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bobbyw24
03-12-2010, 05:10 AM
Dismantling America

Nations rise on economic nationalism; they descend on free trade
____________

Though Bush 41 and Bush 43 often disagreed, one issue did unite them both with Bill Clinton: protectionism.

Globalists all, they rejected any federal measure to protect America’s industrial base, economic independence or the wages of U.S. workers.

Together they rammed through NAFTA, brought America under the World Trade Organization, abolished tariffs and granted Chinese-made goods unrestricted access to the immense U.S. market.

Charles McMillion of MBG Information Services has compiled, in 44 pages of charts and graphs, the results of two decades of this Bush-Clinton experiment in globalization. His compilation might be titled, “Indices of the Industrial Decline and Fall of the United States.”

From 2000 to 2009, industrial production declined here for the first time since the 1930s. Gross domestic product also fell, and we actually lost jobs.

In traded goods alone, we ran up $6.2 trillion in deficits — $3.8 trillion of that in manufactured goods.

Things that we once made in America—indeed, we made everything—we now buy from abroad with money that we borrow from abroad.

Over this Lost Decade, 5.8 million manufacturing jobs, one of every three we had in Y2K, disappeared. That unprecedented job loss was partly made up by adding 1.9 million government workers.

The last decade was the first in history where government employed more workers than manufacturing, a stunning development to those of us who remember an America where nearly one-third of the U.S. labor force was producing almost all of our goods and much of the world’s, as well.

Not to worry, we hear, the foreign products we buy are toys and low-tech goods. We keep the high-tech jobs here in the U.S.A.

Sorry. U.S. trade surpluses in advanced technology products ended in Bush’s first term. The last three years we have run annual trade deficits in ATP of nearly $70 billion with China alone.

About our dependency on Mideast oil we hear endless wailing.

Yet most of our imported oil comes from Canada, Mexico, Venezuela, Nigeria and Angola. And for every dollar we send abroad for oil or gas, we send $4.20 abroad for manufactured goods. Why is a dependency on the Persian Gulf for a fraction of the oil we consume more of a danger than a huge growing dependency on China for the necessities of our national life?

How great is that dependency?

Continue

http://buchanan.org/blog/dismantling-america-3714

bobbyw24
03-12-2010, 05:12 AM
Finally – A Bill To Get The US Out Of NAFTA

By Devvy Kidd

WebNote: Ron Paul has already signed on to this bill.

“Free” trade has all but destroyed our most important and productive jobs sectors: manufacturing, agriculture and industrial. Not to mention stomping on our sovereignty.

On February 15, 2010, I wrote a column titled, Congress refuses to bring home millions of jobs.[1] For all the talk about unemployment and no jobs, why won’t Congress get us out of the major, unconstitutional trade treaties that have killed MILLIONS of good paying jobs and bring them home?

Back in 2007, Rep. Marcy Kaptur introduced a Band Aid bill titled the NAFTA Accountability Act, H.R. 4329[2]

Former Congressman Virgil Goode (R-VA) also introduced a bill back in January 2007: H. Con. Res. 22.[3] However, it went no where because the Republicans still controlled Congress with Bush in the White House.

HOWEVER, we now have a new bill and if Americans don’t fight like warriors to get it passed, we will never take the first step in bringing home jobs. If we can get this passed and sent to the usurper, he will veto it, no question. Congress can over ride Comrade Obama, but it will not happen without massive and consistent pressure on Congress.

I know, we’re all worn out trying to stop the unconstitutional take over of the health care system. The usurper is hell bent on passing another unconstitutional and phony “climate change” bill aka cap and trade. [4]

http://buchanan.org/blog/finally-a-bill-to-get-the-us-out-of-nafta-3722

lynnf
03-12-2010, 05:21 AM
great article, thanks for posting. will Americans wake up in time to do something about this? only time will tell. in the meantime, many just twist in the wind.....

edit: since I first posted this another post appeared about the bill to get us out of NAFTA -- ha, fat chance!

lynn

awake
03-12-2010, 05:46 AM
Dismantling America

Nations rise on economic nationalism; they descend on free trade
____________

Though Bush 41 and Bush 43 often disagreed, one issue did unite them both with Bill Clinton: protectionism.

Globalists all, they rejected any federal measure to protect America’s industrial base, economic independence or the wages of U.S. workers.

Together they rammed through NAFTA, brought America under the World Trade Organization, abolished tariffs and granted Chinese-made goods unrestricted access to the immense U.S. market.

Charles McMillion of MBG Information Services has compiled, in 44 pages of charts and graphs, the results of two decades of this Bush-Clinton experiment in globalization. His compilation might be titled, “Indices of the Industrial Decline and Fall of the United States.”

From 2000 to 2009, industrial production declined here for the first time since the 1930s. Gross domestic product also fell, and we actually lost jobs.

In traded goods alone, we ran up $6.2 trillion in deficits — $3.8 trillion of that in manufactured goods.

Things that we once made in America—indeed, we made everything—we now buy from abroad with money that we borrow from abroad.

Over this Lost Decade, 5.8 million manufacturing jobs, one of every three we had in Y2K, disappeared. That unprecedented job loss was partly made up by adding 1.9 million government workers.

The last decade was the first in history where government employed more workers than manufacturing, a stunning development to those of us who remember an America where nearly one-third of the U.S. labor force was producing almost all of our goods and much of the world’s, as well.

Not to worry, we hear, the foreign products we buy are toys and low-tech goods. We keep the high-tech jobs here in the U.S.A.

Sorry. U.S. trade surpluses in advanced technology products ended in Bush’s first term. The last three years we have run annual trade deficits in ATP of nearly $70 billion with China alone.

About our dependency on Mideast oil we hear endless wailing.

Yet most of our imported oil comes from Canada, Mexico, Venezuela, Nigeria and Angola. And for every dollar we send abroad for oil or gas, we send $4.20 abroad for manufactured goods. Why is a dependency on the Persian Gulf for a fraction of the oil we consume more of a danger than a huge growing dependency on China for the necessities of our national life?

How great is that dependency?

Continue

http://buchanan.org/blog/dismantling-america-3714

The primary U.S. product for export these days are federal reserve notes backed by little or no goods at all. Debasing a currency to artificially boost trade and prices simply priced the market in U.S. Manufacturing and labor out of country . These are self imposed effects of Inflationionisim. It has destroyed your countries production ability to producing real goods in exchange for others and exporting those goods.This combined with the fact that the government classes have consumed or destroyed all of the capital in real savings; placing a strong reliance on credit has made it very difficult to return to producing real in demand goods .

Get rid of NAFTA, but the replacement will not be and open border policy. It will more than likely be a closing the borders by force policy and will only starve your country at this point. It is a politically popular choice; a seemingly easy button that isn't one. And to Blame China for getting the U.S. in this mess is a demagogic tactic to pave the way for partial default on the owing credit.

sratiug
03-12-2010, 06:46 AM
Switching from internal taxes to a flat tariff by constitutional amendment will put us back on a prosperous path. Internal taxes subsidize foreign production. The only way to ensure free trade is to eliminate internal taxes and enact a flat tariff.

hugolp
03-12-2010, 07:09 AM
Switching from internal taxes to a flat tariff by constitutional amendment will put us back on a prosperous path. Internal taxes subsidize foreign production. The only way to ensure free trade is to eliminate internal taxes and enact a flat tariff.

I think free trade is a good think (and NAFTA is not free trade at all, anyone should opose it) but I agree with this. A flat tariff would be a proper way for the goverment to get some revenue. It is important that it is completely flat, because otherwise there would be problem of interests and corruption.

therepublic
03-12-2010, 08:13 AM
bump

Juan McCain
03-12-2010, 08:22 AM
Yup, thanks for the links . . .
http://buchanan.org/blog/finally-a-bill-to-get-the-us-out-of-nafta-3722

H. R. 4759

To provide for the withdrawal of the United States from the North American Free Trade Agreement.

IN THE HOUSE OF REPRESENTATIVES

March 4, 2010

Mr. TAYLOR (for himself, Mr. JONES, Mr. DEFAZIO, Mr. STUPAK, Mr. ARCURI, Mr. BACA, Mr. BARTLETT,
Mr. BRALEY of Iowa, Mr. CAPUANO, Mr. COSTELLO, Mr. FILNER, Mr. GRIJALVA, Mr. HARE, Mr. HINCHEY,
Mr. KAGEN, Ms. KAPTUR, Mr. KILDEE, Mr. KISSELL, Mr. KUCINICH, Mr. MASSA, Mr. MCINTYRE, Mr. MICHAUD,
Mr. PAUL, Mr. SCHAUER, Mr. VISCLOSKY, Mr. WILSON of Ohio, Ms. WOOLSEY, and Mr. STARK)
introduced the following bill; which was referred to the Committee on Ways and Means

SECTION 1. WITHDRAWAL OF THE UNITED STATES FROM THE NAFTA.

Pacis
03-12-2010, 08:39 AM
Ron Paul is the most thoroughgoing proponent of free trade in Congress. He's against NAFTA and such because they are, in fact, managed trade arrangements.

Juan McCain
03-12-2010, 08:55 AM
Yes, calling NAFTA a "free trade" agreement is a terrible and incongruous, self-contradictory oxymoron . . .
Ron Paul, some other Congressmen, and Pat Buchanan are among those that recognize the contradiction.

http://i432.photobucket.com/albums/qq47/panamajohn/burnnafta.jpg

charrob
03-12-2010, 10:49 AM
Ron Paul is the most thoroughgoing proponent of free trade in Congress. He's against NAFTA and such because they are, in fact, managed trade arrangements.

I totally agree with Pat Buchanan, but this is the one issue Ron Paul has me worried on. The reason: it's not just NAFTA and WTO we need to get rid of to level the playing field.

China pegs their currency to the U.S. dollar, which has completely destroyed our manufacturing base and caused our huge trade imbalance. This, in a sense, is a tariff on our goods.

Also, although I believe in limited government, I don't believe in anarchy and believe government can play an important role. Keeping the air clean and the water clean is, imo, a very important role. This costs our manufacturers: so, to level the playing field, I agree with tariffs.

As mentioned: Ron Paul worries me on this, and i wish that he would be more of a protectionist and believe in tariffs. Other countries protect their industries; the chinese government flat out funds alot of their industry. There's a fine line that needs to be kept in this country to ensure the protectionism doesn't coddle unproductive, low-quality U.S. manufacturers; however, the way the situation is now, the playing field is so uneven that U.S. manufacturers don't even have a shot at succeeding.

Pat Buchanan is spot on: I wish Ron Paul would follow suit.

tremendoustie
03-12-2010, 11:06 AM
China pegs their currency to the U.S. dollar, which has completely destroyed our manufacturing base and caused our huge trade imbalance. This, in a sense, is a tariff on our goods.


China's peg to the U.S. dollar is the only thing keeping the U.S. dollar afloat. The destruction of the manufacturing base has been caused by primarily artificially low interest rates and secondarily huge amounts of regulations, which has converted us to a service based economy. We borrow money to consume, and have jobs facilitating this consumption.



Also, although I believe in limited government, I don't believe in anarchy and believe government can play an important role. Keeping the air clean and the water clean is, imo, a very important role.


Pollution is a violation of your neighbor's property rights. All that's necessary is courts of arbitration to settle these disputes, and award fair restitution.



This costs our manufacturers: so, to level the playing field, I agree with tariffs.


Tarrifs do not "level the playing field", they only impoverish us. If we did not have abusive monetary policies, and growing debt, a trade deficit would be impossible. The only way to have a trade deficit is rising debt or printing money. Otherwise, goods must be traded for goods.



As mentioned: Ron Paul worries me on this, and i wish that he would be more of a protectionist and believe in tariffs. Other countries protect their industries; the chinese government flat out funds alot of their industry. There's a fine line that needs to be kept in this country to ensure the protectionism doesn't coddle unproductive, low-quality U.S. manufacturers; however, the way the situation is now, the playing field is so uneven that U.S. manufacturers don't even have a shot at succeeding.

You seem to imagine that tarrifs produce success for domestic manufacturers. That's not even close to the case, since the cost of acquiring supplies goes way up, as does the cost of living. Again, the cause of the trade deficit is increasing indebtedness and printing money.



Pat Buchanan is spot on: I wish Ron Paul would follow suit.

I like Pat, but I think he's dead wrong on this. I support localism, but it should be accomplished by strong communities and consumer choice, not tariffs, subsidies, and force. People have a right to trade goods without me threatening them or demanding a cut.

noxagol
03-12-2010, 11:21 AM
I don't think NAFTA has anything to do with our trade with China since, last I checked, China is in Asia and not North America.

