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Is Protectionism Racism?
The American Cause ^ | April 11, 2005 | Patrick J. Buchanan

Posted on 04/15/2005 6:38:06 AM PDT by LowCountryJoe

“Xenophobia and Politics”—the headline got my attention. And the subhead convinced me I would get honorable mention: “Why Protectionism is a Lot Like Racism.”

I was not mistaken. But the main target of Steven Landsburg’s “On My Mind” column in Forbes magazine was the neo-racist ideas he had ferreted out—on John Kerry’s website.

Kerry had proposed, “Federal contracts, wherever possible, should be performed by American workers.” Landsburg was morally offended that anyone would argue that American workers should be given preference over Asian or African workers.

“It’s not just Kerry,” wrote the professor from the University of Rochester. “Both major parties (and most of the minor ones) are infested with protectionist fellow travelers who would discriminate on the basis of national origin no less virulently than David Duke or any other overt racist would discriminate on the basis of skin color. But if racism is morally repugnant—and it is—then so is xenophobia…”

Declares Landsburg: “I hold this truth to be self-evident: It is just plain ugly to care more about total strangers in Detroit than about total strangers in Juarez. ... Even if Kerry-style (or Nader-style or Buchanan-style) protectionism could improve Americans’ well-being at the expense of foreigners, it would still be wrong.”

Now I do not know what parents pay to send their kids to the University of Rochester. But if the philosophical imbecility of Landsburg is representative of the faculty, it is too much.

To be more concerned about the well-being of one’s fellow Americans is not “xenophobia,” which means a fear or hatred or foreigners. It is patriotism, which entails a special love for one’s own country and countrymen, not a hatred of any other country or people. Preferring Americans no more means hating other peoples than preferring one’s family means hating all other families. An icy indifference as to whether one’s countrymen are winning—be it in a competition for jobs or Olympic medals—is moral treason and the mark of a dead soul.

We are all born into families, clans, tribes, neighborhoods, countries, all of which—as well as the friends we make, the schools that nurture us, the churches at which we worship—have a claim upon our love and loyalty.

But the professor equates “Buy American” and “Hire Americans” programs with aggressive war. “After all, if it’s okay to enrich ourselves by denying foreigners the right to earn a living, why not enrich ourselves by invading peaceful countries and seizing their assets. ... Stealing assets is wrong, and so is stealing the right to earn a living, no matter where the victim was born.”

The professor’s piece testifies to another truth. Free-trade fanatics are running out of statistical proofs so fast they must defend their position on the grounds that, no matter if it fails America, it is a morally superior position. For look at what a soaring dependency on imports is doing to our country.

Last year’s trade deficit topped $617 billion. In January, it hit $58.3 billion, portending a deficit in 2005 of $700 billion. U.S. trade and budget deficits combined are 10 percent of GDP. We are borrowing $2 billion a day abroad to subsidize our lifestyle. The American consumer has never been more indebted—in credit cards, auto loans, mortgages.

The dollar has lost a third of its value against the euro in three years. Gold is back close to $450 an ounce, a run-up of 70 percent. Oil is bumping up against $55 a barrel. When South Korea and then Japan’s Koizumi hinted their treasuries might diversify reserves and hold a lesser share in dollars, the Dow experienced what pilots call, as you grab the arm rests and hold on for dear life, “a little choppiness.” The last fruits of free-trade globalism may be financial collapse.

Under Bush, 2.8 million manufacturing jobs, one in six, have been lost. Real wages of working Americans are stagnant. Two-thirds of a million textile and apparel workers face wipeout from Chinese imports that are now unrestricted. As Paul Craig Roberts writes, the jobs being created pay less and demand less in education and training than the jobs being outsourced. Our workers are being sacrificed on the altar of globalism. Says Landsburg: tough luck!

If economics professors are so fanatic about free trade, why not eliminate their tenure and import English-speaking economics professors from India at half the pay? For as Landsburg instructs us, “It is plain ugly to care more” about him than a total stranger.

Moreover, the stranger might come to love America and even prefer America, which some deracinated academics find so racist a sentiment.


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No Mr. Buchanan, I do not consider you a racist but I do consider you a xenophobe (in the ‘fear’ and not ‘hate’ sense). The problem I have with you, Mr. Buchanan, is not with your patriotism, it’s with your ignorance; the economic policies that you advocate and support are decisively non-patriotic if you were to just examine the evidence. [see below]

"Bad News" on the Trade Deficit Often Means Good News on the Economy

by Daniel Griswold, director, Center for Trade Policy Studies, Cato Institute

Worries persist that the record U.S. trade deficit is weighing down the nation's economy, depressing output, and sending jobs overseas. Those worries have only increased in recent weeks as various measures of the deficit have reached new records. On December 14, the Commerce Department announced that the monthly trade deficit in goods and services for October had reached a record $55.5 billion,[1] and two days later the department announced that the U.S. current account deficit for the third quarter had reached $164.1 billion,[2] also a record. The two related deficits are virtually certain to set annual records approaching $600 billion by the time the full year's trade accounts are tallied in early 2005.[3]

Concern about the impact of the trade deficit on growth is rooted in the assumption that rising imports displace domestic production in the U.S. economy, acting as a drag on the growth of real gross domestic product. As one wire service reported after the recent release of October's record trade deficit number, "such a large trade deficit also threatened to be more of a drag on the domestic economy than first thought and could see analysts trim back expectations for GDP growth this quarter."[4]

How valid is the widespread assumption that a growing trade deficit means slower economic growth? Hard evidence of such a connection appears to be lacking. In fact, an analysis of economic data from the last quarter century shows that a growing current account deficit (as a percent of GDP) is actually associated with faster, not slower, economic growth, as well as rising manufacturing output and falling unemployment.

