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Let's get real in trade talks
The Boston Globe ^ | July 29, 2006 | Robert Kuttner

Posted on 07/29/2006 4:45:54 AM PDT by A. Pole

[...]

The current round of trade talks was launched in 2001 at Doha, Qatar, an authoritarian location conveniently off- limits to protesters.

[...]

The trade agenda has been set by business elites who would impose one economic model on the world -- the model of laissez-faire. This model rejects more than a century of Western history, during which democracies have relied on government regulation and social investment to temper the instability and income extremes of a pure market economy. The elite model would also coerce Third World countries to give up their successful development strategies, in which government helps local business develop new technologies and markets, and fledgling economies are sheltered from foreign speculation.

To the extent that Third World countries have already given in to US pressures, results have often been disastrous. East Asia's economic meltdown of 1998 was largely caused by too abrupt an opening of local financial markets. Speculative capital poured in, overheating local economies; then, when the winds shifted, it poured right out, sinking economies that were otherwise sound. Much the same thing happened to Mexico.

Current trade rules make it too easy for global business to deny workers in both poor and rich countries the fair fruits of their labors, despite rising productivity. US multinationals outsource in search of cheaper labor. China runs a huge trade surplus, in part by denying its workers fundamental rights and decent wages. This puts downward pressure on wages in the United States, Europe, even Mexico.

[...]

It embarrasses free-trade ideologues that the most successful emerging economies like Japan, Korea, and more recently Brazil, India, and China, have generated their own domestic savings and entrepreneurs, and have not relied much on foreign investors. This has both produced high rates of growth, and insulated them from imported instability.

[...]

(Excerpt) Read more at boston.com ...


TOPICS: Business/Economy; Foreign Affairs; Japan; Mexico
KEYWORDS: china; doha; exports; imports; jobs; marxistpropaganda; trade; wages; wto
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1 posted on 07/29/2006 4:45:57 AM PDT by A. Pole
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To: Willie Green; Wolfie; ex-snook; Jhoffa_; FITZ; arete; FreedomPoster; Red Jones; Pyro7480; ...

"Free" trade bump


2 posted on 07/29/2006 4:47:05 AM PDT by A. Pole ("Gay marriage" - Karl Rove's conspiracy to defeat Democrats?)
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To: A. Pole

When did all the Big Goverment Socialists inflitrate Free Republic? This is pure neo Marixist class warfare propaganda.

Only problem for the Marixst. Those businesses are subjected to the "government regulation and social investment to temper the instability and income extremes" imposed over the last century. There is NO ethical or moral reason for any new super national orgnanization to impose their neo Marxist dogma for them. The framework is all ready their and this article a complete waste of time and bandwith.


3 posted on 07/29/2006 4:49:16 AM PDT by MNJohnnie (Fire Murtha Now! Spread the word. Support Diana Irey. http://www.irey.com/)
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To: A. Pole

This is rubbish.

if you don't want to join the WTO,
then don't


4 posted on 07/29/2006 4:53:21 AM PDT by greasepaint
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To: A. Pole
It embarrasses free-trade ideologues that the most successful emerging economies like Japan, Korea, and more recently Brazil, India, and China, have generated their own domestic savings and entrepreneurs, and have not relied much on foreign investors. This has both produced high rates of growth, and insulated them from imported instability.

It's Robert Kuttner so one understands the agenda, but this is still bizarre. The most successful emerging economies, most especially the "Asian tigers," have relied precisely on export oriented growth strategies. They are the textbook examples of the power of trade liberalization to rapidly lift huge numbers of people out of poverty. The process isn't always easy and countries can take painful detours, but the basic strategy has been vindicated time and again.

Kuttner knows all this, but he's in bash-international-capital mode so he's decided to ignore it. I can understand how people who compartmentalize this severely can function day to day -- get to the grocery store, perform a rote job, walk and chew gum at the same time, etc. But I don't understand how they can write things that they know to be untrue.

But then, the almost entire leadership of the Democratic Party gets up every morning and goes out to lie about major issues, so such people obviously exist. But I still don't understand how they can do it.

5 posted on 07/29/2006 5:36:38 AM PDT by sphinx
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To: sphinx
It's Robert Kuttner so one understands the agenda, but this is still bizarre. The most successful emerging economies, most especially the "Asian tigers," have relied precisely on export oriented growth strategies.