Free trade isn't crippling our industry, the government is.

charrob
03-12-2010, 11:21 AM
Again, the cause of the trade deficit is increasing indebtedness and printing money.

I'll be honest, I don't understand what you are saying. If we print more money then the value of the dollar decreases which would make foreign purchases more expensive which would mean our industry can compete.


China's peg to the U.S. dollar is the only thing keeping the U.S. dollar afloat.

how so?


Pollution is a violation of your neighbor's property rights. All that's necessary is courts of arbitration to settle these disputes, and award fair restitution.

this is a matter of opinion. Although I respect yours, I don't agree with it. Although I believe government should be limited, I see conservation as a necessary role. Bogging down the courts with personal lawsuits seems unproductive.

charrob
03-12-2010, 11:24 AM
I don't think NAFTA has anything to do with our trade with China

-not sure you are referring to my post since I never stated that it was...

noxagol
03-12-2010, 11:25 AM
-not sure you are referring to my post since I never stated that it was...

No, just the general focus on NAFTA and some people bringing China into the mix.

lester1/2jr
03-12-2010, 04:24 PM
interesting point that we go on and on about independence from foreign oil but are free trade otherwise.

agree with others that buchanan is attacking the puppet rather than the puppeteer here. the problem is our financial state in general not the piece of the ever slimming piece of the pie being divied up wiht the unions getting the proper amount. I'm not going to pay higher prices for shit AND pay 33% of my paycheck to the govt.

therepublic
03-12-2010, 05:26 PM
As mentioned: Ron Paul worries me on this, and i wish that he would be more of a protectionist and believe in tariffs.

Actually Ron Paul does believe in Tariffs: He says, "All free trade really needs is two words: Low tariffs. " http://www.house.gov/paul/tst/tst2007/tst090907.htm

Our Founding fathers used Tariffs because we had become too dependent on England for goods. The Tariffs were imposed on all imported goods to encourage the development of manufactured goods in the U.S. It worked.

tremendoustie
03-12-2010, 05:32 PM
I'll be honest, I don't understand what you are saying. If we print more money then the value of the dollar decreases which would make foreign purchases more expensive which would mean our industry can compete.


If you print and spend money, then you don't need to produce to consume. Imagine that every person had a money printing machine in their basement, and foreign suppliers were honoring this money. Who would work? Indebtedness has the same effect -- if you're borrowing thousands of dollars a month, you don't need to work. Our economy is based on governments and people borrowing to consume, and everyone else gets jobs to facilitate that consumption. The move from a manufacturing to a service economy directly corresponds to this increase in indebtedness and increase in the money supply.

If there is neither of these, then it's impossible for the nation to consume more than it produces. THAT's the way to solve trade imbalances.



how so?


We would be one step closer to out of control inflation without the China peg, and without purchases of government debt. Currently, the currency is being propped up by foreign governments. In the absence of this intervention, the federal government would be forced to choose between default and hyperinflation.



this is a matter of opinion. Although I respect yours, I don't agree with it. Although I believe government should be limited, I see conservation as a necessary role. Bogging down the courts with personal lawsuits seems unproductive.

It's better than bogging down every business with reams of paperwork. Small business in this country is literally being buried in red tape. It's not about practical measures to conserve the environment, it's about generating money and power for bureaucrats. And the big players, with teams of lawyers, as well as the federal government itself, skirts the law anyway. There are piles of horror stories stemming from interactions with the EPA, the army corps of engineers, etc.

When you give power to a few individuals, count on those individuals to abuse that power.

What's more, those who do not settle out of court, but are determined to have harmed their neighbor's property, can cover court costs. With more free choice and competition in justice, even more just and efficient approaches can be found.

therepublic
03-12-2010, 06:10 PM
Ron Paul writes:
Another NAFTA nail is about to be hammered into the coffin Washington is building for the US economy. Within the next few days our borders will be opened to the Mexican trucking industry in an unprecedented way. A "pilot" program is starting which will allow trucks from Mexico to haul goods beyond the 25 mile buffer zone to any point in the United States . Officials claim this is being done with utmost oversight, but Americans still have their legitimate concerns. Rather than securing our borders, we seem to be providing more pores for illegal aliens, drug dealers, and terrorists to permeate.



Not only that, but the anti-competitive and burdensome yoke of over-regulation of our industry at home is about to send a lot more Americans to the unemployment lines. The American Trucking industry has been heavily regulated since 1935. The express purpose of The Motor Carrier Act was to eliminate competition through permitting, regulating tariff rates, even approving routes. American trucking companies have been fighting ever since for some relief from the substantial regulatory burdens placed on them. Regulatory compliance is the single most daunting barrier to entry, and eats up huge amounts of profit. Now, to add insult to injury, Mexican trucking companies, not subject to the same onerous standards, will be allowed to roll right in and squeeze American industry further. This will severely undermine the ability of American trucking companies to remain solvent.



The fact that this is being done in the name of free trade is disturbing. Free trade is not complicated, yet NAFTA and CAFTA are comprised of thousands of pages of complicated legal jargon. All free trade really needs is two words: Low tariffs. Free trade does not require coordination with another government to benefit citizens here. Just like domestic businesses don't pay taxes, foreign businesses do not pay tariffs – consumers do, in the form of higher prices. If foreign governments want to hurt their own citizens with protectionist tariffs, let them. But let us set a good example here, and show the world an honest example of true free trade. And let us stop hurting American workers with mountains of red tape in the name of safety. Safety standards should be set privately, by the industry and by the insurance companies who have the correct motivating factors to do so.
http://www.house.gov/paul/tst/tst2007/tst090907.htm
(http://www.house.gov/paul/tst/tst2007/tst090907.htm)

charrob
03-12-2010, 07:05 PM
Actually Ron Paul does believe in Tariffs: He says, "All free trade really needs is two words: Low tariffs. " http://www.house.gov/paul/tst/tst2007/tst090907.htm

Our Founding fathers used Tariffs because we had become too dependent on England for goods. The Tariffs were imposed on all imported goods to encourage the development of manufactured goods in the U.S. It worked.

thanks for the link... i did not realize he believed in tariffs!

your description of our Founders using tariffs makes perfect sense, as it will help our manufacturing base in our country become strong again.

charrob
03-12-2010, 07:59 PM
If you print and spend money, then you don't need to produce to consume.

For me it seems to make the discussion of the international trade deficit a bit complicated to discuss other variables (like debt and the printing of money). To be clear, I don't at all believe in printing money like we have been and debasing our currency: it's destroying the dollar. But we wouldn't be in this kind of debt if we still had good jobs here.

I'm not sure how your statement relates to international trade, but if this week I pay $100 for my groceries, then all of a sudden the FED creates zillions of dollars out of thin air, then each dollar is worth less so the next week I would pay, say, $115 for the same groceries. So I would have to produce more in order to pay for my groceries the second week.


We would be one step closer to out of control inflation without the China peg, and without purchases of government debt. Currently, the currency is being propped up by foreign governments. In the absence of this intervention, the federal government would be forced to choose between default and hyperinflation.

i don't like any of this stuff, particularly their pegging their currency to the dollar because that means we are forever slaves to being in debt to them-- we cannot compete against them if they don't allow their currency to float. it would be better to be free, feel our pain, and slowly try to rebuild our manufacturing base. Because of this entangling alliance we are suffocating. so disallow the peg.

at the same time I like Ron Paul's idea of starting with a new, competing, currency in different states (and if it works in those states to slowly start using it throughout the country to replace the dollar). It will be painful, but we have to do it and the sooner we untangle ourselves from China, the better.


It's better than bogging down every business with reams of paperwork. Small business in this country is literally being buried in red tape. It's not about practical measures to conserve the environment, it's about generating money and power for bureaucrats. And the big players, with teams of lawyers, as well as the federal government itself, skirts the law anyway. There are piles of horror stories stemming from interactions with the EPA, the army corps of engineers, etc.

what a mess. I know my dad was telling me an industry close to where he lives just put in scrubbers in their smokestacks. It was an investment and it costed them, but he said the results are supposedly remarkable. Rather than people from all over the area where he lives be sick in the future from air pollution and have to file lawsuits, it makes it a whole lot easier for that manufacturer to simply have put in scrubbers.

i don't know what the answer is except that the government causing all the piles of horror stories is just simply bad government. I don't think that necessarily means we should get rid of the government and let it all go to private lawsuits and people getting sick. Instead I think we should make sure the government has clear, focused, but limited powers. And I think we should replace bad government with good government when it comes to conservation. i don't want to see my country become a cesspool like China just to be able to compete with it.

sratiug
03-12-2010, 08:11 PM
thanks for the link... i did not realize he believed in tariffs!

your description of our Founders using tariffs makes perfect sense, as it will help our manufacturing base in our country become strong again.
http://www.ronpaulforums.com/showthread.php?t=167012&highlight=sratiug+amendment

Anti Federalist
03-12-2010, 08:16 PM
actually ron paul does believe in tariffs: He says, "all free trade really needs is two words: Low tariffs. " http://www.house.gov/paul/tst/tst2007/tst090907.htm

our founding fathers used tariffs because we had become too dependent on england for goods. The tariffs were imposed on all imported goods to encourage the development of manufactured goods in the u.s. It worked.

+1776

Anti Federalist
03-12-2010, 08:23 PM
One major problem that stems from this is that some people benefit from government money creation and some don't. Who gets to spend it first, when it's most valued, and who gets stuck holding the Old Maid card when it vanishes? It's usually the little guy – the middle-class guy – who gets hurt when this happens. And in the U.S., the middle class is contracting. The financial gyrations we're going through are destroying the middle class, which naïvely believes that traditional American values still hold sway and that their government is honest. The lower class has long since lost any values, and the upper class is way too cynical and self-interested to really care. Most middle-class people will end up joining one or the other of these two classes, and that'll be a moral disaster for the country.

Doug Casey

Pacis
03-12-2010, 08:29 PM
It's discouraging to see Hamilton and Lincoln-style mercantilism being promoted in RPF of all places. I think I'm gonna quit reading these forums.

bobbyw24
03-12-2010, 08:35 PM
It's discouraging to see Hamilton and Lincoln-style mercantilism being promoted in RPF of all places. I think I'm gonna quit reading these forums.

After 10 posts? What? Can't stand to read that with which you don't agree?

charrob
03-12-2010, 08:38 PM
http://www.ronpaulforums.com/showthread.php?t=167012&highlight=sratiug+amendment

Please join me and others that have expressed their support for the following or a similar constitutional amendment.

Double Flat Tariff Only Amendment

1. All internal federal taxes and fees shall be replaced within a period of 11 years of ratification of this amendment by a flat across the board tariff applied equally to all goods and to all product sources. The tariff shall be set at the beginning of each year at a percentage sufficient to raise an amount of money equal to all projected federal government expenditures forecasted by the Congressional Budget Office for that year.

2. One year from ratification of this amendment a 10 year phaze in process will be enacted whereby each year the percentage of projected federal government expenditures raised by the tariff shall be 1 divided by the number of years remaining of the ten. For each of these same ten years all internal taxes and fees shall be reduced across the board by a percentage that will eliminate an equal amount of federal revenue.

All internal taxes inhibit free trade and subsidize foreign corporations, workers, and production because foreignors do not pay them. The double flat tariff simply eliminates subsidation of foreign workers, products and corporations, thus insuring free trade. So free traders should all support this amendment or something very similar.

-interesting idea... thanks for passing along...

tremendoustie
03-12-2010, 08:50 PM
For me it seems to make the discussion of the international trade deficit a bit complicated to discuss other variables (like debt and the printing of money). To be clear, I don't at all believe in printing money like we have been and debasing our currency: it's destroying the dollar. But we wouldn't be in this kind of debt if we still had good jobs here.

It's just the reverse. We don't have the good jobs because of debt and distortions of the credit markets.



I'm not sure how your statement relates to international trade, but if this week I pay $100 for my groceries, then all of a sudden the FED creates zillions of dollars out of thin air, then each dollar is worth less so the next week I would pay, say, $115 for the same groceries. So I would have to produce more in order to pay for my groceries the second week.

If the Fed creates zillions of dollars, who spends it? The government? The banks? How do they spend it? That's right, they hire people. People that are no longer working in manufacturing.

Imagine that we all worked in manufacturing, with no trade deficit. We import as much as we export. $100 buys an average worker's day's labor, and $300 buys a day of labor from a plant manager. Now imagine the government prints up a ton of money. It suddenly is able to offer contractors and employees $120 a day to process paperwork, manufacture war supplies, build mars rovers, etc. Imagine the banks, through the federal reserve, also get a great deal of this money. They are now able to offer the best and brightest $400 a day to sit in an office and dream up investment schemes.

