Several days after Thanksgiving in 1988 on November 26 (31 years ago today), President Ronald Reagan discussed the importance of international trade during his weekly Saturday radio broadcast. In the video above of Reagan’s radio address, he made the following comments:
Over the past 200 years, not only has the argument against tariffs and trade barriers won nearly universal agreement among economists, but it has also proven itself in the real world, where we have seen free trading nations prosper while protectionist countries fall behind.
America’s most recent experiment with protectionism was a disaster for the working men and women of this country. When Congress passed the Smoot-Hawley tariff in 1930, we were told that it would protect America from foreign competition and save jobs in this country – the same line we hear today. The actual result was the Great Depression, the worst economic catastrophe in our history; one out of four Americans were thrown out of work. Two years later, when I cast my first ballot for President, I voted for Franklin Delano Roosevelt, who opposed protectionism and called for the repeal of that disastrous tariff. Ever since that time, the American people have stayed true to our heritage by rejecting the siren song of protectionism.…
The record is clear that when America’s total trade is increased, American jobs have also increased, and when our total trade has declined, so have the number of jobs (see chart above showing the close relationship over the last 80 years between the log of US jobs and the log of US total trade, with a correlation coefficient of 0.994).
Part of the difficulty in accepting the good news about trade is in our words. We too often talk about trade while using the vocabulary of war. In war, for one side to win, the other must lose. But commerce is not warfare. Trade is an economic alliance that benefits both countries. There are no losers, only winners; and trade helps strengthen the free world. Yet today protectionism is being used by some politicians as a cheap form of nationalism, a fig leaf for those unwilling to maintain America’s military strength and who lack the resolve to stand up to real enemies—countries that would use violence against us or our allies.
Our peaceful trading partners are not our enemies. They are our allies. We should beware of the demagogues who are ready to declare a trade war against our friends, weakening our economy, our national security and the entire free world. All while cynically waving the American flag. The expansion of the international economy is not a foreign invasion; it is an American triumph, one we worked hard to achieve, and something central to our vision of a peaceful and prosperous world of freedom.
MP: The current protectionist/mercantilist president occupying the White House who is waging a destructive trade war with our trading partners, while “cynically waving the American flag” should pay attention to his predecessor from 30 years ago. Unlike Tariff Man’s “cheap form of nationalism and “economic illiteracy on stilts” when it comes to international trade, President Reagan understood the basics of trade and the importance of trade to America’s economic growth and prosperity. Reagan also understood that Trump’s protectionism, economic illiteracy, and trade war are losing propositions that are weakening America, while free trade is a guaranteed and winning formula for economic success.
HT: Jacob Plott’s post “A Thanksgiving Day Trade Message for the Nation’s Taxpayers” on the National Taxpayers Union Foundation blog.
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