Free Trade vs Protectionism (help me out here)

[shadowhooch]

Regarding free trade vs protectionism......

If we keep our currency strong, then imports become cheaper for us -- FACT.
Because of this, manufacturing eventually goes overseas and we become a consumer/service economy -- FACT.
So how does having a strong currency help us?
Isn't this what happened to the US and also what Switzerland is currently concerned about?

Someone educate me. Why is pure free trade good if all your manufacturing leaves?

Thanks.

[Cutlerzzz]

The point of having a job is not to produce, the point is to consume. Production (and working) is just an means to an end, not the end of it's self.

[Seraphim]

The US is still a manufacturing powerhouse - just not per capita as it was before....Manufacturing doesn't all vanish.

[Stevo_Chill]

you produce more complex products like OSes, power grid managements, space fleets, communication methods. etc.
people need to be students of history to understand what i'm saying.
imagine taking you position during the times in history when ag laborers were losing jobs to tractors or factory workers were losing jobs to automated robots, or wagon makers losing their jobs to auto makers. every time someone was losing ajob to a more productive endeavor/.

[shadowhooch]

Hmmm....
So it is not important to produce per se; but it is important to produce cutting edge materials, correct?
So it is important to incent technology?
I guess what I'm asking is at what point is it a diservice to your country to have manufacturing go overseas?

To make money and consume, you need a job. And if the job isn't to produce something, then what is your contribution?
Since China produces most everything, why don't they produce for themselves to consume?
Why do we as US citizens make so much more money?

I guess I'm trying to understand Peter Schiff's Crash Proof where he is stating the case that Consumption is not a good measure of GDP. And since we no longer produce goods, our economy is destined to suffer.

[phill4paul]

The 1 in 7 on food stamps, the hundreds that stood at the local food bank grateful to be given a Thanksgiving meal, those that have played out their one hundred plus weeks of unemployment and those that currently live with a relative instead of a house they use to own all hail the coming of the service economy. We are soooo much better for it.

[Steven Douglas]

Since China produces most everything, why don't they produce for themselves to consume?

They do. There is a massive (and massively growing) internal consumer market in China. In Wuxi, where I have residence, with a population of 6 million (sprawling by US standards, small by Chinese), ultra-modern malls, mega-department stores, etc., are everywhere - and just as busy as anything you'll find in the most bustling and expensive markets in New York. Equivalent prices too, with massive expenditures.

[phill4paul]

Of course there is also the fact that once you become a service economy you lose the infrastructure to be a manufacturing country. So if ever there was a glitch in the wonderful service plan, say war, the manufacturing base is not able to rebound. And then of course you have these other countries producing things like electronic componenets that may or may not work when they are attached to your military hardware. Yep. This service economy seems like a great idea.

[shadowhooch]

They do. There is a massive (and massively growing) internal consumer market in China. In Wuxi, where I have residence, with a population of 6 million (sprawling by US standards, small by Chinese), ultra-modern malls, mega-department stores, etc., are everywhere - and just as busy as anything you'll find in the most bustling and expensive markets in New York. Equivalent prices too, with massive expenditures.

Yep. So again, why is it important to have a strong currency if it simply encourages manufacturing and production to go overseas?
Are the Swiss wrong to peg their currency to the Euro? Their currency was getting so strong, that their exports were suffering massively and consequently, their manufacturing started suffering losses. So they devalued to protect their production. Is this wrong?

[Cutlerzzz]

A strong currency does not cause manufacturing to go overseas. Look at how many third world countries that have pathetic currencies and no manufacturing. It might help a few manufacturing firms that want to be subsidized, but there is more to manufacturing than the currency.

As for US manufacturing...

http://forwearemany.files.wordpress.com/2010/09/manufacturing_totaloutput.jpg

[Becker]

The point of having a job is not to produce, the point is to consume. Production (and working) is just an means to an end, not the end of it's self.

which is exactly why we should applaud wall street, and ignore blue collar workers. In addition, not care about unemployment, nobody cares about employment, we care about consuming power.

[Becker]

The 1 in 7 on food stamps, the hundreds that stood at the local food bank grateful to be given a Thanksgiving meal, those that have played out their one hundred plus weeks of unemployment and those that currently live with a relative instead of a house they use to own all hail the coming of the service economy. We are soooo much better for it.

1/7 on food stamps because we allow it. if we allowed 6/7 to be on food stamps, I have no doubt every single person will take it (unless there's a price to pay in return)

[AlexMerced]

look up on youtube my videos:

The Case for Free Trade

The Case Against Protectionism

[Becker]

look up on youtube my videos:

The Case for Free Trade

The Case Against Protectionism

Alex, are you consistently for free trade, meaning you're for open borders, free for all immigration, outsourcing, importing?

[shadowhooch]

look up on youtube my videos:

The Case for Free Trade

The Case Against Protectionism

Hey Alex,
I listened to the first video and I understand the benefits of free trade with nations and how it makes for the most efficient global system.

However, I'm more interest in what free trade does to a country if the currency valuations are drastically different (i.e. US vs China or Swiss vs Euro). Peter Schiff critisizes the Swiss for their recent move to peg their currency to the Euro. He said "a strong currency is always a good thing". But if a country's exports are suffering because their goods are too expensive due to their strong currency, how is that a good thing?

Is there a situation where a country should inflate their currency in order to stay competitive and not lose their manufacturing base? Like others have said on this thread and like Schiff has said, once you lose the infrastructure, it takes much longer to rebuild it.

Isn't the fact that the US has such a strong currency a big reason why we have lost so many manufacturing jobs? I work for a retail company. It isn't even close to being economically feasible to create the product here. If every industry is like this, I don't see how a super strong currency helps.

Thanks for responding. I'd love some more opinions and facts on this. I'm just trying to balance free trade and how it partners with a strong currency.

[mojobo]

One thing that a weak currency does is make it harder to purchase the capital necessary to increase the value of labor. The benefit of having a strong currency is that the cost of income producing assets comes down which means workers will produce more. Greater production = more jobs plus higher wages and greater wealth.
The theory that keynsians like to argue is that the country with a weaker currency will export more and therefor have more jobs. The two flaws of that thinking is that normally the currency is weakened by increasing the supply of that currency which usually goes towards imports in one way or another. The second is that they assume only consumption goods go down in price for the stronger currency and don't account for the fact that the goods of production, which is what produces higher wages/more jobs, become more expensive in a weak currency.

[shadowhooch]

One thing that a weak currency does is make it harder to purchase the capital necessary to increase the value of labor. The benefit of having a strong currency is that the cost of income producing assets comes down which means workers will produce more. Greater production = more jobs plus higher wages and greater wealth.
The theory that keynsians like to argue is that the country with a weaker currency will export more and therefor have more jobs. The two flaws of that thinking is that normally the currency is weakened by increasing the supply of that currency which usually goes towards imports in one way or another. The second is that they assume only consumption goods go down in price for the stronger currency and don't account for the fact that the goods of production, which is what produces higher wages/more jobs, become more expensive in a weak currency.

Interesting. Very helpful. Thanks.
So is there ever a case where you need some protectionism? Like if a country were to lose it's entire automotive industry (which almost happened)? Some things you want to keep the production capabilities, no?

[Becker]

Hey Alex,
I listened to the first video and I understand the benefits of free trade with nations and how it makes for the most efficient global system.


LOL, that sounds awfully familiar. Didn't I hear people here complaining how an "efficient global trading system" is an NWO plot for one government, one currency and to rob innocent people blind?



However, I'm more interest in what free trade does to a country if the currency valuations are drastically different (i.e. US vs China or Swiss vs Euro). Peter Schiff critisizes the Swiss for their recent move to peg their currency to the Euro. He said "a strong currency is always a good thing". But if a country's exports are suffering because their goods are too expensive due to their strong currency, how is that a good thing?


Strong currency basically just means "valuable currency", meaning you can buy more for less. Why do you need to export if you have too much money?



Is there a situation where a country should inflate their currency in order to stay competitive and not lose their manufacturing base? Like others have said on this thread and like Schiff has said, once you lose the infrastructure, it takes much longer to rebuild it.


