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Neither Katrina Nor Terrorism Will Bring Down America, But "Free Trade" Will
AmericanEconomicAlert.org ^ | Tuesday, September 20, 2005 | William R. Hawkins

Posted on 09/26/2005 8:31:05 AM PDT by Willie Green

For education and discussion only. Not for commercial use.

What if a terrorist bomb had caused the levee breaks that flooded New Orleans rather than hurricane Katrina? Would such an act of war, as opposed to nature, have brought America to its knees? Or are there other, more dangerous threats pending?

Improving port security has been a high priority since September 11, 2001, with nightmare scenarios of a weapon of mass destruction being slipped into a crowded harbor. According to calculations from GlobalSecurity.org, an attack using toxic industrial chemicals or a radiological weapons could cause 350 deaths, contaminate the affected area for months, and require the evacuation of hundreds of thousands of people. This is not as bad as the situation in New Orleans where the flood water turned toxic, and the area affected covered 80 percent of the city. And the death toll in the city and along the gulf coast is higher.

The New Orleans port complex is the largest in the U.S. by tonnage and the fifth-largest in the world. Since the earliest days of the republic, New Orleans has been one of the most strategic spots in North America. It is the gateway to the Mississippi River, the main link between the American Midwest and the outside world. Its loss to international trade in grains, coal, oil and other raw materials could slow the economy of the U.S. heartland.

A scenario prepared for the Congressional Research Service by Jonathan Medalia last January looked at the detonation of a 15-kiloton nuclear device in a major port. Casualties would be much higher than a chemical attack or a hurricane, but the property damage estimate of up to $500 billion may not be that far from what it will ultimately cost to clean up and rebuild New Orleans and the other damaged areas along the coast. In his address to the nation September 15, President George W. Bush outlined plans to spend at least $200 billion in Federal money on immediate relief and the rebuilding of infrastructure, but much more will be needed to restore destroyed homes and businesses.

Yet, despite the damage and dislocation from Katrina, the country as a whole continues to operate in a normal fashion. Americans have rushed to donate to the evacuees; manpower and resources have been deployed to the area from across the country; and survivors are being relocated to communities both near and far; all indications of a sound civil society. Motorists are paying more for gasoline, but the vast majority of Americans are otherwise going about their business as usual. A half-hearted suggestion from some quarters that pro football games should have been postponed the weekend after the disaster fell on deaf ears. The New Orleans Saints, riding an emotional high of determination rather than despair, then went on to upset the Carolina Panthers.

More importantly from the perspective of America's enemies, U.S. military operations around the world were not disrupted.

Two weeks after the flooding, the U.S. Coast Guard reported many of the affected ports and waterways in the region were reopening, with some restrictions, as was New Orleans international airport. Expectations are that Gulf Coast oil terminals will shortly reopen, and gasoline pipelines are already back in operation.

New Orleans Mayor Ray Nagin said the central business district may reopen within days, and that about 180,000 people may return to the city within a week or two, when power and sewer systems are restored. Many retailers should be open by then and two hospitals are expected to be back in operation. Federal officials, however, are warning against a too rapid attempt to return to "normal" because preliminary sampling by the Environmental Protection Agency and the Centers for Disease Control show high levels of contamination from the flood waters creating a significant health hazards. There is also limited potable water and electricity; and a continuing threat from new storms. Yet, the mayor is confident that New Orleans will come back bigger and better than ever.

The reaction to the destruction of a major American port, should send a message to any terrorists planning a major attack on any other city that their ambitions are futile. The modern nation-state is well-nigh invulnerable to isolated disasters, whether natural or manmade. This is especially true for the United States, a country that spans a continent with 294 million people and a gross domestic product of $12 trillion.

Historian Warren Chin traces this development to the Industrial Revolution, which he argues "may well represent one of only three revolutions to have affected the domain of war over the last fourteen thousand years....States now possessed almost limitless mean with which to wage war" and, one can add, survive and recover from war. Wars became longer because individual battles became less decisive against nations that could mount a defense in depth. The ability to materially support a protracted war meant that victory went to the side best able to sustain its efforts, both economically and politically. The two world wars of the 20th century are the ultimate examples of this principle, but a number of other conflicts also fit the pattern.

If nations can survive strategic bombing, trench warfare, naval blockades and the other extremes of total war, the chances that the comparatively puny efforts of terrorist cells can bring down an otherwise healthy society are small.

What history shows can bring down a national society over time is the steady pounding -- day in, day out; year in, year out -- of economic rivals stealing away the wealth and production capabilities that give a country the means to weather disasters and wars. Historian Paul Kennedy has argued that a critical element in determining victory is "the way in which a state's economy has been rising or falling relative to the other leading nations in the decades preceding the actual conflict. For that reason, how a Great Power's position steadily alters in peacetime is as important...as how it fights in wartime." In its response to foreign economic storms, the Bush Administration is failing on a grand scale and is not learning from its mistakes. The "trade war" with rising powers like China is far more important that the "war on terror."

