came into effect, the company that made French's mustard closed its plants in Mexico and Canada and expanded its plant in Springfield, Missouri, creating hundreds of new union jobs.

Perversely, as a union worker at that plant, I occasionally worked in a warehouse that had previously been a television factory before that company moved its production overseas.

Jobs came, jobs went under the fake "free trade" agreement. But what has the American economy looked like since?

Well, the real median US wage went up from $30,200 per year in 1993 to $42,220 in 2023 according to the Federal Reserve Bank of St. Louis. "Real" means "adjusted for inflation." Both of those numbers are in 2023 dollars. Americans are 28.5% wealthier now than we were the year before NAFTA went into effect.

Manufacturing output? Also up about 28% since 1993. Manufacturing employment went up, not down, with NAFTA. It began falling in the early 2000s -- due not to "free trade," but to increased automation.

What DIDN'T go down was employment in general. As of last month, the US unemployment rate stood at 4.2%, below the 5% rate that economists think of as "full employment" (there are always SOME people looking for jobs, and some people who aren't looking for jobs).

More people are working -- and they're mostly working in jobs that don't involve eight hours a day at a sewing machine, or on a forklift, or wrangling a welding rig or rivet gun. If you've never done factory work, believe me when I tell you that's a GOOD thing.

The real problem with Trump's trade war nonsense isn't that he's a mercurial nitwit, although that's true.

The real problem with Trump's trade war nonsense is that freer trade makes us richer and economic "protectionist" schemes make us poorer.

But you don't need me to tell you that, do you? You're learning it right now.