Yes, countries often need to inflate their currency to faciliate trade and lubricate movement of goods. It also creates the illusion of less labor spent.



Isn't the fact that the US has such a strong currency a big reason why we have lost so many manufacturing jobs?


yes, and it shouldn't be a bad thing.



I work for a retail company. It isn't even close to being economically feasible to create the product here. If every industry is like this, I don't see how a super strong currency helps.

Thanks for responding. I'd love some more opinions and facts on this. I'm just trying to balance free trade and how it partners with a strong currency.

[Becker]

Interesting. Very helpful. Thanks.
So is there ever a case where you need some protectionism? Like if a country were to lose it's entire automotive industry (which almost happened)? Some things you want to keep the production capabilities, no?

that's like asking do you ever need taxes, or inflation? Of course there's always cases for something.
Is there ever such thing as "good" unemployment? Is there ever such thing as "bad" economic growth? of course!
My answer is, no. There's nothing inherently good about production, unless it means avoiding dependence and risk (which is not inherent)
Logically, there's nothing bad about losing jobs, unless it means losing consumption power.

[Anti Federalist]

The point of having a job is not to produce, the point is to consume. Production (and working) is just an means to an end, not the end of it's self.

See, maybe that's where the disconnect for me is.

I do not see it that way at all.

The point of working is not to mindlessly "consume", the point is to do something productive with your time here on earth and to save, invest and build something better for the future and your family.

I hate to think that the one that dies with most flat screen TVs and XBoxes and new cars, wins.

[Becker]

See, maybe that's where the disconnect for me is.

I do not see it that way at all.

The point of working is not to mindlessly "consume", the point is to do something productive with your time here on earth and to save, invest and build something better for the future and your family.

I hate to think that the one that dies with most flat screen TVs and XBoxes and new cars, wins.

interesting enough, I agree with the guy above that production and employment is a means to an end, but I can sympathize with protectionist views. Nonetheless, it only goes so far. I am for protectionism only as far as I believe employment is good and unemployment is bad, otherwise I have nothing against consumption without productivity.

and no, there is no win, the person who dies happiest is the happiest. Whether he lived in debt or lived with savings, whoever is happiest is most worthy, for him at least.

[limepickle]

Having a strong currency may stop manufacturing here, but it will make it easier to invest in and profit from manufacturing overseas. And if we end up with a service-based economy, that's fine. There's nothing wrong with a service based economy.

[shadowhooch]

Having a strong currency may stop manufacturing here, but it will make it easier to invest in and profit from manufacturing overseas. And if we end up with a service-based economy, that's fine. There's nothing wrong with a service based economy.

Thanks for the good answer.
So the fact that we have a service based economy now isn't a real problem; it is simply the level of debt that is steering us towards impending doom?
Is there a good example of a solid and successful service-based economy out there that is prosperous with low debt?

Thanks again.

[Becker]

Thanks for the good answer.
So the fact that we have a service based economy now isn't a real problem; it is simply the level of debt that is steering us towards impending doom?
Is there a good example of a solid and successful service-based economy out there that is prosperous with low debt?

Thanks again.

Hong Kong and Singapore. They manufacture little, and make lots of their money on financial services, trading.
(both of these places have a zero tolerance drug policy, and death penalty, so don't for a minute think they're libertarian)
Las Vegas, produces almost nothing tangible, but makes lots of money by trading money.
Debt is not necessary for any of these industries, its just a bad habit to have and anybody is prone, some are just smart enough not to have it.
Switzerland at one point was dubbed "smoke free industry" to describe their revenue from tourism, although they produce good products as well.

[limepickle]

You're welcome Shadow, and as Becker said, Hong Kong and Singapore are largely service based. The reason why service economies work is because they still invest and derive profit from somewhere, and with that profit, they demand additional services at home.

[Becker]

You're welcome Shadow, and as Becker said, Hong Kong and Singapore are largely service based. The reason why service economies work is because they still invest and derive profit from somewhere, and with that profit, they demand additional services at home.

there are many reasons why Hong Kong and Singapore wealthy.
Many will attribute it to free market. But like I said earlier, they are not libertarian when it comes to crime. and very unlibertarian on immigration.
They're also multicultural, and very small in area. If we stopped here, you have plenty of reason to believe US can never be like them, and we'd almost never want to be.

Taiwan is slightly different, but they all have another thing in common, high employment due to LOW wages and LOW benefits in employment. Many people in the US who are considered "underemployed" would be considered upper middle in Taiwan. In all 3 places, there's very little tolerance for debt, this is not "freedom" by American standards. They do not allow credit cards and mortgages to be blown up, this definitely means lots of potential jobs are lost and prevented, but at a price many Americans would probably kill for.

No system is perfect, and the grass is always greener on somebody else's side. Americans still have lots of benefits people there do not, if nothing else, lots of free space and land to travel. One thing I know about the lifestyle in those countries is, they do not want everything, they live within their means and they frown on people who have kids who they cannot feed. People who have an unwanted child are shunned and shamed, it doesn't happen a 2nd time. They do not condemn abortion, it's their way of saving money.

They are far from Christian as a culture, yet their teens either know how to practice safe sex, or manage to clean up their mess. Look around you, go figure. (sorry for the rant about children, but it's a very real issue when it comes to economics, Americans can be in denial all they want about it).

When Taiwan and Singapore complain about unemployment, its because they have too much talent, and too much free time. Not that they are complaining they'll starve because they don't have money. Restaurants are luxury and most people eat with disposable plastic bags, it's bad for the environment but makes perfect economic sense.

[shadowhooch]

Thanks for the knowledge and feedback. Any good book you'd recommend dealing with currency value, free trading, and the effect on the economy? I read Crash Proof by Peter Schiff -- who is a free market and strong currency advocate. But he sort of condemns the service-based economy stating true wealth can only be derived by producing things -- which is why he pushes for investment in China. I need more understanding on the currency value effect. Thanks again if you have a recommendation!

[Becker]

Thanks for the knowledge and feedback. Any good book you'd recommend dealing with currency value, free trading, and the effect on the economy? I read Crash Proof by Peter Schiff -- who is a free market and strong currency advocate. But he sort of condemns the service-based economy stating true wealth can only be derived by producing things -- which is why he pushes for investment in China. I need more understanding on the currency value effect. Thanks again if you have a recommendation!

for that he is somewhat of a hypocrite, since he is not a blue collar worker himself.

Honestly, no, I cannot recommend any books. Because my knowledge was not from books, but by looking around, asking people who live in different countries, and reading how media covers economic news, with some level of skepticism.

I could recommend Pat Buchanan's blog and books for protectionism, and JBS magazine for protectionism. They make the best cases for protectionism if there are any. This is protectionism without socialism, most other anti-unemployment protectionists are like Michael Moore, they just want jobs and money, they dont care how.

[mojobo]

Interesting. Very helpful. Thanks.
So is there ever a case where you need some protectionism? Like if a country were to lose it's entire automotive industry (which almost happened)? Some things you want to keep the production capabilities, no?
Assuming that we are talking about tarrifs or quotas the only way to protect one industry is at a greater expense to another. There was a video on here that showed the damage that protectionism ended up doing because of the added costs businesses had to pay for domestic goods. Also by saving an industry you are keeping capital in the hands of people who use it inefficiently. By letting them fail the capital flows to people who can more efficiently use it.

[Becker]

Assuming that we are talking about tarrifs or quotas the only way to protect one industry is at a greater expense to another. There was a video on here that showed the damage that protectionism ended up doing because of the added costs businesses had to pay for domestic goods. Also by saving an industry you are keeping capital in the hands of people who use it inefficiently. By letting them fail the capital flows to people who can more efficiently use it.

I agree, protecting one industry or one job, almost always comes at another's expense. But not all jobs and industries are equal, so if you protect the right one and hurt the right one, that'd be ideal.

[phill4paul]

. And if we end up with a service-based economy, that's fine. There's nothing wrong with a service based economy.