How does that contradict "It embarrasses free-trade ideologues that the most successful emerging economies like Japan, Korea, and more recently Brazil, India, and China, have generated their own domestic savings and entrepreneurs, and have not relied much on foreign investors"?

We have very little foreign investment in the U.S. other than they're buying our bonds.

6 posted on 07/29/2006 5:44:25 AM PDT by raybbr (You think it's bad now - wait till the anchor babies start to vote.)
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To: raybbr
We have very little foreign investment in the U.S. other than they're buying our bonds.

That will be news to Toyota, Honda, or hundreds of other foreign based multinationals that operate here. I'm too lazy to go hunting for the statistics right now, but foreign equity investment in the U.S. is very large.

Granted, the Chinese, Korean, or Indian equity stake is still relatively small, although the Chinese are reported to be sniffing around trying to buy in. This is a stage of development thing. As their economies mature, their better companies will grow into true multinationals.

7 posted on 07/29/2006 6:22:36 AM PDT by sphinx
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To: A. Pole
To the extent that Third World countries have already given in to US pressures, results have often been disastrous.

I draw the opposite conclusion. Free trade has been a boon to the people in the Third World raising their standard of living, both in terms of supply and job opportunities. The people that free trade has hurt is the overpaid, unionized, American manufacturing workers. That is the true source of the leftist gripes with the free trade, they couldn't give a rats behind about the Third World. Free trade really does take from the rich and give to the poor, in this case the rich happen to be American workers.

8 posted on 07/29/2006 6:25:58 AM PDT by palmer (Money problems do not come from a lack of money, but from living an excessive, unrealistic lifestyle)
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To: palmer

Who is overpaid when it costs on average $500,000 to buy a home in this country?


9 posted on 07/29/2006 6:52:23 AM PDT by hedgetrimmer ("I'm a millionaire thanks to the WTO and "free trade" system--Hu Jintao top 10 worst dictators)
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To: A. Pole
TFP

"Get real" means get real in the November vote. Out all those who voted for phony 'free trade' deals for trade lobbyists. These trade deals resulted in our exporting both factories and dollars. We lose the jobs and the deficit money comes back to buy our Government bonds. It's lose - lose.

Trade means 'we buy from you' and 'you buy from us'.

Yes, Get Real - vote them out.

10 posted on 07/29/2006 7:23:07 AM PDT by ex-snook ("But above all things, truth beareth away the victory.")
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To: palmer
I draw the opposite conclusion. Free trade has been a boon to the people in the Third World raising their standard of living, both in terms of supply and job opportunities.
11 posted on 07/29/2006 7:31:32 AM PDT by lucysmom
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To: palmer
I draw the opposite conclusion. Free trade has been a boon to the people in the Third World raising their standard of living, both in terms of supply and job opportunities.

Then Mexico must be the exception. Free trade has devastated Mexican farmers without creating new jobs in numbers sufficient to employ them, so faced with starvation, they head north.

12 posted on 07/29/2006 7:34:16 AM PDT by lucysmom
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To: raybbr; Toddsterpatriot; expat_panama; Mase; nopardons; LowCountryJoe
We have very little foreign investment in the U.S. other than they're buying our bonds.

OMGLOL

Correct me if I'm wrong, but Foreign Direct Investment does not include purchase of U.S. government debt instruments.

In 2004, total accumulated foreign direct investment (FDI) in the United States was $1.5 trillion on a historical cost basis, or some $2.7 trillion at today’s market value. This represents approximately 10% of the total current market value of all publicly traded firms. Total outlays to acquire or establish U.S. businesses were $96 billion in 2004 alone. This includes both funding from foreign parents or from existing U.S. affiliates.
Source: U.S. Department of State

More data here, at the U.S. Bureau of Economic Analysis.
13 posted on 07/29/2006 7:35:07 AM PDT by 1rudeboy
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To: sphinx

Please see my #13 above.


14 posted on 07/29/2006 7:35:56 AM PDT by 1rudeboy
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To: A. Pole
We are free trading fools in a merchantilist world - and we have the trade deficit to prove it.

The trade deficit will continue to be what it is until American entrepreneurs have the same access to foreign (particularly Asian) markets as they do to ours.

