America's Superpower Status Coming to an End

Newsmax.com ^ | 3/1/05 | Paul Craig Roberts

[Southack]

"With our trade deficit? With the vanishing industries to slave labor countries?"

The trade deficit will heal itself once we break foreign interventions from continuing to keep our Dollar propped up at artificially high levels (e.g. vis-a-vis the Chinese Yuan-Dollar peg and Indian national bank hording of Dollars).

As for slave labor, as I wrote earlier in this thread...just How cheap will such labor appear next to free robots?

How many "slaves" are going to stand on street corners to compete against free newspaper vending machines/robots? How many "slaves" are going to wait around in office complexes in order to compete against Coke machines in selling soft drinks?

How many "slaves" are going to compete with robot automotive welders and robot car painters?

I think that you'll find that so-called "cheap" labor looks very, very pricey compared to automated solutions such as robots and vending machines.

In fact, the *ideal* for manufacturing is to completely automate a process.

Well, even with "cheap" labor, you can't beat that ideal of a fully automated process.

Which is to say, how are low-paid Chinese going to be able to compete with free American robot labor?

[Southack]

"I still have seen no justification for extended world trade for the good of America and its people. We did much better when we produced what Americans need domestically and traded with each other."

You're still focused on the tail rather than the dog.

Our total imports are a mere 9% of our annual GDP.

Our total exports are a mere 6% of GDP, and our remaining 85% of our economy is entirely domestic.

Yet you're fixated on that 9% of imports rather than on the 91% of the rest of our economy.

[Toddsterpatriot]

Oh sure. You have facts and figures but I heard that WalMart doesn't carry any products made in America. I also heard that all the jobs have been outsourced and that inflation is really 10%.

And foreigners own the Federal Reserve. And they're polluting our precious bodily fluids.

[ARCADIA]

And they're polluting our precious bodily fluids.

That's the last straw and we are not going to take it any longer! ;-)

[Bogie]

You are absolutely correct. Currencies are constantly fluctuating against one another. The real value lies in the technological infrastructure of the industrial economy. Four times when the currency seems weak, it is prudent for investors to keep some of their money in foreign currencies, some precious metals and heaven knows, perhaps even the baseball card collection. The currency is a reflection of value. It can be expected to fluctuate.

I find it strange that people with panic over the value of the currency if nothing has fundamentally changed with the industrialized economy. Just diversify. Time and circumstance will change things.

[1rudeboy]

I won't be fooled. I went to Wal-Mart yesterday and all the plastic lawn furniture was from CHINA. We're doomed!

[Pelham]

Yes, it's a pity that Roberts doesn't have your vast knowledge of economics to draw on. After all, everyone knows that devaluing your currency is the road to prosperity. Just think of how Mexico, Argentina, and the Asian tigers prospered after their currencies fell.

[Southack]

China Spent $195 Billion in 2004 For a $110 Billion Trade Surplus

[Southack]

"Yes, it's a pity that Roberts doesn't have your vast knowledge of economics to draw on. After all, everyone knows that devaluing your currency is the road to prosperity. Just think of how Mexico, Argentina, and the Asian tigers prospered after their currencies fell."

People in the know, realize that devaluing your currency is the right thing to do if your currency is artificially over-valued in the first place.

[Pelham]

People in the know, realize that devaluing your currency is the right thing to do if your currency is artificially over-valued in the first place.

So you're arguing that the dollar is 'artificially over-valued'? How do you think that has been accomplished? The dollar is readily traded. Being the reserve currency it's the most easily traded currency of any.

Who is one of these 'people in the know'? Devaluing your currency is a good way of encouraging your overseas bond holders into unloading their holdings. Japan did that one day in 1987, when James Baker gave them the idea that we would let the dollar fall. Do your people in the know recall the Dow falling 500 points in one day?

[Pelham]

Your statement

To make a long story short(er), the Chinese Yuan-Dollar peg is clearly going to be broken, and soon.

which was Roberts' point:

Overnight, those cheap goods in Wal-Mart, which are the no-think economist's facile justification for Wal-Mart's decimation of communities, small businesses and employment, shoot up in price.

[Southack]

No, Robert's point was that the U.S. economy would be devastated by a falling Dollar (i.e. the very thing that would make Chinese goods more expensive for American consumers to purchase).

He's a dope.