Do you think manufacturing would drop off?

Now imagine that average people start borrowing more and more. Suddenly, Matilda, down the street, who had lived in a small apartment, gets a loan to buy a house. Imagine there are millions of Matildas. Suddenly, workers can be hired at $150 a day to build homes. More quit their jobs at plants. And more plants, unable to offer the higher wages and still be able to compete, close.

Imagine millions of Matildas begin to finance a great deal of consumption on their credit cards. Now, there are more high paying jobs at department stores, hair salons, and golf courses.

Suddenly, we have a service based economy. It seems prosperous, because of all the money that keeps pouring in from individual borrowers, from municipal and state borrowers, from the Federal Reserve's printing of money, and from Federal borrowing. What happens when people stop borrowing, or government stops printing? A crash. The bottom falls out of the false economy, and we all have to get real jobs.

The new money is coming from borrowers, governments, and banks, not from real, sustainable sources -- other producers, both here and overseas. That's the problem.



i don't like any of this stuff, particularly their pegging their currency to the dollar because that means we are forever slaves to being in debt to them-- we cannot compete against them if they don't allow their currency to float. it would be better to be free, feel our pain, and slowly try to rebuild our manufacturing base. Because of this entangling alliance we are suffocating. so disallow the peg.


I agree, I'd rather they pull the plug, so we can get the pain over with, and get back to a real economy.



at the same time I like Ron Paul's idea of starting with a new, competing, currency in different states (and if it works in those states to slowly start using it throughout the country to replace the dollar). It will be painful, but we have to do it and the sooner we untangle ourselves from China, the better.


I think alternative currencies are key, especially metals. If, to any extent, we can develop a real economy based on production, and trade in a stable currency like silver, we'll be able to avoid the worst of an eventual collapse.




what a mess. I know my dad was telling me an industry close to where he lives just put in scrubbers in their smokestacks. It was an investment and it costed them, but he said the results are supposedly remarkable. Rather than people from all over the area where he lives be sick in the future from air pollution, it makes it a whole lot easier for that manufacturer to simply have put in scrubbers.


Good for them! I would say that if they pollute the area, they should have to compensate the people who live there. That would motivate them even more to use pollution control measures.



i don't know what the answer is except that the government causing all the piles of horror stories is just simply bad government. I don't think that necessarily means we should get rid of the government and let it all go to private lawsuits and people getting sick.


People get sick now! And if the companies get good lawyers, they can go on polluting. Don't you agree that if your land, water, or air gets polluted, you should be compensated? This is the best way to hold companies accountable.

I'm just saying, replace regulation with compensation for victims. This means that the money will go where it should -- to the victims -- and that instead of companies working to fulfill some bureaucrat's wishes, they'll be working to ensure they don't harm others. They'll also be able to figure out new and innovative ways to reduce pollution, rather than just checking the box on some form.

Isn't that what we want?



Instead I think we should make sure the government has clear, focused, but limited powers. And I think we should replace bad government with good government when it comes to conservation.


And I want nonstop rainbows and gumdrops. When power is placed in the hands of a few, they'll abuse it. It's always been the case -- the bureaucrats are just as self interested as the industrialists. They want money and power.



i don't want to see my country become a cesspool like China just to be able to compete with it.

Where did I support no accountability for polluters?

Actual liability for harm is the last thing polluters want. They can easily hire teams of lawyers, skirt the law, and grease the hands of key government officials. Reversing the decision the government made during the industrial revolution, to refuse to allow victims of pollution to seek compensation, would be far more effective.

charrob
03-12-2010, 09:05 PM
It's just the reverse. We don't have the good jobs because of debt and distortions of the credit markets.


thank you very much for all of your responses; i will have to think about all of this.

Brian4Liberty
03-12-2010, 09:07 PM
will Americans wake up in time to do something about this? only time will tell.

People don't wake up until it effects them directly and personally. And often those who are effected don't know exactly what happened. Those who blame a situation like this on one and only one cause are most definitely wrong.

Legend1104
03-12-2010, 10:54 PM
thanks for the link... i did not realize he believed in tariffs!

your description of our Founders using tariffs makes perfect sense, as it will help our manufacturing base in our country become strong again.

This is absolutely unbelievable. Tariffs are a horrible thing for our economy. They go against everything that Austrian economics stands for. Also, Our founders were not for protectionist tariffs. As a matter of fact, Jefferson was very much against it. People like Hamilton, Clay, and Lincoln supported tariffs to help promote the American system. Tariffs were one of the biggest reasons that the South left the Union. First off, did you even read that link from Ron Paul. He was not supporting tariffs! He even said that tariffs only hurt people by giving them higher prices. All a tariff does is force people to pay higher prices for goods. For example, say that a chinese company can give us a $5 shirt and American businesses can only do it at $8 dollars. Then if the government charges a $4 tariff on Chinese shirts to put the price of Chinese shirts at $9 dollars, of course people will buy the now cheaper $8 shirt. That would help the American business, but at what cost?! The American people now are forced to pay more money for their shirts. This means that they are not able to spend that extra money on something else, like a pair of pants. So tariffs would hurt the buyer, the Chinese company, other companies that will now not get that extra money that is now spent on American shirts, and employees that are put out of work at the pants store because now they are not making as much because all of that extra money is going to the shirts. The only group that benefits is in fact that American shirt company. As a matter of fact, in the long run even the shirt company will be hurt because the tariff will eventually make America more poor and will eat at their profits. If a company cannot make goods at a competitive price, it should fail. The tariffs of the 1800s failed by the way, they did not work. They caused the South to be overly burdened with unfair tariffs at the benefit of the North and eventually led to the War of Southern Independence and the eventual increase in the government that is robbing us of our liberties. America needs true free trade, which is trade without barriers or tariffs.

tremendoustie
03-12-2010, 11:01 PM
thank you very much for all of your responses; i will have to think about all of this.

:)

I'm not a great communicator, so thanks for bearing with me. This is the best way I find to think about it: How can a trade deficit exist, if savings and debt are stable, and no new money is being printed? It's impossible. The only way for more goods to flow in than out, is for more money to flow out than in. And that can't happen without debt or inflation.

specsaregood
03-12-2010, 11:40 PM
:)

I'm not a great communicator, so thanks for bearing with me. This is the best way I find to think about it: How can a trade deficit exist, if savings and debt are stable, and no new money is being printed? It's impossible. The only way for more goods to flow in than out, is for more money to flow out than in. And that can't happen without debt or inflation.

You did a good job. But even shorter form:
It is cheaper to print dollars than it is to manufacture and create "stuff". As long as we can do that and the world accepts it, manufacturing won't be coming back to this country, no matter how high the tariffs get.

__27__
03-13-2010, 12:49 AM
:)

I'm not a great communicator, so thanks for bearing with me. This is the best way I find to think about it: How can a trade deficit exist, if savings and debt are stable, and no new money is being printed? It's impossible. The only way for more goods to flow in than out, is for more money to flow out than in. And that can't happen without debt or inflation.

Trade deficits are fiction. They DO NOT exist, moreover if they did why the HELL would one complain? If a trade deficit were reality, you would be getting MORE in return than what you are sending out, it would be like going to buy a new car and the dealer gives you two for the price of one. Would you honestly complain???

As Bastiat asked:

"If we exported nothing and imported everything, why would this be bad? You either really hate receiving Christmas gifts or you don't really believe that trade deficits, if they exist, are bad. And what reason do you have to believe that foreigners are, or have ever, been inclined to give us something and take nothing in return? None, that's what."

I borrow from a friend who clarifies better than I:

Tell me, when shopping, do you choose the more expensive or the less expensive of two otherwise equal goods? Leave aside nationality for the moment; we can even assume that we're looking at the same US-made item, available in two different stores. A common enough occurrence, is it not? Well, which do you pick? Do you pick the more expensive or the less expensive one?

To ask it is to answer it. You economize. No sophistry can obscure this fundamental fact of human action: faced with scarcity, the fact that we do not live in an Eden of immediate and total satisfaction of all our whims, we must economize. And for what reason? So we can satisfy more of our wants. Trivially: that which is left over after the satisfaction of one want may be applied to the satisfaction of another want.

I shan't go into economizing with quality, except to say that the same principle holds true. You could devote your whole yearly income to buying a Mercedes (or Aston-Martin or Bugatti or whatever - fill in your pay grade as applicable), but you don't; you are happy enough to make do with 'good enough' satisfaction of one want in order to be able to satisfy others alongside it.

There can be no objection to any of the above, for merely to raise an objection is to prove my point: it cannot be done without economizing your use of scarce resources.

The application to international trade should be immediately obvious, but just in case, I shall belabor the point.

At once, on the face of the above, it's clear that buying a cheaper foreign good allows more immediate want satisfaction than buying a more expensive domestic good. Perhaps you can buy your wife a cheap foreign shiny and take her to a swanky dinner, or you can buy your wife an expensive domestic shiny and sit at home and hope she doesn't mind ramen.

Ah, but you object, this ignores the longer-term consequences! Domestic shiny makers will go out of business, and those unemployed shiny makers will quit buying and will starve and the whole economy'll...

Yes, they'll go out of business? So what? If they go out of business and then just sit on their thumbs, well, they deserve to starve to death. Good riddance! But why should they have to sit on their thumbs and starve to death? For god's sakes, man, turn off the television and think! It doesn't hurt that much! Jobs? What is the point of a job? Do we have jobs just for the hell of it? No! Jobs exist not because we like them, but because they produce the things we want. Jobs are means to ends, not ends in themselves! When foreigners make shinies more cheaply than we can, they free us from having to make shinies ourselves, and give us the opportunity to produce other things to satisfy other wants! As such, where before we could have only shinies, trade allows us to have shinies and whatever else we can produce!

If we don't take the opportunity, we've nobody to blame but ourselves. And in fact that's precisely what's happening. Our government, and nothing else, makes it difficult - often impossible - to re-employ factors of production.

Trade restrictions and 'defense of domestic industry' do not increase want satisfaction; they limit it. They enforce poverty, in other words. They can do nothing else.



As for the rest of the thread:

http://farm1.static.flickr.com/44/132443565_d3629120c6.jpg

sratiug
03-13-2010, 08:05 AM
This is absolutely unbelievable. Tariffs are a horrible thing for our economy. They go against everything that Austrian economics stands for. Also, Our founders were not for protectionist tariffs. As a matter of fact, Jefferson was very much against it. People like Hamilton, Clay, and Lincoln supported tariffs to help promote the American system. Tariffs were one of the biggest reasons that the South left the Union. First off, did you even read that link from Ron Paul. He was not supporting tariffs! He even said that tariffs only hurt people by giving them higher prices. All a tariff does is force people to pay higher prices for goods. For example, say that a chinese company can give us a $5 shirt and American businesses can only do it at $8 dollars. Then if the government charges a $4 tariff on Chinese shirts to put the price of Chinese shirts at $9 dollars, of course people will buy the now cheaper $8 shirt. That would help the American business, but at what cost?! The American people now are forced to pay more money for their shirts. This means that they are not able to spend that extra money on something else, like a pair of pants. So tariffs would hurt the buyer, the Chinese company, other companies that will now not get that extra money that is now spent on American shirts, and employees that are put out of work at the pants store because now they are not making as much because all of that extra money is going to the shirts. The only group that benefits is in fact that American shirt company. As a matter of fact, in the long run even the shirt company will be hurt because the tariff will eventually make America more poor and will eat at their profits. If a company cannot make goods at a competitive price, it should fail. The tariffs of the 1800s failed by the way, they did not work. They caused the South to be overly burdened with unfair tariffs at the benefit of the North and eventually led to the War of Southern Independence and the eventual increase in the government that is robbing us of our liberties. America needs true free trade, which is trade without barriers or tariffs.

All of your arguments can be made more effective when turned against internal taxes. Internal taxes have all of the same free trade problems, they raise the price of everything made in the US, they raise the cost of US labor, plus they compound the problem by forcing manufacturing out of the country. Tariffs do not have this problem and that is why they are superior to internal taxes. One country subsidizing another's production is a vastly bigger problem than the same country subsidizing its own production.

Jefferson ran the entire country on tariffs alone. The Confederacy enacted a 10% tariff, they were not against tariffs, they were against tyrrany. Ron Paul has said the tariff is the least intrusive federal tax.

