General Discussion

on labor force availability, strength of training pipeline, economic development strategies and how policies affect these things. So I know my shit. I've been doing this upwards of 20 years.

According to the Economic Policy Institute, the North American Free Trade Agreement (NAFTA) resulted in the displacement of over 879,280 U.S. jobs by 2002. This was largely driven by a growing U.S. trade deficit with Mexico and Canada, which prompted firms to move manufacturing production, especially in the auto and electronics sectors, to lower-wage regions. And again, the agreement provided incentives for U.S. manufacturers to relocate production to Mexico to take advantage of lower labor costs.

See, that is how incentives work. Wall Street knows this so they worked to get Reagan elected, then HW Bush. NAFTA was conceived by the Reagan administration, negotiated by George H.W. Bush, and enacted by Bill Clinton in 1993, with strong backing from economists, multinational corporations, and key leaders in Canada and Mexico. It aimed to eliminate trade barriers, creating a free trade zone to boost economic integration. So it was spoon fed to us as a noble effort to create a worldwide middle class.

But that was actually bullshit, because Wall Street wanted to get away from American labor unions which they felt drove up labor costs excessively. With NAFTA they could move operations to Mexico where workers made pennies on the dollar American workers did.

Cost of goods sold did it. That's a line item in corporate SEC filings, you know. And it is important in every business because every business needs to earn a profit to survive. The problem here is that Wall Street operates on the doctrine of shareholder primacy, which was established in a 1919 MI Supreme Court ruling against Henry Ford in favor of the Dodge brothers, who sued Ford when he gave his workers big raises on the basis that it deprived them of profits to which they were entitled as shareholders. They won, and thus was born the legal doctrine of shareholder primacy.

This means that according to Wall Street fund managers, the 'right thing to do' was to pressure C-suite officers in publicly traded companies to cut cost of sales to boost PROFITS for shareholders. The problem is this is imbalanced because without workers there can be NO profits. But labor is considered a liability, hence the Wall Street fad of driving layoffs to artificially boost quarterly profits.

When NAFTA came along, it forced the market itself to offshore good jobs from America to places like Mexico and other nations further afield. So lots of good jobs in America disappeared over time, replaced by service industry jobs that do not pay nearly as well.

This is why, if you go into the Bureau of Labor Statistics and look at the productivity curve against wages, you will see that heavy automation and technology drove productivity way up while wages remained stagnant.

So, yes NAFTA did in fact hurt the American middle class. Big time. This is why Trump told his supporters that we need tariffs to level the playing field for workers. He was lying of course, but this is why. It was a compelling campaign slogan for people whose fathers and mothers lost their jobs as high-paying middle class jobs in manufacturing went away and they had to take serious downgrades in pay year after year, while prices went up and decreased their purchasing power.

It's the old Wall Street SQUEEZE and it is terrible because greed never rests. This is why we're so fucked now. Wall Street slowly corrupted our politicians so that corporations now pay around 9% of the government's tax revenue while we individuals pay over 80%. In pre-NAFTA days, pre-Reagan Chicago School trickle down economics, this ratio was around 35% corporations to 45% individuals. These policies have shifted the cost of running the American empire squarely on the shoulders of individual taxpayers, while policymakers at the federal level have slowly worked at Wall Street's behest to deregulate, privatize and gut New Deal programs like Social Security. They genuinely believe the market will take care of itself and should be unregulated and 'pure.' The only legitimate reason for the Federal Government to exist is to provide for the common defense. That's it.

Those are the people in power now.

So yes, NAFTA accelerated the demise of America's middle class on the heels of 1) the Taft-Hartley Act of 1947, which diluted the power of unions to strike in sympathy with other unions, 2) Lewis Powell's essay, An Attack on American Free Enterprise, which he wrote in 1971 at the behest of the US Chamber of Commerce, and which lays out the plan for a corporate takeover of the republic, which has happened, 3) NAFTA and 4) corporate tax cuts that have proven very damaging to our government's ability to function and certainly to enact and fun policies that actually HELP the middle class.

These idiots have run up a national debt of $35 trillion because you cannot cut taxes for a few rich people and corporations, which limits tax revenue and at the same time fund domestic programs that actually help Americans. That is why we are now being told we cannot 'afford' things like Social Security and Medicare.

I could go on, and in fact could teach a graduate level course on this stuff. NAFTA was not the sole culprit in the killing of the middle class. Rather, it is part of a toxic Wall Street mix that has made the rich richer by stacking the deck against all American wage earners.