A Suicidal Country

Townhall.com ^ | 02-26-03 | Paul Craig Roberts

[Willie Green]

The idea is that countries who are rich because of trade will have no reason to try and conquer other nations. Exchange will replace plunder.

So instead of preserving our socio-economic stability and national security, you advocate a pre-emptive transference of our wealth to the Third World so that we may decline to their level and they won't declare war on us.

No Thanks.

[Buckeye Bomber]

Wages match up with productivity. Not all car manufacturing jobs have left the country. Just ones that can be done more efficiently elsewhere. I'm sorry I can't get all worked up about the plight of inefficient steel mills or inefficient textile factories or inefficient airlines or inefficient car makers, but wages, standards of living, prices of items, and consumer spending will adjust. Do you think my grandparents ever thought our family would have computers, TV's, and cars? I doubt it. Your sky-is-falling attitudes may be welcome in Socialist Europe, but here in America we like our markets free.

[Buckeye Bomber]

It's not a transfer of wealth. You're operating under the assumption that there is a limited amount of wealth. Humans will continue to multiply the amount of available wealth far past that which is alloted to the people of the world. I have faith in humans to continue to do that which was thought impossible even 20 years ago.

When you lift a man out of hole, you don't get in it with him.

[tm22721]

Defense, baby.

The defense industry is the ultimate safe harbor from the MBAs outsourcing your jobs.

Because the US government will never give an Indian 'engineer' a security clearance to write code for an aircraft carrier.

BUMP

[Maximum Leader]

At least he spelled 'tariffs' right.

It's hard to know to take Paul Craig Roberts, sometimes he's out in left field. However on his opposition to the exporting of jobs, he's on to something important.

I have a friend who just got back from a trade show in India. Basically any job that can be exported to India (or China) will be and any cheap worker who can be imported from India (or China) will be as well. Even doctors and lawyers will face the economic pressure that ensues.

Cheap labor certainly increases the return on capital at the cost of diminishing the number of Americans who can afford a middle-class lifestyle.

Economically, that may be the most efficient way, but as Disraeli once said, the castle is not safe if the cottage is not happy.

[Willie Green]

You're operating under the assumption that there is a limited amount of wealth. Humans will continue to multiply the amount of available wealth far past that which is alloted to the people of the world. I have faith in humans to continue to do that which was thought impossible even 20 years ago.

No, you're the one who has been deluded by visions of perpetual growth.
Economics is cyclical. Wealth can be created by certain activities, but it can also be transferred, redistributed, dissipated, dispersed, squandered and obliterated.

[Buckeye Bomber]

Explain to me how wealth is obliterated. That seems like an interesting economics theory you have there.

A temporary recession does not mean economic growth has stopped or even slowed down over the long term. Populists tend not to be very long term people. If yer grandma needs her medicare, they'll help you out then. I'd prefer to sacrifice the short term for the long term rather than sacrifice the long term for the benefit of the short term.

[Willie Green]

Explain to me how wealth is obliterated.

The most recent example was the 9/11 terrorist attack on the WTC.

[Buckeye Bomber]

I'm sorry, but one anecdote does not convince me of your position. A hundred anecdotes won't. I want hard economic data that says the average American is worse off because of free trade.

I have this friend who just got back from this killer free-trade forum. He said that free trade is good for all of us.

So the American middle class ought to be shrinking, and consumer spending ought to be dropping, right?

[Buckeye Bomber]

Wow, invoking 9-11. What an emotionally powerful appeal you make. So explain to me how protectionism would have prevented 9-11.

No wealth was destroyed in the 9-11 attacks. Many lives were lost, and the stock markets took a hit, but I can't see wealth being obliterated anywhere. Maybe the insurance industry got a little leaner.

I hate to be this crude when discussing a national tragedy, and I hope that people will understand the point I'm trying to make. And as much as I hate to use this excuse, Willie Green opened this can of worms. So I am just replying to his blatant emotional appeal with a knife I call logic.

[Willie Green]

I'd prefer to sacrifice the short term for the long term rather than sacrifice the long term for the benefit of the short term.

