Posted on 08/29/2007 1:25:30 AM PDT by 2ndDivisionVet
BILOXI, Mississippi (Reuters) - Officials from the Federal Reserve on Saturday warned of dangers from a rising tide of trade disputes and the harmful impact on what one otherwise termed a "resilient" United States economy.
Three regional Fed presidents steered clear of current economic or monetary policy topics at a panel discussion on the southern U.S. economy at the Southern Governors' Association conference.
The presidents of the St. Louis, Dallas and Atlanta Feds, respectively, mostly focused on the dangers of protectionism and the need for an educated and flexible work force to cope with rising foreign competition.
The governors convened their meeting in this small city on the Mississippi Gulf coast to mark the second anniversary of Hurricane Katrina, which flattened much of the region in August 2005. Biloxi and nearby communities were "ground zero" for the storm.
RESILIENT ECONOMY
In some of his first remarks since taking over as president at the Atlanta Fed in March, Dennis Lockhart hailed the "resilience" of the region since Katrina, which he said was characteristic of the broader U.S. economy.
But St. Louis Fed President William Poole warned of protectionist sentiment radiating from Washington, which he said could undermine U.S. exports and the growth in better-paying jobs often associated with export industries.
"Some U.S. legislative proposals seem to be based on a presumption that trade retaliation is an effective strategy; however, economic history suggests otherwise," Poole said.
Poole is a voting member of the policy-setting Federal Open Market Committee in 2007.
Many lawmakers blame much of the huge U.S. trade deficit on unfair foreign practices. But Poole said proposed legislation was "unlikely" to affect the trade deficit.
One Senate bill aimed at easing U.S.-China trade imbalances would allow U.S. companies to seek anti-dumping duties on goods from any country that maintains a "fundamentally misaligned" exchange rate after being formally cited by the United States.
"The U.S. economy is fully employed ... we need to focus less on creating more jobs and more on creating better jobs," Poole said. "Increasing (trade) liberalization is central to creating better jobs around the world, including here at home."
Many economists say that a jobless rate under 5 percent shows the U.S. economy is at or near full employment -- the rate below which inflation pressures can build. The U.S. jobless rate has been below 5 percent since December 2005.
Poole has been in the spotlight this month after comments on Bloomberg TV that downplayed the financial market "contagion" to the overall U.S. economy and the need for an emergency reduction to the federal funds rate, the Fed's primary monetary policy tool.
Since then, financial markets have slowly swung around more to Poole's viewpoint, somewhat marking down the chances for aggressive Fed action to rescue the economy.
Lockhart told regional policy-makers of the need to nurture workplace skills to attract the right kinds of jobs -- higher paying, and in new and growing industries such as biotechnology or computer and network engineering.
Competition between states to attract those kinds of companies through domestic or direct foreign investment is often intense, he said.
"States are on the right track when they invest in programs that stress 'foundation skills' such as applied mathematics and reading comprehension," Lockhart said.
Dallas Fed President Richard Fisher spoke on one of his favorite themes, the "creative destruction" of the work force, especially in today's globalized economy.
The southern U.S. lost 80 percent of its apparel manufacturing work force between 1990 and 2005, and much of its payroll at paper plants and furniture makers as well as companies switched production overseas, he said.
"Despite these employment losses, each state in the Southern region now has a larger job base than it did in 1990," Fisher said, helped by growth in emerging service industries.
"Rather than labor fruitlessly to protect your constituents from foreign competition, you and your legislatures must prepare them for it," Fisher said.
Wow, for the last fifteen years we've been told this wasn't possible.
Our nation's economy exposed due to massive trade dependencies beyond our control? No way! I can't believe that.
“Our nation’s economy exposed due to massive trade dependencies beyond our control? No way! I can’t believe that.”
lol, I was spinning a free-trader one day I ended up having them acknowledge the above. They walked right into it...classic. Then they have a hard time explaining why that “freedom” with trade is such a great thing afterall.
day I = day, and I
If they admitted anything, you’ve been more successful than I have been. There couldn’t possibly be any downside whatsoever from moving as much manufacturing offshore as possible, according to the folks I’ve discussed this with.
