A transcript of the speech - a radio address to the nation from May 1987 - is available here. In it, Reagan touts the benefits of both exports and imports and explains how free trade spurs competition, productivity and innovation. He also rejects protectionism outright. Here's the money paragraph:
When you hear talk about a tough trade bill, remember that being tough on trade and commerce, the lifeblood of the economy, will have the worst possible consequences for the consumer and the American worker. First, it will drive up the price of much of what we buy. But worse than that, it could drag us into an economy-destroying trade war. I'm old enough to remember the last time a so-called tough trade bill passed Congress. It was called Smoot-Hawley, and it helped give us, or at least deepened, the Great Depression of the 1930's. Well, the way up and out of the trade deficit is not protectionism, not bringing down the competition, but instead the answer lies in improving our products and increasing our exports. The Government should work to create the conditions in which fair trade will flourish. We should be trying to foster the growth of two-way trade, not trying to put up roadblocks, to open foreign markets, not close our own.
By Dan Ikenson's and my unreasonably high standards, Reagan's speech certainly isn't a perfect 10, most notably because he harped on the trade deficit and glorified "fair trade" (although in his defense, it's possible that the term "fair" hadn't become the four-letter word that it is today). But the speech was still a good, solid 7.5, particularly given that the President's very first point was on the benefits of trade for American consumers, and that he mentioned removing obstacles to imports and the inevitably deleterious effects of global trade disputes. And compared to most pro-trade politicians these days (whose singleminded, troublesome focus on exports earns them maybe a 5 on the Lincicome-Ikenson scale), Reagan's speech deserves more than a little love.
Exit question: Since Reagan's era, the United States has become far more globally integrated and the benefits of free trade are even more universally accepted among (and promoted by) American businesses and economists. So if Reagan - who, again, was certainly not a free trade dogmatist - could avoid the self-defeating rhetoric of mercantilism when trying to sell free trade and denounce protectionist, then why can't today's elected officials at least do the same? Why have our politicians' sales pitches regressed?
I have my theories, but they'll have to wait for another blog post.
I have my theories, but they'll have to wait for another blog post.
2 comments:
Bastiat was the ultimate salesman. People have had almost 170 years to understand these concepts. And yet, I had a classroom of people questioning the conclusions of the parable of the broken window, convinced that maybe the delinquent boy DID do a good deed.
Eh, maybe I'm a cynic. I think you're allowed to do that when you turn 40.
Is one of your theories that since the end of the Cold War, free trade salesmanship just hasn't been as important to Presidents?
I was only 7 at the end of the Reagan presidency. I once watched a typical early-70s archived news broadcast and was thrilled to hear a report about American interests depending on the growth of foreign capitalist economies (South Vietnam was the focus of this broadcast). Nowadays foreign economic growth is never presented by the major networks or politicians without stoking fears about US unemployment and environmental catastrophe.
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