O/T Economy and Trade

I watched Lou Dobbs a while ago. Speaking of unfair trade, he said "what this country needs is BALANCED, MUTUAL, RECRIPROCAL trade. This isn't protectionism, it's common sense. Under the unfair trade practices we now have a $7 trillion trade debt". He also added "our government wants the middle class to compete with the cheapest labor in the world, but the CEO's aren't expected to compete with anybody". I thought he nailed a huge problem with our economy and you hardly hear it mentioned. So now we have a "stimulus" but the unfair trade issue isn't addressed. Why hasn't our country insisted on trading dollar for dollar?

I hate to say it but I think this country is doomed to failure. Hope I can survive a few more years on my 40 acres. I don't know what my kids will do. DH

It's called "protectionism", and it's been tried in the past.

The fact of the matter is that in the end, trade does balance out. A country that is a net importer exports its own currency, devaluing it in the process. Over time, that causes the importing country's goods to be cheaper and the exporting country's become more expensive. If nothing else happens, an equilibrium of sorts will be reached. Of course, the world economy is never that simple, and there are all sorts of things that come along to upset things: wars, fuel shortages, labor problems, etc.

Now the situation with China is that they have artificially devalued their own currency in order to preserve their exports. If they weren't allowed to do that and get away with it, our trade imbalance with China would be much less.

Well, the debt based Keynesian system started by Rooseveldt will fail, (failing already), but the country will go on. No one knows what it will look like, though. I for one think it will be better. Hard times have a way of straightening out our priorities.

China is still trying to use Mercantile Theory to run their economy. It works for a while; it worked really well for the European colonial countries of the sixteenth and seventeenth centuries. The theory won't work much longer since money is now a commodity just like everything else. I could elaborate but you'd all fall asleep.

It's hard to have a trade balance when you're deeply in debt to the people you're trading with.

The borrower is a servant to the lender.

Paul

I just read an article about manufacturing tonight. You see, a manufacturing based economy is a lot stronger and stable than a service based one. This depression will be much worst than even early 80's. We now manufacture 60% of goods here ( I think this is skewed with the fact the final assembly is done here, thus considered manufactured here), while 30 years ago 85% was made here. The trading currency argument is not valid, you do not trade currency, it is fro purchace and payment. I do agree that China has kept their money devalued for many years. China is a very old nation, they at one time wanted to control the world. You do not see western Europe doing much buisness their. They are another old area. We are a very young country, and I think by some of our policies we are making some "young" mistakes.

Then we need to pay our politicians what the other countries pay theirs, no sence overpaying our political clowns any more than third world lawyers.

I would liked to hear just one of the bankers getting grilled by congress, have enough of a spine to say, "the country has lost faith in its political system, since they are the ones making the laws that the banks have to follow. So in efect, you politicians need a pay cut as well (but their salaries are fixed for now and cant go DOWN, but everybody elses can).

Clasic finger pointing. How many of your local bankers have been indicted for perjury, tax evasion, child molestation, drunken driving, drowning passengers, rape, and the list goes on and on.

How can americans demand everything from people who work along side them, including bankers (there are some good solid fair banks out there people), and expect absolutely nothing from the government officials. Must have something to do with the propaganda news that tells citizens to bark at their neighbor, and not the slezeballs in Washington DC.

People, we need some accountability in the white house, and currently, things are going the same as the last 8 years, more spending, AND tax cuts for the political pet projects. I love the salary fixing for govt employees, i want a gaurenteed salary for the next four years while everybody else gets tossed from their job!

When are the people going to wake up

Over!

China was ruling a large portion of the world LONG before this country was even thought about by the caucasion.

I am done now, can you guys stop talking about this stuff, it is cutting into my relaxing tractor time.

How do you work that out.Isn't a trade balance the excess of exports over imports and vice versa.. The balance will then reduce or increase by the size of the excess or deficit.
Not all trading is negative.Japan may be your biggest trading partner,that maybe a negative.
These figures will be in the ether somewhere.
Borrowings I think are separate from trade.

In 2008 didn't America pressure China to devalue the Yuan.?? . That would indicate it is beneficial to America for them to do so. So what are you saying " to get away with it".

Mainly because the US makes very little that anyone in the rest of the World wants these days and the stuff we make is overpriced compared to what is made elsewhere.In order to trade you have to have something the other party wants.

I'll be 62 come fall. As I look ahead, I'm not sure this country will be worth living in. The President seems to favor more welfare--"sharing the wealth"--more government intervention, and more spending. We can't borrow our way to prosperity. In a couple of years we'll have inflation. Then we'll have to create a recession to cool it down. More government meddling. How much can the taxpayers bear?