Testing the Conventional Wisdom


In 8 of the years since 1980, the U.S. current account balance has moved in a positive direction (i.e., the deficit has shrunk or "improved") as a share of GDP from the previous year. In 16 of those years, it has moved in a negative direction (i.e., the deficit has grown or "worsened"). Of those years in which the balance moved in a negative direction, 10 have seen a moderate movement of between 0.0 and 0.5 percentage points, and 6 have seen a more rapid movement of 0.7 to 1.3 percentage points.[5]

How has the U.S. economy fared under each of those three current account scenarios? To address that question, Table 1 lists the size of the current account as a share of GDP for each year since 1980, along with the change in the current account percentage, real GDP,[6] manufacturing output,[7] and the unemployment rate[8] from the previous year. (Changes in manufacturing output and the unemployment rate are measured from December to December to more fully capture the trend of that year.) The years are grouped in three categories, according to the magnitude of change in the current account balance as a share of GDP.

As the table illustrates, by all three measures of economic performance–GDP, manufacturing output, and the unemployment rate–the U.S. economy performs better in years when the current account deficit is rising as a share of GDP than in years when it is shrinking. And it performs especially well in years when the current account deficit is rising most rapidly.

Trade Deficits, GDP, Manufacturing, and Unemployment
By the most basic measure of economic performance, the change in real GDP, evidence points to a stronger economy in years in which the current account deficit is rising. In those years since 1980 when the current account deficit declined as a share of GDP, the economy grew each year by an average of 1.9 percent. In those in which the current account deficit grew moderately, real GDP grew at an annual average of 3.0 percent. In those years in which the deficit most rapidly "deteriorated," to borrow another popular characterization, real GDP grew by a robust annual average of 4.4 percent–a rate more than double the growth in years when the deficit was "improving." Four of the five best years for GDP growth since 1980 have occurred in the same years when the current account deficit was growing most rapidly.

The same pattern emerges in the manufacturing sector. It has become the conventional wisdom that a trade deficit hurts manufacturing because imports presumably displace domestic production, but the plain evidence of the past quarter century contradicts that presumption. Manufacturing output actually declined slightly on average in those years in which the current account deficit shrank. In contrast, it grew by 4.1 percent in years when the current account deficit grew moderately and by a brisk 5.3 percent when the deficit grew rapidly. In fact, five of the six years that saw a decline in manufacturing output occurred in years in which the current account deficit was declining.

The pattern also applies in the politically sensitive area of employment. Again, the conventional wisdom holds that a trade deficit destroys jobs by supposedly shipping them overseas. But again the evidence suggests something quite different. In those years of an "improving" current account deficit, the unemployment rate on average jumped by 0.8 percentage points. In years when the deficit moderately "worsened," the unemployment rate fell by an average of 0.2 points, and in years when the deficit grew the most rapidly, the unemployment rate fell by an even larger average of 0.7 points. Indeed, in 7 of the 8 years in which the current account deficit "improved," the unemployment rate went up; in 13 of the 16 years in which the current account deficit "worsened," the unemployment rate went down.

The year 2004 appears to fit the pattern comfortably. Through the first three quarters of the year, January through September, the current account deficit averaged 5.5 percent of GDP, a 0.6 percentage point shift in the negative direction from 2003.[9] That would place 2004 somewhere between a moderate and rapid growth of the current account deficit. Befitting the pattern, economic performance through the first three quarters of the year was also moderate to robust. Real GDP grew an average annual rate of 3.9 percent during the first three quarters.[10] Manufacturing output grew during those same three quarters at an annual rate of 5.4 percent from the previous year,[11] while the unemployment rate was on a pace to drop by 0.4 percentage points during the full year.[12]

In 2004, as in previous years, a rising current account deficit may have been bad news to headline writers, but it appears to have accompanied good news for the U.S. economy, its factories, and its workers.

A Growing Economy, a Growing Trade Deficit


Evidence from the past 25 years directly contradicts the assumption that trade deficits impose a drag on the U.S. economy. Contrary to prevailing assumptions, "worsening" trade deficits are associated with faster GDP and manufacturing growth and more rapidly declining unemployment, while "improving" trade deficits are associated with slower GDP and manufacturing growth and rising unemployment.

The evidence does not suggest that expanding trade deficits cause the superior economic performance. More plausibly, causation runs the other direction. An expanding economy fuels demand by American consumers and producers to buy more imports as well as domestically produced goods and services while rising domestic output attracts the foreign investment that finances an expanding current account deficit. In contrast, slowing domestic demand not only depresses output and employment growth but also demand for imports and the inflow of foreign investment.

Nor does the evidence address the question of how persistent and rising current account deficits may affect the U.S. economy in the long run. The "sustainability" of the U.S. current account deficit has been addressed elsewhere in Cato studies.[13] But whatever negative impact the deficit may have in the long run, there is no evidence that it poses a drag on the economy in the short run.

Misperceptions about the trade deficit and the economy can tempt policymakers to "do something" about the deficit that would only hurt economic growth. The most obvious example would be raising barriers to imports in the mistaken belief that protectionism would cut the trade deficit and spur the economy. Even if higher trade barriers could somehow trim the trade deficit, there is simply no evidence that such a policy goal would deliver faster growth in GDP, manufacturing, and employment.

[1]U.S. Commerce Department, "U.S. International Trade in Goods and Services Highlights," news release, December 14, 2004, www.census.gov/indicator/www/ustrade.html.
[2]U.S. Commerce Department, "U.S. International Transactions: Third Quarter 2004," Bureau of Economic Analysis, news release, December 16, 2004, www.bea.doc.gov/bea/di/home/bop.htm.

[3]The trade deficit is a subset of the current account deficit. It includes imports and exports of goods and services. The current account is the broadest measure of U.S. international transac-tions, including goods, services, income on foreign investment, and unilateral transfers such as foreign aid. The two measures are closely related and can be used interchangeably for the pur-pose of this analysis.

