Forum Post: Balanced Trade
Posted 12 years ago on Oct. 6, 2011, 7:34 p.m. EST by IonU
(4)
from Stratford, CA
This content is user submitted and not an official statement
The first obstacle to growth is the sheer insanity of politics in Washington today. Neither side is taking on the real issues facing this economy and the market for workable solutions is virtually empty. This country needs to work toward balanced trade and it requires a federal mandate to accomplish the task. The free market was already asked politely to keep jobs and production here – it simply accelerated outsourcing. This country needs strong domestic procurement laws for all government spending. If the government is going to put steel reinforcements in the pavement as it refurbishes crumbling highways, that steel must be made in America by American workers and an American-owned company.
That will lead to trade wars with China, India etc. That was exactly what led the World into Global Depression in 30s!
No, the stock market crash of 1929 lead to the depression due to over extension of credit, sound familiar?
http://www.dailymail.co.uk/news/article-537688/1929-What-Great-Crash-teach-todays-credit-crunch.html
Stock market crash is typically result not the cause! There are many reasons for the Great Depression and one of them is Protectionism: "In 1928, Hoover ran on a platform of higher tariffs designed to protect farmers from European competition. Congress passed the Smoot-Hawley Tariff Act in 1930; Hoover signed the bill although economists protested. It is unlikely that tariffs alone caused the Great Depression, but they fostered global protectionism; world trade declined by 66% from 1929 to 1934."
I'm all for free trade, however I liken the existing situation with the chinese as follows: Imagine participating in a poker game where everyone knows that one player is capitalizing on marked cards.. and everyone else is too afraid or intimidated to say anything.. they just sit there and keep getting screwed. yes, an over simplification, but free trade can only be equitable when everyone plays by the same rules.
There will be all the time cheaper labor somewhere. It was Japan in 70s now it is China, Brazil, Mexico etc. That is happening in US too, many companies are moving jobs to states with lower wages and less regulation -Texas for example, where they can pay less to the employees and spent less on Environmental protection! The extra profit taken from the pockets of the US labor force goes to bonuses of corporate execs, dividend payments or stock repurchase! That is the problem! That profit should be redistributed back to the society and to be reinvested in retraining programs, infrastructure projects, cheaper health care etc. which by the way will create local jobs and increase the demands for goods and services.
All points well taken..