The American economy is set up to benefit the domestic consumer and gives him the greatest benefits possible, not the domestic producer whom it penalizes for making products here.

15 posted on 07/29/2006 7:44:26 AM PDT by Last Dakotan
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To: Last Dakotan
The trade deficit will continue to be what it is until American entrepreneurs have the same access to foreign (particularly Asian) markets as they do to ours.

Sounds like we need more trade agreements, not less. South Korea is a good start.

16 posted on 07/29/2006 7:48:49 AM PDT by 1rudeboy
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strike "less," insert "fewer." (I hate it when I do that).


17 posted on 07/29/2006 7:49:29 AM PDT by 1rudeboy
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To: 1rudeboy
Sounds like we need more trade agreements, not less. South Korea is a good start.

So long as there is a bilateral opening of markets I see these agreements as a positive too.

The problem is that for the past 30 years most trade agreements have been made for political reasons with more State Department influence than economic reasons. These left barriers to US based businesses while opening our markets with the obvious results.

18 posted on 07/29/2006 8:16:15 AM PDT by Last Dakotan
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To: hedgetrimmer
Who is overpaid when it costs on average $500,000 to buy a home in this country?

I know you're usually wrong, but this time, you've outdone yourself.

The national median existing single-family home price was $215,900 in the third quarter, up 14.7 percent from the third quarter of 2004 when the median price was $188,200. The median is a typical market price where half of the homes sold for more and half sold for less.

Home-Price Appreciation Stays Hot in Most Metro Areas

19 posted on 07/29/2006 8:22:36 AM PDT by Toddsterpatriot (Why are protectionists so bad at math?)
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More interesting news, if it doesn't kill this thread nothing will:

Sectoral Facts

Geographic Facts

Specific Countries

Source: Bureau of Economic Analysis (BEA), Department of Commerce. Unless otherwise stated, all figures are on a historical cost basis as of 2004. New BEA 2005 break-out figures should be available during the latter half of CY-2006.
20 posted on 07/29/2006 8:22:53 AM PDT by 1rudeboy
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To: Last Dakotan
These left barriers to US based businesses while opening our markets with the obvious results.

If that's how you feel.

21 posted on 07/29/2006 8:24:21 AM PDT by 1rudeboy
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To: 1rudeboy
Like any debt, it can be seen as good or bad depending on what the proceeds are used for.

If the Japanese for instance are building new plant and equipment for our industrial infrastructure, obviously that is win for us Americans.

However, if the debt is being used solely for current consumption to be paid off later, (remember when it was the Republicans who talked about future generations paying off debts?) I don't see the gain.

Simply trading assets like stock in existing US based companies (and their future revenue streams) for the consumption of foreign goods is very problematic.

22 posted on 07/29/2006 8:29:59 AM PDT by Last Dakotan
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To: Last Dakotan

Please review my #20, and highlight what you find "problematic."


23 posted on 07/29/2006 8:32:02 AM PDT by 1rudeboy
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To: Last Dakotan
We are free trading fools in a merchantilist world - and we have the trade deficit to prove it.

You'd know more about whether you're a fool than I would, but please don't speak for the rest of us.

You're saying that we got a "trade deficit" and this is bad.   Maybe you're talking about the Current Account or maybe you're talking about exports and imports.  Whatever.  Hopefully we can all agree that something like unemployment or real wages is important.  Please tell us why a "trade deficit" is important.

24 posted on 07/29/2006 8:33:02 AM PDT by expat_panama
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To: Last Dakotan
The trade deficit will continue to be what it is until American entrepreneurs have the same access to foreign (particularly Asian) markets as they do to ours.

They never will. The sole purpose of the "free trade" system is to redistribute American wealth to other countries so transnational corporations will have 'emerging markets' and protect transnational corporations in case their business deals go south in the communist hell holes they invest in.

American citizens are overpaid, aren't capable of building their on freeways, and are too inept to do the jobs illegal aliens and h1b workers are doing, so they deserve the disdain of the "free traders"./sarc
25 posted on 07/29/2006 8:45:42 AM PDT by hedgetrimmer ("I'm a millionaire thanks to the WTO and "free trade" system--Hu Jintao top 10 worst dictators)
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To: expat_panama

Please tell us why US taxpayers must pay for "globalization"?