Legend1104
03-13-2010, 09:28 AM
All of your arguments can be made more effective when turned against internal taxes. Internal taxes have all of the same free trade problems, they raise the price of everything made in the US, they raise the cost of US labor, plus they compound the problem by forcing manufacturing out of the country. Tariffs do not have this problem and that is why they are superior to internal taxes. One country subsidizing another's production is a vastly bigger problem than the same country subsidizing its own production.

Jefferson ran the entire country on tariffs alone. The Confederacy enacted a 10% tariff, they were not against tariffs, they were against tyrrany. Ron Paul has said the tariff is the least intrusive federal tax.

I am certainly not in total disagreement, but the quotes I was hearing made it seem as if tariffs were a wonderful idea and very effective. Both tariffs and internal taxes are an evil. The Confederacy was actually attempting to reduce the tariff by instituting a 10% tariff because it was drastically lowered from the northern tariffs and would have brought a flood of business into southern ports; this is one of the major reasons so many northerners supported the war. It was for economic survival. Do not forget though that the smoote hawley (spelling?) tariff was a major cause of the great depression and the highest tariff, the tariff of abominations, almost caused a war, and that tariffs led to the civil war. I agree that some form of taxation has to be done, but it must be minimal at best.

charrob
03-13-2010, 10:23 AM
It's just the reverse. We don't have the good jobs because of debt and distortions of the credit markets.

If the Fed creates zillions of dollars, who spends it? The government? The banks? How do they spend it? That's right, they hire people. People that are no longer working in manufacturing.

Imagine that we all worked in manufacturing, with no trade deficit. We import as much as we export. $100 buys an average worker's day's labor, and $300 buys a day of labor from a plant manager. Now imagine the government prints up a ton of money. It suddenly is able to offer contractors and employees $120 a day to process paperwork, manufacture war supplies, build mars rovers, etc. Imagine the banks, through the federal reserve, also get a great deal of this money. They are now able to offer the best and brightest $400 a day to sit in an office and dream up investment schemes.

Do you think manufacturing would drop off?



so, you are saying the reason manufacturing has left the country is because the employees who worked in those factories are leaving their jobs for better-paying jobs in the government and the banking sector?

i guess we all see life in context of our own experiences, and in that regard, nothing could be further from the truth. i think you have a valid way of looking at things and i'm trying to understand your frame of reference, so bear with me.

at 18, i started work in a factory paying good wages, having good health benefits and a good pension plan. 7,000 people worked in that factory: just rows and rows of people soddering circuit boards. -after working there for 6 years i saved enough to go to college, which had always been my dream. -during a break i paced back and forth outside of my bosses office no less then 25 times trying to get the courage to go in there and tell him i was leaving: co-workers came up to me and said "you're crazy to leave a job like this with good benefits, good pay". i knew that i was but at the same time i had a dream. -so i left. -but let me tell you _nobody_ else left that factory. But years later the factory closed down and went to Asia: 7,000 people lost their jobs. They _loved_ their jobs.

so why did the factory go to Asia? -because Asia has slave labor, works their people 14 hour days for slave labor wages, employs young children, has unsafe working conditions in their factories, and spews all kinds of pollution into their air. And because of all of this, it's cheaper.

as Buchanan has stated in the past: the question is: do we want to allow ourselves to live in that kind of grotesque situation in order to compete? -to live in a polluted cesspool like China, to work in unsafe conditions? THIS is the question. My answer is "No"!

if a new manufacturer wanted to compete with the factory in China, they can't unless they resort to these sub-standard conditions. UNLESS: tariffs are put on circuit boards coming from China. That would allow 7,000 people to, again, have a _skilled_ job, good wages, and a good middle class lifestyle.

so your argument would be: joe consumer now cannot afford to buy circuit boards. However, there's a new factory down the street opening up that makes the plastic casing for radios that have those circuit boards. This factory can open up because now, since tariffs are put on plastic casings coming from China, this factory can now compete. Joe consumer gets a job at that new factory, has better wages and, once again, a middle class lifestyle: so he can afford to buy those tariff'd circuit boards.

where am i wrong?

TheBlackPeterSchiff
03-13-2010, 11:56 AM
Could you guys school me on NAFTA, and the free market view of global trade in general?

therepublic
03-13-2010, 12:07 PM
Could you guys school me on NAFTA, and the free market view of global trade in general?
Here is a good place for that: http://ronpaullibrary.org/topic.php?id=4
(http://ronpaullibrary.org/topic.php?id=4)

bobbyw24
03-13-2010, 12:07 PM
Could you guys school me on NAFTA, and the free market view of global trade in general?

YouTube - Ron Paul on Free Trade - Lou Dobbs/CNN (http://www.youtube.com/watch?v=prtR-h8oKqU&feature=player_embedded)

silverhandorder
03-13-2010, 12:40 PM
charrob all it comes down to is the cost of running a factory.

It cost more to do it here then in China. Ofcourse it is a combination of things. For example Chinese are more competitive because they have no regulations on their products or relatively few in comparison. They also provide heavy subsidies to their industries.

Yes we can raise tariffs on Chinese goods. However historically tariff wars hurt both countries participating.

On pollution and child labor I would rather someone explain this. The short version is that it is a combination of things. It is both their relatively primitive status as an economy and some encouragement from their own government.

charrob
03-13-2010, 12:53 PM
Yes we can raise tariffs on Chinese goods. However historically tariff wars hurt both countries participating.



by not putting tariffs on Chinese goods, we have allowed the destruction of our manufacturing base. imo, this is one of the largest factors that have hurt our country. our jobs are gone!

unless someone can prove to me differently and explain their rationale, i have to agree with Pat Buchanan on this.

Brian4Liberty
03-13-2010, 01:03 PM
I borrow from a friend who clarifies better than I:

[i]Tell me, when shopping, do you choose the more expensive or the less expensive of two otherwise equal goods? Leave aside nationality for the moment; we can even assume that we're looking at the same US-made item, available in two different stores. A common enough occurrence, is it not? Well, which do you pick? Do you pick the more expensive or the less expensive one?

Most people are not comparison shoppers. They have favorite stores. They have favorite brands. People are lazy, they don't compare prices. They often think that more expensive automatically means higher quality. They follow trends. They buy for status. They borrow money to pay for things that they can't afford but want anyway. They charge on credit cards and don't even realize how much they spend. Ideally, every consumer would be like an advanced computer program that takes in every conceivable parameter and makes the most economic choice, but that is not reality.

Certainly the entire economy can shift to less expensive production over time, but end-consumers only play a part. Corporate executives play a larger role than consumers. In a sense they are consumers too, but a very different kind of consumer. They focus on cost and trends far more than an end-consumer does. They want to make a buck for themselves today. And yes, that means that they will often make very foolish choices based on cost. (see the recent thread on cheap fluoride from China). Literally, decisions are made that cost them more money (and quality), because they are so short-sighted and myopic. They may buy the more expensive products if it means a personal kick-back (of some type) to them. Of course that applies to big government as well as big corporations.

Over long periods of time and large numbers of people, economies will favor true lower cost, but it is not a smooth ride; there will be many bumps and reversals, and individuals and nations can be destroyed in the process.


I think free trade is a good think (and NAFTA is not free trade at all, anyone should opose it) but I agree with this. A flat tariff would be a proper way for the goverment to get some revenue. It is important that it is completely flat, because otherwise there would be problem of interests and corruption.

That's probably the best realistic choice. It would also free purely domestic businesses from the burden (and overhead) of taxes.

silverhandorder
03-13-2010, 01:16 PM
by not putting tariffs on Chinese goods, we have allowed the destruction of our manufacturing base. imo, this is one of the largest factors that have hurt our country. our jobs are gone!

unless someone can prove to me differently and explain their rationale, i have to agree with Pat Buchanan on this.

First I don't have a problem with low tarifs.

Our jobs are gone not only because of tarifs but because of regulations and anti bussiness policies. When you say I want tariffs but don't want to touch the other two how can you claim to be a libertarian?

__27__
03-13-2010, 01:24 PM
First I don't have a problem with low tarifs.

Our jobs are gone not only because of tarifs but because of regulations and anti bussiness policies. When you say I want tariffs but don't want to touch the other two how can you claim to be a libertarian?

When you say you want to rid the market of government force on domestic producers, but want to impose government force in the market on foreign producers, how can you claim to be for the free market?

silverhandorder
03-13-2010, 01:26 PM
When you say you want to rid the market of government force on domestic producers, but want to impose government force in the market on foreign producers, how can you claim to be for the free market?

I'm not a purist. Regulations + hightariffs + anti bussiness policy is not where I want to be. I want to be at the low tariffs part.

__27__
03-13-2010, 01:27 PM
I'm not a purist. Regulations + hightariffs + anti bussiness policy is not where I want to be. I want to be at the low tariffs part.

So you want to demand that American consumers pay more for their goods for some sort of good feeling in your head?

charrob
03-13-2010, 01:46 PM
First I don't have a problem with low tarifs.


good!



Our jobs are gone not only because of tarifs but because of regulations and anti bussiness policies.


i agree, there are certainly things we can, and should, do to make it easier for domestic businesses to compete. one would be streamlining red-tape that might be involved with conservation and the environment so that it is easier for them: they shouldn't have to be going through mountains of paperwork to comply with environmental regulations, or safety regulations, etc.

-an anarchist would say there should be no regulations at all; i disagree. As a nation the big question should be: are we going to allow our nation to become a cesspool like China in order to compete with it? I say no!


When you say I want tariffs but don't want to touch the other two how can you claim to be a libertarian?

i'd need to know what you mean by not touching the other two? in a previous post i mentioned a manufacturer living close to my dad put in scrubbers in its smokestacks in order to comply with environmental regulations. -the results were fantastic- the air is much cleaner making it a safer place to live. How is that not better than having people get sick and filing lawsuits?

charrob
03-13-2010, 02:03 PM
so you want to demand that american consumers pay more for their goods for some sort of good feeling in your head?

see previous post:


...



...

Old Ducker
03-13-2010, 03:00 PM
by not putting tariffs on Chinese goods, we have allowed the destruction of our manufacturing base. imo, this is one of the largest factors that have hurt our country. our jobs are gone!

unless someone can prove to me differently and explain their rationale, i have to agree with Pat Buchanan on this.

In an advanced stateless society, trade (access to markets) would be regulated by retail, distribution and industry associations. Products not in conformance would be declared rogue and not allowed access to distribution in member outlets. While such organizations already exist, they don't have police powers due to the monopolization of coercion in governments. As long as we have a central government, the best way to protect industry, commerce and community as well as fund such government is a general tariff, in addition to excises. It must be a uniform and not targeted tariff however to discourage lobbying the attendant corruption.

I doubt Buchanan would agree with my reasoning, but I do agree with his in this matter and a cursory look at economic history confirms the correctness of his views. The US, Japan and Germany all became first rate industrial economies under a tariff regime. The current system fosters corporatism and undermines sovereignty (both individual and collective).

silverhandorder
03-13-2010, 03:15 PM
So you want to demand that American consumers pay more for their goods for some sort of good feeling in your head?
Yes that and because I have easier time getting people to meet me half way.

i agree, there are certainly things we can, and should, do to make it easier for domestic businesses to compete. one would be streamlining red-tape that might be involved with conservation and the environment so that it is easier for them: they shouldn't have to be going through mountains of paperwork to comply with environmental regulations, or safety regulations, etc.

-an anarchist would say there should be no regulations at all; i disagree. As a nation the big question should be: are we going to allow our nation to become a cesspool like China in order to compete with it? I say no!

Actually you should read up on English Common Law it all but eliminated pollution without need for regulations. Regulations are used today to circumvent natural market forces that would punish those who pollute.

As I said before China is not an example of no regulations. China is an example of a country that encourages pollution. We do the same to a lesser extent.



i'd need to know what you mean by not touching the other two? in a previous post i mentioned a manufacturer living close to my dad put in scrubbers in its smokestacks in order to comply with environmental regulations. -the results were fantastic- the air is much cleaner making it a safer place to live. How is that not better than having people get sick and filing lawsuits?

Because in the market it works like this. First time someone proves it is detrimental to their health the polluters gets sued and has to pay reparations. Then the insurance companies consider pollution as a liability and from that point on all polluters either pay higher insurance costs and get sued for all they have or they change their business practices. It worked great for paper industry that used to pollute water ways.

