The New Protectionists

opinionjournal ^ | March 10, 2006 | WSJ

[unseen]

No one says it must be one ruler. A select group of people calling the shots is the same as one person. the UN, WTO, or some other inner circle power brokers. The keys to power throughout history has always been commerce. He who controls the commerce pulls the strings of power. Now it seems due to free trade American can not even pass its own tax laws.

http://www.breitbart.com/news/2006/03/14/D8GBCJF08.html

The announcement comes 30 days after a WTO panel upheld a decision condemning the tax breaks, affirming previous judgments that the so- called Foreign Sales Corporation, or FSC, law breached global trade rules by giving illegal subsidies to some U.S. businesses


So much for our freedoms. We have the WTO what we can and can not do with our tax dollars. Got to love that free trade...

[unseen]

Well I guess I will just have to go to facts. Like this from my previous post:

Comment:

If you bother to read further and due the math you will see that for the last 40 years The percentage of GDP due to Industry and trade has fallen and the GDP due to Consumer and Government has risen. Thus we owe an ever increasing amount of our GDP to government and consumer spending. In other words our industrial expenditure as a percentage of GDP is about 5% less than in 1965. If our industrial base was really growing the 1997 number should be higher than the 1965 number but of course it is shrinking. And if you look at 2004 numbers it is even worse and the decline is accelerating. But you free traders keep smoking that wacky weed and drinking the kool aid. Short term profit is not the same as long term gain.

[unseen]

How's that NAFTA working for us? Well I see Mexico getting a lot of free trade with us but when it comes to the US getting the free trade? Nope:

Fox said his administration has invested more than $6.3 billion in exploration in the last five years. Pemex expects the new find to offset further production declines at Cantarell expected in coming years.

Pemex contracted a private company to drill the well. The fastest way to get the oil out would be by Pemex forming alliances with companies that have the deep-water technology. However, current laws forbid private companies from exploration and production activities in Mexico except under contract to Pemex.

The Fox administration has been attempting to ease foreign investment restrictions in the state-run energy sector. But those efforts have been blocked in Congress.

Pemex produced 3.33 million barrels a day of crude oil last year, of which it exported 1.82 million barrels. This year, the company expects to raise production to about 3.42 million barrels


http://news.yahoo.com/s/ap/20060315/ap_on_bi_ge/mexico_oil_find_1


I'm soooooooo glad that our leaders make such great treaties. We are getting such great deals. Our leaders are like the old lady selling the 1969 mustang for $50.00

[LowCountryJoe]

If you bother to read further and due the math you will see that for the last 40 years The percentage of GDP due to Industry and trade has fallen...

I've never disputed that but it is not relevant to the claim that manufacturing output is falling. Yes, it's 'falling' but only relative to the significant gains in other areas of our economy.

...and the GDP due to Consumer and Government has risen. Thus we owe an ever increasing amount of our GDP to government and consumer spending.

Do me a favor...show me that you know what in the hell you're talking about by showing me the very basic components that make up the GDP. Then explain how our GDP reflects an increase in government spending and consumption with an overall increase in GDP, while things are so dire.

You, Sir, don't even have a clue as to what Kool Aid is: truth is is that you've probably been drinking it for years without even being aware. And the only thing that I'm smokin' is you in this debate we're trying to carry on intelligently - for the record, I'm doing my part.

[1rudeboy]

We have the WTO what we can and can not do with our tax dollars.

No. We can choose to ignore the WTO if we wish. The ruling simply allows others to retaliate against us (in some yet unspecified fashion) without penalty.

I'm truly sorry I have to mention it, but misperceptions about the WTO run pretty deep around here.

[1rudeboy]

How's that NAFTA working for us? Well I see Mexico getting a lot of free trade with us but when it comes to the US getting the free trade?

Dated (2003), but still relevant to your question:

Myth: NAFTA was a failure for the U.S. [Free Republic]

[unseen]

The news story I posted was from today. Not 2003. So it's a myth that Mexico keeps whole industries locked up? Hmmm better go tell Fox that he is living a myth and we are coming down there to drill because its a myth. I could be wrong but as far as I can tell Avery industry in the US is open of the highest bidder. Hell even our security is open to the highest bidder. In 20 years we will be outsourcing our military recruiting to the highest bidder.