[4]Reuters, "Trade Gap Widens, Industrial Output Up," December 14, 2004.

[5]For the current account balance and nominal GDP for the years 1980 through 2002, see Council of Economic Advisers, The Economic Report of the President 2004 (Washington: U.S. Government Printing Office, February 2004), Tables B-1 and B- 103. For 2003, see Joint Economic Committee of Congress, Economic Indicators, pp. 1 and 36, www.gpoaccess.gov/indica-tors/ 04novbro.html. The current account balance for 1991 was adjusted by - $41 billion to remove the one-time payments to the U.S. government that year by Gulf War allies.

[6]For changes in real GDP through 2002, see Council of Economic Advisers, Table B4, p. 289. For changes in 2003 and the first three quarters of 2004, see U.S. Commerce Department, Bureau of Economic Analysis, "National Economic Accounts: Gross Domestic Product," Table 1, www.bea.doc.gov/bea/dn/home/gdp.htm.

[7]For the index of manufacturing output (seasonally adjusted) in December of each year, see U.S. Federal Reserve Board, "Statistics: Releases and Historical Data," G.17 Supplement, Table B00004, www.federalreserve.gov/releases/g17/ipdisk/ip.sa.

[8]For the unemployment rate in December of each year, see U.S. Bureau of Labor Statistics, "Labor Force Statistics from Current Population Survey," Unemployment Rate: Civilian Labor Force, Table LNS14000000, data.bls.gov/cgi-bin/surveymost?ln.

[9]For nominal GDP through the first three quarters of 2004, see U.S. Commerce Department, Bureau of Economic Analysis, "National Economic Accounts: Gross Domestic Product," December 22, 2004, Table 3, www.bea.doc.gov/bea/dn/home/gdp.htm. For the current account balance through the first three quarters of 2004, see U.S. Commerce Department, "U.S. International Transactions: Third Quarter 2004."

[10]See U.S. Commerce Department, Bureau of Economic Analysis, "National Economic Accounts: Gross Domestic Product," December 22, 2004, Table 1. According to the BEA, real GDP grew 4.5 percent in the first quarter of 2004, 3.3 per-cent in the second, and 4.0 in the third, for an average growth of 3.9 percent.

[11]See U.S. Federal Reserve Board.

[12]See U.S. Bureau of Labor Statistics.

[13]Daniel T. Griswold, "America's Record Trade Deficit: A Symbol of Economic Strength," Cato Trade Policy Analysis no. 12, February 9, 2001, pp. 10-14.


1 posted on 04/15/2005 6:38:06 AM PDT by LowCountryJoe
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To: LowCountryJoe
Under Bush, 2.8 million manufacturing jobs, one in six, have been lost. Real wages of working Americans are stagnant. Two-thirds of a million textile and apparel workers face wipeout from Chinese imports that are now unrestricted.

I'm no blanket apologist of free trade, but numbers like this are very misleading. The U.S. did not "lose" 2.8 million manufacturing jobs to foreign competition -- it "lost" most of them to efficiency improvements right here in the U.S. The strongest evidence of this is that U.S. manufacturing input was higher in 2004 than in 2001 -- which means we've manufactured more products with 2.8 million fewer "manufacturing" employees.

The other thing to remember is that employees are classified by the industry in which they work, not the job they perform. So an accountant for General Motors is considered a "manufacturing employee" even if he's never picked up a wrench in his life. So if General Motors decides to lay off 500 accountants and instead use a major accounting firm to do the same work (maybe even using the same people!), the net result is a loss of 500 "manufacturing" jobs that never existed in the first place.

2 posted on 04/15/2005 7:01:45 AM PDT by Alberta's Child (I ain't got a dime, but what I got is mine. I ain't rich, but lord I'm free.)
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To: LowCountryJoe

Asking that question is racism.


3 posted on 04/15/2005 7:02:48 AM PDT by Lazamataz (Time Ebbs No Rankle)
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The full text from the piece that ran in Forbes - the piece Pat Buchanan is responding to - can be found on an FR thread found here, if you're interested in reading it.
4 posted on 04/15/2005 7:03:15 AM PDT by LowCountryJoe (50 states, and their various laws, will serve 'we, the people' better than just one LARGE state can)
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To: LowCountryJoe
It's reverse racism. There is such a hatred of all Euro-Christians that it has been taken to extremes. It's a sad SELF-hatred of our own culture, tradition, history, race and religion. We wouldn't be having this conversation if we actually HAD a culture, like every other country on the planet does. But, since we are a nation of immigrants, we can rightly claim that we have none.
We MIGHT HAVE considered ourselves "European," but, apparently, that just isn't good enough.....too splintered. So, our history of being multi-ethnic and mono-cultured (that is, Euro-Christian) haa been slowly altered to the chaos of being multi-cultured.
The secularists chip away at our religion and moral values and the racists chip away at our culture and race. Those secularists and racists, by the way, are of ALL races, ALL religions, both genders and both parties.
The culture war continues and we lose.
5 posted on 04/15/2005 7:03:58 AM PDT by starfish923 (Iohannas Paulus II, Requiescat in Pacem)
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To: LowCountryJoe; All

No, but protetionism is stupid..


6 posted on 04/15/2005 7:05:25 AM PDT by KevinDavis (Let the meek inherit the Earth, the rest of us will explore the stars!)
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To: LowCountryJoe

Buchanan is right.

Soon, all these countries with formerly American jobs will no longer have the American market to export the fruits of their formerly American jobs to......so we will then see them whining about finding a new "market" for their slave-labor-produced inferior products. International trade agreements and myths/lies and MFN are rapidly liquidating America.