You get the same effect without a costly bureaucracy. Another thing that EPA does today is that it frees polluters from reparation if it is found out in the future that their pollution is harmful.

charrob
03-13-2010, 03:35 PM
Because in the market it works like this. First time someone proves it is detrimental to their health the polluters gets sued and has to pay reparations. Then the insurance companies consider pollution as a liability and from that point on all polluters either pay higher insurance costs and get sued for all they have or they change their business practices.

thank you: this is the first argument I've heard to reduce regulation through the market that makes sense. :) i don't like the argument because i think alot of people could still get hurt in our legal system. (my argument being that from personal experience what I've seen is that our legal system is very unfair and alot of good people get hurt). However, let that go for a bit to address the ramifications, if any, on whether this solution would mean we could do without tariffs on foreign imports.

all this would mean is that the domestic manufacturer would choose to invest in, say, scrubbers in smoke-stacks, eliminate mercury going into rivers, etc., all on their own. There's still one caveat: that means they are still paying money to do this that the chinese manufacturers are not doing. -that still creates an uneven playing field that makes it more difficult for domestic companies to compete. Add to that, that Americans are not going to accept child labor, slave labor, unsafe working conditions, and all the other stuff that goes on in chinese industry.

so, we still need tariffs to level the playing field.

silverhandorder
03-13-2010, 03:55 PM
thank you: this is the first argument I've heard to reduce regulation through the market that makes sense. :) i don't like the argument because i think alot of people could still get hurt in our legal system. (my argument being that from personal experience what I've seen is that our legal system is very unfair and alot of good people get hurt). However, let that go for a bit to address the ramifications, if any, on whether this solution would mean we could do without tariffs on foreign imports.

One quick point I would like to make is that whether we like it or not the facts are that we traded a system with some problems for a system with the same problems plus more. So to me it's obvious that you should not try to fix something that is not broken in relative terms.



all this would mean is that the domestic manufacturer would choose to invest in, say, scrubbers in smoke-stacks, eliminate mercury going into rivers, etc., all on their own. There's still one caveat: that means they are still paying money to do this that the chinese manufacturers are not doing. -that still creates an uneven playing field that makes it more difficult for domestic companies to compete. Add to that, that Americans are not going to accept child labor, slave labor, unsafe working conditions, and all the other stuff that goes on in chinese industry.

so, we still need tariffs to level the playing field.

I agree free market tends to be a lot harsher then government. However you also have to realize Chinese have cons too. They give huge subsidies to their bussiness making it prone to competition outside of country. And if they decide to shower us with cheap goods that is great too we will shower them with other goods that they can not make. Right now we are not producing anything. With no regulations and low tarifs we would be producing a ton.

mczerone
03-13-2010, 04:10 PM
by not putting tariffs on Chinese goods, we have allowed the destruction of our manufacturing base. imo, this is one of the largest factors that have hurt our country. our jobs are gone!

unless someone can prove to me differently and explain their rationale, i have to agree with Pat Buchanan on this.

By instituting more harmful regulations and focusing production in unsustainable areas, the govt put a disadvantage on American companies, and allowed Chinese companies to produce a more desired product at a cheaper price.

How this would excuse the govt adding artificial costs to products individuals buy from far away places is beyond me. Further, the logic that one location should be self-sufficient in industry overlooks the direct benefits of specialization and the division of labor: why should we (Americans) pay $.42 per ton (hypothetically) of iron ore when the Chinese can extract it from their local sources for $.30 and ship it here for $.10 (=$.40 to the consumer)? That's two cents that local iron producers SAVE if they don't dig, but buy from afar. And a tariff to add that two cents to the costs makes life more expensive for the local population, while giving profits TO THE GOVERNMENT, FOR DOING NOTHING BUT IMPOVERISHING US.

LibertarianfromGermany
03-13-2010, 04:11 PM
There already is a fee for imports: It's called transportation costs.

If they subsidize their production in china and we get the low-cost imports, WE profit. Basically, the Chinese government is paying for a part of our product which is pretty good for us. This is EXACTLY why predatory pricing doesn't work and why subsidies are decreasing our living standards.

If we had a free market without tariffs, we could just say "You know what Chinese Government, thank you for giving us part of your money" publicly, the Chinese people would get pretty pissed since they're on the short end of the stick (paying for our consumption) and they'd do their best to put an end to the subsidies.

tremendoustie
03-13-2010, 04:16 PM
so, you are saying the reason manufacturing has left the country is because the employees who worked in those factories are leaving their jobs for better-paying jobs in the government and the banking sector?

i guess we all see life in context of our own experiences, and in that regard, nothing could be further from the truth. i think you have a valid way of looking at things and i'm trying to understand your frame of reference, so bear with me.

at 18, i started work in a factory paying good wages, having good health benefits and a good pension plan. 7,000 people worked in that factory: just rows and rows of people soddering circuit boards. -after working there for 6 years i saved enough to go to college, which had always been my dream. -during a break i paced back and forth outside of my bosses office no less then 25 times trying to get the courage to go in there and tell him i was leaving: co-workers came up to me and said "you're crazy to leave a job like this with good benefits, good pay". i knew that i was but at the same time i had a dream. -so i left. -but let me tell you _nobody_ else left that factory. But years later the factory closed down and went to Asia: 7,000 people lost their jobs. They _loved_ their jobs.


Right -- but this is what should have happened: wages should have dropped, and cost of living should have dropped too. That would have made us competitive. Instead, because of regulations, wages were not allowed to drop, and because of inflation, cost of living kept going up.

Things balance out naturally. Do you understand what I said, how trade deficits cannot occur without borrowing or inflation? It's when government distorts the market that these problems occur.



so why did the factory go to Asia? -because Asia has slave labor, works their people 14 hour days for slave labor wages, employs young children, has unsafe working conditions in their factories, and spews all kinds of pollution into their air. And because of all of this, it's cheaper.

Yes, but in order for people in this country to buy from asia, they would need to have productive jobs in which they export to asia, or other countries. That is, unless there's lots of debt or inflation .. so again, the trade deficit could not occur without these things.




as Buchanan has stated in the past: the question is: do we want to allow ourselves to live in that kind of grotesque situation in order to compete? -to live in a polluted cesspool like China, to work in unsafe conditions? THIS is the question. My answer is "No"!

That's fine -- it just means we'll produce less. Imagine infinitely high tariffs. That means we consume what we produce, right? Now imagine a single person is allowed to trade outside of the country. He must give an equal amount to what he receives, right? So we're still consuming as much as we produce. There is no trade deficit. There is no theft of jobs. It just means that one person traded the fruit of his labor for something even better. It benefits everyone.

You're marking up to lack of tariffs what is really a problem with debt, inflation, and regulation. There will be full employment without these distortions -- because the cost of labor will fall until the labor pool is used up. And, the cost of living will fall as well, as production increases.

We'd have full employment, and we'd use the fruit of our labor, or what we could trade it for. Again, the problem is not the trade, it's malemployment, unemployment, and underemployment.





if a new manufacturer wanted to compete with the factory in China, they can't unless they resort to these sub-standard conditions. UNLESS: tariffs are put on circuit boards coming from China. That would allow 7,000 people to, again, have a _skilled_ job, good wages, and a good middle class lifestyle.


Not true. Again, see the example above. The total wealth of the country is the amount it produces, period. How many little green pieces of paper are used to represent this is irrelevant. The total consumption will be the total production divided by the number of people. It is up to each person whether they want less consumption and less work, or more of both. Whether the goods are traded or not is totally irrelevant.

If a job moves overseas, the people out of work will want new work. If the market is free (which it is not), wages are then allowed to fall to the point where all these people become employed. The cost of living falls with the wages.




so your argument would be: joe consumer now cannot afford to buy circuit boards. However, there's a new factory down the street opening up that makes the plastic casing for radios that have those circuit boards. This factory can open up because now, since tariffs are put on plastic casings coming from China, this factory can now compete. Joe consumer gets a job at that new factory, has better wages and, once again, a middle class lifestyle: so he can afford to buy those tariff'd circuit boards.

where am i wrong?

If wages are allowed to fall, there will be full employment anyway. And again, the amount of wealth is the amount of production.

The problem is, wages are not allowed to fall. There are a great deal of fixed costs to employing a person, including huge amounts of red tape to wade through. Factory owners should be able to hire a person on the spot for whatever wage they'll take.

At best, tariffs are a band-aid to fix the problems of not having a free economy. Full and effective employment is what is needed. That's it. It may be tariffs help us avoid the full brunt of the negative impact of market regulations and distortions, but they are not necessary to achieve full, effective employment, in a free economy. In fact, they distort the market so that people may be employed in areas with high tariffs, when they'd be better off working in another sector.

therepublic
03-13-2010, 05:20 PM
Contaminated drywall from China that is making residents sick is a serious problem in Florida. http://www.cbsnews.com/stories/2009/03/26/cbsnews_investigates/main4895737.shtml


Drywall has been found in prescription drugs from China
Inferior Steel from China is compromising the safety of schools, bridges and public buildings.


food from China contaminated. http://www.nytimes.com/2008/10/31/world/asia/31iht-01china-update.17426856.html


Toys from China found containing lead, and now cadmium.


Cheap does not equate better. My Congressman says the government is afraid to stand up for us in this instance because China holds a large hammer...our debt...we do not want to anger them.

You see, if they co-operate with our so called government regulated "free trade" deals, we give them money and technology. If they don't agree to co-operate, we bomb them, and move in with the pretense of showing them Democracy. China was smart enough to turn the game around in their favor making fools out of the elitists who envision a one world order in their control. The jailer becomes the prisoner at our expense.

Note: Japan is one of few trade partners who tries to play the game fairly by putting factories in the U.S.. They are given the third degree over a problem with their cars, but China is handled with kit gloves. hmmm...keep track of this story because I want to know where the troublesome parts were manufactured .

therepublic
03-13-2010, 06:47 PM
Two more to above post:


Faulty tiers from China caused crashes and deaths



Hard dries from China found to have spy-ware installed

The list is endless

Legend1104
03-13-2010, 07:32 PM
By instituting more harmful regulations and focusing production in unsustainable areas, the govt put a disadvantage on American companies, and allowed Chinese companies to produce a more desired product at a cheaper price.

How this would excuse the govt adding artificial costs to products individuals buy from far away places is beyond me. Further, the logic that one location should be self-sufficient in industry overlooks the direct benefits of specialization and the division of labor: why should we (Americans) pay $.42 per ton (hypothetically) of iron ore when the Chinese can extract it from their local sources for $.30 and ship it here for $.10 (=$.40 to the consumer)? That's two cents that local iron producers SAVE if they don't dig, but buy from afar. And a tariff to add that two cents to the costs makes life more expensive for the local population, while giving profits TO THE GOVERNMENT, FOR DOING NOTHING BUT IMPOVERISHING US.

Thank you. That is exactly right. I get so tired of hearing people say, "We need to stop our dependency on foreign oil." I understand the theory that if we are dependent on them and they are killing us, then we are funding terror, but that is based on too many faulty ideas. First, off you are right, specialization is very important. We need to get out of this walmart mentality that America should corner the market on everything. Look at the old South, cotton was king because they found something they were good at and did it. For anyone that is against war, specialization is the answer. Trade promotes freedom and peace. Read Mises and Rothbard on this. When we trade with people it makes a symbiotic relationship. They need us and we need them. Therefore, war is less likely to errupt. When we try to be self-sufficient we promote war because our policies are naturally hostile. True free trade will promote specialization, peace, and freedom. Look at Cuba and how we through our economic policies have done exactly the opposite of what we wanted. We wanted to end their dictatorship and communism with sanctions, but those policies are naturally hostile and have keep that regime in power.

charrob
03-14-2010, 07:36 PM
Do you understand what I said, how trade deficits cannot occur without borrowing or inflation?


I think you mean that in order to purchase merchandise, one needs to have produced the equivalent of what that merchandise costs. That assumes one can have a job that will allow that person to earn in cash enough to pay in cash for that merchandise.



Right -- but this is what should have happened: wages should have dropped, and cost of living should have dropped too. That would have made us competitive.


the only way our cost of living would drop in order to be competitive with the chinese is if our standard of living would also drop to be like the chinese. (in other words, live in poverty, employ child labor and slave labor, work in unsafe conditions, and pollute the environment: in most occasions, that is the only way our industry could be competitive with the chinese.) Our government would also have to subsidize our industry the way the chinese government does theirs to be competitive.

free trade works when employed on an even playing field between two countries who have the same standard of living, and ethics with regard to labor, safety, and the environment.



Things balance out naturally.


free trade must be ‘fair’ trade in order for things to balance out naturally. –the same rules must apply to both countries. example: 2 football teams. one team plays within the established rules of the game. however, the second team brings bats and all attacks the quarterback of the first team when its beneficial to them. Because the 2 teams are playing with a different set of rules, no matter how talented the first team is, they will never be able to fairly compete and win the game.