Nope nothing wrong with it at all.....

Surely nothing could go wrong with that.


The Senate released a report that claims that on 1,800 separate occasions, the U.S. military or contractors have purchased electronics materials for defense systems that were either fake or poorly recycled.
http://www.theblaze.com/stories/made-in-china-u-s-military-finding-fake-chinese-electronics-in-gear-at-alarming-rate/

It's always smart to outsource your infrastructure projects. Surely we will never be in a position where we might have to do it ourselves. So it won't matter that we might not be able to.


“I don’t think the U.S. fabrication industry could put a project like this together,” Brian A. Petersen, project director for the American Bridge/Fluor Enterprises joint venture, said in a telephone interview. “Most U.S. companies don’t have these types of warehouses, equipment or the cash flow.

http://www.nytimes.com/2011/06/26/business/global/26bridge.html?_r=1&pagewanted=all

[mojobo]

I agree, protecting one industry or one job, almost always comes at another's expense. But not all jobs and industries are equal, so if you protect the right one and hurt the right one, that'd be ideal.

Thats almost never the case though. The fact that a job would need protecting indicates that it is likely not worth saving and doing so would cause the "right" one to be hurt at the expense of the wrong one.

[nobody's_hero]

See, maybe that's where the disconnect for me is.

I do not see it that way at all.

The point of working is not to mindlessly "consume", the point is to do something productive with your time here on earth and to save, invest and build something better for the future and your family.

I hate to think that the one that dies with most flat screen TVs and XBoxes and new cars, wins.

See. I think we've been doing it wrong. I think I'll try racking up as much debt as I possibly can and then dying before I have to pay it back. That should do wonders for the economy.

[Becker]

Nope nothing wrong with it at all.....

Surely nothing could go wrong with that.


Nothing wrong with that, unless blue collar workers want to buy big screen tvs, there's only 2 ways to live, work and welfare, and debt is the norm. Nothing is wrong until you want something other countries which are largely service economies don't have.


.

http://www.theblaze.com/stories/made-in-china-u-s-military-finding-fake-chinese-electronics-in-gear-at-alarming-rate/

It's always smart to outsource your infrastructure projects. Surely we will never be in a position where we might have to do it ourselves. So it won't matter that we might not be able to.


you'd never "have to" as long as you can afford to keep paying them and trust that they won't screw you.



http://www.nytimes.com/2011/06/26/business/global/26bridge.html?_r=1&pagewanted=all

[Becker]

Thats almost never the case though. The fact that a job would need protecting indicates that it is likely not worth saving and doing so would cause the "right" one to be hurt at the expense of the wrong one.

Almost all jobs in US are more expensive than overseas. So from the start, you'll say all jobs are worth exporting. Luckily, the US does have some resources we can sell to pay for foreign jobs. Otherwise, you cannot completely outsource if you do not something to give in return. In our case, we used debt, then we encouraged Americans to learn useless things in college, with debt, then we pay some people to not work.

Just to be clear, I am not against outsourcing, importing or immigration. I am also not against unemployment. I know when people complain about jobs, what they really mean is they want money, and if we paid them to sit on their sofa, they'd not complain they have too much free time. At most they'd complain they aren't as rich as they "can be".

I am guessing your view is, why should we pay more for American jobs if we can pay less for the same job? Sounds fully logical, because who wants to pay more? The question then is, what do you want the unemployed Americans to do?

1) will they save money because of cheap imports?
2) will you pay them from the savings in forms of welfare?
3) will you force them to find alternative jobs? (what if all alternatives are only more saturated)
4) will you have no problem telling them to starve? (this is my answer, because living and working is not a right or obligation)
5) will you have no problem with lowering the overall standard of living due to competition?
6) are you aware that when people are not "occupied" they are more likely to commit crime?

[Becker]

See. I think we've been doing it wrong. I think I'll try racking up as much debt as I possibly can and then dying before I have to pay it back. That should do wonders for the economy.

forget the economy, that'd be best for you and there's nothing anybody can do about it to hurt you.

[Brian4Liberty]

you produce more complex products like OSes, power grid managements, space fleets, communication methods. etc.
people need to be students of history to understand what i'm saying.


That one caught my eye. Where can I sign up to join Starfleet? ;)

[zyphex]

Regarding free trade vs protectionism......

If we keep our currency strong, then imports become cheaper for us -- FACT.
Because of this, manufacturing eventually goes overseas and we become a consumer/service economy -- FACT.
So how does having a strong currency help us?
Isn't this what happened to the US and also what Switzerland is currently concerned about?

Someone educate me. Why is pure free trade good if all your manufacturing leaves?

Thanks.

A stronger currency makes imports cheaper. The majority of our imports are inputs in US manufacturing processes. Thus, with a strong currency, US manufacturers have an advantage over foreign manufacturers because the inputs of production are relatively cheaper in the US.

[limepickle]

phill4paul,
what makes you think that the military has to have defense products made overseas or that we have to produce infrastructure overseas? If the cost exceeds the benefit, then we won't do it. We have choices

[mojobo]

Almost all jobs in US are more expensive than overseas. So from the start, you'll say all jobs are worth exporting. Luckily, the US does have some resources we can sell to pay for foreign jobs. Otherwise, you cannot completely outsource if you do not something to give in return. In our case, we used debt, then we encouraged Americans to learn useless things in college, with debt, then we pay some people to not work.

Just to be clear, I am not against outsourcing, importing or immigration. I am also not against unemployment. I know when people complain about jobs, what they really mean is they want money, and if we paid them to sit on their sofa, they'd not complain they have too much free time. At most they'd complain they aren't as rich as they "can be".

I am guessing your view is, why should we pay more for American jobs if we can pay less for the same job?

When most people from the protectionist point of view try to put themselves in the shoes of the view of someone who is free trade they often think they are saying "who cares if a few U.S. workers go unemployed its better to have cheaper goods." That is not the point I am trying to make. The point is that you will end up hurting not only the consumer who gets to enjoy the low prices but more importantly it will come at the expense of other industries and will cause a net loss in the number and quality of jobs in other industries.

Lets say for example we put tariffs on cars to protect our domestic industry and in the process we make raise the price of a car from $20,000 to $30,000. First of all people will buy less at the higher price so you take away value right away from that market. Since less cars will be sold dealerships will lose a significant amount of business and thus jobs will be lost from that sector. Next since less people will have cars, there will be less demand for auto-body shops so there will be less auto jobs. Then you deal with the fact that those who did buy the cars now have $10,000 less to spend on other goods/investments which takes away from other industries leading to less jobs there.


Sounds fully logical, because who wants to pay more? The question then is, what do you want the unemployed Americans to do?

1) will they save money because of cheap imports?
2) will you pay them from the savings in forms of welfare?
3) will you force them to find alternative jobs? (what if all alternatives are only more saturated)
4) will you have no problem telling them to starve? (this is my answer, because living and working is not a right or obligation)
5) will you have no problem with lowering the overall standard of living due to competition?
6) are you aware that when people are not "occupied" they are more likely to commit crime?

Free trade leads to higher paying jobs and lower prices so its not on those who support free trade to figure out what to do with this its up to the protectionists. If I turn the list back at you...
1) will you pay the newly unemployed created by protectionism with the wages from the jobs that were saved? (seems a little contradictory since the whole point was to give the people in the industry higher paying quality jobs)
3) since you are taking wealth away from other industries are you willing to force others to take lower pay for their job either in the form of inflated prices or a lower wage, or both
4) will you have no problem telling the people who can't compete because one industry needs to be propped up to starve or at best take a very significant cut in their standard of living?
5) will you have lowering the overall standard of living due to protectionism?
6) will you have no problem that the people who wont be occupied with protectionism will be more likely to commit crime?

Not calling you out personally but the protectionist philosophy overall. If free trade really lead to the problems you talked about then I likely wouldn't support it. I support whichever philosophy leads to a better standard of living. It is a means to an end of a better standard of living not an end itself. If central planning lead to the best standard of living then I would support central planning. Since free market capitalism allows for the greatest standard of living I support that.