While many conservative pundits and members of Congress are complaining about spending $200 billion for reconstruction, they continue to ignore a trade deficit that will likely send over $720 billion out of the country this year, on top of last year's $618 billion deficit. The loss of national industry and over two million manufacturing jobs since 2000 dwarfs the economic impact of Katrina.

Harvard sociologist William Julius Wilson is one of the leading experts on the urban poor whose desperate images and sometimes violent behavior during the Katrina crisis have sparked a new debate on poverty in America. In his book, When Work Disappears: The World of the New Urban Poor, Wilson writes, "The problems of joblessness and social dislocation in the inner city are, in part, related to the processes in the global economy that have contributed to greater inequality and insecurity among Americana workers in general."

Wilson's data indicates that while there had been progress in reducing poverty in the 1970s, this trend was reversed in the 1980s -- despite general economic growth. "A neighborhood in which people are poor but employed is different from a neighborhood in which people are poor and jobless," he argues, adding, "Many of today's problems in the inner city ghetto neighborhoods -- crime, family dissolution, welfare, low levels of social organization, and so on-- are fundamentally a consequence of the disappearance of work."

The movement of blue collar jobs to low wage overseas factories, plus the influx of illegal aliens to compete with American blacks for urban work (especially construction) are social problems that an administration obsessed with the rhetoric of economic sophistry have ignored. The Federal government had already failed New Orleans long before the hurricane season started.

The trade policy levees which protected the American economy from the toxic flood of foreign imports have not just broken, they have been torn down by a succession of administrations. Acolytes of "free trade" have seen the flood as a cleansing process that only a few transnational corporations deserve to survive by outsourcing the construction of their ark. Luddite Americans, those who still cling to a middle class, patriotic ideal of a vibrant national economy, are left to drown, with no recovery effort in the offering.

This suicidal mind set must be rejected and removed from public policy thinking. In its place must come a new commitment to rebuilding the nation's economic strength across the board behind trade policies that support domestic production against the machinations of foreign rivals. National survival depends on building strong defenses against threats, whether natural or manmade.


TOPICS: Business/Economy; Culture/Society; Foreign Affairs; Government
KEYWORDS: biggovernment; bobsweeney; communism; corporatism; depression; despair; doom; dustbowl; eeyore; globalism; grapesofwrath; greenwithenvy; joebtfsplk; protectmeplease; socialism; thebusheconomy; willielogic
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1 posted on 09/26/2005 8:31:06 AM PDT by Willie Green
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To: AAABEST; afraidfortherepublic; A. Pole; arete; billbears; Digger; Dont_Tread_On_Me_888; ...

ping


2 posted on 09/26/2005 8:31:39 AM PDT by Willie Green (Go Pat Go!!!)
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To: Willie Green

As always, fact free union propaganda. I suppose everything you purcahse is Made in America Willie?


3 posted on 09/26/2005 8:35:37 AM PDT by Diplomat
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To: Diplomat

As always, fact free union propaganda.
---

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


4 posted on 09/26/2005 8:41:50 AM PDT by traviskicks (http://www.neoperspectives.com/secondaryproblemsofsocialism.htm)
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Comment #5 Removed by Moderator

To: Willie Green

I am sick of the Jesse Jackson mentality that tries to take advantage of the hurricane for everyone's own cause.


6 posted on 09/26/2005 8:49:38 AM PDT by jbwbubba
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To: Willie Green
In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, I vote in favor of free trade.
"On the Question of Free Trade"

- January 9, 1848 KARL MARX
7 posted on 09/26/2005 8:52:44 AM PDT by hombre_sincero (www.spadata.com)
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To: Willie Green

"Many of today's problems in the inner city ghetto neighborhoods -- crime, family dissolution, welfare, low levels of social organization, and so on-- are fundamentally a consequence of the disappearance of work."

He has this backwards, the disappearance of work is the result of crime, family dissolution, welfare, low levels of social organization, and so on.


8 posted on 09/26/2005 8:58:32 AM PDT by bkepley
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To: bobbdobbs

If trade always balances then what is the meaning of being in deep debt? Where 10 credit card companies are after you, you can't pay your home mortgage and your car is going to be repossessed? Is that also balanced and therefor OK?


9 posted on 09/26/2005 9:00:21 AM PDT by dennisw (You shouldn't let other people get your kicks for you - Bob Dylan)
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To: bobbdobbs

William Hawkins, who wrote the article, is far from being "pig ignorant" about economics. He is in fact a former professor of economics. Protectionism has always been his mantra.