Larry in Michigan

Adding to this, "protectionism" is discussed by the government and media as a bad thing. When you take your truck to town and take the keys out when you park it, isn't that protectionism? Doesn't external_link have protectionism everywhere he goes? Turtles have shells, porcupines have quills, skunks have odor, all for protectionism. Don't we as a nation have a _HERITAGE_ that our forefathers bought and paid for? Is it worth protecting? We are being treated like U.S. citizens are nothing special, just part of the "global community". That to me is a large part of our demise.

It was the other way around. The US pressured China to RAISE the value of their currency. And China did make a token effort; enough to appease the US but not enough to significantly affect trade.

I was in China last year and I was astounded at how cheap things were. A room in a good hotel in one of the smaller cities was 17 bucks, as I recall.

Searching Google News with "China revalue currency" will bring up a number of hits on this topic, here's a recent article from the NY Times, for example:
China and US in Currency Spat

The problem with protectionism is that when you protect one industry, you generally do it at the expense of another one.

A major contributing factor to the American Civil War was the debate over protective tariffs. Northern, industrial states wanted tariffs to protect domestic industries. Southern states, on the other hand, had little industry and depended heavily on trade with European countries. American cotton was traded for European finished goods.

I'm not saying that there isn't a time and place for protectionism, only that it is seldom a black-and-white issue.

One word about the congress boys in those hearings. Several of the ones who scolded the auto and bank folks about show'n up in private jets had oficial work to do in Paris over Valentine's day and they got to take their wives with them. Yep they flew them selves and there wives to Paris for Valentine's on our dime. Had a story about it on the all night news on ABC or CBS one, seen it a few nights ago at work. Don't recall the names but I thought it was funny.

Dave

The strong dollar policy of the US dooms it to a trade imbalance. Our commodities (like grain) are way over priced because ofthe over valued dollar. When the dollar was falling last spring and summer grain prices went up along with metals and even scrap paper. Now that the dollar has regained footing all those commodities are in the dumper again.

NO promises are being made that they won't spent Trillions MORE later on this very same thing...
They seem to not understand that they are propping up a SYNTHETIC Economy that is doomed to failure...
They have taken us off a solid (Gold or Silver) backed system and we are now on a worthless PAPER-Backed system..
The absolute best thing they could have done is pulled money OUT of the system and made our Dollars worth MORE..not Less as it will be now..
Wall Street Produces Nothing, yet it is the basis for evaluation of most everything now..
I feel sorry for all the people who are tied up trying to "Get Rich" with this system, but we "used" to figure you WORKED--and--SAVED for the future..
Now if you do, you only loose money from inflation..and it is going to get worse..
What don't they understand about "pouring money down a Rat Hole"..??

For the most part our whole system has had a monkey wrench thrown in it.If you try and compare it to what used to be,you dont have a used to be scenario to compare it to.I like Lou Dobbs but I think while he is thinking about it rationally,nobody else is.Those people hollering protectionism are like somebody throwing gas on a fire to put it out.We may need to do lots of things to get the country working right again,and like some of the others said it looks like whats being done could make things worse.About all that can be said for what is going on is that these ones are trying to fix it,and the other ones were trying to ruin it,which is still a mystery to me as why anybody would want to ruin it.I hope we can survive the cure and hope somebody can figure out the right thing to do to fix it.The whole world might depend on it.
Most of our trouble began with giving China most favored nation status.We should not have done that.We should cut way back on importing anything from everybody.Protectionism or not,we have to have industry to survive.We will never get out of this mess trying to compete with third world slavery.Thats stupid.We need to advance instead of go back to the stone age.Who wants to go back and farm with mules?Sure a few people will farm with mules,but the way we feed everybody is by doing things a lot better and smarter than that.I think we can put a higher value on our food that China buys from us,than the junk we get from them.So what we do is raise the price on our corn that we sell them,and use the extra money to pay them back for our debt.If they dont like it,they can buy it from some other big country that will sell it cheaper.When they cant get enough they wont have a choice but to buy from us.Either that or they can write off some of the debt because we probably wont pay it any way.

Hang on here. I think we've got a $7 trillion government deficit,but not a $7 trillion TRADE deficit. Let's not confuse the two. If he's wrong about that,what else is he wrong about?

Four 8 years, ABC, CBS, NBC, et al, were "the lying abundant media" and not to be believed.

So when did the "lying abundant media" repent and get baptized? What makes them believable NOW when they weren't believable THEN? They haven't had significant personnel change since January 20th...so it's essentially the same "liars" that were there during the Bush presidency.

When did the press turn over a new leaf and become believable?

Face facts boys, we can't compete. We can't compete when taxes and "fringe benefits", like health care, are driving business away from here. So either we make the US business friendly and competitive by cutting taxes across the board (and the spending that causes high taxes) and letting investors, stockholders and company employees keep their money to spend and reinvest or we watch the whole shebang sink into the swamp.

I'm whistling in the wind though because no politician, no bureaucracy, no entitlement driven foundation will ever do with less. They'll fiddle while Rome burns.