Friday, October 31, 2014

HEINTZ: Free trade for the working class

By ANDY HEINTZ, For What It's Worth | 4/16/2014

I’m no fan of “class warfare,” a term that oddly seems to only be applied to the people who excoriate the wealthy for being, well, wealthy.

Some people earn their money through thrift, hard work and creativity, while others acquire their wealth through more dubious methods. To lump these people in the same group is as abominable and dangerous as demonizing an entire group based on race, gender or religion.

I’m no fan of “class warfare,” a term that oddly seems to only be applied to the people who excoriate the wealthy for being, well, wealthy.

Some people earn their money through thrift, hard work and creativity, while others acquire their wealth through more dubious methods. To lump these people in the same group is as abominable and dangerous as demonizing an entire group based on race, gender or religion.

That said, Republicans and other defenders of today’s economy often are too quick to use the “class warfare” label as a cudgel to verbally bludgeon critics of the extreme income inequality that exists in our country. To point out that the U.S. economy has been tilted to favor the rich over the working and lower class is not tantamount to declaring warfare on the affluent; it’s merely an opinion backed up by solid evidence.

The main problem with the vast income inequality that stalks America today is that it can’t, although many have tried, be blamed on the usual excuses trotted out by defenders of the status quo: globalization, automation and free-market economics. In reality, government policies are a big reason before-tax income has been redistributed upward for the past couple of decades. For example, NAFTA-style, free-trade agreements have put working class people in direct competition with some of the lowest paid workers in the world while the professional class (doctors, lawyers, etc.) hasn’t been exposed to competition with its lower-paid counterparts.

To make matters worse, American’s high-dollar policy has had the affect of making U.S. exports more expensive and foreign imports less expensive. This essentially subsidizes foreign products that enter the United States, while making expensive U.S. products less attractive to consumers. So while working class and poor people lose their jobs or are forced to take lower-paid jobs because their jobs have been outsourced, the wealthy have the luxury of buying cheap goods made overseas.

There are, however, alternative free-market and free-trade policies that could be pursued that would be much more advantageous to working people. For example, the U.S. Treasury in coordination with the Federal Reserve Board could bring the value of the dollar down against other currencies, a move that would create millions of U.S. manufacturing jobs. In addition, the government could negotiate free-trade agreements in a manner that also exposed the professional class to international competition.

One way to achieve this would be to weaken or eliminate the barriers that keep highly qualified foreign doctors and lawyers from entering the United States while still ensuring quality standards.

“For example, allowing doctors who have been licensed in countries with comparable standards to be automatically licensed in a given state could potentially give many more doctors the opportunity to practice in the state,” economist Dean Baker writes in his book, “The End of Loser Liberalism: Making Markets Progressive.”

Since foreign-born doctors make less than their U.S. counterparts and ostensibly would be willing to work for less play, their presence in America would push doctor’s wages downward to the point where their pay would more closely resemble what doctors make in other developed countries. This would curb healthcare costs and save patients money.

Another free-trade, pro-market way to save money for working people would be to allow Medicare beneficiaries to get highly complex medical procedures performed overseas, where such procedures cost of fraction of what it costs here in the states. Baker writes that savings gained from having these procedures done overseas could be split between the government and patient. This medical trade would provide people with more retirement income and would lower health-care costs overall.

Free trade should benefit everyone, not just the wealthy. Structuring trade in a way that helps working and lower income people keep more money in their pocket would be a superior alternative to the status quo.

Andy Heintz is a political commentator. He previously was a Herald staff writer, now a sports reporter at the Ottumwa Courier, Ottumwa, Iowa. Read his blog at http://www.orble.com/just-one-mans-vision/ and follow @heintz23 on Twitter.

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