26 posted on 07/29/2006 8:46:40 AM PDT by hedgetrimmer ("I'm a millionaire thanks to the WTO and "free trade" system--Hu Jintao top 10 worst dictators)
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To: 1rudeboy
Correct me if I'm wrong, but Foreign Direct Investment does not include purchase of U.S. government debt instruments.

You are wrong:

The U.S. net international investment position at yearend 2005 was -$2,693.8 billion (preliminary) with direct investment valued at current cost, as the value of foreign investments in the United States exceeded the value of U.S. investments abroad (table 1). At yearend 2004, the U.S. net international investment position was -$2,360.8 billion (revised).

The -$333.0 billion change in the net investment position from yearend 2004 to yearend 2005 was largely due torecord private net foreign purchases of U.S. securities, including U.S. Treasury securities, and to depreciation of most major foreign currencies against the U.S. dollar, which lowered the dollar value of U.S.-owned assets abroad. The impact of these net purchases and exchange-rate changes was largely offset by price appreciation of U.S.-held foreign stocks that surpassed by a large amount price appreciation of foreign-held U.S. stocks.

27 posted on 07/29/2006 8:47:17 AM PDT by raybbr (You think it's bad now - wait till the anchor babies start to vote.)
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To: lucysmom
Free trade has devastated Mexican farmers without creating new jobs in numbers sufficient to employ them...

The story is supposed to be that "free trade" was moving jobs out of the US and into Mexico.

we've got a $15 billion trade deficit with Mexico, 300,000 jobs have gone south,

Pat Buchanan,  ..opposed NAFTA and a lot of the jobs going to Mexico

By 1997, 3,300 maquiladora factories were operating, employing 800,000 Mexican workers in jobs that not long ago would have gone to Americans.

jobs going to Mexico

28 posted on 07/29/2006 8:50:20 AM PDT by expat_panama
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To: raybbr

That's not FDI, friend.


29 posted on 07/29/2006 8:51:03 AM PDT by 1rudeboy
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To: Last Dakotan
Simply trading assets like stock in existing US based companies (and their future revenue streams) for the consumption of foreign goods is very problematic.

Definition: FDI stands for Foreign Direct Investment, a component of a country's national financial accounts. Foreign direct investment is investment of foreign assets into domestic structures, equipment, and organizations. It does not include foreign investment into the stock markets. Foreign direct investment is thought to be more useful to a country than investments in the equity of its companies because equity investments are potentially "hot money" which can leave at the first sign of trouble, whereas FDI is durable and generally useful whether things go well or badly. [emphasis added]
Source

30 posted on 07/29/2006 8:57:27 AM PDT by 1rudeboy
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To: A. Pole
China runs a huge trade surplus in part by denying its workers fundamental rights and decent wages...
Time that unions wake up and go where there is need for higher wages and rights, yes it will take guts, instead of chasing businesses out of the country by sitting on huge wage, fringes, health care, guaranteed employment and retirement contracts, which car buyers refuse to subsidize.
See General Motors this once dominant world giant hanging on sickly and asking Nissan to bail them out by merging... but then finds rejection.
Time however will take care for weaklings.
31 posted on 07/29/2006 8:59:08 AM PDT by hermgem (The same)
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To: hermgem
China runs a trade surplus with us, but a deficit with the world.
32 posted on 07/29/2006 9:01:37 AM PDT by 1rudeboy
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To: 1rudeboy
Let's try this again:

The U.S. net international investment position at yearend 2005 was -$2,693.8 billion (preliminary) with direct investment valued at current cost, as the value of foreign investments in the United States exceeded the value of U.S. investments abroad (table 1). At yearend 2004, the U.S. net international investment position was -$2,360.8 billion (revised

33 posted on 07/29/2006 9:04:31 AM PDT by raybbr (You think it's bad now - wait till the anchor babies start to vote.)
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To: raybbr

FDI is a subset of your "net international investment" figure. Understand now?


34 posted on 07/29/2006 9:30:45 AM PDT by 1rudeboy
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To: 1rudeboy
Correct me if I'm wrong, but Foreign Direct Investment does not include purchase of U.S. government debt instruments.

You were wrong.