Then you should be more concerned with the retention of our wealth creating industrial sector rather than the short term expediency of the service sector.

The Road to Productive Wealth

The only true key to wealth lies in production. While you can increase your own wealth at the expense of others, we all become wealthier when productive resources are increased. Greater wealth for our economy lies in increasing the quantity or quality of productive resources -- labor, capital, and natural resources. This is done by investing in education, capital goods, research and development, and technology.

"Free" trade as advocated by globalists does not accomplish this. Instead, our nation's productive resources are hampered by the burden of excessive government regulation and domestic industry is undermined by foreign sources not subject to the same restraints. We are not on a level playing field.

[Willie Green]

So explain to me how protectionism would have prevented 9-11.

Tighter control over our borders would have helped significantly.

US blunder gave September 11 terrorists visas

No wealth was destroyed in the 9-11 attacks. Many lives were lost, and the stock markets took a hit, but I can't see wealth being obliterated anywhere.

The collapse of the Twin Towers has been replayed countless time on television.
You must be blind if you missed it.

WEALTH: The net ownership of material possessions and productive resources. In other words, the difference between physical and financial assets that you own and the liabilities that you owe. Wealth includes all of the tangible consumer stuff that you possess, like cars, houses, clothes, jewelry, etc.; any financial assets, like stocks, bonds, bank accounts, that you lay claim to; and your ownership of resources, including labor, capital, and natural resources. Of course, you must deduct any debts you owe.

In case you're still stumped, the WTC buildings themselves (and all their contents) were wealth.

[Buckeye Bomber]

Last time I checked, there's still a Budweiser plant here in Columbus, there's a still a Jeep plant in Toledo, and P and G still does mot of its production in Cincinnati, and General Electric still produces jet engines in Cincinnati. The coal mines of West Virginia continue to be productive. I think you either are under a false impression about the state of manufacturing in this country, or being deceitful to advance a protectionist agenda.

---"Free" trade as advocated by globalists does not accomplish this. Instead, our nation's productive resources are hampered by the burden of excessive government regulation and domestic industry is undermined by foreign sources not subject to the same restraints. We are not on a level playing field.---

So rather than remove the government regulation on our companies to even the playing field, we put government regulations on companies in other countries. Beautiful idea. I've always thought we could use a little regulation in the world economy.

[semaj]

Buchanan was right after all.

[Buckeye Bomber]

The issue of immigration reform is far different from the issue of free trade. I assume you have passionate beliefs about both, and connect them tightly in your own mind, but I am only arguing free trade here.

The wealth of the buildings was converted into liquid assets via insurance money. You don't think the owners of the buildings were compensated in any way for their destruction? The money didn't just disappear. Where'd that money come from? Premiums paid over the years by numerous entities. And I'm sure the companies that insure the insurance companies continue to be quite profitable.

[Jack Black]

Agreed. And how about outsourcing some CEO jobs. European CEOs work for a fraction of their US counterparts. They also have better accountants, apparently. As a shareholder I'd like to see the companies I own "outsorce" and "rightsize" the expenditures on executive compensation.

[semaj]

Without a manufacturing base, a nation cannot sustain "superpower" status nor claim to be one. Is that what we want for America?

[Buckeye Bomber]

What manufacturing base are we losing!!! If a steel mill shuts down, it probably ought to, especially since the government probably tried to prop it up before. General Electric, Boeing, and the other related manufacturers aren't exactly on the brink of collapse. And in my ideal future, there is no need for superpower status, since there are no wars due to the rampant free trade that is happening. But that would have required you reading my earlier posts.

[Arkie2]

Yeah, but he didn't spell specifically right so what's your point? Is this a spelling bee? Or is that be? To bee or not to be, what is your question?

[Buckeye Bomber]

And free trade will also eventually solve the problem of terrorism as well, while we're on the subject. Terrorists feed on hopelessness. If your economy was built entirely on oil profits and government grants, you'd be pretty angry too. Once the Middle East becomes democratic and capitalist, rather than a mess of dictatorships and pseudo-socialism, I'd gamble terrorism will go down to near zero. No one with a steady job will strap a bomb to themselves and kill Israelis.