By: Frank Shannon

It should be clear by now to even the most casual observer that this year’s election cycle is all about the trade deficit and outsourcing middle class jobs, which has devastated the middle class.  It is hard for even the most ardent supporter of establishment candidates to deny that the public is fed up with terrible trade deals that enrich multi-national corporations at the expense of American workers and small businesses that have employed them.

Non-establishment Republican candidates’ (Cruz & Trump) combined poll numbers are in the 70-80% range depending on the particular poll.  Poor old Bernie on the Democrat side is doing a good job illustrating the anger, but he faces an even more daunting task considering the power held by the super delegates.  For the Washington Cartel, “the jig is up.”  The public is tired of the promises to make better trade deals and to address currency manipulation.  We are tired of political games and deception while our middle class is gutted and job growth continues at a glacially slow pace.

Cruz has half of the answer to America’s job woes.  His Value Added Tax, which he calls a “Business Flat Tax,” is exactly the tax reform needed to mitigate this advantage our trading partners have over America.  Trump advocates for the other half with his call for standing up to currency manipulators.

No matter how this election turns out, it will be difficult for the political elites to put this genie back in the bottle.  The truth is out and will only be more widely understood as the pain on Main Street continues.  Candidates who continue to support more bad trade deals will face an uphill battle.  Current office holders who refuse to listen to the voters will put their political careers in jeopardy.

Spending by President Obama is blamed for running up the debt, but a large portion of the national debt (more than half) is due to our trade deficit.  We can hold him accountable for not cutting expenses once we lost 30% of our international market share, but I choose to blame him for not keeping his campaign promise of fixing the outsourcing of American businesses and jobs.

From 1989-2015 the cumulative trade deficit is almost $10 trillion.  More than $8 trillion is from the 2001-15 period.   Looking at goods only, the last 7 years resulted in a deficit of $4.8 trillion — almost half of the 27 year total deficit.  Certainly, with more balanced trade we would have a reduced federal deficit.  With a smaller trade deficit:

  • Employment and wages would be higher, adding to government revenue from income, sales and payroll taxes.
  • Spending on unemployment benefits and family assistance would be lower.
  • The Federal government would have to borrow less.
  • Social security would be more solvent.

There can be no doubt that the phenomenon of Trump (R) and Sanders (D) drawing in millions and millions of new voters can only be attributed to the fact that on trade policy they both agree with the American voter that we need to renegotiate our trade relations with several nations, especially the Asian Tigers.

In January 2000, President Bill Clinton boldly promised China’s inclusion in the World Trade Organization (WTO):

…is a good deal for America. Our products will gain better access to China’s market in every sector from agriculture, to telecommunications, to automobiles. But China gains no new market access to the United States.

None of what President Clinton promised came true. Since China joined the WTO, Americans have witnessed the closure of more than 50,000 factories and the loss of tens of millions of jobs. It was not a good deal for America then and it’s a bad deal now. It is a typical example of how politicians in Washington have failed our country.

From the Donald Trump website:

The most important component of our China policy is leadership and strength at the negotiating table. We have been too afraid to protect and advance American interests and to challenge China to live up to its obligations. We need smart negotiators who will serve the interests of American workers – not Wall Street insiders that want to move U.S. manufacturing and investment offshore.

Bernie Sanders echoes Trump’s refrain.  Both are drawing millions of voters and Trump is drawing from across the entire political spectrum.  Yet establishment leaders in both parties are desperate to keep the Ponzi scheme going.  Democrats appear able to tamp down the uprising – Republicans not so.  This issue alone may shake the Republican Party to its core, ensuring future populist anger until the party reforms itself.

Trump’s support is actually understated as he draws heavily from independents and some Democrats.  Pollsters only poll Republican primary voters.  An interesting question is what happens to some of Sanders’ supporters when he finally suspends his candidacy, which is very likely.

Enter the Trans Pacific Partnership and another bad deal waiting in the wings.  The Republican leadership in Congress twisted itself in ways unseen until now to pass the authority for President Obama to negotiate on Congress’ behalf for this deal.  Congress then has a couple of months to inform the public (not happening) before they can approve it for President Obama’s signature.  What strange bedfellows – Republican leadership and President Obama trying to pass legislation that the public is against by huge margins!

Now McConnell and Ryan are saying that there won’t be a vote until after the election.  They don’t want their minions to have to go home to angry voters and explain why we should want another job-killing trade agreement.  Obama wants to pass this before the election to expose pro-TPP Republicans to angry voters on this issue.

Some day we may once again have political leaders that tend to the nation’s interest rather than to special interests who fund them and keep them in power.

Frank Shannon served in the U.S. Army, was an engineering/operations manager for AT&T for 27 years, was the owner of a small manufacturing business for 23 years, served as Colorado Chair of the Coalition for a Prosperous America and moved to Mesquite in 2013.