[Becker]

When most people from the protectionist point of view try to put themselves in the shoes of the view of someone who is free trade they often think they are saying "who cares if a few U.S. workers go unemployed its better to have cheaper goods." That is not the point I am trying to make. The point is that you will end up hurting not only the consumer who gets to enjoy the low prices but more importantly it will come at the expense of other industries and will cause a net loss in the number and quality of jobs in other industries.


is there any guarantee or reliable promise that employers and companies who import and outsource necessarily pass savings on to consumers?
it'd be nice if there was, but what if there isnt and they do not?

[mojobo]

is there any guarantee or reliable promise that employers and companies who import and outsource necessarily pass savings on to consumers?
it'd be nice if there was, but what if there isnt and they do not?

Competition... and they will either pass it on by adding quality and or lowering price. If you don't believe me look at some of the insane deals businesses were offering on black Friday or the lower computer prices that exist today versus a few years ago. Not only that but we have more brands and more computer jobs than we did when they were expensive.

[cavalier973]

Free trade doesn't send jobs overseas; the blame for that rests solely on bad gov't--high taxes, heavy regulation, licensing requirements, subsidies, etc., which are the real reasons for a company to move its operations overseas. A $50-an-hour American worker, with his knowledge, skills, and abilities, and tools, can be less expensive to hire, all things being equal, than a foreign worker who only makes a few dollars a day, when one considers the relative levels of productivity. Gov't intervention jacks the price of production up in other areas, though, and allow people to think that wages are the only expense a company considers. Instituting protectionism would only make things more expensive and of lower quality, because there would be less competition. As others have stated, using government coercion to prop up one particular firm or industry only hurts other firms and industries--and consumers.

[AlexMerced]

Hey Alex,
I listened to the first video and I understand the benefits of free trade with nations and how it makes for the most efficient global system.

However, I'm more interest in what free trade does to a country if the currency valuations are drastically different (i.e. US vs China or Swiss vs Euro). Peter Schiff critisizes the Swiss for their recent move to peg their currency to the Euro. He said "a strong currency is always a good thing". But if a country's exports are suffering because their goods are too expensive due to their strong currency, how is that a good thing?

Is there a situation where a country should inflate their currency in order to stay competitive and not lose their manufacturing base? Like others have said on this thread and like Schiff has said, once you lose the infrastructure, it takes much longer to rebuild it.

Isn't the fact that the US has such a strong currency a big reason why we have lost so many manufacturing jobs? I work for a retail company. It isn't even close to being economically feasible to create the product here. If every industry is like this, I don't see how a super strong currency helps.

Thanks for responding. I'd love some more opinions and facts on this. I'm just trying to balance free trade and how it partners with a strong currency.



If that's the case look up all my videos regarding currency and Japan, there dozens of videos on that topic alone

just go to youtube.com/alexmerced for a quick search

I'd link to those videos but can't till I get back to NY from CT

[TomL]

See, maybe that's where the disconnect for me is.

I do not see it that way at all.

The point of working is not to mindlessly "consume", the point is to do something productive with your time here on earth and to save, invest and build something better for the future and your family.

I hate to think that the one that dies with most flat screen TVs and XBoxes and new cars, wins.

Just wanted to say, I like this post. Where's the "like" button?

[low preference guy]

See, maybe that's where the disconnect for me is.

I do not see it that way at all.

The point of working is not to mindlessly "consume", the point is to do something productive with your time here on earth and to save, invest and build something better for the future and your family.

I hate to think that the one that dies with most flat screen TVs and XBoxes and new cars, wins.

Would you like to be slave? That's what slaves do, work and not enjoy the fruits of their labor.

[TomL]

You fellas have my head spinning.

I always thought productivity was linked to consumption.

Productivity means jobs, the more jobs the greater the buying power, and the greater the buying power the more consumption. Is that not the way it works? I mean, for something to be consumed, doesn't someone have to produce it?

[Jtorsella]

You fellas have my head spinning.

I always thought productivity was linked to consumption.

Productivity means jobs, the more jobs the greater the buying power, and the greater the buying power the more consumption. Is that not the way it works? I mean, for something to be consumed, doesn't someone have to produce it?
Also TomL, Welcome to the forums! Glad to see you're contributing to the discussion.

[TomL]

Also TomL, Welcome to the forums! Glad to see you're contributing to the discussion.

Thanx. But I am limited. Sometimes I have to sleep. With that. Goodnight.

[heavenlyboy34]

Would you like to be slave? That's what slaves do, work and not enjoy the fruits of their labor.
I don't think that's what he meant. He qualified "consume" with "mindlessly". It's easy to consume in a manner that is not mindless.

[limepickle]

I think the balance works so that we produce only after feeling or seeing the consumption. We produce as a means to achieve the end of putting food on the shelves and meeting our other demands

[romacox]

http://www.youtube.com/watch?feature=player_embedded&v=ayagukQ9wVg

[Mogambo Guru]

Free trade doesnt work so well with global fiat currency and central banks/governments manipulating to their advantage every chance they get. I imagine its hard for someone to think of how free trade could work when they are thinking in the context of how things are being run today...

[limepickle]

I disagree- although I would prefer that countries would stop manipulating their currency, ultimately it only hurts them and not us at all. If we got all free stuff from China, we would have no employment, but at the same time, we wouldn't need employment because everything would be free. It works out that way so that the country with stronger currency never really gets hurt.

[specsaregood]

I disagree- although I would prefer that countries would stop manipulating their currency, ultimately it only hurts them and not us at all. If we got all free stuff from China, we would have no employment, but at the same time, we wouldn't need employment because everything would be free. It works out that way so that the country with stronger currency never really gets hurt.

Short-sighted. It does hurt us. It makes us fat, weak, lazy and incapable of supporting ourselves. We'll be ready for the culling when the feed gets cut off.

[limepickle]

specsaregood, I wouldn't say that service jobs encourage us to be lazy. And if China's currency eventually became stronger and it became advantageous to move manufacturing back to the US, it would happen and people would learn the trade and do the job.

[Becker]

Short-sighted. It does hurt us. It makes us fat, weak, lazy and incapable of supporting ourselves. We'll be ready for the culling when the feed gets cut off.

what's wrong with that if you can afford it?

[arkana]

Thanks for the knowledge and feedback. Any good book you'd recommend dealing with currency value, free trading, and the effect on the economy? I read Crash Proof by Peter Schiff -- who is a free market and strong currency advocate. But he sort of condemns the service-based economy stating true wealth can only be derived by producing things -- which is why he pushes for investment in China. I need more understanding on the currency value effect. Thanks again if you have a recommendation!

I think what everyone should keep in mind is Schiff is condemning the service sector that only serves the U.S. consumer. It offers zero services for export and doesn't produce. The only way a country grows is to export products or services.

Think about all the mobile dry cleaning, car washes, and random service businesses were popping up before 2008 hit. While there's nothing wrong with living in comfort and spending your money on things like that those were 'malinvestments' as the majority are now bankrupt.

The reason financial service countries, and even Vegas do well is because they bring in money from outside of their country(or city) in exchange for their services. They aren't just shining each others shoes to 'prosperity'.

What Schiff is condemning is the fact that regulations, taxes, etc are not favorable for firms to produce products for export(or domestic consumption) and therefore we have a nation simply servicing itself. Add on top of that the deficit spending and inflation that has given us a false sense of prosperity and you have a situation ripe for collapse.

[specsaregood]

what's wrong with that if you can afford it?

Give a man a fish and he eats for a day....and all that jazz.

[Becker]

Give a man a fish and he eats for a day....and all that jazz.

and I can ask again, what's wrong with not knowing how to fish if he never needs to?

Sure, its a big IF, but WHAT IF?

[specsaregood]

and I can ask again, what's wrong with not knowing how to fish if he never needs to?
Sure, its a big IF, but WHAT IF?

Why would one never need to?

Perhaps you are the person that likes to live at the mercy and/or charity of others, however; I am not. And I prefer my country to not be that way either.