7 posted on 04/15/2005 7:07:18 AM PDT by Vn_survivor_67-68
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To: Willie Green; NEBUCHADNEZZAR1961; palmer; Penner; sixmil

ping


8 posted on 04/15/2005 7:10:14 AM PDT by LowCountryJoe (50 states, and their various laws, will serve 'we, the people' better than just one LARGE state can)
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To: Vn_survivor_67-68
But at least our trade deficit will turn to surplus, we'll be someone else bitch, and the protectionists can finally be happy, right?
9 posted on 04/15/2005 7:12:30 AM PDT by LowCountryJoe (50 states, and their various laws, will serve 'we, the people' better than just one LARGE state can)
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To: LowCountryJoe

"Bad News" on the Trade Deficit Often Means Good News
-----
George Orwell knew the time would come when bad is good and good is bad. You free traders are frightening group. You all name-call as you and this professor both did.

Name calling is a sign of weakness.

The rich people got theirs. The international buzzards are going to pick Americas carcass clean by about 2012-15. Then
we'll have 35% Lords and 65% serfs. Just like the good old days before the union era.

I suspect in a few years the proposal will be floated to turn the 8 hour work day into a 12 hour work day.

American workers are going to be castrated if this isn't stoped. No thanks.


10 posted on 04/15/2005 7:19:04 AM PDT by Finalapproach29er (America is gradually becoming the Godless,out-of-control golden-calf scene,in "The Ten Commandments")
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To: LowCountryJoe

NO.

Because by then, our (physical brick and mortar) industrial base will be so small as to be ineffective.

There are other serious effects thus far, for example, CHINA is financing its agenda largely through the largesse of one william jefferson clinton, who granted MFN to our enemy.......how many American jobs, factories, and technologies was THAT alone?


11 posted on 04/15/2005 7:19:27 AM PDT by Vn_survivor_67-68
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To: Alberta's Child

Good points.

Until 120 years ago, our whole economy was based on agriculture and raw materials. Afer that, we had manufacturing as an economic base. Now, it is changing again.

Some folks see the latest change as bad, some as good. I just see it as inevitable.


12 posted on 04/15/2005 7:43:28 AM PDT by L98Fiero
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To: Finalapproach29er
I suspect in a few years the proposal will be floated to turn the 8 hour work day into a 12 hour work day.

Who can afford to have their employees work just an 8 hour day? I have not been working an 8 hour day since I was 16!

13 posted on 04/15/2005 7:48:12 AM PDT by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: Vn_survivor_67-68
Buchanan is right.

International trade agreements and myths/lies and MFN are rapidly liquidating America.

====

Ten Myths about Jobs and Outsourcing:

Myth #4: Free trade, free labor, and free capital harm the U.S. economy.

Fact: Economic freedom is necessary for economic growth, new jobs, and higher living standards.

A study conducted for the 2004 Index of Economic Freedom confirms a strong, positive relationship between economic freedom and per capita GDP. Countries that adopt policies antithetical to economic freedom, including trying to protect jobs of a few from outsourcing, tend to retard economic growth, which leads to fewer jobs.

Myth #6: Outsourcing is a one-way street.

Fact: Outsourcing works both ways.

The number of jobs coming from other countries to the U.S. (jobs “insourced”) is growing at a faster rate than jobs lost overseas. According to the Organization for International Investment, the numbers of manufacturing jobs insourced to the United States grew by 82 percent, while the number outsourced overseas grew by only 23 percent.[5] Moreover, these insourced jobs are often higher-paying than those outsourced.[6]

Myth #7: American manufacturing jobs are moving to poor nations, especially China.

Fact: Nations are losing manufacturing jobs worldwide, even China.

America is not alone in experiencing declines in manufacturing jobs. U.S. manufacturing employment declined 11 percent between 1995 and 2002, which is identical to the average world decline.[7] China has seen a sharper decline, losing 15 percent of its industrial jobs over the same period.

Ten Myths about Jobs and Outsourcing

14 posted on 04/15/2005 8:47:15 AM PDT by Mase
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To: Mase

LOL!

The "Facts" you posted are merely restatements of the same rhetoric that got us into this mess in the first place. My God, man.....its an easy empirical call, unless one is predisposed to the liquidation of America.


15 posted on 04/15/2005 9:09:20 AM PDT by Vn_survivor_67-68
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To: Finalapproach29er

Quote: I suspect in a few years the proposal will be floated to turn the 8 hour work day into a 12 hour work day.

Wal mart is trying to push through a 16 hour day for their truck drivers versus the current 14 hours allowed.


16 posted on 04/15/2005 9:13:23 AM PDT by superiorslots
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To: Mase; WRhine; Paul Ross; jpsb; oceanview

Your Quote: Fact: Nations are losing manufacturing jobs worldwide, even China.

You free traitors are so full of it. Yeah china may be loosing manufacturing jobs due to better production but so many companies are moving over there the unemployed are immediatly rehired. See the FR post below.


Help Wanted: China Finds Itself With a Labor Shortage

Posted by neverdem
On News/Activism 04/03/2005 2:42:43 PM PDT · 56 replies · 1,031+ views


17 posted on 04/15/2005 9:22:02 AM PDT by superiorslots
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To: Alberta's Child

Yeah just like Bush's old economic secretary that tried to have hamgurger making classified as manufacturing to boost numbers.


18 posted on 04/15/2005 9:26:02 AM PDT by superiorslots
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To: Vn_survivor_67-68
The "Facts" you posted are merely restatements of the same rhetoric that got us into this mess in the first place

==

What mess are your referring to?

From Bruce Bartlett:

In July, economist Martin N. Baily, chairman of the Council of Economic Advisers under President Clinton, looked at who benefits from outsourcing. He found that for every $1 spent by a U.S. corporation on outsourcing to India, only 33 cents stayed in India. The other 67 cents came back to the U.S. in the form of cost savings, new exports, and repatriated profits. However, productivity gains add another 45 to 47 cents of value to the U.S. economy. Thus, on balance, the U.S. economy gains $1.12 to $1.14 for every $1 invested in outsourcing.

In August, economist Charles Schultze, chairman of the CEA under President Carter, looked at the number of jobs lost to outsourcing. He found that between the end of 2000 and the end of 2003, at most 215,000 service-sector jobs were lost. This is a minuscule amount in a working population of close to 150 million. Moreover, Schultze says, the productivity gains produced by outsourcing raised real incomes and living standards in the U.S. He concluded that outsourcing cannot be blamed for the “jobless recovery.”

Also in August, the nonpartisan Public Policy Institute of California looked at the costs and benefits of restricting outsourcing. It found that the cost of restricting outsourcing would greatly exceed any gains. Policies targeted toward those affected by outsourcing are far preferable to a ban on outsourcing. For this reason, California Gov. Arnold Schwarzenegger recently vetoed several bills that would have restricted outsourcing in that state.

In September, International Monetary Fund economists Mary Amiti and Shang-Jin Wei did the most thorough study of outsourcing to date for the prestigious National Bureau of Economic Research. These are their findings:

U.S. imports of computing services — the most controversial area of outsourcing — came to just four-tenths of 1 percent of the gross domestic product in 2003.

In 2002, the U.S. was the world’s largest exporter of computer services, which added almost $60 billion to our exports. By contrast, India’s total exports in this area came to less than $20 billion and China’s were just over $10 billion.

China and India, the two countries most blamed for outsourcing, actually outsource more than we do — six-tenths of 1 percent of GDP for the former and 2.4 percent of GDP for the latter.

Contrary to popular belief, the U.S. is a large recipient of outsourcing from other countries — i.e., insourcing. In 2002, the U.S. ran a healthy trade surplus in this area — receiving $22 billion more in outsourcing from other countries than it paid in outsourcing to other countries.

The number of jobs gained from outsourcing approximately equals the number of jobs lost.

The Federal Reserve Bank of Kansas City did the most recent study of outsourcing. It concluded that outsourcing has no permanent employment effects, although there can be temporary displacements.

Finally, press reports indicate that the outsourcing boom may have already peaked. A Sept. 22 report in the Wall Street Journal said that Chinese workers are now demanding better pay and more time off, which has sharply raised the number of labor disputes. This is quickly eroding the cost advantage of outsourcing to China.

An Oct. 7 report in the Financial Times said that General Electric, which pioneered outsourcing to India, has decided to sell its international outsourcing business. It found that the savings from outsourcing were mostly one-time gains that tended to dissipate over time. One reason is high employee turnover. Call centers operated by GE in India lost 40 to 50 percent of their workers every year.

Outsourcing Myths Debunked

19 posted on 04/15/2005 9:52:35 AM PDT by Mase
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To: Vn_survivor_67-68

Buchanan was exposed as a fraud back in the 1990s when he traveled all over the Rust Belt complaining about the loss of U.S. manufacturing jobs -- then climbed into his Mercedes-Benz and drove back to his comfortable home in the Beltway suburbs.


20 posted on 04/15/2005 10:08:38 AM PDT by Alberta's Child (I ain't got a dime, but what I got is mine. I ain't rich, but lord I'm free.)
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To: Finalapproach29er
Then we'll have 35% Lords and 65% serfs.

I suspect in a few years the proposal will be floated to turn the 8 hour work day into a 12 hour work day.

Some of us already work 12 hours a day. If you want to make sure you're one of the "lords" instead of the "serfs," I've got a suggestion for you -- the 8-hour day ain't doing you much good.

21 posted on 04/15/2005 10:10:41 AM PDT by Alberta's Child (I ain't got a dime, but what I got is mine. I ain't rich, but lord I'm free.)
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To: LowCountryJoe; chimera
So we will be happy only when we are proved right? B.S.

Declares Landsburg: “I hold this truth to be self-evident: It is just plain ugly to care more about total strangers in Detroit than about total strangers in Juarez. ... Even if Kerry-style (or Nader-style or Buchanan-style) protectionism could improve Americans’ well-being at the expense of foreigners, it would still be wrong.”

Let's put this proposition to a FR vote. Who here thinks this a legitimate American position, that necessarily requires that we have no national-favoring concerns whatsoever?

Well? [ sound of crickets chirping]

I call this newest evolution of the pseudo-free-traders the "Neo-Globalist" position. Buchanan is right, catching the shift by these guys. The nation state they seek to subvert, however, is the one whose constitution guarantees our rights...including economic. A global world government construct will be totally unprotective of any individual rights whatsoever, other than the power of the Government. And there will be no individual nations with any power to oppose such a government...so that such a tyrannical government will have a free hand...with no checks and balances whatsoever to try and preserve individual liberty.

LCJ: Griswold's apology for trade deficits is simply laughable. We should have had a huge economic boost from all these trade deficits we have been running non-stop now...by his reckoning. Well where is it? The Reagan era protected manufactures, and saw a dramatic decline in the trade deficit towards the end of his administration...with manufacturing in the U.S. soaring as we indeed found new things to make. Today, by contrast, ALL manufacturing of new consumer products is promptly sent over to China. No U.S.-production interim step. Hence, no possibility even, of a U.S. reduction of the trade deficit until a complete collapse of our credit-worthiness...a result which you appear to be all-too-eager for. Hence, the previous models that Griswold uses are misunderstood by him...and grossly misapplied. His conclusions are complete poppycock, misunderstanding causes and effects.

22 posted on 04/15/2005 10:17:31 AM PDT by Paul Ross (Many so-called liberals aren’t liberal—they will defend to the DEATH your right to agree with them.)
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To: Mase
America is not alone in experiencing declines in manufacturing jobs. U.S. manufacturing employment declined 11 percent between 1995 and 2002, which is identical to the average world decline.[7] China has seen a sharper decline, losing 15 percent of its industrial jobs over the same period.

China, however, is not losing its jobs to other countries. It's purported declines are a result of the influx of Western technology-induced productivity increases. They consequently are drastically increasing their actual manufacturing. The U.S., unfortunately, and unlike during the Reagan era, is now finding it more 'productive' to outsource...than to spend the money to increase domestic productivity. Gambling that they will be able to prevent China from co-opting all that is being transferred. Bad bet.

23 posted on 04/15/2005 10:24:18 AM PDT by Paul Ross (Many so-called liberals aren’t liberal—they will defend to the DEATH your right to agree with them.)
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To: superiorslots
Help Wanted: China Finds Itself With a Labor Shortage

May not be as rosy as you think:

"Over the past ten years, bloated state-owned enterprises and “collectives” (most of them in effect also state-owned) have shed much of their excess labour. Many have been simply closed. Between 1998 and 2002, such closures resulted in job losses for a staggering 24m workers, or about 10% of the urban labour force, by government reckoning."

"The closures continue. Official newspapers reported this month that more big layoffs are imminent at some of the country's state-owned commercial banks, which have already shed some 250,000 staff and closed 45,000 offices since the late 1990s. The government says some 2,500 state-owned mines and large enterprises with a total staff of 5.1m are due to be shut in the coming four years."

"China ignores rural areas when calculating unemployment figures in the belief that, since villagers enjoy land-use rights, they can make a living. Even so, 150m or so rural-dwellers have little or nothing to do and in the coming years may move to urban areas. This vast reservoir will add to urban employment pressures just as China faces a baby-boom surge in the labour force and, thanks to heavy investment in capital-intensive production, diminishing employment gains from growth. “Socialist” China will have its work cut out."

Economist China employment

This is also appropriate for those who think all is well in China:

Forbes

24 posted on 04/15/2005 10:29:35 AM PDT by Mase
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To: Vn_survivor_67-68


"There are other serious effects thus far, for example, CHINA is financing its agenda largely through the largesse of one william jefferson clinton, who granted MFN to our enemy.......how many American jobs, factories, and technologies was THAT alone?"

Cut the crap. 104th Congress helped usher that in. Clinton signed the deal that was passed through Congress. You better mention Clintons bedfellow: House Speaker Newt Gingrich. There is enough blame to go along.


25 posted on 04/15/2005 10:36:10 AM PDT by Skeeve14 (De Opresso Liber)
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To: Paul Ross
We should have had a huge economic boost from all these trade deficits we have been running non-stop now...by his reckoning. Well where is it?

It really depends on how you define an "economic boost." It's easy to focus on specific statistics or indicators and find a crisis at any given time, but let's step back and look at the big picture here. Can you think of any measure by which the standard of living in the U.S. has declined since the end of Reagan's second term in 1988?

26 posted on 04/15/2005 10:53:42 AM PDT by Alberta's Child (I ain't got a dime, but what I got is mine. I ain't rich, but lord I'm free.)
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To: Paul Ross
China, however, is not losing its jobs to other countries. It's purported declines are a result of the influx of Western technology-induced productivity increases.

==

Yes, China's productivity has risen dramatically in recent years. It's interesting to note that: "With China starting at a much lower productivity level than the developed world, it is able to grow productivity much faster. Restructuring activity is also expected to lead to more productivity increases."

"Joint U.S.-, European- and Japanese-Chinese ventures were seven times as productive as state-owned companies in 2002."

How much longer can the state prop up their state owned and joint stock firms before they have to privatize more industry?

"China's increase in service jobs and decline in manufacturing jobs is not only part of its economic development but also fits in with domestic and global demand, the study said. Services made up 33.5 percent of China's gross domestic product in 2002, up from 30.7 percent in 1995. In the United States, there are five service-providing jobs for every goods-producing job."

McGuckin noted that 12-15 percent of U.S. jobs are created and destroyed every year as its economy evolves. Now, China is experiencing this "creative destruction" as well, he said.

China losing jobs as productivity soars

27 posted on 04/15/2005 11:34:04 AM PDT by Mase
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To: superiorslots

bttt...


28 posted on 04/15/2005 11:53:38 AM PDT by WRhine (Is anything Treasonous these days?)
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To: superiorslots; oceanview; jpsb; Toddsterpatriot
The article is a couple of years old but the conclusions are right on.

Put in a global evolutionary context, the loss of 2.6 million manufacturing jobs in the U.S. since the start of 2001 looks far less ominous -- at least to folks not seeking elective office. Facts about the extent of the decline in global manufacturing jobs would demolish the economic (not the political) argument for protectionist measures. Both houses of Congress have proposed legislation that would impose stiff tariffs on Chinese imports.

"Facts about human capital's decreasing relevance in the manufacturing process would expose the silliness of appointing a manufacturing czar, an initiative announced recently by President George W. Bush. They would upend the misplaced notion that China's undervalued currency -- the yuan has been pegged at 8.3 to the dollar for almost a decade -- is giving the country's manufacturers' a competitive edge and ballooning its trade surplus with the U.S. to $103 billion in 2002."

"No reasonable degree of yuan appreciation could offset the labor-cost differential between the two countries. U.S. manufacturing workers make about 25 times what an average Chinese factory worker earns, according to statistical agencies in the U.S. and China."

The fact that China is losing factory jobs at a faster rate than the countries from which it is supposedly stealing them just might put to rest the notion of China, job thievery nation.

I never put much faith in the belief that unpegging the yuan would be a panacea for the American worker.

So Who's Stealing China's Manufacturing Jobs?

29 posted on 04/15/2005 11:57:26 AM PDT by Mase
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To: Vn_survivor_67-68
What mess are we in? You talk about empirical...check out the empirical evidence! Show me how bad it is while you're at it!
30 posted on 04/15/2005 11:59:44 AM PDT by LowCountryJoe (50 states, and their various laws, will serve 'we, the people' better than just one LARGE state can)
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To: Paul Ross
You have consistently demonstrated that you have no clue as to what you're talking about...you write decently and use sophisticated language but nothing that you are writing makes sense and it can easily be dismissed. You're, once again, ignoring the evidence laid out in front of you.

Now, go ahead and tell the moderator - as you usually do - that I'm picking on you so that this post can be removed.

31 posted on 04/15/2005 12:08:15 PM PDT by LowCountryJoe (50 states, and their various laws, will serve 'we, the people' better than just one LARGE state can)
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To: Alberta's Child
It really depends on how you define an "economic boost." It's easy to focus on specific statistics or indicators and find a crisis at any given time, but let's step back and look at the big picture here. Can you think of any measure by which the standard of living in the U.S. has declined since the end of Reagan's second term in 1988?

Obviously by the time I checked there were no replies, just crickets! Why is that?

32 posted on 04/15/2005 12:15:12 PM PDT by LowCountryJoe (50 states, and their various laws, will serve 'we, the people' better than just one LARGE state can)
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To: LowCountryJoe
That's right. One of the sober realities of the world is that a solid manufacturing base requires two things: 1) a standard of living that is consistently lower than that of its trading partners, and/or 2) a wide variance in the standards of living among its citizenry, so that those with a lower standard of living can manufacture things to be sold to those with a higher standard of living.

Scenario #2 began to disappear under FDR's New Deal -- when the U.S. started getting an internal "level playing field" that took away the economic advantages associated with manufacturing in certain regions of the country. The greatest enemies of a robust manufacturing sector are all those things that are supposed to elimiate economic distinctions across the nation -- Federal minimum wage laws, Social Security, Medicare, etc.

33 posted on 04/15/2005 12:22:33 PM PDT by Alberta's Child (I ain't got a dime, but what I got is mine. I ain't rich, but lord I'm free.)
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To: LowCountryJoe
nothing that you are writing makes sense and it can easily be dismissed. You're, once again, ignoring the evidence laid out in front of you.

Same to you, Bud.

34 posted on 04/15/2005 12:23:21 PM PDT by Paul Ross (Many so-called liberals aren’t liberal—they will defend to the DEATH your right to agree with them.)
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To: WRhine
You bumped that post (#17)!?

Why?


35 posted on 04/15/2005 12:27:45 PM PDT by LowCountryJoe (50 states, and their various laws, will serve 'we, the people' better than just one LARGE state can)
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To: Alberta's Child

Buchanan was correct about the Rust Belt and the trememdous loss of mfg. jobs in the 70's and 80's. What most folks don't realize is that when many companie's sent mfg. jobs overseas they eliminated a lot of white collar positions such as engineering, management, supervisory, accounting, etc. Add to that the impact on service sectors in the community that depended on business from the local factory workers and the effects were pretty devastating.......Buchanan's mistake was delivering the truth in a somewhat disingenuous manner.


36 posted on 04/15/2005 12:39:08 PM PDT by american spirit
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To: superiorslots

http://www.townhall.com/columnists/larrykudlow/lk20050414.shtml

Larry Kudlow has a pretty convincing argument against you.


37 posted on 04/15/2005 12:43:20 PM PDT by antisocial (Texas SCV - Deo Vindice)
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To: american spirit
Many of the manufacturing jobs that left the Rust Belt in the 1970s and 1980s weren't "outsourced" to foreign countries -- they were "outsourced" to the southern U.S. The 1980s marked a great turning point in this nation's history, as we started seeing major Japanese auto manufacturers like Nissan and Honda open their first plants right here in the U.S.

Nissan has been employing 6,000 auto workers at its plant in Smyrna, Tennessee since 1983.

38 posted on 04/15/2005 12:46:42 PM PDT by Alberta's Child (I ain't got a dime, but what I got is mine. I ain't rich, but lord I'm free.)
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To: Alberta's Child

I think you forgot about the maquiladora plants in Mexico that landed a lot of work that used to be done in the Midwest and although many southern states did lure in auto plants the fact is many communities were devastated after the factories left. That's why there was such a signifiicant exodus of people south from states like Ohio, Pa., Ill., etc.


39 posted on 04/15/2005 1:12:48 PM PDT by american spirit
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To: Paul Ross
Hey, how come you didn't quote my last sentence, bud?
40 posted on 04/15/2005 2:17:48 PM PDT by LowCountryJoe (50 states, and their various laws, will serve 'we, the people' better than just one LARGE state can)
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To: LowCountryJoe
how come you didn't quote my last sentence

You haven't violated the rules on this thread...yet.

41 posted on 04/15/2005 8:41:33 PM PDT by Paul Ross (Many so-called liberals aren’t liberal—they will defend to the DEATH your right to agree)
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To: LowCountryJoe
You bumped that post (#17)!? Why?

Because I agreed with it. Do you agree with Steven Landsburg when he says:

“Both major parties (and most of the minor ones) are infested with protectionist fellow travelers who would discriminate on the basis of national origin no less virulently than David Duke or any other overt racist would discriminate on the basis of skin color. But if racism is morally repugnant—and it is—then so is xenophobia…”

Declares Landsburg: “I hold this truth to be self-evident: It is just plain ugly to care more about total strangers in Detroit than about total strangers in Juarez. ... Even if Kerry-style (or Nader-style or Buchanan-style) protectionism could improve Americans’ well-being at the expense of foreigners, it would still be wrong.”

42 posted on 04/15/2005 9:07:10 PM PDT by WRhine (Is anything Treasonous these days?)
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To: american spirit
Buchanan was correct about the Rust Belt and the trememdous loss of mfg. jobs in the 70's and 80's. What most folks don't realize is that when many companie's sent mfg. jobs overseas they eliminated a lot of white collar positions such as engineering, management, supervisory, accounting, etc.

