Free Republic

<p>The VAT is used as a trade strategy to accomplish the same benefits as currency devaluation. The VAT strategy is called “fiscal devaluation” and I’ll explain it at the bottom. It took me three years to understand the power of the VAT in trade strategy, so I understand why it takes others a while to think through it. But the price differential result (as between domestic and imported products) is substantial. And we need it to neutralize what other countries have done.</p>

Like most academics, professors of economics are not generally stupid people, IQ-wise. But they do have a remarkable ability to lose sight of basic realities. I’ve seen this over and over again. I just had an extended e-mail exchange with one Ron Boudreaux, a professor of economics at George Mason University, about the trade deficit. Now I’m not going to offer any comment on it, and will just let the reader judge for himself who’s right in the back-and-forth below. (Feel free to post a comment or e-mail me if you think I was mistaken.) ************* Dear Mr. Fletcher: I...

The Smoot-Hawley tariff passed in 1931 is the silver bullet of Free Trade advocates. All other arguments do not matter for them because they say the Smoot-Hawley tariffs either were part of the cause of the Great Depression or were responsible for continuing the depression by reducing international trade. This reasoning does not hold up to close inspection. Smoot-Hawley did not cause the Great Depression, nor did it extend the Depression. ... In general, the statistical arguments made by current Free Traders are deceptions. They generally say something like, "the United States economy grew after NAFTA." That may be true,...

When economic patriotism died Pat Buchanan agrees with the pope about ' the dark side of globalism' “This is called slave labor,” said Pope Francis. The Holy Father was referring to the $40 a month paid to apparel workers at that eight-story garment factory in Bangladesh that collapsed on top of them, killing more than 400. “Not paying a just wage … focusing exclusively on the balance books, on financial statements, only looking at personal profit. That goes against God!” The pope is describing the dark side of globalism. Why is Bangladesh, after China, the second-largest producer of apparel in...

For anybody disheartened about years of disappointing economic news, Japan's recent announcement that it intends to join the Trans-Pacific Partnership (TPP) offers a real reason to celebrate.Free trade agreements (FTAs) historically are some of the most surefire ways to open up new markets to U.S. exporters while enhancing American interests abroad. They create economic growth by fostering innovation and efficiency and, as a bonus, they generally produce invaluable political benefits.As FTAs go, Japan's participation in TPP makes this trade pact the Super Bowl and the World Cup of trade agreements wrapped into one. It's a game changer.It will give American...

A study of the Bitcoin exchange industry has found that 45 percent of exchanges fail, taking their users' money with them. Those that survive are the ones that handle the most traffic -- but they are also the exchanges that suffer the greatest number of cyber attacks. Computer scientists Tyler Moore (from the Southern Methodist University, Dallas) and Nicolas Christin (of Carnegie Mellon University) found 40 exchanges on the web which offered a service of changing bitcoins into other fiat currencies or back again. Of those 40, 18 have gone out of business -- 13 closing without warning, and five...

Stretching from Singapore and the Strait of Malacca chokepoint in the southwest to the Strait of Taiwan in the northeast, the South China Sea is one of the most important energy trade routes in the world. Almost a third of global crude oil and over half of global liquefied natural gas (LNG) passes through the South China Sea each year. The Strait of Malacca is the shortest sea route between African and Persian Gulf suppliers and Asian consumers. The strait is a critical transit chokepoint and has become increasingly important over the last two decades. In 1993, about 7 million...

ustralia is seeking to bypass trading in U.S. dollars with China in an effort to avoid the commercial uncertainties that come with the recent fluctuations in the greenback. For example, just a half a year ago, the dollar traded at about $1.20 to the euro; by February, it had weakened to $1.34 per euro and now it is going for $1.27. Eliminating the dollar in trade will be the focus of Australian Prime Minister Julia Gillard’s trip to Beijing next week. Trade with China, Australia’s primary trading partner, totaled $120 billion in the last fiscal year. China buys nearly one-third...

(Reuters) - A long-term U.S. manufacturing rebound is under way, and it will likely endure because the United States is becoming more competitive with China and other emerging economies. According to a recent report by the Boston Consulting Group titled "Made in America, Again," the cost advantage China has over the United States is shrinking fast. "Within five years, rising Chinese wages, higher U.S. productivity, a weaker dollar, and other factors will virtually close the cost gap between the U.S. and China for many goods consumed in North America," the report said.

Washington: The United States and Japan on Friday agreed on language aimed at giving Japanese Prime Minister Shinzo Abe political cover to bring the world’s third-largest economy into negotiations on a US-led free trade agreement in the Asia Pacific region. In a carefully worded statement following Abe’s meeting with President Barack Obama, the two countries reaffirmed that “all goods would subject to negotiation” if Japan joins the talks with the United States and 10 other countries. At the same time, the statement leaves open a possible outcome to the Trans-Pacific Partnership, or TPP, talks where the Japan could still protect...