[Becker]

Why would one never need to?

Perhaps you are the person that likes to live at the mercy and/or charity of others, however; I am not. And I prefer my country to not be that way either.

Just because I don't need to do lots of work, does not mean it must be at the mercy, expense, or charity of others. But yes, if I can, without consequences, why not?

My hypothesis, is that automation technology will make labor less necessary, and thus a person can survive, or even live well, without hunting and fishing on his own. This doesnt necessarily mean it comes at another person's expense.

[limepickle]

specsaregood, the problem is that you are suggesting that no one does any work if we don't have manufacturing. We still work by doing service jobs and managing our investments overseas. But if you want to talk about the principle, it's not as if we don't have the ability to fish- we have the ability but other people are just giving the fish to us for free.

[low preference guy]

Why would one never need to?

dude... you're responding to WaltM. that might hurt your rep count.

[low preference guy]

What would happen if tariffs are increased in a nutshell:

1. Prices will raise immediately and the standard of living will go down.
2. The flow of trade will stop for some goods and that will have consequences even after freer trade is restored. So even if we have sound money at some point in the future the ceasing of trade will have some consequences then. Reestablishing trade routes takes money and time.
3. The government will print even more money to do the same things the government does now, as the price of everything increases.
4. As a consequence of the printing of money, the business cycle will accentuate in America and more local industries will go bankrupt due to miscalculations induced by the increased money supply. This will increase unemployment and make goods even more expensive.

[showpan]

What would happen if tariffs are increased in a nutshell:


1. Prices will raise immediately and the standard of living will go down.

No sir, prices have gone up since NAFTA, this happened almost over night. The standard of living in this country has been decimated and the quality of goods has been reduced to shit.


2. The flow of trade will stop for some goods and that will have consequences even after freer trade is restored. So even if we have sound money at some point in the future the ceasing of trade will have some consequences then. Reestablishing trade routes takes money and time.

The flow of manufacturers back into this country will create the jobs we once had. The flow of goods would barely see a bump. This country was built into the biggest industrialized nation on this planet using tariffs and the most recent example would be Brazil who in less than 10 years went from the very bottom of the worlds economies to the #5 spot today. After NAFTA was passed, this country lost aver 4 million jobs and over 400 farms in a little over 1 years time. The losses continue to mount and today we find that over 25 MILLION Americans need a real job, not some crappy Walmart or McDonalds low paying SERVICE job. It takes less than 1 year to bring a manufacturing plant into full production.


3. The government will print even more money to do the same things the government does now, as the price of everything increases.

The price has increased because of NAFTA, so your point is? Printing money is an entirely different subject.


4. As a consequence of the printing of money, the business cycle will accentuate in America and more local industries will go bankrupt due to miscalculations induced by the increased money supply. This will increase unemployment and make goods even more expensive.

Yes, the printing of money does make everything expensive. What you have failed to point out is the fact that 100 years of futures regulations were wiped out in 2000 with Clinton's Commodities Act. While regulated, futures speculation accounted for less than 30% of the market. Today it accounts for over 80% as companies like JP Morgan who lease more oil tankers than Chevron owns buys up all the oil and lets those tankers sit full at anchor until the prices are artificially raised. This is happening for almost everything we buy, especially food. The increased unemployment is due to companies getting huge tax breaks for leaving.

Economics 101: We live in a consumer based economy. Without decent paying jobs, we can't consume.

[Jtorsella]

No sir, prices have gone up since NAFTA, this happened almost over night. The standard of living in this country has been decimated and the quality of goods has been reduced to shit.



The flow of manufacturers back into this country will create the jobs we once had. The flow of goods would barely see a bump. This country was built into the biggest industrialized nation on this planet using tariffs and the most recent example would be Brazil who in less than 10 years went from the very bottom of the worlds economies to the #5 spot today. After NAFTA was passed, this country lost aver 4 million jobs and over 400 farms in a little over 1 years time. The losses continue to mount and today we find that over 25 MILLION Americans need a real job, not some crappy Walmart or McDonalds low paying SERVICE job. It takes less than 1 year to bring a manufacturing plant into full production.



The price has increased because of NAFTA, so your point is? Printing money is an entirely different subject.



Yes, the printing of money does make everything expensive. What you have failed to point out is the fact that 100 years of futures regulations were wiped out in 2000 with Clinton's Commodities Act. While regulated, futures speculation accounted for less than 30% of the market. Today it accounts for over 80% as companies like JP Morgan who lease more oil tankers than Chevron owns buys up all the oil and lets those tankers sit full at anchor until the prices are artificially raised. This is happening for almost everything we buy, especially food. The increased unemployment is due to companies getting huge tax breaks for leaving.

Economics 101: We live in a consumer based economy. Without decent paying jobs, we can't consume.
NAFTA is not free trade.

[showpan]

NAFTA is not free trade.

I never stated NAFTA was free trade? NAFTA did however remove and or reduce most tariffs to almost nothing therefore our current economic condition is a perfect example of what happens when tariffs are eliminated.

[Knighted]

I never stated NAFTA was free trade? NAFTA did however remove and or reduce most tariffs to almost nothing therefore our current economic condition is a perfect example of what happens when tariffs are eliminated.

Your analysis is flawed. NAFTA was introduced in 1994. What followed was about six years of incredible economic growth. I'll be the first to admit though that NAFTA probably played only a small part in that, since the economy was simply swept along with the tech boom. That aside, the point is that trying to blame NAFTA for the state of the economy 17 years after its introduction just does not compute. Correlation does not mean causation. There are a million factors affecting the economy, and instead of considering any of them, you've honed in to blame NAFTA alone for all of the economy's woes. That makes about as much sense as liberals saying that since the economy tanked after Bush's tax cuts, the tax cuts caused the recession.

[TomL]

Your analysis is flawed. NAFTA was introduced in 1994. What followed was about six years of incredible economic growth. I'll be the first to admit though that NAFTA probably played only a small part in that, since the economy was simply swept along with the tech boom. That aside, the point is that trying to blame NAFTA for the state of the economy 17 years after its introduction just does not compute. Correlation does not mean causation. There are a million factors affecting the economy, and instead of considering any of them, you've honed in to blame NAFTA alone for all of the economy's woes. That makes about as much sense as liberals saying that since the economy tanked after Bush's tax cuts, the tax cuts caused the recession.

Six years of incredible economic growth? Since 1994? For who?

[showpan]

Six years of incredible economic growth? Since 1994? For who?

not for middle class America, that's for sure. The only ones who have profited are those who own shares. The tech boom created another problem. Because of NAFTA, and the subsidized sell out, H1-B visa's were used as an excuse to bring in more unskilled workers who had to be trained by their American counterparts only to later be fired. Our economic problems are a direct result of NAFTA. Companies were payed to move as tariffs were eliminated. This has had a trickle down effect in which those jobs that once averaged $18 per hour were eliminated and only a small percentage of them were replaced with low paying service jobs (making Big Macs). This has had a devastating effect on local, state and federal governments who have been forced to cut back. Not that this is such a bad thing in context, the problem is that they have fired teachers and raised our taxes while advancing the police state. The big push to screw up our education system in order to privatize (corporate profit) what once was the leader now has become an obsession of the NWO. Globalization by the NWO is nothing more than their idea that share prices and profits are valued higher than human life itself. The effect this has had on our economy is monumental. We have lost over 10 million decent paying jobs which also supported small business and local government. Just as many more jobs were lost because of this and the monopolies that have been created have left us with a standard of living that will soon resemble that of a thrid world country, with third world wages and third world education system.

[Steven Douglas]

Our economic problems are a direct result of NAFTA.

That's like saying that someone with AIDS died as a direct result of a cold. If you want to get at the heart of our economic problems, you are going to have dig a LOT deeper, and go back a LOT further, than NAFTA.

