Posted on 04/13/2005 1:00:10 PM PDT by LowCountryJoe
There is a disturbing trend under way in Washington these days where politicians threaten Draconian action as a "stick" to coerce a result they desire. They do this even while they acknowledge that swinging the stick won't solve the problem it purports to address and most likely will exacerbate it and lead to undesirable consequences. They typically justify their use of provocative and extreme threats as the only means available to rectify a situation they characterize as a pending "crisis" or a "systemic meltdown."
The most recent instance that comes to mind immediately is levying huge protectionist tariffs on selected trading partners (China) to stifle their exports into the United States and to coerce them into artificially altering the value of their currency. It is an extremely dangerous stratagem to impose a protectionist tariff on China just because some people believe we are importing too many Chinese goods and would like to coerce the Chinese government into cutting their currency free of its link to the dollar. For example, Sen. Charles Schumer, D-N.Y., has introduced a bill to hit all Chinese imports with a 27.5 percent protectionist tariff, which is co-sponsored by the Democratic Senate Leader Harry Reid, (D-Nev.) and the junior senator from New York, Hillary Clinton (D-NY).
Red flags are raised immediately by the way supporters of smacking China in the face with a huge protective tariff mangle the English language to distort reality. Schumer is fond of calling his bill a "tough-love effort" to force the Chinese to "stop playing games with their currency." Similarly, other senators supporting the legislation insist it is crafted to pressure the Chinese into "ending their currency manipulation."
How can one rightly call anchoring a nation's currency to the dollar, as China does, "playing games" or "manipulating" their currency? Was it "currency manipulation" under the Bretton Woods international monetary system when the value of the dollar was fixed at a specific weight of gold and the value of foreign currencies then fixed to the dollar? It may be the best policy or the worst possible policy (I happen to think it was one of the best) but it certainly isn't "manipulative." There is substantial professional opinion among economists that a nation can effectively stabilize the value of its currency (especially if it isn't widely traded) and de-politicize its monetary policy by linking it to a strong foreign currency like the dollar or the euro.
Imposing a 27.5 percent tariff on Chinese imports not only would be disastrous in its own right, it would not stop there. China almost certainly would retaliate, and the seeds of a trade war would be sown. The Schumer-Hillary tariff on China could easily turn into the Smoot-Hawley tariff of the 21st century. Just as Smoot-Hawley quickly got out of control - expanding originally from an effort to protect farmers - so too would Schumer-Hillary get out of control as other petitioners quickly lined up to demand protection against other countries "flooding" our economy with "cheap" goods and "manipulating" their currencies to give their exports an "unfair" advantage.
There is a permanent lobby in Washington for replacing free trade with managed trade led primarily by Fred Bergsten, a former assistant secretary of Treasury for international affairs under President Jimmy Carter and now the director of the Institute for International Economics. Bergsten recently made a pitch before the Counsel on Foreign Relations for a pre-emptive 50 percent tariff on China to prevent an international economic calamity. Even former Nixon Commerce Secretary Pete Peterson, who supports the idea, acknowledges that a hefty protectionist tariff on China is playing with fire. Peterson said, "I don't suggest using sticks lightly. They're a very dangerous thing to get started because they can result in retaliation and so forth."
The simple truth is, there is no demonstrable instance in economic history where nations were made worse off by free and open trade. There are only doomsday scenarios spun out of the imagination of half-baked economists that are concocted to spur governments to act pre-emptively. There are, however, innumerable instances where a false fear of free trade (usually goaded by economic interests who benefit in the short run from protectionist policies) has led a government to "pre-empt a crisis" with protectionist policies that very quickly cascaded into a genuine economic calamity. Smoot-Hawley is the most dramatic instance in the last hundred years. Let's not tempt fate with a Schumer-Hillary tariff that could become the Smoot-Hawley tariff of the 21st century.
Let's get back to it [the subject of trade] then. Let's not bring up illegal immigration or inconsistencies with our beliefs any longer...you read the damned paper and then please comment on what it's trying to convey to you! Then, if you would, explain where you disagree or even possibly agree with the information presented in it.
Everybody knows that the primary cause of the Great Depression was the collapse of the speculative stock market bubble in 1929. With the market hyperinflated by debt, the failure cascaded throughout the entire financial sector. Economic activity slowed to a snail's pace because NOBODY had any money.
You've changed the argument, Willie. In your first post you described a global recession. The content of my post revolved around that theme. There were many reason for our depression, much of it involving things that you failed to mention.
End of story. You lose.
But then, we've become accustomed to expecting that from you.
How about trying something different for a change?
Your act is starting to lose its entertainment value.
Now, as to the issue of illegal immigration and "free trade", I'll grant you for the sake of progress, that you have a point about "free trade" in a strict and comprehensive interpretation being conducive/permissive to/of illegal immigration. But, if true free trade were to exist, then the immigration would not really be illegal at all. So let's - for the sake of progressing in our dialog - call so-called "free trade", managed trade with minimum barriers. One barrier that has to remain in place is immigration policies where all foreigners are documented and approved for entry. Satisfied?
I did not run from it so will you finally quit running from the paper and once and for all read the farking thing...and then comment on your findings.
By the way, I haven't lost sh_t so far! P.s. if you encounter a word or a concept that you don't quite grasp in that paper, please don't quit; just look up the word in the dictionary or the concept on-line...you may just learn yourself something KING NEBUCHADNEZZAR.
Buehler?Buehler? Buehler?
I try to remain objectively neutral.
As you've already conceded, labor unions are merely artificial entitiies that exist as an economic check and balance in opposition to other artificial entities: corporations and government.
Labor vs. Management -- It's a balancing act of negotiating power.
Corruption and abuse occurs on both sides.
Professionally, I have always held positions on the management side of the fence.
However, I also strongly believe that the best managerial style is to operate in a fashion such that the labor force would perceive no benefit to organization.
Poorly managed companies give rise to conditions that promote labor organization. Abuses occur on both sides. I don't have sympathy for either side.
Poorly managed companies give rise to conditions that promote labor organization.
There is that but then there's also an 'entitement mentality' amongst many people the comprise the labor pool. Many people feel that if corporations show increase profit then they should also reap some of the reward too.
Profit sharing is a legitmate incentive for continuous performance improvement.
In fact, I have always believed that employees should invest at least a small portion of their savings in the stock of the company that they work for. That is not always possible, of course, since many companies are not publicly traded. But when the opportunity exists, I would certainly encourage it.
Thank you Simone!
Frye? Frye? Frye?
Yes.
For decades.
And, unless you were being facetious, what is your excuse for not knowing that?
I'm no economist, but it seems a good starting point.
Indeed.
And a recognition of that mentality is one of the several things that separates us from the rough beasts, and raises us to a Christian regard for our fellow man.
The rich man is the one with the entitlement.
You are correct, the life choice is his.
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