Let's now climb back in the hole by deregulating the 'players'

To the editor,

That old New Hampshire motto is sort of confusing for some of us who live here and a lot of people who visit for vacation. They say, "Free of what?" Certainly not free of trade. We are constantly fretting about trade because the business profits tax is one of the main income sources for the state coffers. It's one of the well kept secrets of those who take the so-called pledge.

Those same people are constantly bleating about how NAFTA has taken our jobs overseas. The point that they miss is there is a collision occurring between protectionism and the expansion of global markets. The recession and a large trade deficit are feeding into the debate about restriction of trade.

During our history, tariffs have not served us well. One of our first uses of the tariff was the Tariff Act of 1828. The industrial north was able to get it passed to protect their factories. The south, with very little manufacturing, was faced with disaster. The two main products were cotton and rice. Prior to the tariff their main trading partners were in Europe. They lost a good portion of that market due to the European reaction to the tariff. It was one of the "other" causes of the Civil War.

During the next hundred years, we periodically relied on tariffs with very little success. During the Roosevelt administration in the thirties, the Reciprocal Trade Agreements Act was passed. After the Second World War, additional global institutions came into being. Chief among those was the International Monetary Fund. It came out of a meeting at the Mount Washington Hotel in Bretton Woods. The IMF is charged with safeguarding the stability of the international monetary system. That is a tall order. Some of its members have been less than honest in their accounting practices and governance.

The so-called "Cold War" was brought into being during the Eisenhower administration. One of the effective tools that the "free world" had was the trade with the emerging nations of Africa, Asia and South America. Although the Soviet Union and China tried mightily to compete with the free economies, their efforts fell short. They managed to distract the west with Korea and Viet Nam, but the economic giants of the free world proved too attractive to the rest of the world. China is still trying to make communism work but trade with the rest of the world is making that difficult for them.

In this current U.S. election, one of the political choices is whether to restrict or expand trade. As we have seen in the last few years, when the cost of doing business across borders goes down the pressure to permit more of it goes up. What some fail to see is that trade is going to occur in the world, with or without us. Withdrawing from the global marketplace would be a very bad move. Fact of the matter is, we couldn't, even if we wanted to. Trade may enable poorer nations to grow faster than we are but we gain from the enterprise as well. What we should be concentrating on is making sure we have a stable currency. Why; because the U.S. dollar is the standard currency for trade throughout most of the world.

What happened in the past 20 years should not be repeated. The control framework of the national and international financial institutions was relaxed. Deregulation of investment banks, insurance, mutual funds and global accounting standards spawned a group of manipulators. The sole purpose of those "players" of the markets was to extract huge sums from the system. The near collapse of the economy was the result. We are almost out of that hole. Let's not visit there again!

Bill Dawson

Northfield