10 posted on 09/26/2005 9:14:29 AM PDT by CivilWarguy
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Comment #11 Removed by Moderator

To: bobbdobbs
"If we buy something from them, they use the money to buy something from us. "

LOL Good one! They might be buying something from other countries but from us they are buying ownership of companies, panama canals and ownership of treasuries [and building up weaponry]. We have the boiling frog syndrome.

12 posted on 09/26/2005 9:23:32 AM PDT by ex-snook (Vote gridlock for the most conservative government)
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Comment #13 Removed by Moderator

To: dennisw
If trade always balances then what is the meaning of being in deep debt?

Are you referring to the budget deficit or the trade deficit?

If I buy a CD player from a Japanese company, they get my $50.00 and I get a CD player. How did this transaction create debt for anyone involved?

14 posted on 09/26/2005 9:45:00 AM PDT by Mase
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To: Willie Green

The first solution: BAN trade with China. That is where the bulk of the trade deficit is from, and it isn't even free trade involved there!


15 posted on 09/26/2005 9:50:44 AM PDT by Heartofsong83
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To: CivilWarguy
Protectionism has always been his mantra.

"Protectionism" is a disparaging slur that's employed by Hawkins' critics.
The truth is, Hawkins is merely guilty of advocating trade policies that favor America's national interests first.

16 posted on 09/26/2005 10:04:53 AM PDT by Willie Green (Go Pat Go!!!)
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To: Mase

We as a nation borrow 740 billion per year (our trade deficit) from foreigners to buy the CD players and other items made overseas. We are in debt to foreigners by roughly 740 billion dollars more each year


17 posted on 09/26/2005 10:06:08 AM PDT by dennisw (You shouldn't let other people get your kicks for you - Bob Dylan)
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To: Mase
If I buy a CD player from a Japanese company, they get my $50.00 and I get a CD player. How did this transaction create debt for anyone involved?

If the Japanese used the $50.00 that you gave them to purchase goods from one of our companies, then trade would balance out. However, since they don't do that, we have a trade deficit. Instead, they use the $50.00 you gave them to purchase debt issued by our Treasury to finance the budget deficit. In turn, your taxes then go to the Japanese as interest payments on our national debt instead of being used to pay for operation of our own government.

18 posted on 09/26/2005 10:12:14 AM PDT by Willie Green (Go Pat Go!!!)
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To: bobbdobbs

2 + 2 = 4

and this brilliant repartee means ..... ?

Free trade is great in the One-World-Economy which we may/will get to soon.

BUT ... in the meanwhile, free-trade means communist chinese goods being dumped inside our borders throwing Americans out of jobs - just as ONE example.

Free trade will work when there is a One-World-Economy monetary system and there is EQUALITY of PAY world-wide.

Say good-bye to to your $50/hr labor jobs in the steel belt - the avg in the USA is $12/hr. What do you think those union boyz will say to that?

Imagine when they "equalize" the wages worldwide - it will be done! The socialist/communist dream! "To Each according to their needs, from each according to their abilitites" - the leaders keep all the rest - Nyet?

Let's just assume for the next generation, only the US wages will be equalized. Like I said earlier, what would the steel-belt and bluse-staters think of their wages going down by 3/4? They'll see how the "fly-over country tries to live.

Buy American - the job you WILL save could be your own.

How America compares to the rest of the world monetarily?

The average "POOR" on welfare in the USA "earns" more money than 95% of the world's population. Counting the cars, tvs telephones, a/c, etc etc. - Our POOR are their RICH!

Germany (EU's best economy) last year bragged how their economy raised so much that it had finally surpassed the economy of ......

....... ARKANSAS!

They really did brag about that!

So you want the "free trade" where an article from china that ws made with $.50/hour labor is to compete with the American avg wage?

We had a local DJ here that quit last year - his sign off said it all ---- "Thank God, we live here in Hot Springs, Arkansas!"

When the economy crashes - you can't go lower than Arkansas - we're already there! Have a good trip.


19 posted on 09/26/2005 10:20:42 AM PDT by hombre_sincero (www.spadata.com)
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To: dennisw
We are in debt to foreigners by roughly 740 billion dollars more each year

If I pay $50.00 cash for a CD player made in Japan, how does that create debt? The goods we buy from foreign countries are assets. My imported car, which is paid for, is an asset of mine. The dollars we send them to pay for these goods are also assets. We send them dollars, not IOU's. They can use those dollars to buy goods from us or invest them in stocks and bonds or, they can do nothing with them. Nowhere in this equation has any debt been created.

I don't think you understand capital and current account balances.

This site will provide a good overview.

20 posted on 09/26/2005 10:24:59 AM PDT by Mase
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