By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – If you are at all confused or even on the fence about free trade, I highly recommend you check out the Federal Reserve Bank of Dallas' 2002 annual report essay, titled, "The Fruits of Free Trade." I'm Maxine Shapiro with KERA Marketplace Midday.
At a time when more and more consumer rights are taking the backseat to big business interests, it is undoubtedly a breath of fresh air to know the prestigious Dallas Fed is watching out for our well-being. Somehow this 50-page report has taken the politics out of free trade. They've simplified this hotly debated topic by using straightforward examples from our daily lives. Here's a couple:
The grocery store. A lot of what we purchase is domestically produced - potatoes from Idaho and beef from the rancher a few counties away. But then there's the potpourri of foods we import from other countries. For most of these items, we don't have the proper climate. That's not to say if we really wanted to limit our trade and protect ourselves we couldn't do it. For instance, take the banana. The report illustrates, if we really wanted to - we could grow our own. Of course, reproducing the tropical growing conditions would take huge capital investments. Glass-domed greenhouses, artificial lighting and voila - the most expensive banana in the world! But we would be self-sufficient! An absurd example for fruit, but what about oil?
The Fed paper points out our growing dependence on foreign oil, and the increasing outcry by "isolationists" for America to "quench its own thirst for gasoline." Yeah, right?! We could always produce our own oil, but at a much higher cost to the consumer. I'll save you the arithmetic on how they got there, but the outcome of oil self-sufficiency would mean $7.50 for a gallon of gas while driving nearly 60% less.
So what sounds more like a nursery rhyme is a summation: "The secret to wealth is, do what you do best and trade for the rest." For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m.
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