[unseen]

Well from your post it is evident that you did not even read my post. Let me re paste it and you can read it very slowly.

Here's some cut and paste. Like facts on GDP:


Of the three methods for calculating GDP, the expenditure approach is most common. This approach sums the total expenditures by each sector of the economy: household Consumption, business firm Investment, Government purchases, and Next Exports which is eXports - iMports. The formula is GDP=C+I+G+(X-M). Determine GDP for 1997 (data is in billions of dollars).:


GDP C I G X M
5,493.7 860.7 1,454.6 965.4 1058.8

Adding across we can determine that GDP is $7,715.6 billion or slightly less than $8 trillion. That's a lot of stuff. How much is $1 trillion? If you had a trillion dollars bills in one stack, it would be slightly higher than seven New York State Empire buildings; laid end to end they would reach the moon four times. The U.S. doesn't have a trillion dollars bills. Remember that GDP adds each sale which is price times quantity.


http://www.brazosport.cc.tx.us/~econ/arch/GDPcalc.html


Comment:

If you bother to read further and due the math you will see that for the last 40 years The percentage of GDP due to Industry and trade has fallen and the GDP due to Consumer and Government has risen. Thus we own an ever increasing amount of our GDP to government and consumer spending. In other words our industrial expenditure as a percentage of GDP is about 5% less than in 1965. If our industrial base was really growing the 1997 number should be higher than the 1965 number but of course it is shrinking. And if you look at 2004 numbers it is even worse and the decline is accelerating. But you free traders keep smoking that wacky weed and drinking the kool aid. Short term profit is not the same as long term gain.

Now exactly what part don't you understand? You do know how to turn things into percentage, right? And you can total up several columns, right? and you can see where a trade deficit negatively impacts GDP right? and you see where the Industrial capex has declined as a PRECENTAGE of GDP where as the Consumer and GOVERNMENT spending as a PERCENT has taken up the slack (.i.e the 2.7 trillion dollars spending by the government is artificially stabilizing GDP) right? I mean all that is obvious too you, right? You can see it through all that smoke,right?


Maybe that isn't easy enough for you here's the definition of GDP out differently:

http://www.streetauthority.com/terms/g/gdp.asp


Gross Domestic Product (GDP) is the broadest quantitative measure of a nation's total economic activity. More specifically, GDP represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period of time.

The components used to calculate GDP include:

Personal Consumption:
-- Durable goods (items expected to last more than three years)
-- Nondurable goods (food and clothing)
-- Services

Government Expenditures:
-- Defense
-- Roads
-- Schools

Investment Spending:
-- Nonresidential (spending on plants and equipment), Residential (single-family and multi-family homes)
-- Business inventories

Net Exports:
-- Exports are added to GDP
-- Imports are deducted from GDP

A common equation used to calculate GDP is as follows:
GDP = Consumption + Government Expenditures + Investment +Exports - Imports

The GDP report also includes information regarding inflation:
-- The implicit price deflator measures changes in prices and spending patterns.
-- The fixed-weight price deflator measures price changes for a fixed basket of over 5,000 goods and services.


Now you do understand how we calculate GDP, right? You understand how IMPORTS Deficits give a negative(i.E take away from GDP) You understand how Government SPENDING and CONSUMER spending give a positive(i.e add to GDP) and if you use advance 5th grade math you can see how the PRECENTAGE of Industrial CAPEX is less in 1997 than it was in 1965 meaning that the Industrial spending in this country has failed to keep its percentage over the years. This is why on wall street the consumer is King. and it is why the State of the Union address and the budget moves more stocks then if Industry capex raises. Do you understand now? I really can not make it any simpler for you.

[unseen]

If you want additional reading try this. I know it has big words in it so just take your time. You should get it.

http://www.quickmba.com/econ/macro/gdp/

[unseen]

While your at it go tell the textile and furniture and auto industry that it was "myth" that NAFTA put them out of business. Tell every taxpayer that had to pay benefits to formerly working Americans that lost there jobs to Mexico, usually the same companies and same jobs just in Mexico. Yep it's amazing all the tax dollars we spent on welfare, food stamps, and healthcare since NAFTA was a "myth" I'm just happy that all those additional taxes from the tariffs from those products and all those taxes on the increase in company profits made up the difference in tax receipts....Ahh no wait a minute...THAT is a MYTH

[LowCountryJoe]

You didn't read this, did you?

