Neither Katrina Nor Terrorism Will Bring Down America, But "Free Trade" Will

AmericanEconomicAlert.org ^ | Tuesday, September 20, 2005 | William R. Hawkins

[Last Dakotan]

The biggest problem facing inner-city ghetto neighborhoods today is not a "disappearance of work," but a complete social breakdown...

I lived in Milwaukee WI through the 80's. It wasn't a chicken vs. egg thing, but rather they happened simultaneously.

[Last Dakotan]

Agreed. Let's have more free trade, more prosperity and less unions!

The union jobs in manufacturing were gone twenty years ago for the most part. Now I see 7.50/hr mom and pop foundry jobs leaving too.

[Last Dakotan]

Maybe it is confusing to you because in reality Sony does not buy US Bonds directly but rather the Japanese central banks do.

Your $50 for a CD player (plus millions of others) leaves the Japanese (or Chinese for that matter) with a surplus of US dollars which would drive the value of the dollar down in a free market. Instead they buy US Treasuries to sop up these dollars. US politicians, both Republican and Democrat fuel this market by deficit spending and borrowing.

[chris1]

You will be attacked soon on FR. Free Trade to some on here is more holy than the bible and word of God.

[A. Pole]

[chris1 to RFT1] You will be attacked soon on FR. Free Trade to some on here is more holy than the bible and word of God.

Or more like the Koran. See my tagline.

[ARCADIA]

If I buy a drill made in China from Home Depot and use my Amex card, which I pay off every month, how does that create any foreign obligation?

Every dollar we send overseas has to evetually be redeemed in its own currency or exchanged for US made goods and services. It may temporarilly come back to underwrite the debt, or it may buy property within the US; but, the more we do that the further we debase the currency.

[Regulator]

As to trade balancing, it will, and it will be painful

Oh...so we must endure pain, because we've been bad little citizens and built our own economy that benefits us, not other countries.

Bad us. Bad citizens. Take that! Free trade down your throat to show you that you've been BAD and you must be PUNISHED with pain.

How quaint. Economics as B&D farce. That's the gig you want to sell to voters?

Won't last long. One more election cycle or so. CAFTA was the result of bribes and criminal manipulation.

Won't be long. No one except masochists votes to inflict worthless pain on themselves.

[janetgreen]

Well hell! They got lots of work now. Let's see how they perform.

They won't have as many jobs as the illegal aliens will.

URL Source: http://www.latimes.com/news/opinion/commentary/la-op-latino25sep25,0,6499962.story? coll=la-news-comm

[dennisw]

Have an economist explain it to you

[Mase]

Free trade ping.

[Mase]

Have an economist explain it to you

It seems pretty simple, why can't you?

[Junior]

"Capitalism bad. Socialism good."

More liberal crap.

[raybbr]

If they held on to the money, we'd get the goods and they'd get unredeemed IOU's. Dollars are not goods or services, they are IOU's.

Hey slick, send me your worthless IOU's. I'll find something they are useful for.

[raybbr]

If they do choose to buy our debt instruments, they contribute to our low interest rates which have stimulated our incredible economic growth. It requires a lot of capital to grow a $12 trillion economy 4.4% a year. This is also a source for the low mortgage rates responsible for our housing boom.

Good. We finally got one of you guys to admit that foreigners run our economy.

[junta]

Foreign central banks bought 98% of treasury issuance last year.

[1rudeboy]

Just out of curiousity, do you agree or disagree with the Marx quote you posted?

[1rudeboy]

Foreign central banks bought 98% of treasury issuance last year.

Do you have a source for this? Or is it unadulterated BS?

[redgolum]

Funny tagline.

[raybbr]

Actually, that's my standard offer. You send me all your worldly possessions, I'll send you an IOU.

I am not as willing as a free trader to simply give up my assets.

The terms of the agreement are that you'll never come back to me with the IOU for redemption.

Are those the same terms that the foreigners who are receiving billions of our dollars have agreed to? I doubt it. They have the option of redeeming them why shouldn't I?

You can pass it around to anyone else you want, but no one can come back and redeem it with me.

Huh? The same as the last point. Why would I be as greedy and simple as to accept those terms? The Chinese surely aren't?

After all, redeeming the IOU with me would be the completion of the trade, the balancing of trade, which you anti-traders insist doesn't occur.

They do expect at some point to be able to redeem them. Unless you are just simply going to declare those IOU's null and void. Is that the future of capitalism?