Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
A Simple Way to Preserve Your Wealth Amid Uncertainty - 11th Aug 20
Precious Metals Complex Impulse Move : Where Is next Resistance? - 11th Aug 20
Gold Miners Junior Stcks Buying Spree - 11th Aug 20
Has the Fed Let the Inflation Genie Out of the Bottle? - 10th Aug 20
The Strange Food Trend That’s Making Investors Rich - 10th Aug 20
Supply & Demand For Money – The End of Inflation? - 10th Aug 20
Revisiting Our Silver and Gold Predictions – Get Ready For Higher Prices - 10th Aug 20
Storm Clouds Are Gathering for a Major Stock and Commodity Markets Downturn - 10th Aug 20
A 90-Year-Old Stock Market Investment Insight That's Relevant in 2020 - 10th Aug 20
Debt and Dollar Collapse Leading to Potential Stock Market Melt-Up, - 10th Aug 20
Coronavirus: UK Parents Demand ALL Schools OPEN September, 7 Million Children Abandoned by Teachers - 9th Aug 20
Computer GPU Fans Not Spinning Quick FIX - Sticky Fans Solution - 9th Aug 20
Find the Best Speech Converter for You - 9th Aug 20
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Free Trade and the Tea Party: Puppets or Rebels?

Politics / US Politics Mar 13, 2011 - 04:47 AM GMT

By: Ian_Fletcher


Best Financial Markets Analysis ArticleMy job deprives me of the luxury of partisanship, as I have to reach out to both sides on the issue of free trade--a disastrous policy one can give impeccably liberal or conservative reasons to be against. So I can't offer any opinion of the Tea Party movement per se. But I can tell you that the way they're handling the issue of free trade reveals a lot about them.

Over the last year, I've interacted with the Tea Party about the issue at both the local level and with some of their leadership. And I've observed a few things.

The main thing is just how utterly conflicted they are, in two very different ways.

The first way is simply that the base of the Tea Party has views of free trade very different from its Washington leadership, and very different from the Republicans they've elected to Congress. (In this respect, the Tea Party's base is not all that different from a lot of disappointed liberals who voted for Obama.)

Polls show that 61% of the grass roots of the Tea Party think free trade agreements have been bad for the country. (This is not a perfect proxy for free trade per se, but it's close enough to make the point, especially when these agreements are the flashpoints of the issue.) But there's no sign of such skepticism in their leadership, which seems to think that it's leading the Ayn Rand Party, not the Tea Party. The leadership is utterly gung-ho for new free trade agreements with Korea and now Panama and Colombia.

More importantly, the Tea Party's grass roots are themselves conflicted--between what they believe, and what they want.

What they believe about economics, if you ask them, is similar to what they say they believe about many other issues: America should return to this country's founding principles, get the overweening government out of the way, etc. It's the familiar classical liberal vision of society.

But if you ask them what they want in economics, i.e. what outcomes they want to see happen, you get a very different story: they want good jobs with good wages, an industrial base strong enough for us not to be beholden to foreign nations, no more endless accumulation of foreign debt, etc.

It's 1776 vs. 1956.

The problem here is that A doesn't follow from B. The reality, in both this country and abroad, both today and a hundred years ago, is that prosperous economies do not come from a pure less-government strategy. While government must respect its limits, every nation that has became a developed nation--and every nation that has stayed that way--has done so thanks to a long list of proactive government policies designed to make this happen. Laissez faire is simply false economic history.

This isn't just a liberal or Democratic insight, though obviously FDR and the New Deal would be obvious examples of effective government interventions. It's also a Republican insight, thanks to the interventionist policies of great Republican presidents like Lincoln ("give us a protective tariff and we will have the greatest country on earth") and Teddy "the trustbuster" Roosevelt.

Now here's where the Tea Party actually has a fighting chance to sort out its own conundrum, because, for all its intellectual limitations , it does at least claim to take history seriously. (By the way, the free trade issue will help reveal if this is, in fact, true.)

So if Tea Partiers ask, for example, what the Founding Fathers really thought about free trade, they will find out very fast that they were explicitly against it, thanks to Alexander Hamilton, America's first Treasury Secretary and the one serious economist among the Founders.

And if Tea Partiers want to get back to the original intent of the Constitution, Article I, Section 8 of the Constitution says plain as day that Congress has the power "to regulate commerce with foreign nations."

Clearly, a lot of the Tea Party grass roots already gets this. So--can this eventually put an end to the paradox that they have mostly elected Republicans who support free trade once in office? Obviously, that's a tough nut to crack, because conservatives in this country have a long history of being used as electoral cannon fodder by a corporate-centered Republican establishment that despises them and sniggers at their beliefs behind their backs.

But the Republican establishment doesn't have a magical grip on the Republican party. It has a grip that depends on certain finite kinds of institutional and financial power, and it has been challenged before. The most famous example, of course, is the revolt against liberal "Rockefeller" Republicanism that nominated Barry Goldwater and eventually put Ronald Reagan in the White House.

The Republican establishment has already lost a few battles in Republican primaries against the Tea Party. So it could quite possibly lose control of the party.

America's economic situation probably has to get quite a bit worse before trade will boil hot enough as an issue for this to happen, but this may, of course, be in the cards. And obviously there are huge risks involved whenever a populist insurgency takes over a party, as insurgents generally lack a lot of the political skill and prudential judgment that establishments, for all their flaws, bring to the table.

But yes, there is hope, and--to answer some of my liberal friends--no, the Tea Party is not entirely a puppet show orchestrated by selfish billionaires. Neither, as shown by its surprising willingness to countenance cuts in defense spending, is it a pack of mindless right-wing drones incapable of new thinking.

Somebody is going to have to save this country's economy from free trade, and honestly, I don't really care which end of the spectrum does it. If it turns out to be a right-wing-populist insurgency, liberals will have only themselves to blame for not having gotten the job done first.

Ian Fletcher is the author of the new book Free Trade Doesn’t Work: What Should Replace It and Why (USBIC, $24.95)  He is an Adjunct Fellow at the San Francisco office of the U.S. Business and Industry Council, a Washington think tank founded in 1933.  He was previously an economist in private practice, mostly serving hedge funds and private equity firms. He may be contacted at

© 2011 Copyright  Ian Fletcher - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules