Posted on 08/28/2003 2:49:44 PM PDT by lelio
I've written a nationally syndicated column for nearly 25 years. Columns critical of Social Security and handouts to farmers used to bring the angry self-serving mail. Now it's international trade. Let me address some of the issues raised.
First, it's misleading to say that the United States trades with Japan, China or England. Does one really think that the U.S. Congress trades with England's Parliament or the Japanese Diet? When I purchased my Lexus, I dealt with a Japanese producer through an intermediary, the auto dealer. To my knowledge, the U.S. Congress and the Japanese Diet had little to do with the transaction, save attempts to sabotage it through regulations and taxes.
Now the question: What moral standard justifies third-party use of force to prevent an American from exchanging with whomever he pleases, whether that person lives in Montana, Mexico or Japan? Some might rejoin: Through trade restrictions, other countries don't permit their citizens to trade freely. That's true, but should we support the notion that, for example, since the Japanese government doesn't permit its citizens to be free, the American government should retaliate by denying its citizens the right to trade freely? Is your answer yes or no?
Here's another thought to ponder upon. Because of restrictions on the importation of rice, so as to benefit rich Japanese farmers, Japanese citizens pay four times the world price for rice. Should Congress retaliate by creating restrictions forcing Americans to pay four times the world price for rice or some other commodity? Yes, or no?
One writer lamented there's a deal in the works to permit Vietnam to sell millions of cotton shirts and slacks to Americans. "But we never hear about what Vietnam will buy from us." Let's look at this: When a Vietnam producer sells an American a shirt, he gets dollars in return. What's he going to do with those dollars: hide them in a mattress, paper the wall with them or just cherish them? It'd be great if foreigners did that – we'd have near heaven on earth. We'd simply put a few Americans to work printing dollars, and the rest of us could live lives of Riley whilst the rest of the world labored and shipped us Lexus, Mercedes, caviar, steel, clothing and other life-comforting goodies all in exchange for these wonderful little slips of paper called dollars.
Unfortunately, that doesn't happen. That Vietnamese producer might use those dollars to purchase something from a German producer. The German producer might use the dollars to purchase something from a Japanese producer. People willingly accept those dollars because, ultimately, they represent a claim on something in America. You might ask, "OK, Williams, I go along with what you're saying so far, but if that's true, how come we're running a large balance of payments deficit?"
Do a Web search for major foreign holders of U.S. Treasury securities. As of June 2003, foreign holdings of U.S. Treasury bonds totaled $1.347 trillion. Japan is the largest holder with $441 billion, followed by England with $122 billion and Mainland China with $122 billion. Thus, dollars are coming back to America, in this case to help sponsor Congress's profligate spending. Also, we mustn't forget that foreigners also use their dollars on Wall Street to purchase stocks, bonds and other financial instruments. All the nonsense we hear about balance of payments deficit ignores the fact that there are two types of accounts: a goods and services account and a capital account. Any imbalance in the goods and services account is offset by the capital account (stocks and bonds).
The bottom line is that free trade, while it might mean painful adjustments for the few, benefits immensely the many through cheaper prices and wider choice.
What moral standard justifies third-party use of force to prevent an American from exchanging with whomever he pleases, whether that person lives in Montana, Mexico or Japan? Some might rejoin: Through trade restrictions, other countries don't permit their citizens to trade freely. That's true, but should we support the notion that, for example, since the Japanese government doesn't permit its citizens to be free, the American government should retaliate by denying its citizens the right to trade freely? Is your answer yes or no?
Here's another thought to ponder upon. Because of restrictions on the importation of rice, so as to benefit rich Japanese farmers, Japanese citizens pay four times the world price for rice. Should Congress retaliate by creating restrictions forcing Americans to pay four times the world price for rice or some other commodity? Yes, or no?
And when you get down to the molecular level, things practically suck.
I think Walter needs to start thinking a little deeper. These dollars "coming back to America" in this manner is NOT a good thing.
Foreign nations utilize the currency they obtain from our Trade Deficit to purchase securities issued by the U.S. Treasury to finance our Defict Spending and National Debt.
For FY 2002, interest paid on the National Debt was $332 billion, or roughly 18% of federal revenue for that year. For the first 10 months of FY 2003, the Treasury has already spent over $288 billion in interest expense.
What this means is that, due to the Trade Deficit, a significant and growing portion of the taxes you pay goes directly to support interest payments to foreign governments and NOT to finance services provided by our own government.
"Think what you do when you run into debt;
you give another power over your liberty."
-- Benjamin Franklin (1706 - 1790)
The only way to reverse this downward spiral into debt and poverty is to shift our tax policy to reflect that preferred by our Founding Fathers. Implementation of a relatively low (10~15%), flat-rate "revenue tariff", levied on ALL imported goods would accomplish this. The proceeds from such a tariff could offset further reduction in other forms of domestic taxation WITHOUT bankrupting our Treasury. And our domestic economy would prosper under the favorable stimulative effects of the tax policy.
Taxation is a necessary "evil" to provide revenue for the Treasury. The policy that we pursue should be that which is LEAST oppressive of our own domestic production. Instead, Congress (and Walter Williams) have opted for more oppressive forms of domestic taxation in order to facilitate "free" trade.
Ha!! Wait until they find out what's backing those dollars here. Thin air?
Cheaper prices and wider choice doesn't much help the many when they lose their jobs. I wonder if Williams thinks Americans could just buy stock in the free-trade corporations, accept their layoffs with a smile because they can live a nice life off the profits from their stocks. Maybe no American really needs to work.
Professor Williams nailed it.
Question: Do you want to be owned by foreigners? Yes or No.
Say it, suh! Say it! I don't hear very many complaints about these.
Should Congress retaliate by creating restrictions forcing Americans to pay four times the world price for rice or some other commodity? Yes, or no?
No, sir! Not at all.
I've witnessed the attack mode, but not one refutation. As usual, those who consider themselves "conservatives" will not "conserve" their bitching. There are many things we can do that will help all of us, but get this: bitching ain't one of 'em!
Amen! Short, deadly, and accurate.
Free trade does not exist.
Having all strategic production moved out of the United States is dangerous to our security and our future even if you can say, without remorse, "to hell with the human cost to the millions being thrown out of work in this country." Americans are not only losing jobs, they are losing the GOOD jobs paying living wages and providing benefits.
Textbook free market capitalism will not pay the bills of working Americans and they are real people who will not go quietly into poverty. Present trends portend a tremendous political and social upheaval in America.
Why should Americans being thrown out of work to the benefit of foreigners put up with this?
To what end should a people embrace poverty to benefit foreigners?
To say Americans deserve to be in a race to the bottom in standard of living is so breathtakingly silly as to be absurd.
It is not in the best interest of the United States to have its citizens increasingly unemployed and underemployed. Why do Americans have to suffer for their own good? Why should they and why should they allow their political and economic system to be run to the lopsided benefit of other countries?
How can it be in the best interest of the American consumer to cease being a wage earner and therefore cease being a consumer of foreign goods made more cheaply?
You cannot buy if you cannot earn and the millions of good jobs disappearing are not being replaced.
There is absolutely no doubt that what you say is true.
If you were to go through the hundreds (if not thousands) of articles that have been posted on this forum discussing the same set of interrelated issues, you will find the same group of conartist flying monkeys repeating the same old mantra over and over and over again:
"Don't worry about the Trade Deficit"
"Don't worry about the Budget Deficit"
"Don't worry about the National Debt"
"Don't worry about the economy"
"Don't worry about declining standards of living"
"Don't worry about dependency on imported oil"
"Don't worry about earning a living"
"Don't worry about illegal immigration."
And if you disagree with them on any of these issues, the flying monkeys will belittle and curse you because you are "negative".
Yes, you are right. Arguing with the same arrogant band of conartists over and over again is pointless. But it serves a purpose to express legitimate disagreement in order to assure thoughtful lurkers that they are not alone in their disatisfaction with current trends.
And because of the oppressive regulatory bureaucracy of our bloated federal government, that constitutes just about every domestic company and industry within our nation.
We need a LEVEL playing field on which to compete. FAIR TRADE. Not this negotiated "free" trade abomination that plunders and ransacks our own industries.
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