Today’s blog come from Chris Conley’s sleeping compartment on the eastbound Lake Shore Limited to New York. I’m on vacation until Tuesday, July 20. I will blog again later this week.

NEWS BLOG (WSAU) From the window of Train 48 you can see the shores of Lakes Michigan, Erie and Ontario. Later in the trip you’ll ride along the route of the Erie Canal banks of the Hudson River. It’s all very scenic.

This trip also takes you through the American rust belt. You see what’s left of the great stockyards and rail yards of Chicago, the steel mills and blast furnaces of Indiana, the factories and warehouses of Erie and Buffalo. Most of it is boarded up and no longer in use. These are businesses that sprung up along rail lines on purpose generations ago. This is also an industrial part of our past that may never come back. What used to be made in those factories is somewhere overseas.

I remember economic theory in college where there were lessons on the benefits of international trade. If you believed in supply side economic theory, trade was the only way to grow your economy beyond domestic capacity. But that was all based on the assumption that both sides had something the other wanted. Today most of our trading partners don’t get raw materials or other manufactured goods from us… they get U.S. dollars. And they use those tremendous stockpiles of cash to buy our infrastructure.

A generation ago Toyota and Honda were expanding. Ronald Reagan was president. Those Japanese automakers were told the price of entry into the U.S. car market was that a certain percentage of their cars had to be built here. There were quotas and tariffs on foreign cars. Those companies still built U.S. factories, and still did very well in the U.S. marketplace. Yet today those policies would seem protectionist. Others would say fighting for U.S. jobs, even if they are provided by a foreign corporation, is economic patriotism. We don’t do that anymore. Companies build things anywhere but here, and we happily let them sell at low prices to American consumers.

As I look out my train window, I will probably speed past a hundred or more boarded up factories. And I wonder what Reagan would have thought of NAFTA. Would he have been a "free trader" by today's standards?

Chris Conley
Operations Manager, Midwest Communications-Wausau
7.12.10