The classic ripple effect that free traders rarely concern themselves with. Now, there is an oversupply of people in the already overcrowded, lower paying service sector all chasing the same business.

43 posted on 04/15/2005 10:25:33 PM PDT by WRhine (Is anything Treasonous these days?)
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To: 1rudeboy

ping


44 posted on 04/15/2005 10:57:11 PM PDT by investigateworld (RCC:1, USSR: 0 God bless Poland for giving the world JP II)
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To: WRhine
Because I agreed with it. Do you agree with Steven Landsburg when he says:

“Both major parties (and most of the minor ones) are infested with protectionist fellow travelers who would discriminate on the basis of national origin no less virulently than David Duke or any other overt racist would discriminate on the basis of skin color. But if racism is morally repugnant—and it is—then so is xenophobia…”

Declares Landsburg: “I hold this truth to be self-evident: It is just plain ugly to care more about total strangers in Detroit than about total strangers in Juarez. ... Even if Kerry-style (or Nader-style or Buchanan-style) protectionism could improve Americans’ well-being at the expense of foreigners, it would still be wrong.”

No, I don't like what he wrote, it went way too far and over the top. Did you see post #1 (everything that was posted there)? I'll go that far, though. Did you happen to read post #4 and click on the link? Here's what else Landsburg had to write when he wasn't gunning for 'shock value' in his piece (this was the portion that Buchanan deliberately omitted from his editorial by use of the ellipses - which you've quoted in the last paragraph of your post):

"...Of course we care most about the people closest to us - our families more than our friends and our friends more than our acquaintances. But once you start talking about total strangers, they all ought to be on pretty much the same footing. You could say you care more about white strangers than black strangers because you've got more in common with whites. Does that make it okay to punish firms for hiring blacks? [I've also got problems with the way Landsburg continues to race bait here, in this last sentence]

It's also worth mentioning that laws intended to "protect" Americans raise the price of goods that Americans buy. I won't dwell on this because it's already obvious to anyone with a dollop of economic literacy. Besides, it's tangential to my main point, which is this:..."

But now I have some questions for you:

Why did Buchanan gloss over the stuff in Landsburg's piece that actually had merit?
Why are the economic policies - regarding trade - identical in the Kerry (and many other prominent Democrats) and the Buchanan camp?
How do you read the table found in post number one and then walk away still defending your position of protectionism when trade, though counter intuitive but not really if you gave it some thought on why it works domestically, makes us better off and offers maximum growth?

45 posted on 04/17/2005 5:35:00 AM PDT by LowCountryJoe (50 states, and their various laws, will serve 'we, the people' better than just one LARGE state can)
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To: sixmil
PING!
I'm looking forward to your rebuttal to this very post (post#1).

I did score in the top .5% on the GRE, if that means anything

Let's hope so!

46 posted on 05/13/2005 4:36:09 AM PDT by LowCountryJoe (50 states, and their various laws, will serve 'we, the people' better than just one LARGE state can)
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To: LowCountryJoe
Are we comparing stock prices and skirt lengths again? WRT the title of this thread I've said this way too many times, but I'll say it again - Fair traders used to openly use the N word, now they just talk about hiring Americans. (adapted phrase from race baiter Donna Shalayla)
47 posted on 05/13/2005 7:16:11 AM PDT by sixmil (In Free Trade We Trust)
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To: sixmil

I didn't understand any of that reply. Look at the table and information posted in #1 and make a comment to refute what you see - one the make sense please!


48 posted on 05/13/2005 7:37:32 AM PDT by LowCountryJoe (50 states, and their various laws, will serve 'we, the people' better than just one LARGE state can)
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To: NewRomeTacitus
Please read post #1, thoroughly, and respond if you care to.
49 posted on 05/15/2005 1:56:05 PM PDT by LowCountryJoe (50 states, and their various laws, will serve 'we, the people' better than just one LARGE state can)
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To: LowCountryJoe
“It’s not just Kerry. Both major parties (and most of the minor ones) are infested with protectionist fellow travelers who would discriminate on the basis of national origin no less virulently than David Duke or any other overt racist would discriminate on the basis of skin color. But if racism is morally repugnant—and it is—then so is xenophobia…”

First off, the British creep who wrote that obviously believes looking after the interests of one's country over allowing others their way with it is somehow immoral. That he equates protectionism with racism brands him as a liberal and a "fellow traveler" himself, plying the classic tactics espoused by radical icon and hero-to-Hillary Saul Alinsky ("Apply the enemy's labels for us back to them to encourage a breakdown in their ranks.") Patent BS bought by too many indoctrinated in our public school systems and enthralled by the legions of socialists who find refuge there while holding trusted positions as teachers. Yup; England's open arms policy is really working out well for them (NOT).

Pat Buchanan is right on target around 90% of the time (IMO) - right far more often than his detractors who whoop and holler over his every error. None will acknowledge that he reversed his position on Israel after noting it is a necessary bastion of defense against the growing evil of Islamic fanaticism. I believe the garbage going down because of NewsWeak's faux paux (or was it?) illustrates just how peace-loving that cult is.

I have no training in economics, LCJ, but can see that our government has taken out one mortgage after another on the strength of America's potential. While doing this our government representatives have sat by while the true sources of our value and sustainment have been given up one Financial Quarter at a time by their primary contributors for the sake of short-term profits or the illusion of it. They don't care that we citizens will be left holding the (empty) bag so long as they get their cut while holding escape hatch tickets. Traitors in every sense of the word.

Gosh, don't you regret asking me for my two centavos? That's what I tape on those RNC fundraising letters. It's a growing phenomenon.

50 posted on 05/15/2005 4:06:35 PM PDT by NewRomeTacitus
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