[visose]

Devaluing a currency is similar as getting a pay cut. You'll get hired more frequently (exports) but you have to work more hours to buy the same things (imports). Well, its not exactly like this. It's more like if your whole neighborhood decides to get a pay cut at the same time. Sure you are making less but your tailor is now cheaper so its not that bad. But not all things are made in your neighborhood, for example, you need oil to transport almost anything, and the guys selling the oil are outside your neighborhood and didn't agree to any pay cut, so prices also increase somewhat in your locally produced products and services and lot in imported products.
The mainstream argument for devaluing a currency is that economists argue that prices are "sticky downward" and a country's population isn't going to voluntarily decide to get a pay cut at the same time.

[TomL]

not for middle class America, that's for sure. The only ones who have profited are those who own shares. The tech boom created another problem. Because of NAFTA, and the subsidized sell out, H1-B visa's were used as an excuse to bring in more unskilled workers who had to be trained by their American counterparts only to later be fired. Our economic problems are a direct result of NAFTA. Companies were payed to move as tariffs were eliminated. This has had a trickle down effect in which those jobs that once averaged $18 per hour were eliminated and only a small percentage of them were replaced with low paying service jobs (making Big Macs). This has had a devastating effect on local, state and federal governments who have been forced to cut back. Not that this is such a bad thing in context, the problem is that they have fired teachers and raised our taxes while advancing the police state. The big push to screw up our education system in order to privatize (corporate profit) what once was the leader now has become an obsession of the NWO. Globalization by the NWO is nothing more than their idea that share prices and profits are valued higher than human life itself. The effect this has had on our economy is monumental. We have lost over 10 million decent paying jobs which also supported small business and local government. Just as many more jobs were lost because of this and the monopolies that have been created have left us with a standard of living that will soon resemble that of a thrid world country, with third world wages and third world education system.

That is pretty much the way I see it. But there are other trade agreements that has contributed to the problem as well. That is why my economic plan http://www.ronpaulforums.com/showthread.php?332918-My-Economic-Plan deals with the trade imbalance, which some call protectionism. Why is that everything that will help this country is called protectionist?

[Steven Douglas]

Why is that everything that will help this country is called protectionist?

Could it be in the way you define both "help" and "this country"? Just a thought, given that it is virtually impossible to meddle with the aggregate without picking winners and losers.

[TomL]

Could it be in the way you define both "help" and "this country"? Just a thought, given that it is virtually impossible to meddle with the aggregate without picking winners and losers.

In any of my writings, how am I picking winners and losers?

[Salvial]

The solution to runaway globalization is localization. You need to foster a strong domestic economy that can keep capital circulating healthily throughout a country. Once workers aren't burdened by not being able to keep minimum wage up against inflation and excessive taxes, full domestic employment may not be necessary - if the value of one's work was able to afford a decent standard of living for his entire family, for example. Imagine if YOU had double the money in your pocket!

LOCALIZE - shop at farmer's markets, support small independent stores, domestically made goods, buy from local farmers, start city gardens, trade on craigslist/ebay, produce a good or service, etc. - it's an extremely important step in all this.

[Steven Douglas]

In any of my writings, how am I picking winners and losers?

Where do I begin? I wanted to state that I am a loser for having my own individual liberty - the untrammeled freedom to come and go as I please - taxed. But let's take on just one from your list:

5. Congress should levy tariffs on all goods coming into the United States to recuperate lost revenues due to the elimination of Capital Gains and Corporate taxes.

Firstly, I don't care about lost revenues for Capital Gains, which are often tantamount to "inflation taxes" (paying for the privilege of having your currency devalued by an already hidden tax). That one is not always about profits anyway, and is already a tax that picks winners and losers.

Furthermore, levying a tariff on foreign goods coming into the United States gives an artificial incentive for American interests not be as competitive. I don't see that as a good thing at all, or anything but damaging - especially in the long term. It sounds good on paper, as it appears on the surface only to choose winners and losers on the manufacturing side, but the additional loser that you left out is the CONSUMER.

In addition, you will have incentivized (as we have done so many times in the past) those on the foreign side to a) devalue their own currency to remain competitive, and/or b) slash their own prices (offer a sale and accept less, even long term) to make themselves more competitive, and/or c) work all the harder to make a superior product which is naturally more competitive despite the difference in price. In reality, it is a combination of all the foregoing, and then some. They don't just sit back and take it. AND, you don't have control over the amounts or tariffs they will NO DOUBT put up in return, to try and make up the artificial difference with one that is equally artificial on their part.

[showpan]

The losers right now are all of us (99%). Go to any dept store and you are very limited by the choices between cheap crap and even cheaper crap. None of it is made here. Since NAFTA, so many companies have closed that it would be impossible to list them all. Not only have those manufacturers closed, the businesses that once supported them have closed. The suppliers, restaurants, mom and pops, and a host of others have been closed and in their place sprout up Walmart and McDonalds who get their supplies from overseas along with their government subsidies and huge tax breaks for supporting them. Again, the losers are ALL of us, or at least the 99% of us who have no choice but to shop at these places. The winners...the 1% who own them and another small percentage who own shares. Most Americans do not own shares. The globalists have already picked the winners and it ain't us!! Again, NAFTA has eliminated competition, eliminated 1/4 of this countries jobs and prices have almost doubled. While other factors such as devaluation of our currency, wall street deregulation, and a host of other things all designed to turn us into even bigger losers, the main problems right now are, NAFTA, nation building, the FED and a supreme court that should be tarred and feathered. Globalization is nothing more than the reality that share price and profits are worth more than human life and the ability for someone to live the American dream. They are now destroying 1000's of homes that went into foreclosure just as they leveled many of the vacant factories that once made this country strong. Corporate fascism is being advanced and they have accelerated their plan to dismantle the middle class so that we are weak and desperate. Our military is now supplying cities and towns with a lot better hardware than we have. Americans who are hungry, homeless and desperate will welcome whatever scraps they throw and won't question them for fear of getting the boot from their hand out programs. We are now heading down the homestretch and it doesn't look good for us. While shopping at farmers markets and searching for made in USA should be something we all do, stocking up on ammo would be prudent at this point. They will have bought themselves a little more time by extending the unemployment benefits. Once those finally run out, FEMA camps will be a reality for a lot of folks.

[Steven Douglas]

showpan - what all those corporate interests had in common, more than anything else, was not NAFTA. They were doing just fine without NAFTA, and everything was already made overseas long before NAFTA. "Made in Japan" eventually became "Made in Korea" which eventually became "Made in Hong Kong or Taiwan", which became "Made in China", which is now becoming Made in Vietnam, India, Mexcio, Indonesia -- you name it. If an otherwise impoverished country develops an infrastructure, it WILL compete - "free trade" or otherwise. That did NOT originate with NAFTA, and that historic tide was never turned back with even our most protectionist historical measures.

You are batting at leaves and branches which have always existed, while completely ignoring the roots.

What Walmart and other large corporate interests have in common is their superior capital - NOT self-funded capital, but rather proximity and superior access to superior credit and debt instruments - wealth that is literally siphoned from a collectivized money pool and loaned out to them, with interest, NONE of the interest of which comes back to that pool, with bad debt principle remaining in that pool, and with which NO Mom & Pop concern could ever hope to compete in the long run. Furthermore, an infinitely inflating money supply GUARANTEES that wage requirements will ALWAYS go up - regardless of what happens with other currencies. We were artificially PRICED out of our own markets, on ALL fronts, LONG BEFORE NAFTA.

[showpan]

Nope, this country used to make most of it's products and it was a direct result of tariffs. Rewriting history will not work here. Not only did we produce our own goods, we processed much of our own raw materials and had grown so much food, we gave it away to the less fortunate. Prior to NAFTA, our #1 exports were aircraft industry and machinery/parts. Today, our #1 export is waste. (unless you would like to count jobs lost as an export) Almost all of those "Japanese" companies had built plants here. Sony, Honda, Toyota all moved because it was cheaper to make the products here than it was to pay the tariffs. You are correct in that our problems started long before NAFTA. Our problems started when Hamilton tried to turn us into another Britain. He should have been shot sooner. Much of our problems that have adversely effected us today can be traced directly and indirectly to the Morgan family. NAFTA has been the nail in the coffin and JP Morgan was the hammer.