China has leapfrogged the US to become the world’s biggest trading nation, bringing an end to the US’s post-war dominance of global commerce. The total value of US exports and imports in 2012 was $3.82 trillion (£2.4 trillion), the US Commerce Department has revealed. China’s customs administration has already announced that the country’s total trade last year was worth $3.87 trillion. “It is remarkable that an economy that is only a fraction of the size of the US economy has a larger trading volume,” Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics in Washington, told Bloomberg....

The re-election of Barack Obama hasn't done anything to make more jobs available to Americans, and there is no indication that it will. America now has 23 million people who want a full-time job but can't find one. Obama doesn't think American citizens or businessmen create jobs. His Jobs Czar, Jeffrey Immelt, recently said on a television interview referring to China, where he has outsourced General Electric's light bulb plants, "state-run Communism may not be your cup of tea, but their government works." In his first presidential debate last year, Obama claimed that passage of free trade agreements with...

FRESNO, Calif. (AP) — Bill Enns, a central California real estate agent specializing in farmland, fields dozens of calls every week from potential buyers. Many want almond, pistachio or walnut orchards — or any land suitable for growing nut trees. [...] California's almond industry, which grows about 80 percent of the global almond supply and 100 percent of the domestic supply, saw the most dramatic growth — powered by strong demand from new money-spending middle classes in India and China. The growth has prompted a rush for almond-growing land and pushed almond land values through the roof. Read more: http://www.sfgate.com/news/us/article/With-almonds-rising-revenues-land-values-soar-4189081.php#ixzz2Ht4HqjiG...

American leaders bring to mind the last Abbasid Caliph, who made no preparations for the approach of the Mongols in 1258. What, asked al-Musta'sim Billah, could Mongol arrows do to the walls of Baghdad? When the Mongol commander Hulagu Khan arrived on January 29, though, he had with him 1,000 Chinese bombardiers, as well as Persian, Turkish and Georgian auxiliaries. Historians disagree as to whether the Mongols used cannon or counterweighted catapults, but in any case the bombardment breached the city's walls within three weeks, and they proceeded to slaughter between 200,000 and a million of its inhabitants. There are...

The Mississippi River's Water Levels Are Dropping, And Could Shut Down Trade Next Week Jim Salter, Associated PressDecember 28, 2012Wikimedia Commons ST. LOUIS (AP) — The Mississippi River level is dropping again and barge industry trade groups warned Thursday that river commerce could essentially come to a halt as early as next week in an area south of St. Louis. Mike Petersen of the Army Corps of Engineers said ice on the northern Mississippi River is reducing the flow more than expected at the middle part of the river that is already at a low-water point unseen in decades, the...

The U.S. Balance of Trade with China The U.S. Census Bureau announced this week that the cumulative trade deficit with China through October 2012 amounted to $262 billion, $16 billion higher than at the same point last year. Last year's trade deficit with China was a record imbalance and was the largest bilateral U.S. trade deficit in history with any country. At this pace, the bilateral trade deficit with China this year is expected to be the highest on record. Although cumulative annual U.S. exports to China were up 6.4 percent over last year, this was offset by imports, which...

The prospect of hanging, as Samuel Johnson observed, "concentrates the mind wonderfully." We're counting on that kind of concentration to keep us from falling off the infamous fiscal cliff, which doesn't sound like fun. But while the Republicans and Democrats argue about whom to blame if they let the worst happen, we might look outside the box to find something beyond partisan gloom and economic doom. We've given up our role as the manufacturing colossus, which blinds us to the reality that the times, they are a-changing -- again. "For decades," writes James Fallows in The Atlantic magazine, "every trend...

It’s an issue that has plagued states along the Mississippi River for months and has now landed squarely on the desk of President Obama: how to prevent the imminent shutdown of commercial traffic along the nation’s largest waterway. A nationwide drought, the worst to hit the U.S. in decades, has lowered water levels along the river, threatening barge traffic. White House spokesman Jay Carney told reporters Thursday that the President raised the issue with Agriculture Secretary Tom Vilsack at Wednesday’s cabinet meeting, directing his administration to take “every step to mitigate” the situation. Carney added that there are a number...

In a campaign speech, President Obama said: “I know we can outcompete any other nation on earth.” No we can’t. We can’t outcompete Germany, China, France–we can’t compete any other country. In fact, no country can outcompete any other. The very concept “outcompete” makes no sense on a national scale. One business can outcompete another business, but a nation can’t outcompete another nation across the board. Suppose Bangladesh firms have a comparative advantage in sewing garments. Even if Americans are better at it than Bangladeshis, both countries gain if Americans outsource their garment-sewing work to Bangladesh firms and shift American...

... Obama supported Southeast Asian nations' proposed multilateral approach to tackling territorial tension in the South China Sea, pushing back against Beijing as a major international meeting became bogged down in acrimony for the second time in five months..