Free Trade Transportation Theory

I have done my best to follow the current crisis, though i am a novice economist. What I am about to say is based on what i have seen from here in the states, so i am sorry if I omit things from other nations.

If i had to guess there were a few additional things that added to the problems we are having that are not currently being spoken. (federal reserve and other corrupt bankers aside)

1. The high gas prices this past summer that damaged many freight companies and helped the obscene increase of prices on nearly everything that has to be shipped.

2. Free Trade pulling manufacturing jobs (good and bad) from the markets that the products are targeted to.

The two above did not cause the problems we are experiencing, however they definitely helped in tearing the economy down. I am sure it is more complex than this, but...

1. I believe we should end free trade on finished goods, components of finished goods, and services. Allow raw materials to still fall under free trade as different regions have different resources.

Doing this could benefit all major industrial nations because it would be a complete redistribution of jobs across a global economy. It allows the company to focus on products for that market specifically and could potentially reduce costs if it was done correctly. It would increase tax revenue in those regions and it would allow local safety regulations to be strongly enforced as you can just shut them down and they are out.

Take a cell phone. From its inception to your hand. The manufacturer would have to contract companies to make the smaller components, open a small facility for assembly and repair, and provide tech support all directly in that region. That being said one region will loose jobs, but will be gaining them from other companies. Benefits for the company include, lower shipping costs, a direct link to the market and quicker product introduction into the market. In addition the price can then be relative to that market (based on demand and costs), and it will provide incentive for companies to introduce themselves into developing markets as things become more relative.

2. Focus on developing all electric internal freight transportation. Locomotives are powered by electric motors. They have a diesel motor to power a generator. That being said, why not a third rail? For other transportation focus on batteries. Finally encourage the shippers to develop their own solar/wind power plants to power their fleets.

Although they are two very different points they are relative. If your freight infrastructure is not as subject to the fluctuation of fuel prices and the products are local this would help reduce price fluctuations in that region and greater overall stability. Finally it is still allows for a global economy as a company from one country is still injecting itself into another.

I need thoughts on this, once again I am a novice. This maybe wrong. It was just a thought i had.

[edit on 22-2-2009 by dantrav]

[edit on 22-2-2009 by dantrav]

[edit on 22-2-2009 by dantrav]