Why when Loral gave China the ability to stabalize their guidance systems and launch multiple satellites per launch it was a great day for America. And when it was mentioned that China’s unreliable missiles could suddenly be relied upon to not only place one missile on target, but multiple warheads, they could hardly contain their glee. No problems with this...
When I realized this, I simply wrote off every individual who defended what was taking place.
When Orin Hatch devised a plan to gift China with our entire patent database, there wasn’t a free trader to be found that objected.
Well, I’ve seen all I need to see. I see very little difference between most of them and Benedict Arnold.
Was he a analyst as the Dallas Fed Bank?
By extension, our security as well.
Lockhart told regional policy-makers of the need to nurture workplace skills to attract the right kinds of jobs -- higher paying, and in new and growing industries such as biotechnology or computer and network engineering.
Is that why we're importing millions of unskilled and uneducated workers?
If the economy tanks, it won’t be because of trade, but because of the Fed’s mistakes.
Don’t think so...but they’re all the same to me (lol). I was bored one day and thought I’d have some fun :)
Foreign trade is booming, even considering the ill effects of the terror threat.
Years before Ronald Reagan used the term, I used to think of our robust economy growing to the point that even the menial jobs would pay a decent wage (floating all boats). It was my thought that as wages rose, the bottom scale would go up as well.
I surmised, that eventually managers would make a great living. General workers would make a really good living, and those who did the menial jobs would make a good living.
It was my view that eventually even the lowest paid jobs could support families. This was my view of how our society would reach a rather utopian existance.
Who cares what job a guy had if he was able to afford a home for his family? The status of holding a lesser job, would then become respected. We need all types of workers in our economy. Someone has to pick up the trash, wash the dishes, serve the customers, receive and distribute the goods. These are respectable positions. Good people fill them.
Today we see unskilled and uneducated people brought into his nation to circumvent the natural progression of things. And so, the ideal that would come about naturally, will not come about naturally, because something unnatural is taking place.
Pay a decent wage to a guy in the fields. I’ll pay 25% more for my vegetables. Make it so the bottom guy can afford to raise a family and everyone will be happy. Put US Citizens in these positions. I’ll respect every one of them.
Today, the corporate environment is crushing what could have been. Yes we’ve cut all the waste, but more often than not IMO, that waste wasn’t wasteful. It was an honest wage. It was your fellow man that held those jobs. And now it’s our neighbor nation that has sent it’s poorest and least educated to replace our bottom rung.
That isn’t right.
Not only is our neighbor not being paid any longer, the money that would have been poured back into our local economies is now flowing outside the nation to the tune of
$30 billion dollars annually to Mexico alone.
I won’t even touch manufacturing jobs. The trillions that siphens out of our economy is a subject for another time.
This isn’t right either.
The corporate glutony knows no bounds. I don’t say that because I don’t like corporations. Corporations can get some things done that could not be accomplished without them. I realize that. It’s just that knowing those corporations must report out, and they lose sight of what is right and do their damndest to produce on a shoestring, without the shoestring.
That doesn’t serve us well IMO.
Thanks for your reply.
Yes, I realize this. Because the effects are less immediate, it’s harder for people to appreciate the long-term (future) damage. Sort of like the cigarrette vs. cancer thing. It’s at the “awwww shi’it” stage when people wish they had done things a bit differently. I actually don’t try to change anyone’s mind here on the subject, as I truely see how far along we are down this road. I’ll be surprised if we can re-direct the train, let alone stop it. Simply defining Conservatism in even a broad scope seems to have hit a few bumps within the past several years.
Yes, Nixon did go to China and Thatcher did sell off the coal mines. The North American energy market is integrated and a world market for natural gas is being built.
The list goes on. And on. And on. And on.
The only real conflict is on the left where the social democrats and third way are still dueling on issue of equality of outcome versus the equality of oppurtunity.
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