It's when government distorts the market that these problems occur.


a manufacturer does not leave a country because that country is in debt. the manufacturer leaves a country because there’s cheaper labor and less regulation in another country.



Yes, but in order for people in this country to buy from asia, they would need to have productive jobs in which they export to asia, or other countries.


Until the same labor laws, safety regulations, environmental regulations, and floating of the currencies is followed equally by both nations involved, America will never rid itself of its suffocating trade deficit with China. And this has destroyed our country.



You're marking up to lack of tariffs what is really a problem with debt, inflation, and regulation.


the problem is an uneven playing field.



There will be full employment without these distortions -- because the cost of labor will fall until the labor pool is used up. And, the cost of living will fall as well, as production increases.


you’re talking slave labor and dire poverty living conditions in order to compete with china. –it’s a race to the lowest common denominator.

tremendoustie
03-14-2010, 09:12 PM
I think you mean that in order to purchase merchandise, one needs to have produced the equivalent of what that merchandise costs. That assumes one can have a job that will allow that person to earn in cash enough to pay in cash for that merchandise.


Yes, in order to trade, one must give equal value to what one is receiving. Barring debt and inflation, if one is not exporting, one cannot import. This is true on an individual basis, as well as on a national basis.



the only way our cost of living would drop in order to be competitive with the chinese is if our standard of living would also drop to be like the chinese. (in other words, live in poverty, employ child labor and slave labor, work in unsafe conditions, and pollute the environment: in most occasions, that is the only way our industry could be competitive with the chinese.) Our government would also have to subsidize our industry the way the chinese government does theirs to be competitive.


The only way our standard of living will be higher than the Chinese is if we produce more than the Chinese. Keep in mind this production can come in the form of corporate management, advertising, etc, and need not be physical goods. If we do not produce as much as the Chinese per capita, our standard of living will be lower -- regardless of what tariffs are put into place.




free trade works when employed on an even playing field between two countries who have the same standard of living, and ethics with regard to labor, safety, and the environment.


That's untrue. A country's wealth is the amount they produce, period. If safety is and weekends are sacrificed in country A, for example, they will have more material wealth, but not as much free time, and more injuries. Trade has nothing to do with it -- it's just a tradeoff that each individual must make for themselves, and each nation, in the aggregate.

The only reason there is the illusion that we have more wealth, despite producing less, is because of indebtedness and inflation. Neither of these factors are sustainable.



free trade must be ‘fair’ trade in order for things to balance out naturally. –the same rules must apply to both countries. example: 2 football teams. one team plays within the established rules of the game. however, the second team brings bats and all attacks the quarterback of the first team when its beneficial to them. Because the 2 teams are playing with a different set of rules, no matter how talented the first team is, they will never be able to fairly compete and win the game.


Your analogy describes a violent, non voluntary interaction. In these situations, there is often a loser and a winner. In a voluntary interaction, such as free trade, both sides benefit. Otherwise, they would not trade. Trade increases the wealth in this country. It is inflation and debt that is destroying our productive capacity for temporary gain. Our wealth will inevitably balance with this decreased production, causing a lower standard of living.




a manufacturer does not leave a country because that country is in debt. the manufacturer leaves a country because there’s cheaper labor and less regulation in another country.


If the market were free, wages would fall until there was full employment. If a manufacturer leaves the country for lower wages overseas, wages would fall in this country until the displaced workers are all rehired. Assuming that the new job is as productive as the old job, total wealth and standard of living in this country would remain the same.

This outsourcing only leads to lingering unemployment because of government red tape.



Until the same labor laws, safety regulations, environmental regulations, and floating of the currencies is followed equally by both nations involved, America will never rid itself of its suffocating trade deficit with China. And this has destroyed our country.


Again, think. Take it on a personal level. Can I have a trade deficit with the world? That is, can I consume more than I produce? Only if I take on debt, expend savings, or print my own money. Otherwise, I can never consume more than I produce.



the problem is an uneven playing field.


No, again, consider it on an individual level. To keep it simple, suppose people only produce and consume widgets and TV dinners. Suppose I am able to make ten widgets an hour, and I work 40 hours a week. There is no foreign trade. I get paid $400 a week, because widgets are worth $1 each. My buddy makes 5 TV dinners an hour, which is 200 TV dinners a week. He also makes $400 a week, because TV dinners are worth $2 each. Together, the two of us make up our "nation".

Now, what is our standard of living? Each of us can buy 100 TV dinners, and 200 widgets per week.

Suppose a foreign nation enters the picture, with whom we have free trade. They work 100 hours a week, and have low safety standards, so the two members of that nation are able to produce 1000 TV dinners a week, and 2000 widgets, respectively. They are underpaid -- only making $200 a week each. That means the widgets and TV dinners their nation produces cost only ten cents, and twenty cents, respectively.

Suddenly, at these lower prices, we cannot be paid as much. Since I make 400 widgets a week, my salary drops to $40 a week, and since my compatriot makes 200 TV dinners a week, his salary also drops to $40 a week. This is the value of what we are producing.

But, what can we buy with our new salaries?

Each of us can still buy 100 TV dinners, and 200 widgets per week. Our wages have nominally dropped, but our standard of living has remained the same.



you’re talking slave labor and dire poverty living conditions in order to compete with china. –it’s a race to the lowest common denominator.

Nope. You're thinking about this all wrong. It's this simple: your wealth is what you produce, period. If we produce more, we're more wealthy. Whether we trade or not makes no difference. Actually, in reality, trade can have a positive effect, as we can give what is less valuable to us and obtain what is more valuable.

charrob
03-16-2010, 05:36 PM
Yes, in order to trade, one must give equal value to what one is receiving. Barring debt and inflation, if one is not exporting, one cannot import. This is true on an individual basis, as well as on a national basis.

thanks I now understand this as equating to:

agreed statement: America not in debt (as a whole) == no trade deficit.
agreed statement: America in debt (as a whole) == trade deficit.



The only way our standard of living will be higher than the Chinese is if we produce more than the Chinese.

This is the problem. If we produce equal to or greater than the Chinese, we destroy our standard of living, and work ethics. In other words, we become the cesspool China is today.



If we do not produce as much as the Chinese per capita, our standard of living will be lower -- regardless of what tariffs are put into place.

I disagree. In a land where manufacturers have shut down their plants long ago, if tariffs were created on imports from countries not supporting the same work ethics, pollution standards, safety standards, slave labor, child labor and floating of their currency as the United States does, that would mean our manufacturers could then compete. This would create new factories and manufacturers sprouting up everywhere throughout America. Americans now working selling Chinese goods would then get better paying, skilled, jobs making those goods in those new factories.

However, for countries who have the same standards as we do, no tariffs would be needed. In other words, nations would strive to better the living standards of their populations in order to trade with us, rather than we lowering our living standards in order to trade with them.



That's untrue. A country's wealth is the amount they produce, period. If safety is and weekends are sacrificed in country A, for example, they will have more material wealth, but not as much free time, and more injuries.

Right. If we would lower our living standards so that work safety is sacrificed and we work on weekends in order to compete, we would be able to compete with other countries whose workers work in unsafe conditions and sacrifice their weekends to compete. It’s a race to the bottom.



Trade has nothing to do with it -- it's just a tradeoff that each individual must make for themselves, and each nation, in the aggregate.

Let’s just talk nations for now. Trading with countries having impoverished conditions has caused domestic manufacturing to leave this country in search of more profitable slave labor conditions. This created loss of good paying, skilled, jobs which directly caused our debt as a nation.



The only reason there is the illusion that we have more wealth, despite producing less, is because of indebtedness and inflation. Neither of these factors are sustainable.

I agree.



Your analogy describes a violent, non voluntary interaction. In these situations, there is often a loser and a winner.

The fact that we have a nation voluntarily destroying our domestic manufacturers with its “free” trade is what seems violent to me.



In a voluntary interaction, such as free trade, both sides benefit.

Only when “free” trade is “fair” trade and we trade with countries that respect the same ethics, environmental, safety, slave labor, child labor, and floating of currency rules. In other words, only when everybody plays by the rules.



Otherwise, they would not trade.

exactly: we should not be trading with China unless they vastly change their behavior and ethics.



Trade increases the wealth in this country.

not if it’s done on an uneven playing field. Also don’t forget: there is a “human” cost for child labor, there is a “human” cost for slave labor, there is an “environmental” cost for spewing pollution into the air and depositing mercury into the ocean, and there is an “American” cost when other nations manipulate their currency by pegging it to the U.S. dollar so that it does not naturally float.



It is inflation and debt that is destroying our productive capacity for temporary gain. Our wealth will inevitably balance with this decreased production, causing a lower standard of living.

I agree that if there is no debt as a nation, then there is also no trade deficit as a nation (we’re not buying anything because we can’t afford it). To get out of this mess, we need tariffs on imports from unethical nations like China.



If the market were free, wages would fall until there was full employment. If a manufacturer leaves the country for lower wages overseas, wages would fall in this country until the displaced workers are all rehired. Assuming that the new job is as productive as the old job, total wealth and standard of living in this country would remain the same.

Right- we’d all work for slave wages: in other words, impoverish ourselves to compete with workers in other impoverished nations. This also, indirectly, and quite frightenly, moves toward a one world government.

-----------------------------------------------------------------------------------------



Again, think. Take it on a personal level. Can I have a trade deficit with the world? That is, can I consume more than I produce? Only if I take on debt, expend savings, or print my own money. Otherwise, I can never consume more than I produce.

No, again, consider it on an individual level. To keep it simple, suppose people only produce and consume widgets and TV dinners. Suppose I am able to make ten widgets an hour, and I work 40 hours a week. There is no foreign trade. I get paid $400 a week, because widgets are worth $1 each. My buddy makes 5 TV dinners an hour, which is 200 TV dinners a week. He also makes $400 a week, because TV dinners are worth $2 each. Together, the two of us make up our "nation".

Now, what is our standard of living? Each of us can buy 100 TV dinners, and 200 widgets per week.

Suppose a foreign nation enters the picture, with whom we have free trade. They work 100 hours a week, and have low safety standards,

ok, so far.




so the two members of that nation are able to produce 1000 TV dinners a week, and 2000 widgets, respectively.

??? (10 widgets/hour) * (100 hours/week) == 1000 widgets per week.
??? ( 5 dinners/hour) * (100 hours/week) == 500 dinners per week.

I am assuming the 2000 widgets per week and 1000 dinners per week are a result from loss of safety standards?




They are underpaid -- only making $200 a week each. That means the widgets and TV dinners their nation produces cost only ten cents, and twenty cents, respectively.

okay, so to compete with them you’d have to work like a slave in unsafe working conditions for pennies. got it.



Suddenly, at these lower prices, we cannot be paid as much.

right.



Since I make 400 widgets a week, my salary drops to $40 a week, and since my compatriot makes 200 TV dinners a week, his salary also drops to $40 a week. This is the value of what we are producing.

right.



But, what can we buy with our new salaries?

Each of us can still buy 100 TV dinners, and 200 widgets per week. Our wages have nominally dropped, but our standard of living has remained the same.

I must admit, you present a very compelling argument.

However, it seems there is a flaw in the logic. Your example works for a nation containing a total of 2 people. Both people have a salary decrease of 10% at the same time. This would mean the value of the dollar increases.

Now modify your example to a nation of 300 million (the U.S.). For your example to work, 300 million people would have to have their salaries decreased by 10% at the same time. What would this cause?

Well, over the course of, say, 100 years until the dollar increases in value to that extent, there would be mass starvation, poverty, etc. in our country until that change worked itself through the entire country: say, for a hundred years (if we survive that long).

At the same time, the chinese would either live like zillionaires or decrease the number of their work hours to 40 hours per week (which is probably what would happen). This would allow them to live the middle class lifestyle we in America are living right now.

So the result of all this is that you would have the chinese assuming our middle class lifestyle and our population living in dire poverty, possibly not able to exist, for the next 100 years until all this works through our system. And after all this what happens?

The chinese start working their 100 hour weeks again…we decrease our wages another 10% and instead of making $40 per week we instead make $4 per week. However it will take another hundred years for it to work itself through our nation of 300 million people. So for 200 years we live in dire poverty and the chinese assume a middle class lifestyle going back to 40 hour weeks.
And on and on.

So what’s the point? We are basically reversing the lifestyles of Americans and Chinese by trading with people that have uneven playing fields (working their workers 100 hour weeks). Why not, instead, sit in the driver’s seat: until the Chinese pull their ethics to be up to ours slap a tariff on their goods?