The reason why our GDP growth grows faster during periods of falling Net Exports - the component of the GDP the works against our GDP calculation on the surface - is because there's an offset of larger increases in C and I - two of the three components that work positively on GDP.

Also, the G rising is of consequence, but since this is a real GDP calculation, the G is rising because American productivity can allow for it. But, properly understood, the G comes from taxation and deficit spending - the taxation portion act as a dead-weight loss on our GDP calculation because it actually shrinks the C by more than a straight one for one amount. My question for you is how our economy keeps expanding at faster rates even as we take huge 'hits' for importing more than we export? I've already given you the answer above but I want to actually see you write it out for me.

It's nice to see that you're learning but we still have some hurdles...keep up the reading, it makes your arguments more effective if you at least know the terminology.

[unseen]

There you go again...I already showed you that (I) as a percentage of GDP is falling. The only two positives we have in GDP is C and G. That's it. True (I) is increasing in real terms but not at the percentage it was so you have a net negative. I wish you could comprehend that but the kool-aid is affecting you.

To top it off you use the age old myth of American productivity rises. The only reason productivity is rising at such a rate is because of outsourcing/technology (each cost American jobs which means more federal spending for things such as healthcare and food stamps thereby increasing G and decreasing I). Only about 60% of the eligible workforce is employed at the moment(I hope you don't need a refresher course on employment stats.) Thus in real terms, because both C and G are rising due to increasing DEBT spending and taxes, I hope you can see where that slope takes us in the long term...Hint not good.

So from all the numbers I still have not seen one positive long term benefit from free trade. If it was totally free trade maybe( big maybe) but it isn't and it never will be. Our ideal of free trade is not there and never will be. As long as this government and people like you keep the rose colored glasses on, the country(i.e middle class/lower class Americans) gets screwed. China's monetary policy, Japan's deflationary easy money and tariffs and other countries tariffs and regulation all mean that we are getting our butts handed to us.

[Toddsterpatriot]

The production records the entire price parts+assembly to the US thus inflating the numbers in the US favor. When in reality we are losing production CAPACITY.

That's right. As you can see here, our capacity is lower every year. Only $3 trillion last year.

[Toddsterpatriot]

How's that NAFTA working for us?

In 1994 we exported $50.8 billion to Mexico. In 2005 we exported $120 billion.

So why do you think NAFTA was bad?

[Toddsterpatriot]

and if you use advance 5th grade math you can see how the PRECENTAGE of Industrial CAPEX is less in 1997 than it was in 1965 meaning that the Industrial spending in this country has failed to keep its percentage over the years.

Yes, and that's why GDP has shrunk every year since 1965 and why we're the poorest country in the Western Hemisphere. Oh, wait, our GDP was 3.5 times larger in 2005 than in 1965. And we have a GDP per capita of $41,800. I guess manufacturing isn't everything.

[jonrick46]

With my limited time (I will respond in more depth later), your mention of the WTO and its workings behind the scenes, makes it all the more necessary for our representatives in government to safeguard our sovereignty and constitution with good law.

We must be vigilant.

[Paul Ross]

You know, your chart shows a rather dramatic deep dip in the Wealth index as the current account deficit accelerated. The rebounding phenomenon could be explained by an acceleration of housing inflation masking the real dilution of the 'wealth' being reported.

[Paul Ross]

Did you see Vox Day's newest posts?

[unseen]

see above post. I can't explain it better. If after reading the post you still need help. I suggest further reading.

[unseen]

GDP is 3.5 times larger in 2005 than 1965 due to increases as a precentage of G (government spending) and C consumer spending. Not I (industrial spending nor T (exports minus imports). You do understand how record Government budgets 2.77 TRILLION and record Consumer DEBT has contributed to that 3.5 times in GDP, right? If not don't worry I know it's a diffucult concept. Keep at it. It will come to you.