[Steven Douglas]

You are correct in that our problems started long before NAFTA. Our problems started when Hamilton tried to turn us into another Britain. He should have been shot sooner. Much of our problems that have adversely effected us today can be traced directly and indirectly to the Morgan family. NAFTA has been the nail in the coffin and JP Morgan was the hammer.

We agree on that much at least for sure. Hamilton should have been shot sooner, the Morgans should have gone down with the Titanic, and you left out Rockefeller, but I won't quibble, as it sounds like we are in agreement, at least on the original causes.

As for your assertion that our country made most of its own products as a direct result of tariffs, while completely ignoring sound money policies internally (at times, on the whole), we can continue to disagree.

[TomL]

Where do I begin? I wanted to state that I am a loser for having my own individual liberty - the untrammeled freedom to come and go as I please - taxed. But let's take on just one from your list:

5. Congress should levy tariffs on all goods coming into the United States to recuperate lost revenues due to the elimination of Capital Gains and Corporate taxes.

Firstly, I don't care about lost revenues for Capital Gains, which are often tantamount to "inflation taxes" (paying for the privilege of having your currency devalued by an already hidden tax). That one is not always about profits anyway, and is already a tax that picks winners and losers.

Furthermore, levying a tariff on foreign goods coming into the United States gives an artificial incentive for American interests not be as competitive. I don't see that as a good thing at all, or anything but damaging - especially in the long term. It sounds good on paper, as it appears on the surface only to choose winners and losers on the manufacturing side, but the additional loser that you left out is the CONSUMER.

In addition, you will have incentivized (as we have done so many times in the past) those on the foreign side to a) devalue their own currency to remain competitive, and/or b) slash their own prices (offer a sale and accept less, even long term) to make themselves more competitive, and/or c) work all the harder to make a superior product which is naturally more competitive despite the difference in price. In reality, it is a combination of all the foregoing, and then some. They don't just sit back and take it. AND, you don't have control over the amounts or tariffs they will NO DOUBT put up in return, to try and make up the artificial difference with one that is equally artificial on their part.

Really, this should be discussed in the thread made for it. See you there.

[showpan]

We agree on that much at least for sure. Hamilton should have been shot sooner, the Morgans should have gone down with the Titanic, and you left out Rockefeller, but I won't quibble, as it sounds like we are in agreement, at least on the original causes.

As for your assertion that our country made most of its own products as a direct result of tariffs, while completely ignoring sound money policies internally (at times, on the whole), we can continue to disagree.

I also failed to mention King Rothschild...lol
I have never ignored sound money. This country once backed it's currency with gold and silver and now it is nothing more then debt and interest. This happened long before tariffs were reduced to nothing therefore it was not the reason for those companies leaving. Neither has regulations which were reduced and taxes which were also reduced prior to NAFTA. This country DID make everything here and those companies made a very decent profit before they left even with our taxes and regulations. Greed set in and market share martinis flowed faster than the money out of the pockets of drunken sailors in a whore house. Backed by Rothschild, JP Morgan and others bought up whole industries, eliminated their competition creating huge monopolies and then left after buying off our government. Europe knows this, when will America and the sleeping giant wake up? This "class warfare" has yet to accelerate as it should.

[-C-]

Our problems started when Hamilton tried to turn us into another Britain. He should have been shot sooner.

Have you read his report on manufactures to congress? Or his report on public credit to congress? He was a protectionist. Was not for "free trade britain" by any means. So what you're saying makes no sense to me. He was actually opposite of Adam Smith. The problems started with Burr and his "Bank of Manhattan" which is now wallstreet and your beloved morgans you spoke of. So actually, Hamilton's only mistake, was missing ON PURPOSE when shooting "at" burr.

[Steven Douglas]

I also failed to mention King Rothschild...lol
I have never ignored sound money. This country once backed it's currency with gold and silver and now it is nothing more then debt and interest. This happened long before tariffs were reduced to nothing therefore it was not the reason for those companies leaving. Neither has regulations which were reduced and taxes which were also reduced prior to NAFTA. This country DID make everything here and those companies made a very decent profit before they left even with our taxes and regulations. Greed set in and market share martinis flowed faster than the money out of the pockets of drunken sailors in a whore house. Backed by Rothschild, JP Morgan and others bought up whole industries, eliminated their competition creating huge monopolies and then left after buying off our government. Europe knows this, when will America and the sleeping giant wake up? This "class warfare" has yet to accelerate as it should.

My problem with all of this can be equated to something I said to someone who was defending socialized health care, and "making health care more affordable" (what an assumption-loaded piece of garbage that is). They never address in ANY meaningful explanation or examination of what made health care so unaffordable in the first place. When they say "make it more affordable" what they really mean how to make others pay for it (e.g., "their fair share" of costs they accept as REAL!).

They don't want to look at the underpinnings of health care that has already long been propped up by DOMESTIC tariffs, regulations, and internal protectionism. I don't give a rat's ass about how to get creative so that we can "pay our fair share" of a cost that is artificially, perniciously UNFAIRLY PROTECTIONIST to begin with.

So no, I don't care about how to pay for it until we FIRST address (not later, not after -- NOW) the problem of how it got so ridiculously unaffordable in the first place. And it's not The Dreaded Uninsured. That's like blaming a Greedy Laborer for who needs a pay raise to keep up with inflation - for that very inflation.

The Health care and insurance industries are 100% behind any solutions that involve coming up with creative ways to pay for their crap, while giving political lip-service to "containing costs". Why wouldn't they be. They get theirs, regardless. Better that it comes from entities who only see numbers, and don't feel the costs. No negotiation to it. $43 for a bottle of aspirin in the hospital room. That's the cost. Just pay it and shut up.

As for sound currency as a protectionist measure, see this post (http://www.ronpaulforums.com/showthread.php?336745-What-Is-Protectionism&p=3838385#post3838385). Poke holes in that, if you don't mind, I need to hone my schtick. ;)

[showpan]

Alexander Hamilton was the leader of the Federalist Party established in 1787. He believed in a strong central government being run by a handful of elite businessmen. They strongly supported the British. Then Secretary of State, Hamilton was key in the formation of a national bank in 1791 along the lines of the Bank of England. He was against tariffs (since most of our first imports came from England) and favored taxes. He wrote the federalist papers that very much coincided with Britain's way of life.

http://www.econlib.org/library/Smith/smWN4.html

I also suggest you read the Anti-federalist papers as well.

http://www.utulsa.edu/law/classes/rice/constitutional/antifederalist/antifed.htm

In 1800, Jefferson was elected and abolished all internal taxes, including the whiskey excise tax and the land tax in favor of tariffs. This proved to be monumental as our country began to experience unprecedented growth and self reliance for over 150 years.
"Jefferson got repealed all the direct federal taxes passed by the Federalists and boasted that ordinary Americans would never see a federal tax collector in their whole lives."
http://www.friesian.com/presiden.htm


also might want to research:
http://www.aaronburrassociation.org/

The Manhatten Company
http://www.aaronburrassociation.org/Chase%20Manhattan%20Bank.htm


Sound Currency - a currency whose actual value is the same as its nominal value; a currency which does not deteriorate or depreciate or fluctuate in comparision with the standard of values.

Steven, you're interpretation of sound money sounds more like supply and demand. This is what you wrote.

"Tom, a sound currency is the greatest protectionist measure in the world, one that does not require artificial intervention of any kind
A sound currency means that prices naturally fall as the economy grows, given a surplus of goods and services to sell relative to a very slowly expanding money supply (e.g., mining, exports). If there is a scarcity of goods and services, the prices will not fall, but once you have an excess of goods and services, prices will naturally fall"

Sound money would be money that is backed by gold or silver or something of value instead of the fiat money we have today. I do agree that a devalued currency increases prices and by printing money out of thin air does exactly that, supply and demand is driven by consumers and production. Presently, we, as a whole, cannot consume like we once did since 1/4 of this country is unemployed. Forget production numbers because our statistics are a complete fabrication embellished by NAICS (http://www.census.gov/eos/www/naics/) that categorizes such things as Big Macs, salads, pasteurization of milk into manufacturing output...lol...this system was adopted in 1997 to lie about the effects of NAFTA which was passed a couple years earlier. NAICS conveniently made those statistics retro to 1995...lol

Health care costs are a completely separate issue driven by large insurance and pharmaceutical corporations.