Nope. You're thinking about this all wrong. It's this simple: your wealth is what you produce, period.

incorrect: your true wealth is what you produce – (it’s “human” cost in slave labor) – (it’s “human” cost in child labor) – (it’s “environmental” cost) – (it’s “human” cost due to lack of safety) – (how much the government of your country subsidized your product) – (how much the government of your country manipulated it’s currency to be unnatural when it trades).

awake
03-16-2010, 06:42 PM
"Until the same labor laws, safety regulations, environmental regulations"

So based on that statement we need to invade and occupy China to force them on to these standards? Or, better yet, stop all Chinese goods coming into the U.S. or its pre-aproved trade partners. War is inevitable in both instances.

The U.S. adopted all these regulations to try and hobble competition but instead hobbled itself.


"So what’s the point? We are basically reversing the lifestyles of Americans and Chinese by trading with people that have uneven playing fields (working their workers 100 hour weeks). Why not, instead, sit in the driver’s seat: until the Chinese pull their ethics to be up to ours slap a tariff on their goods?"

Tariffs force the consumer to pay higher prices, purposely taxing (heavily) the goods they survive on, with proceeds of the rip off going to prop up the under productive or non productive.

The high wages or the high prices we enjoy was done through currency debasement (money and credit expansion) not saving and investment resulting in higher production in the true sense. We were warned a million times over against this and now the day of reckoning is upon us. The pleas to keep it all going are numerous, but the magicians are all out of tricks.

Peter Schiff summed it up quite neatly; The U.S. economy was turned into a service economy, away from production. He likened it to a farmer turning his farm into a golf course and sending IOUs in exchange for real goods from other farmers. Once the other farmers caught on that they were never going to get repaid by the farmer - turned golf course owner - they eventually stopped sending goods. This leaves the golf course owner only two just options: Re convert his golf course to produce something of real value to exchange with others or starve.The first choice is solely reliant on the circumstance that he can even remember how to produce. There is a third option, unjust as it is popular with the U.S. Imperium, and that is threatening to attack the other farmers for not buying IOUs.

The worst of all, we are fed bogus statistical information that is blatantly manipulated and serve as the guiding force of economic decision making. One stat in particular is the GDP. All government spending is counted as productive growth in output instead of rightly viewed as a subtraction by theft, destruction and malinvestments; it serves as a wonderful example of how deceptive the term "growth" is in our age of state perverted economics.

tremendoustie
03-16-2010, 08:09 PM
thanks I now understand this as equating to:

agreed statement: America not in debt (as a whole) == no trade deficit.
agreed statement: America in debt (as a whole) == trade deficit.



Exactly. Well, what really matters is the change in indebtedness/savings, not the actual value. So if we are not losing savings or increasing indebtedness, and if we are not printing money, we will have no trade deficit.



This is the problem. If we produce equal to or greater than the Chinese, we destroy our standard of living, and work ethics. In other words, we become the cesspool China is today.


So we may choose to produce less, and work less, and have better safety practices, etc. That's fine -- we'll still be fully employed, but we won't have more material wealth than the Chinese. We don't have to "compete" in the way you're thinking of it. But if we believe we can produce less and have more material goods, we're fooling ourselves.



If we do not produce as much as the Chinese per capita, our standard of living will be lower -- regardless of what tariffs are put into place.




I disagree.

To be clearer, I should have said that in the long run, we will not be able to consume as much material goods as the Chinese per capita, if we do not produce as much. Do you still disagree? If so, how do you believe we could continue to consume more than we produce? Or, how do you believe the Chinese could continue to produce more than they consume? It's impossible.



In a land where manufacturers have shut down their plants long ago, if tariffs were created on imports from countries not supporting the same work ethics, pollution standards, safety standards, slave labor, child labor and floating of their currency as the United States does, that would mean our manufacturers could then compete.


You're putting too much emphasis on competition, when all that really matters is production. Think about it -- if anyone's unemployed and wants a job, there is a price at which someone will employ them. Taking red tape out of the picture, then, we can have full employment. The total amount America produces is its total wealth. High tariffs would make it so that that wealth is traded within the U.S., rather than outside it -- but that doesn't really help the situation. If we find that the goods we produce can be traded outside the country, for something better, doing so is beneficial.

The reasons we are not producing effectively are debt and inflation, and the reasons we have unemployment are red tape and overhead. Otherwise, we would be productive. Whether that production would take the form of manufacturing, or whether we would find something we're better at producing, it's impossible to say. That's why central planning doesn't work ;).



This would create new factories and manufacturers sprouting up everywhere throughout America. Americans now working selling Chinese goods would then get better paying, skilled, jobs making those goods in those new factories.


At best, tariffs can act as a band-aid, to stop people from borrowing to buy foreign goods. In reality, though, most of the indebtedness is being caused by governments, and all of the inflation is being caused by the federal government and banks. The reason for the malemployment now is not mostly individual borrowing -- and even individual borrowing is better solved by allowing the credit markets to adjust, rather than holding rates low, as the Fed does.

Trade deficits are the symptom, not the disease. Let credit rates increase, stop governmental borrowing and inflation, and the problems would resolve themselves -- far more effectively than tariffs ever could. What is needed is a reallocation of resources. Freedom's the only way to allow this to happen.




However, for countries who have the same standards as we do, no tariffs would be needed. In other words, nations would strive to better the living standards of their populations in order to trade with us, rather than we lowering our living standards in order to trade with them.


You don't have to have lower living standards to trade. You can produce less, but sell it at the same price. (Or, better yet, you can produce something different, that you are more efficient at producing).



Right. If we would lower our living standards so that work safety is sacrificed and we work on weekends in order to compete, we would be able to compete with other countries whose workers work in unsafe conditions and sacrifice their weekends to compete. It’s a race to the bottom.


Or, we can sell half as much stuff, at the same price as the people who work twice as much. We'd have less material goods, but we'd have more free time.



Let’s just talk nations for now. Trading with countries having impoverished conditions has caused domestic manufacturing to leave this country in search of more profitable slave labor conditions. This created loss of good paying, skilled, jobs which directly caused our debt as a nation.


Again, this is backwards. Artificially low interest rates caused people to borrow huge amounts of money, a great deal of it for housing. Politicians borrowed huge amounts of money because that's what they do. They inflated because that's what they do.

The spike in debt happened before the recession, you'll recall.

Debt caused the phony economy, and regulations are preventing us from adjusting, and are keeping unemployment high. Continued government spending is also continuing to keep the phony economy propped up.




I agree.

Yay! :)



Your analogy describes a violent, non voluntary interaction. In these situations, there is often a loser and a winner.



The fact that we have a nation voluntarily destroying our domestic manufacturers with its “free” trade is what seems violent to me.


I think you dodged my point here.




In a voluntary interaction, such as free trade, both sides benefit.




Only when “free” trade is “fair” trade and we trade with countries that respect the same ethics, environmental, safety, slave labor, child labor, and floating of currency rules. In other words, only when everybody plays by the rules.


That's untrue. Suppose I work on my own farm, growing my own crops. I have a good deal of free time, and work safely. Now suppose my neighbor works around the clock to produce the maximum possible.

Now, suppose I have a turnip. I want a carrot. My neighbor has a carrot, he wants a turnip. If we trade, we both benefit. The question of how he obtained his goods is irrelevant. A trade benefits both parties -- or they wouldn't do it.



exactly: we should not be trading with China unless they vastly change their behavior and ethics.


You didn't respond to my point here, you changed the subject.

Now, I could agree with boycotts of China, in order to get them to change their abusive behavior (although I would prefer an effort that goes after the Chinese government more directly, rather than Chinese business). This should be accomplished by free individuals, however -- not government.

If two people want to trade justly acquired goods with each other, I do not have a right to forcibly stop them, nor does the government. I don't own them, their lives, or their goods.



not if it’s done on an uneven playing field. Also don’t forget: there is a “human” cost for child labor, there is a “human” cost for slave labor, there is an “environmental” cost for spewing pollution into the air and depositing mercury into the ocean, and there is an “American” cost when other nations manipulate their currency by pegging it to the U.S. dollar so that it does not naturally float.


Materially, trade benefits both participants. If goods are acquired violently - as in slave labor - then I would support forceful prevention of that trade, and justice for the perpetrators.

If goods are only acquired in a way I consider unethical, or unpreferable, boycotts are a good response, as is support for better alternatives. Buying fair trade, for example, is a good way to combat low wages in third world countries.



I agree that if there is no debt as a nation, then there is also no trade deficit as a nation (we’re not buying anything because we can’t afford it). To get out of this mess, we need tariffs on imports from unethical nations like China.


We don't need no debt -- we need to stop increasing debt. Let interest rates rise, stop government spending, and government inflation, and we'd be on our way to recovery tomorrow. There'd be a tough period as the phony economy collapses -- while malls close and before factories open -- but I think we'd be seeing improvement within a year.



Right- we’d all work for slave wages: in other words, impoverish ourselves to compete with workers in other impoverished nations.


What we produce is our wealth. I can't emphasize this strongly enough. What nominal wages are doesn't matter. Cut the prices of everything by a factor of 100, and cut wages by a factor of 100, and no one's quality of life will change.

If you get one thing I say, get this: Ignore the movement if little green pieces of paper, and look at what happens to the actual wealth. That's how to understand an economy.

The second really great trick is this: Take it to a personal level. Imagine if you, as an individual, were a nation, or imagine your family were a nation. That helps one avoid being confused by distractions that impede understanding the essentials.

Wages will be equal to the value of what is produced. Tariffs are really just a roundabout way of cutting wages. If wages and prices of domestic goods both fall, as they should, buying foreign goods will be more expensive. Tariffs have the same effect -- making foreign goods more expensive -- but instead of being done efficiently, by the market, it is done inefficiently, by politicians.



This also, indirectly, and quite frightenly, moves toward a one world government.


I don't follow how free trade leads to one world government. It seems to me that freedom is the opposite of tyranny.





ok, so far.


??? (10 widgets/hour) * (100 hours/week) == 1000 widgets per week.
??? ( 5 dinners/hour) * (100 hours/week) == 500 dinners per week.

I am assuming the 2000 widgets per week and 1000 dinners per week are a result from loss of safety standards?


Yes, I supposed that they could produce more because they had lower safety standards.





okay, so to compete with them you’d have to work like a slave in unsafe working conditions for pennies. got it.



right.



right.



I must admit, you present a very compelling argument.


Thanks :).



However, it seems there is a flaw in the logic.


Ruh roh.



Your example works for a nation containing a total of 2 people. Both people have a salary decrease of 10% at the same time.


Well, I think their salary decreased by 90%, but ok.



This would mean the value of the dollar increases.


Yes. Things are being made cheaper, so one dollar buys more.



Now modify your example to a nation of 300 million (the U.S.). For your example to work, 300 million people would have to have their salaries decreased by 10% at the same time. What would this cause?

Well, over the course of, say, 100 years until the dollar increases in value to that extent, there would be mass starvation, poverty, etc. in our country until that change worked itself through the entire country: say, for a hundred years (if we survive that long).


It would happen almost instantly -- a few months or a year at most -- and during the intermediate time, we'd be living high on the hog off the increased value of our savings. What's more, the first thing to adjust downward is prices -- as the cheap goods hit the market -- and wages follow shortly after. Businesses will not be able to pay employees more than the value of what they are producing. Wages will adjust downward almost immediately

Again, for what you describe to occur, we would need to have persistent undesired unemployment, which is impossible in a truly free market.



At the same time, the chinese would either live like zillionaires or decrease the number of their work hours to 40 hours per week (which is probably what would happen). This would allow them to live the middle class lifestyle we in America are living right now.


You're right, they probably would change to a 40 hour work week, and increase safety, since they value these aspects of quality of life just as we do. And here you have the real way to increase equality: freedom.



So the result of all this is that you would have the chinese assuming our middle class lifestyle and our population living in dire poverty, possibly not able to exist, for the next 100 years until all this works through our system. And after all this what happens?

The chinese start working their 100 hour weeks again…we decrease our wages another 10% and instead of making $40 per week we instead make $4 per week. However it will take another hundred years for it to work itself through our nation of 300 million people. So for 200 years we live in dire poverty and the chinese assume a middle class lifestyle going back to 40 hour weeks.
And on and on.


I think you're letting your imagination run wild. Again, the adjustments we're talking about, in a free society, take months, not years. It does not take long for supply to meet demand at price.

Freedom would not lead to poverty for either us or the Chinese, as I described above. You're viewing this as a zero sum game, when it's not at all. The amount produced is the amount of wealth -- this is true for both China and the US. Our production is not negatively effected by China's existence. At worst, there is no effect, and we simply produce what we need on our own. At best, we can trade what we produce with them for things we want even more.

