Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Barr McClellan: "Malaise has returned"
In an article in the August 22 Foreign Policy Journal (Open Trade Season: Ten Steps for Job Creation), Barr McClellan advocates balanced trade as the way to restore U.S. economic growth. McClellan is the former personal lawyer of LBJ and the co-author of Made in the USA: Corporate Greed, Tax Laws and the Exportation of America's Future. Here is his realistic assessment of where the economy is right now:
The impact of so-called free trade and its huge imbalances has been in business and jobs. After two years of grants and incentives, the economy is dead, there are no jobs, unemployment is over 9% and malaise has returned.
He advocates a ten step program to bring more jobs to the United States. Tariffs only figure in one of his steps:
5. Open trade requires parity. America is open, disclosing the terms for global trade. Other nations have to reciprocate by adopting similar terms. If not, America should impose similar restrictions.
Export subsidies figure in another:
6. Open trade requires a level playing field. If other nations refuse to remove restrictions on American exports, the positive alternative is to reduce the burden on American companies. We compete on equal terms, and we will win.
He also advocates reducing corporate taxes:
10. Promote American free enterprise. This is perhaps the most important and the most ignored. On request, we tell Washington what should be done. Key examples are reducing corporate taxes and expensing capital improvements. Washington ignores the advice. There are many additional steps to promote the private sector.
During the last week, three independent thinkers wrote commentaries recommending that we deal with our growing trade deficits: Nobel Prize winning economist Paul Krugman, former Reagan advisor Paul Craig Roberts, and now former LBJ advisor Barr McClellan. Each has advocated his own solutions.
But my father, son and I are the only ones with a solution that would enforce the IMF agreement, comply with WTO rules, reduce imports, expand exports, end mercantilism, and help to balance the budget, all at the same time -- the scaled tariff.
Journal of Economic Literature:
Atlantic Economic Journal: