I'm a capitalist for one reason: to raise living standards in my community. A familiar mantra of capitalism guides me: Markets are powerful and efficient.

I'm also a realist, so I temper that mantra: Markets are powerful and efficient. And markets fail.

Market failure is an established, well-understood field of study in mainstream economics. Generations of economists accept the basics of market failure.

However, American economists turn their heads away at the mention of it, because it sounds like heresy.

Washington State has a world-class aerospace cluster, employing more than 130,000 people making products the rest of the world wants to buy. In 2003, the Boeing Co. cast a chill on the state, moving its headquarters to Chicago. In 2009, the chill deepened with the decision to assemble some 787s in South Carolina.

We need to think differently about trade.

First, let me say that I am 100% in favor of trade. Trade is when we do what we do best, they do what they do best and we trade. Trade, done right, will raise living standards.

Last summer, a respected policy expert from the Brookings Institution spoke at a large meeting. He introduced himself, saying that he works with a lot of brilliant economists who can't understand why the recovery is so slow.

Nobel laureate economist Paul Krugman has an explanation,"...corporations use their growing monopoly power to raise prices without passing the gains on to their employees."

This January, Sens. Orrin Hatch (R-Utah) and Amy Klobuchar (D-Minn.) introduced the Immigration Innovation Act, known as "I-Squared." It will triple the number of foreign temporary workers from about 800,000 to more than 2.3 million. This will distort the labor market for jobs in science, technology, engineering and math (STEM), which has only 4 million workers all told. I-Squared will seriously depress the domestic STEM labor market.

The United States and 10 other countries are negotiating our next big trade agreement, called Trans-Pacific Partnership, or TPP. It's time to re-examine what works and what doesn't work.

Imagine a thought experiment, where we put environmentalists in each country in charge of negotiating the next trade agreement. Preposterous! I know. Stick with me. This is a thought experiment.

My career is invested in the aerospace industry, so it was very sobering to me when the Federal Aviation Administration ordered that 787 airplanes be grounded.

Friends ask me to explain the situation— what lessons can we draw from the 787? Invariably, we start with "outsourcing."

We've heard a lot about loss of labor rights in Wisconsin, "right to work" for less legislation in Indiana and now Michigan. We get the impression that laws in those states had somehow required workers to join unions.

Quite the contrary. Unions are the bargaining agent for the employees, negotiating contracts with employers—binding legal contracts, sacred to conservative think tanks everywhere.

We hear two views about the high-tech workforce.

On one hand, employers warn of a dire labor shortage. On the other, recent high-tech graduates can't find jobs. Many face crushing student loans that they may never pay off. Mid-career high-tech workers are steadily being let go. Discouraged mid-career workers take lower-paid service jobs after months of searching for a job as good as the one they lost.

This is a cross-post from The Huffington Post by Stan Sorscher, labor representative for the Society of Professional Engineering Employees in Aerospace/IFPTE Local 2001 (SPEEA/IFPTE).

The other day, I had lunch with an economist I respect and admire. I asked him, what would it take for China to become a modern democracy and build a strong middle class?

OK. I didn't ask him that. I told him that China would need strong institutions of civil society and a deeper sense of a social contract to become a stable modern democracy with a dynamic middle class.