[Southack]

"So you're arguing that the dollar is 'artificially over-valued'? How do you think that has been accomplished? The dollar is readily traded. Being the reserve currency it's the most easily traded currency of any."

The Dollar is artificially propped up by the central banks of China, India, Japan, the EU, and several other export-based nations.

...All of which is highlighted in a very bright way in the link in post #488.

[William Terrell]

Justify for me, for the good of America and her people, head over heels involment in world trade as opposed to producing what American's need to live domestically and trading among ourselves within the country.

Why should you care if I shut up or not?

[ARCADIA]

Yet you're fixated on that 9% of imports rather than on the 91% of the rest of our economy.

A 6 or 9% reduction in taxable domestic economic activity translate into at least a 6 to 9% tax hike to recover the shortfall in budgeted revenues. Oh yeah, there was that last round of tax cuts, but that was only pretend. We didn't cut spending, we just barrowed the additional moneys to pay ourselves a "tax cut". That money is eventually going to come due, and we are less likely to reduce spending when another 6 to 9% of the population is now even more dependent on public spending (whether direct transfers, or education grants, or public works, or direct employment).

Why bother looking at that small percentage. It is just going to come out of your pocket; and, you are not worried about it, then why should we.

[William Terrell]

Graph goes to 2000, not 2003. No notation if the dollars are adjusted. "Total Trade as a Percent of GDP", imports or exports or average of both?

GDP is market value of goods and services. Service are based on the use of goods. If goods are not made here, significant amount of wealth goes to the source country of the goods. Separate out goods from services in the GDP to make it meaningful.

Explain the chart to me. I'm not getting it. The very title says it was put together to push a ideology. No sources and raw data. Too many opportunities and too much motivation to cook. Proports to show that low or no tariffs benefit America in world trade when if fact America is only being used as a consumer nation in world trade.

I can see why you're fooled, though.

[cubreporter]

In your dreams, dude...in your dreams.

[William Terrell]

You get "economy leveling" when a 3rd world nation buys its first weaving machine. This doesn't mean that the 3rd world country suddenly has American standards of living...our economies aren't actually "level," but they will move a little bit closer to parity. India did this in the 1970's. 3 decades later their economy is no where near ours, but yet, it is far more "level" than it was in 1975.

I get economy leveling when the 3rd world nation buys its first weaving machine, then slave wages us out of the infrastruction of our weaving industry. I'm not getting why we would want to elevate the economy of a 3rd world pit at the expense of our own.

What I am saying is that 3rd world nations want to buy, and will buy and adapt when they can, American productivity advancements like weaving machines, refineries, cotton gins, robots, software, etc.

They're not, though, except for machinery and techniques to go into competition with us. The only way we can compete is to lower our standard of living toward theirs while raising their standard of living toward ours in a process of entropy.

Theirs may elevate some, but our will lower more because their countries are not based on the same philosophies as ours and freedom of the people thereof is not a value. I see no reason for us to do this.

I see no objective reason based on the good of American and her people to become as deeply involved in world trade as we are becoming. I can see the objective benefit for agencies within and without the US that want a global government, though.

[William Terrell]

The trade deficit will heal itself once we break foreign interventions from continuing to keep our Dollar propped up at artificially high levels. . .

The dollar is a fiat entity, based on nothing but comparative values and believe. The medium of exchange should not be traded as a de facto commdity.

How cheap will such labor appear next to free robots?

Slave labor can't compete with robots, once they are made and programed. Question who makes them, who develops the programing for them and who are we dependent on to repair and replace them. Not to mention that robots are not happening to any significant extent and have not started making the millions of items we import and have come to depend on.

How many "slaves" are going to stand on street corners to compete against free newspaper vending machines/robots? How many "slaves" are going to wait around in office complexes in order to compete against Coke machines in selling soft drinks?

How many "slaves" are making our fabrics, sewing it into clothing, making all other apparel and foot wear, making the internal workings of the machinery our economy is now based on, the components used in our military weapons and transport, and all the items we use and buy every day?

Where are the robots that compete with that? And if they are there and being used, why aren't they programed to place "Made in America" on the items they are making.

[William Terrell]

I'm fixated on the fact that our economy runs on services, and what goods we make are made from components from other countries. Services are based on the uses of hard, material goods, and a significant portion of the return on those services goes to the countries that provide the physical goods and another significant portion goes to taxes which are used to further the degradation of our economy.