Read Online The Betrayal of the American Dream by Donald L. Barlett, James B. Steele - Free Book Online Page B

start on the road toward reducing this enormous trade deficit.” Democratic senator Bennett Johnston of Louisiana said that the trade law sent a forceful message to the rest of the world: “When the United States and its products are discriminated against by other countries, we are not going to take it lying down; we are going to do something about it.”
    It did no such thing. But that’s because Congress’s actions ensured that the country’s workers would have to continue “to take it lying down.” Five years later, another trade bill to open foreign markets was once again back before Congress. This was NAFTA (the North American Free Trade Agreement), a treaty that knitted together the economies of the United States, Mexico, and Canada by eliminating all tariffs among them to promote the free flow of goods. Even though U.S. manufacturers of autos, machinery, apparel, electronics, and many other products were sending a steady stream of jobs to Mexico, the United States was selling slightly more goods to Mexico than it bought, so in 1993 the United States had a relatively tiny trade surplus with Mexico of less than $2 billion.
    Supporters seized on this to mount their most grandiose case ever: by lowering tariffs, NAFTA would be a bonanza for American exporters and provide high-paying jobs to U.S. workers. “We will have greater access to a rapidly expanding market that hungers for U.S. consumer products,” contended a bullish Republican representative, Jim Kolbe of Arizona. But with millions of manufacturing jobs already lost and small businesses hurt by imports since the 1970s, many worried that NAFTA would accelerate the slide, and fierce opposition mounted against the trade pact.
    Congress brushed aside concerns about jobs. “NAFTA will provide trade reforms that will lift all boats with a rising tide of prosperity,” proclaimed Senator Orrin Hatch, the Utah Republican. “The United States will enforce its own domestic trade laws to deal with unfair trade practices.” Democratic senator John Breaux of Louisiana predicted that American workers “will prosper and increase in numbers as a result of a free-trade agreement.” In casting his vote for NAFTA on November 20, 1993, Republican senator Phil Gramm of Texas said that America would one day look back fondly on the day NAFTA was approved: “I think as we look back, people a decade from now will have a hard time understanding what was controversial about NAFTA.”
    Dead wrong. As usual, Gramm and the others were speaking for the super-rich ruling class and Wall Street. At the time, Gramm’s wife, Wendy, was chairman of the Commodity Futures Trading Commission (CFTC) and President Reagan’s “favorite economist.” It was during her tenure that the CFTC exempted the trading of energy derivatives from regulation. When she left the CFTC, she took a seat on the Enron board of directors. Thanks in part to the unregulated derivatives, Enron collapsed, taking with it the jobs of thousands of employees and wiping out their retirement accounts. It was the canary in the coal mine for what would prove a few years later to be the largest economic failure since the Great Depression.
    A decade after NAFTA’s passage, the trade agreement was more controversial than ever. The claims of its supporters turned out to have been hollow, and the fears of its opponents came true. The much-vaunted trade surplus with Mexico that backers used to engineer NAFTA’s passage quickly evaporated, replaced by a trade deficit that became the norm. The cumulative deficit with Mexico had ballooned to $698 billion by the end of 2011. Sometime in the next five years the total will approach $1 trillion, and another major milestone for American jobs deliberately terminated by the U.S. Congress will have been reached.
    Rather than stimulate exports to Mexico, NAFTA triggered a rush of American companies to invest south of the border, and Mexican imports to the States surged. In the five years