[Steven Douglas]

Sound Currency - a currency whose actual value is the same as its nominal value; a currency which does not deteriorate or depreciate or fluctuate in comparision with the standard of values.

Steven, you're interpretation of sound money sounds more like supply and demand.

It is all supply and demand - regardless whether the currency is sound or not. Hard specie is just a commodity, albeit having a one-to-many relationship, which operates on the same laws of supply and demand like any other commodity. That is why our botched up bi-metal standard that conflated gold and silver values ended up with an invocation of Gresham's law, as gold and silver chased one another out of circulation at times. That never had to happen. They could have competed freely with one another and both would have remained in circulation at all times. It was ONLY because a comparative value was declared and FIXED that the market responded with the real truth behind the ever-shifting fundamentals.

Your definition of sound currency deserves closer examination, since "nominal value" of hard currency is nothing more than a unit of measure - not market value relative to anything else. The "market value" of the "nominal value" of anything, including hard specie, is something else entirely, and is never the same, as it depends on supply and demand of all units concerned, whether goods, services or units of exchange medium.

As for what "the standard values" means, I have no idea. Is there such a thing as "the standard of values"? I would like very much to see such a beast (unless it is talking about units of measurement).



Sound money would be money that is backed by gold or silver or something of value instead of the fiat money we have today.

Correct, provided it is 100% "backed" at all times. If fractional reserve lending is tolerated, the currency cannot be considered sound, regardless of its backing, since at all times there will be a percentage of counterfeit derivatives floating and competing for goods and services in the form of multiple conflicting claims to the same wealth.

But that does not mean that a "sound" money supply is fixed - nor should it be, since mining and exports alone (not to mention capital flight from countries with unsound currencies) would increase the supply in circulation as the economy grows, which in turn places downward pressure on all other "like" specie. No problem - it is just a commodity, the more the merrier, as it is limited like any other commodity and the market will adjust.


I do agree that a devalued currency increases prices and by printing money out of thin air does exactly that, supply and demand is driven by consumers and production. Presently, we, as a whole, cannot consume like we once did since 1/4 of this country is unemployed.

No, it's worse - FAR WORSE - than that even. Supply and Demand are both distorted and driven by a distorted supply of currency, and the RIDICULOUSLY artificial business cycles associated with them. And since that currency is available ONLY as debt instruments, the only way to obtain new currency to support the Full Expectation of REQUIRED growth in the form of new debts and debtors to be added - none of which can be paid off in the aggregate without crashing the entire system. That is because if all debts are paid (an impossibility, since it requires new debt to be added), ALL currency disappears from circulation.

None of that has ANYTHING WHATSOEVER to do with being "consumption-minded", or "employed". You can be as austere as you want, and impose that austerity on others (and that day is coming down the pike, trust me on that one), and it will do nothing to save the system from its own logical impossibilities, including the bizarre requirement that, like a heroin addiction, you need increasingly larger doses just to feel "normal".


Health care costs are a completely separate issue driven by large insurance and pharmaceutical corporations.

To name but a very few, albeit large. It is all rooted in protectionism in one form or another.

[showpan]

Protectionism is NOT what those large multinational corporations are after....lol... Have you ever read the plutonomy reports?
It's all about us vs them.


http://culturekitchen.com/files/plutonomy-2-1.pdf

Secondly, we believe that the rich are going to keep getting richer in coming years, as
capitalists (the rich) get an even bigger share of GDP as a result, principally, of globalization


Risks = What could go wrong?
Our whole plutonomy thesis is based on the idea that the rich will keep getting richer. This
thesis is not without its risks. For example, a policy error leading to asset deflation, would
likely damage plutonomy. Furthermore, the rising wealth gap between the rich and poor will
probably at some point lead to a political backlash. Whilst the rich are getting a greater share
of the wealth, and the poor a lesser share, political enfrachisement remains as was – one
person, one vote (in the plutonomies). At some point it is likely that labor will fight back
against the rising profit share of the rich and there will be a political backlash against the
rising wealth of the rich. This could be felt through higher taxation (on the rich or indirectly
though higher corporate taxes/regulation) or through trying to protect indigenous laborers, in
a push-back on globalization – either anti-immigration, or protectionism. We don’t see this
happening yet, though there are signs of rising political tensions. However we are keeping a
close eye on developments

[showpan]

http://www.youtube.com/watch?v=oWItkj0X_wo&feature=player_embedded

[Cutlerzzz]

Alexander Hamilton was the leader of the Federalist Party established in 1787. He believed in a strong central government being run by a handful of elite businessmen. They strongly supported the British. Then Secretary of State, Hamilton was key in the formation of a national bank in 1791 along the lines of the Bank of England. He was against tariffs (since most of our first imports came from England) and favored taxes. He wrote the federalist papers that very much coincided with Britain's way of life.

http://files.sharenator.com/godzilla_facepalm_godzilla_facepalm_Facepalm_colle ction-s640x387-82177-580.jpg

[showpan]

Citlerzz, are you going to post some facts that prove otherwise? Please do.

[Cutlerzzz]

Showpan, there is no need for me to bother wasting time with you to tell you that Jefferson supported low tariffs while Hamilton (and the British) were Mercantilist. I've shown this to you before. You argued for several pages that Mercantilism is a free trade doctrine.

[showpan]

Showpan, there is no need for me to bother wasting time with you to tell you that Jefferson supported low tariffs while Hamilton (and the British) were Mercantilist. I've shown this to you before. You argued for several pages that Mercantilism is a free trade doctrine.

lol....again, since you never showed any facts to back your claim, please be informative and show the forum that Jefferson supported low tariffs, maybe we all might learn something from you.

[Roy L]

In 1800, Jefferson was elected and abolished all internal taxes, including the whiskey excise tax and the land tax in favor of tariffs.
The federal property tax Jefferson abolished was levied on buildings and slaves as well as land.

[Roy L]

Regarding free trade vs protectionism......

Someone educate me.
I found these at mises.org, of all places:

http://mises.org/daily/1592

mises.org/etexts/freetrade.pdf

[showpan]

Roy, that free trade "utopia" that Henry George describes has never and will never exist in this capitalist world. It's simply a theory. While it actually sounds good, there would also have to be a number of other factors present for such theory to exist such as a world without borders...lol....good luck with that one.

He also states this:
The truth is, that a low rate of wages does not mean a low cost of production, but the reverse. The universal and obvious truth is, that the country where wages are highest can produce with the greatest economy, because workmen have there the most intelligence, the most spirit and the most ability; because invention and discovery are there most quickly made and most readily utilized. The great inventions and discoveries which so enormously increase the power of human labor to produce wealth have all been made in countries where wages are comparatively high (p. 126).

This describes to a tee, exactly what this country enjoyed while "protectionist" tariffs were being imposed. Our wages and production were excellent and employment opportunities were abundant. Also, before NAFTA, the consumers of this country had a choice of products to buy. I would observe that many of the people who are posting in this forum do not remember this because they are too young. Most American made products were more expensive than the "jap crap" but they were also a much higher quality and lasted longer. Today, Chinese and Mexican goods have pretty much taken over the shelves of large dept stores who have monopolized the markets by forcing the Mom and Pops to close. You have to search online for American made products and while they are more costly, they are definitely worth the money and most products online are tax free. (This is about to change since Walmart and others have been pushing for the internet sales tax) Either way, since tariffs were removed, the price for these once cheaper (crappy) goods have gone up and monopolies have been created. Wages have been reduced since employment has become scarce and immigration encouraged in order to further reduce our wages. Given the present conditions that the globalists have forced upon us, the only proven way out would be to roll back all they have changed. It would be fair to conclude that the only thing that drives their economy is perpetual war.