Looks Like Ross Perot Was Right About The “Giant Sucking Sound”

Perot is famous (among other things) for his statement during the 1992 presidential campaign that if NAFTA (North American Free Trade Agreement) was not a two way street would create a “giant sucking sound” of jobs going south to the cheap labour markets of Mexico. 

Both of Perot’s opponents (George H.W. Bush and Bill Clinton) argued that NAFTA would create jobs in the U.S. because of business expansion. 

However, the goods balance of trade for the U.S. with Mexico has been negative and steadily growing over the years.  In 2010 it amounted to $61.6 billion, which was 9.5% of the total goods trade deficit last year.

So Perot has been vindicated in his opinion; expanded free trade has not been accompanied by an increase in jobs in the U.S. relative to the vast numbers of jobs created in the rest of the world as NAFTA became just a stepping stone on the pathway to global commerce.

Just how much the giant vacuum has been collecting has been calculated at GEI Analysis.  The results are shown in the following two graphs.  The first shows manufacturing jobs lost each year starting with 1992 that are equivalent to the U.S. goods trade deficits over the past 19 years.  The second shows the cumulative job loss, amounting to almost 29 million jobs by the end of 2010.



The full analysis and data details are available at GEI Analysis.

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