Furthermore, free trade allows a degree of specialization, which increases everyone's wealth. It may be that we're better at certain things, and don't need to all be in factories. We run Microsoft, and other major computer companies. Entertainment is largely centered here, as is advertising and branding. With high tariffs, we've all got to be in factories making widgets, and every other thing we need -- but it may be that it's more efficient for the Chineese to make our widgets, while we can work in other sectors, where we are more productive.



So what’s the point? We are basically reversing the lifestyles of Americans and Chinese by trading with people that have uneven playing fields (working their workers 100 hour weeks). Why not, instead, sit in the driver’s seat: until the Chinese pull their ethics to be up to ours slap a tariff on their goods?


The point is, in the example I gave, we and those in the foreign nation are both just as good at making widgets and TV dinners. In this case, there's really no benefit to trade. It evens out prices, but has no real effect on quality of life one way or the other. The reality, is, however, different countries are good at different things.

Let's change our example slightly to reflect this. Suppose, as before, that my compatriot and I can make 200 TV dinners a week each, or 400 widgets. In our economy, then, just as before, TV dinners cost $2, and widgets cost $1, and we both make $400 a week. Each of us can buy 100 TV dinners, and 200 widgets per week, just as before.

Now the foreign nation enters the picture. This time, however, instead of making 1000 TV dinners or 2000 widgets a week, they each can make 2000 TV dinners or 2000 widgets. That is, while we're better at making widgets, they're equally good at TV dinners and widgets. As before, they make $200 a week. This means the widgets their nation produces cost ten cents, and so do the TV dinners they make.

Now, the value of my job, making widgets, has dropped to $40 a week, as before, since that's the value of what I'm producing (400 widgets a week). My compatriot's salary, however, has dropped all the way to $20 a week (he makes 200 TV dinners a week, which are now only worth ten cents).

He quits his job and gets a job with me, in the widget factory, since it pays better. Now we both make $40 a week. What can we buy?

We now can buy 200 TV dinners AND 200 widgets a week. That's 100 TV dinners per week RICHER than we would be otherwise. If we'd put up huge tariffs, what would have been our wealth? Only 100 TV dinners and 200 widgets per week.




incorrect: your true wealth is what you produce – (it’s “human” cost in slave labor) – (it’s “human” cost in child labor) – (it’s “environmental” cost) – (it’s “human” cost due to lack of safety) – (how much the government of your country subsidized your product) – (how much the government of your country manipulated it’s currency to be unnatural when it trades).

I'm talking material goods here. The total material wealth of your country is the total amount it produces, period. You can't consume more than you produce, in the long run. Ignore the movement of little green pieces of paper. We make stuff. What happens to that stuff? We consume it, or we trade it. If we trade it, that's equal value for equal value, so no net gain or loss. We then consume what we traded for.

The only way we can consume more than we produce is if goods are entering the country without goods leaving the country. Why would this happen? Either someone's feeling charitable, or we sent them an IOU. That's not sustainable.

Thus, in the long term, you can only consume what you produce.

tremendoustie
04-16-2010, 02:22 PM
Bump!

charrob
04-16-2010, 04:05 PM
...sorry for the delay. ok, here's a start:

Last time we spoke of this it had never occurred to me how debt was related, but now I understand what you’re saying and what you say makes perfect sense (thank you for explaining): I guess I come from the old school where (except for my home, car, and student loans) I’ve never believed in using credit cards to purchase things I couldn’t afford.

So, let’s pretend we’re talking about two countries who, at this point, do not trade (China and the U.S.). So, starting clean:
• the citizens of both countries do not use credit cards/debt.
• the citizens of both countries are not losing savings.
• the countries are not printing fiat money.

In China, there is a huge problem with poverty; people are willing to do just about anything in order to survive.

However, the U.S. is the way it was back in the 1960’s where most people had a single-family home with only one income earner, the only debt they had was their mortgage, they had plenty of food, and a relatively good, middle class, lifestyle. The wage earners worked in manufacturing with good wages and working conditions.

All of a sudden the U.S. decided it was going to open up trade with China. This is where our discussion (and my confusion) starts.

---------------------------------------------------------------------------------------------------------------------------------------

Day 1: the impoverished Chinese realize they can make manufacturing items more cheaply by incorporating slave labor, child labor, unsafe working conditions, 80-hour work weeks with no vacation, etc. Additionally the Chinese decide they are going to peg their currency to the U.S. dollar.

Chinese imports start coming into the U.S.; U.S. consumers realize that imported items from China are cheaper: voila: they got a bargain! What they didn’t realize is that by purchasing that cheaper widget from China, their neighbor who made those widgets in the U.S. would eventually lose his manufacturing job. And that eventually, Mr. Consumer himself would lose his manufacturing job as well since the Chinese compete on this uneven playing field.

Now that we’ve lost our manufacturing jobs, we can no longer afford to purchase Chinese widgets.

The value of our currency therefore decreases. We could start making widgets again keeping the same 8-hour workdays, safety standards, living standards, etc. that we used to work under. Since the value of our currency decreased, we could, in fact, sell our widgets to China whose consumers would now happily purchase our lower-cost widget.

Unfortunately, before we are able to open our manufacturing back up, the Chinese government pegs their currency to the U.S. dollar. (Our widgets could not only not compete in China,) but since the Chinese continue working 80-hour weeks, our manufacturers still cannot open up. As a result we continue with our low paying service jobs selling Chinese widgets and simply become poorer and poorer as a nation until no one in the U.S. can afford any widgets at all and we become as poor as the Chinese were originally.

My thesis is that our "free" trade with China will only result in U.S. workers having to work 80-hour workweeks and basically living in the same impoverished situation the Chinese were in before we ever started trading with them in the first place.

tremendoustie
04-16-2010, 06:00 PM
...sorry for the delay. ok, here's a start:

Last time we spoke of this it had never occurred to me how debt was related, but now I understand what you’re saying and what you say makes perfect sense (thank you for explaining): I guess I come from the old school where (except for my home, car, and student loans) I’ve never believed in using credit cards to purchase things I couldn’t afford.


That's a very wise policy. ;)



So, let’s pretend we’re talking about two countries who, at this point, do not trade (China and the U.S.). So, starting clean:
• the citizens of both countries do not use credit cards/debt.
• the citizens of both countries are not losing savings.
• the countries are not printing fiat money.


Ok.



In China, there is a huge problem with poverty; people are willing to do just about anything in order to survive.


In order to understand the scenario, we have to understand the reason for this. You can make up your own (it's your scenario after all) -- but we have to understand why they're poor. Is their government stealing from them? Are they not able to produce much per-capita because of low industrialization? Etc.



However, the U.S. is the way it was back in the 1960’s where most people had a single-family home with only one income earner, the only debt they had was their mortgage, they had plenty of food, and a relatively good, middle class, lifestyle. The wage earners worked in manufacturing with good wages and working conditions.


Ok -- so let's note, the US is able to produce all of the goods necessary to support this lifestyle.



All of a sudden the U.S. decided it was going to open up trade with China. This is where our discussion (and my confusion) starts.

---------------------------------------------------------------------------------------------------------------------------------------

Day 1: the impoverished Chinese realize they can make manufacturing items more cheaply by incorporating slave labor, child labor, unsafe working conditions, 80-hour work weeks with no vacation, etc. Additionally the Chinese decide they are going to peg their currency to the U.S. dollar.


We've got a problem already -- because you cannot "peg" a currency without printing fiat money. Let's adjust your starting point to say that the U.S. is not printing fiat money, but the Chinese will print as necessary to stay "pegged" to the dollar.



Chinese imports start coming into the U.S.; U.S. consumers realize that imported items from China are cheaper: voila: they got a bargain!


Let's identify clearly what industries the U.S. is involved in. In order to fully understand a scenario like this, we have to specify the details. Are the Chinese producing cheaper corresponding goods for everything the US makes, or just some things? What is the average income in the US before trade is opened, and what precisely does that buy?

Please describe your scenario with specific details, so we can really analyze what would happen. I'll go ahead with rough generalities, but we need to be specific to get this right.



What they didn’t realize is that by purchasing that cheaper widget from China, their neighbor who made those widgets in the U.S. would eventually lose his manufacturing job.


That's untrue -- the neighbor's wages would drop.

Week 1: The neighbor's company realizes sales have dropped to zilch, because they are being undercut by the Chinese. They figure out how they can cut costs to compete. We'll say it includes a 50% reduction in salaries.

Weeks 2-8: The employees decide whether they will stay on at the new decreased salary, or not. This is largely dependent on whether the Chinese are cheaper in all areas, or just some. If they are cheaper in all areas, all other industries would have experienced similar salary drops, so the employees would stay put. If there are some industrial sectors where the U.S. businesses are not being undercut, and salaries have not dropped, it is likely that the workers will quit and move to that industry.
[/quote]



And that eventually, Mr. Consumer himself would lose his manufacturing job as well since the Chinese compete on this uneven playing field.


No, again, his salary will adjust downward.



Now that we’ve lost our manufacturing jobs, we can no longer afford to purchase Chinese widgets.


The jobs would still exist, but at lower salaries. The only way the jobs will not exist at all, is if there are other jobs paying more.

Again, let me know what specific scenario you'd like to take a look at here -- are all industries affected, or just some? Which industries are exporting?



The value of our currency therefore decreases.


The value of the currency is measured in what it can buy. The same unit of currency can purchase more goods, now that Chinese import is allowed, so unless there is another asset or good to offset the effect, the value of the currency has actually increased.


We could start making widgets again keeping the same 8-hour workdays, safety standards, living standards, etc. that we used to work under. Since the value of our currency decreased, we could, in fact, sell our widgets to China whose consumers would now happily purchase our lower-cost widget.

What's the currency valued in? Is it only widgets -- are widgets the only good in our simplified scenario? Again, if you can fully specify things, that would help.

Actually, if you want to have import/export and stable savings, we're going to need to have at least two goods in our scenario. You specified that Americans are not increasing in indebtedness or savings -- so, if we import the only good, we have no exports, and vice versa, which would imply net borrowing or saving.


Unfortunately, before we are able to open our manufacturing back up, the Chinese government pegs their currency to the U.S. dollar. (Our widgets could not only not compete in China,) but since the Chinese continue working 80-hour weeks, our manufacturers still cannot open up. As a result we continue with our low paying service jobs selling Chinese widgets and simply become poorer and poorer as a nation until no one in the U.S. can afford any widgets at all and we become as poor as the Chinese were originally.

This is incorrect -- but please describe your scenario precisely, so we can see how.



"My thesis is that our "free" trade with China will only result in U.S. workers having to work 80-hour workweeks and basically living in the same impoverished situation the Chinese were in before we ever started trading with them in the first place."


This is false. Again, think of it on an individual basis. I have my farm, and you have yours. Suppose we don't know about each other. I provide all my needs, and you yours. Suppose you work 120 hours a week, and so have very little time and poor heath, but lots of goods. I work 40 hours a week, so I have less goods, but more time and health.

Now suppose we discover eachother, and can now trade if we both want to. Will this impoverish me, or force me out of my lifestyle? Of course not. In fact, if I have a something that you want more, and you have something I want more, we both become better off. Trade can only be beneficial.

Describe your scenario very precisely, and we'll see how this works in your case. It can be complicated if you want -- involving service industry, multiple imports/exports, etc, but it has to be completely described. Throw something out there, if you want, and I'll ask questions to clarify relevant details.

charrob
04-16-2010, 08:09 PM
That's a very wise policy. ;)


Thank you so much for explaining this to me; this is very nice of you! :)
I really would like to learn how you see things: it is most interesting.

Also, thank you for allowing me to create the scenario: this makes it alittle easier to understand.

Sometimes I'm alittle slow to respond, so if it's ok, I've placed a thread in a less busy, slower-paced Economics forum:


.

Let me know if this is not ok.

Now I will spend some time thinking about these things and will try to respond back tomorrow, if this is ok? :o

tremendoustie
04-16-2010, 10:33 PM
Thank you so much for explaining this to me; this is very nice of you! :)
I really would like to learn how you see things: it is most interesting.

Also, thank you for allowing me to create the scenario: this makes it alittle easier to understand.

Sometimes I'm alittle slow to respond, so if it's ok, I've placed a thread in a less busy, slower-paced Economics forum:



Let me know if this is not ok.

Now I will spend some time thinking about these things and will try to respond back tomorrow, if this is ok? :o

Perfect! Thanks :).

If everyone were as honest a thinker as you are, the country would be in excellent shape.