TONELSON: Failed trade policies a good focus for tea party

ANALYSIS/OPINION:

The battle for the “tea party” movement’s hearts and minds hasn’t yet extended to trade policy, but how far off can that be?

After all, dealing with the world economy has often angrily divided conservatives since the Cold War ended. Future decisions on trade and related policies will surely affect U.S. employment and living standards — for good or ill — in increasingly prominent ways as the economic slump drags on. And clashing sentiments have already appeared in tea party ranks.

From FreedomWorks, the advocacy group that’s helped propagate the movement, tea party activists have heard, “Trade in goods, services, and investment capital improves the quality of life for all people … Free trade … is also an issue of freedom.” But Fox News’ Glenn Beck, a hero to many tea party activists, has warned of a “U.S. Foreign Trade Bomb: $400 billion in trade deficits are added each year, and foreigners now own $2.5 trillion of America. …”

Closer to the grass roots, Cincinnati tea party member Ken Close, urges President Obama to “improve the economy,” by inter alia creating “rules promoting increased foreign trade.” Yet the Worcester, Mass. tea party recently heard academic economist Nicholas Sanchez upbraid U.S. China trade policies for helping to inflate the national credit bubble that triggered the financial crisis and ensuing recession.

Limiting government obviously is what’s floating most tea party activists’ boats, and many just as obviously prize the movement’s ideological “work in progress” status. But there are at least three powerful reasons for the tea party activists to focus on overturning America’s failed outsourcing-focused trade policies.

First, the evidence that these trade policies underlie the economic crisis is too overwhelming to ignore legitimately. For too long, Washington has indiscriminately expanded trade with countries rich and poor that don’t share America’s spendthrift ways. Because these trade competitors were thrilled to subsidize U.S. profligacy in order to amass productive capacity (i.e., real wealth), the nation is strapped with too many unpaid bills, too little income, too few opportunities to earn it, and a mountain of debt — including the government debt that so rightly alarms the tea party movement.

Powerful corporate importing and outsourcing interests, however, still profit from these dangerously lopsided economic flows, and lavishly bankroll both Republican and Democratic officeholders to protect the status quo. These special interests must be overcome or Americans will remain debtors for generations.

Second, as the FreedomWorks folks insist, the freedom to buy and sell any legally produced good or service should be sacrosanct. But because excessive debt is so dangerous, the freedom to buy endlessly on credit scarcely deserves the same status. And tragically, even where the opportunity existed, market forces failed to mete out timely punishment, and often encouraged recklessness.

Unfettered trade with foreign protectionists also has empowered and enriched many of freedom’s worst enemies. Economically, the verdict couldn’t be clearer. Since the mid-1990s, when Bill Clinton and Congress’ Republican leaders took the wraps off trading with China, the People’s Republic of China (PRC) has more than tripled its share of world merchandise exports (to 9.1 percent), sharply limited its imports, and amassed trillions of dollars in foreign-exchange reserves, including lots of U.S. debt. And behind China’s successes are the world’s most protectionist trade policies, along with feckless American responses.

Worse, many of the PRC’s largely illicit trade earnings continue flowing into its rapidly rising military budget. And this as the Pentagon has officially labeled China a major potential threat to U.S. global interests. Any tea party activists expecting these developments to aid the cause of liberty at home or anywhere abroad, please raise your hands.

In other words, some limits are needed on foreign commerce — which brings up the third reason for tea party targeting of trade policies, and one vital for a movement so avowedly inspired by the Founding Fathers. They completely agreed. As documented exhaustively by Alfred E. Eckes’ authoritative history “Opening America’s Market,” most recognized that active government involvement in trade flows was essential for building and maintaining the kind of productive, innovative economy that characterizes any truly great nation.

In large measure, the national failures recognized by the tea party activists — and so many others — have multiplied precisely because these common-sense economic truths have not remained self-evident to America’s shortsighted political and business elites. By helping to spark a revolution in U.S. trade policy, the movement could play a genuinely historic role in restoring America’s greatness.

• Alan Tonelson is a research fellow at the U.S. Business and Industry Council, a national business organization whose more than 1,900 members are mainly small- and medium-sized domestic manufacturers. Author of “The Race to the Bottom,” Mr. Tonelson also is a contributor to the council’s Web site www.americaneconomicalert.org.