Sunday, February 18, 2007

Global Economic Stupidity

So, they worry about a backlash against free trade?
Worries about the dark side of free trade are surfacing in the United States in ways that could affect the course of globalization worldwide.
What is this, an episode of Star Wars? ooohhhhhh....the DARK SIDE.
The reason: Free-trade brush fires have recently erupted on economic and political fronts:
Democrats are in control of Congress, with new lawmakers in their ranks who are especially eager to do something about what they see as unfair trade practices by China. Bipartisan bills introduced this week could result in retaliatory tariffs or revocation of China's trade status with the US.
Oh yes, let's bring on those Smoot-Hawley tariffs.
Trade has always been always destabilizing for the workers in affected industries. What's new is the unprecedented scale and pace of change worldwide.
Yes, the pace of change is quickening. That just mean we all have to adapt faster and more often. Nothing is going to stop change - you either adapt or die.
Another new bill, the Fair Currency Act of 2007, classified China as a currency manipulator in violation of US trade law.
So what. Let China manipulate its currency. They are pushing things in our favor, not theirs. They are hurting their own citizens, not ours. If you cannot understand that, then you should not be in the Congress. All this act would do is hurt Americans.
"We need to declare a moratorium on new trade agreements until we figure out how to do this right," says Alan Tonelson of the US Business and Industry Council, which represents companies concerned about the erosion of US manufacturing.
Manufacturing productivity is at an all-time high. Yet, it requires less and less people for more and more output. We can, therefore, use our valuable resources for more productive uses. There is nothing wrong with moving from manufacturing to service.

And lastly, the biggest stupidity of all:
It remains unclear whether the advocates of a harder line on trade will gain traction. Some economists believe this will be a better year for US exports - and a narrowing in the trade deficit.

And that deficit, they say, is not in itself a sign of economic decline. But it could be unsustainable if other nations grow less willing to finance that deficit by lending to the US.
Here's the thing. They are not financing our debt, they are investing in America.

Please people. I am begging you. Read some economics. A good place to start: Cafe Hayek. Myths of Rich and Poor.


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