By Lou Dobbs
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Editor's note: Lou Dobbs' commentary appears every Wednesday on CNN.com.
NEW YORK (CNN) -- Victorious Democrats will, with the opening of the 110th Congress, have a historic opportunity to right the course of a country that has been hell-bent on permitting free-trade corporatists and faith-based economics to bankrupt the nation.
As the New Year approaches, newly elected Democrats in the House and Senate will be battered by calls, even demands, to stay the course, rather than right it. And we can only hope they and their new leadership in both houses will have the courage and character to be rationalists and realists and overcome their partisan political debt to corporate America, and U.S. multinationals in particular.
Eye-glazing stuff, international trade. But the consequences of faith-based free-trade will be eye-popping in the disaster it wreaks on our economy and working Americans. The facts are anything but dull: For 30 consecutive years the United States has run a trade deficit, and our trade deficit has surged to record highs in each of the past four years. Our monthly deficits have reached record levels in two of the past three months.
Our current account deficit -- the broadest measure of international trade -- is on track to approach $1 trillion this year. And our current account deficit is almost 7 percent of our nation's gross domestic product, considerably above the threshold at which Federal Reserve studies have acknowledged our economy must make policy adjustments or face major financial crisis. We're borrowing about $3 billion a day just to pay for our imports, and our trade debt now stands at $5 trillion.
We will no longer have to be patient to see the impact of these faith-based policies in free trade. Signs are already beginning to mount that a reckoning is nearing. Our trading partners in Europe are counseling "vigilance" in the currency markets, as their anxiety rises with the value of the Euro against the dollar. For the first time, the Chinese government is publicly expressing its concern about the more than $1 trillion it holds in reserves.
But most disturbing of all are the comments of new Treasury Secretary Henry Paulson, who said in London Tuesday, "A strong dollar is clearly in our nation's interest and I feel very good today about the strength of the U.S. economy," as the U.S. dollar hit a 20-month low against the Euro. Treasury secretaries are not paid for their candor, but Paulson's rejection of our current reality won't bolster his credibility with either our trading partners or the new Democratic-led Congress.
The new Congressional leadership understands that, at least in part, their majority was won as a result of growing middle-class concerns over job insecurity, stagnant wages and disgust at a class of elites that has subordinated the well-being of our middle class to the dictates of corporate masters.
I hope they can acknowledge that so-called free trade has come at an inordinate cost to working men and women in this country. We've lost three million manufacturing jobs as a result of these so-called free trade agreements that enable corporate America to export plants, production and jobs to cheap foreign labor markets. Millions more American jobs remain at risk of being outsourced. And wages in industries where jobs are being created, on average, pay 21 percent lower than industries in which jobs are disappearing, according to the Economic Policy Institute.
Amazingly, even our own top trade officials admit that U.S. free-trade policies aren't working. U.S. Trade Representative Susan Schwab appears to understand the consequences of the past few administrations' free trade policies, but she's shown little willingness to shift that policy. Schwab said, "...Our trade deficits are too high. We can't...pretend that the trade imbalance can just keep getting bigger with no cost."
Ambassador Schwab's Deputy Trade Representative, Karan Bhatia, says outright, "From Chile to Singapore to Mexico, the history of our [Free Trade Agreements] is that bilateral trade surpluses of our trading partners go up."
And yet we persist with our historical ignorance, and we continue to enter poorly negotiated agreements that pose great threats to the U.S. economy and the middle class. NAFTA, for example: In 1993, we had a $9.1 billion total trade deficit with Mexico and Canada. Last year we ran a $128.2 billion deficit with our North American neighbors, and we're on pace to break that record again this year.
Instead of opening new markets to U.S. products and services, the U.S. government over the past 10 years has negotiated nothing more than a series of outsourcing agreements. Aside from agriculture, our trade representatives have consistently steered clear of negotiations with Western Europe and Japan. We'll never achieve a tangible reduction in our trade deficit without significant exports to those markets.
The new Democratic-led Congress will be called a lot of names by the devoted servants of corporate America and the U.S. multinationals who have no regard for the standard of living or quality of life for working Americans and their families. I hope that we'll be able to call this new Congress true reformers and servants of the people.
The opinions expressed in this commentary are solely those of the writer.
Lou Dobbs hopes the new Congress will be able to resist the siren song of corporate America.