35 posted on 07/29/2006 9:39:09 AM PDT by raybbr (You think it's bad now - wait till the anchor babies start to vote.)
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To: hedgetrimmer
Please tell us why US taxpayers must pay for "globalization"?

Beats me too.

36 posted on 07/29/2006 9:40:44 AM PDT by Last Dakotan
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To: raybbr
Here is the OECD Benchmark Definition of Foreign Direct Investment. Here is the Economist's definition. Boy, that word "direct" really threw you, didn't it?
37 posted on 07/29/2006 9:52:57 AM PDT by 1rudeboy
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To: hedgetrimmer
Please tell us why US taxpayers must pay for "globalization"?

If you build a factory here, the government will tax and regulate it. If you build your factory overseas, the Federal government will insure it for you.

38 posted on 07/29/2006 10:02:21 AM PDT by Last Dakotan
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To: 1rudeboy

Then I am not the one misunderstanding. It's the BEA that isn't using the very definition they signed on for in the convention.


39 posted on 07/29/2006 10:03:53 AM PDT by raybbr (You think it's bad now - wait till the anchor babies start to vote.)
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To: Last Dakotan

OPIC is a self-funding agency.


40 posted on 07/29/2006 10:05:32 AM PDT by 1rudeboy
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To: raybbr
Here is an interesting artical from the July 20 National Review, "Foreign Direct Investment: Under Assault ". No mention of foreign purchases of U.S. government debt. Why would that be?
41 posted on 07/29/2006 10:08:00 AM PDT by 1rudeboy
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To: 1rudeboy
I think raybbr is confusing foreign governments (China, Japan) buying our Treasury Bills (which he feels is evil, for some reason) with foreign companies building factories here (which, I think, he also feels is evil) which employs Americans.

If we ask, maybe he'll tell us why either of these is bad for America.

42 posted on 07/29/2006 10:11:46 AM PDT by Toddsterpatriot (Why are protectionists so bad at math?)
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To: 1rudeboy
From your Economist link:

FOREIGN DIRECT INVESTMENT

Investing directly in production in another country, either by buying a company there or establishing new operations of an existing business.

I don't see how buying bonds fits into that definition.

43 posted on 07/29/2006 10:14:35 AM PDT by Toddsterpatriot (Why are protectionists so bad at math?)
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To: 1rudeboy

Like I said - the BEA is using the words 'direct investment' in their report.


44 posted on 07/29/2006 10:14:36 AM PDT by raybbr (You think it's bad now - wait till the anchor babies start to vote.)
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To: Toddsterpatriot

You know, not too long ago, He Who Should Not Be Named was arguing that high levels of FDI are a sign of weakness. On this thread, some people are arguing that we have no FDI at all, and the only "I" is debt-purchases. I suppose things change.


45 posted on 07/29/2006 10:15:35 AM PDT by 1rudeboy
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To: raybbr

And like I said, you don't know what "foreign direct investment" means.


46 posted on 07/29/2006 10:16:25 AM PDT by 1rudeboy
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To: raybbr
Like I said - the BEA is using the words 'direct investment' in their report.

LOL! Because Direct Investment is part of U.S. net international investment.

47 posted on 07/29/2006 10:16:50 AM PDT by Toddsterpatriot (Why are protectionists so bad at math?)
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To: 1rudeboy
You know, not too long ago, He Who Should Not Be Named was arguing that high levels of FDI are a sign of weakness.

Did HWSNBN change his position? I remember him blaming Bush for FDI dropping. Although HWSNBN taking both sides of an argument (even in the same thread) wasn't unusual. It was easy for him because he so rarely understood the issues he was discussing.

48 posted on 07/29/2006 10:19:56 AM PDT by Toddsterpatriot (Why are protectionists so bad at math?)
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To: raybbr
Contained herein is what the BEA has to say about FDI. If you find where the term involves purchase of U.S. government debt, please point it out. I didn't see it.
49 posted on 07/29/2006 10:20:03 AM PDT by 1rudeboy
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To: 1rudeboy; Last Dakotan
OPIC is a self-funding agency.

LOLOLOL! So is the post office. So are price supports for sugar.
50 posted on 07/29/2006 10:20:24 AM PDT by hedgetrimmer ("I'm a millionaire thanks to the WTO and "free trade" system--Hu Jintao top 10 worst dictators)
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