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Trade Deficits
I have done some research of government stats and came up with some pretty
interesting statistics on trade surpluses and trade
deficits.
From 1940-1970, the US ran 30 straight years of trade
surpluses. The US was a manufacturing Juggernaut.
GDP growth was 8.06% from 1940-1970.
From 1976-2004, the US ran 28 straight years of trade
deficits. GDP growth averaged 6.87% from 1976-2004.
Free traders will argue that inflation should be lower
because of the competition of imports against American
made goods.
Wrong!!! Inflation from 1940-1970 average 3.28%.
Inflation from 1976-2004 average 4.44%.
Free traders will say well you didn't look at
unemployment stats. Wrong!!! Yes I did.
The bls.gov stats only goes back to 1948 but here it
is. From 1948-1970 unemployment ran from just under
4% to a high of 8% and average of around 5.25%
From 1976-2004, unemployment went from 8% to a high of
over 10% to a low of 4%. The average was around 6%.
From 1940-1970, GDP growth was over 1% higher,
inflation was over 1% lower and unemployment was 0.75%
lower compared to 1976-2004.
This proves that free trade policy is a total failure
and a national disgrace.
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Christian Democrat
Christian Democrat
Capitalism
Capitalism is self-destructive. Left to its own devices, it pushes down the wages of workers who then don't have enough money to buy the products it manufactures. Automatically, it over-produces and destroys demand. Henry Ford understood this so he paid higher wages so people could afford to buy his cars. But he was the exception to the rule. Only the government can keep it from commiting suicide. And in a democracy, only the people can force the government to act. Reagon started the downward spiral by unravelling the constraints on the "free market"and Bush is just accelerating the process.
Free Markets are a blessing
Free Markets are a blessing to mankind.
The Right however correctly places constraints on the Free Market so as to stop Monopolies. Aristocrats do NOT go willingly into Monarchy. Those at the top have NO problem engaging in legislation and litigation to stop another at the top from leaving them in the dirt.
The Right correctly rails against Communism but does NOTHING to fight against Aristocracy. This is deeply subversive. They can make no appeal to their fetish for anal retentive rules of the game, for as stated above, they too do not allow the winner to take all.
Liberal Democrats stand by the American experiment of preventing Communism AND Aristocracy! We broaden the constraints on winner take all to both broaden the middle class substantially and allow for better overall growth. Genetic variation being what it is, the offspring of the well to do may not be the brightest economic engines available. A farm kid, for example, may be gifted beyond measure but if capitol –in the way of descent wages for jobs and low prices for goods- are not available, the economy never gains real input from this gifted individual.
Please consider rethinking the language of economics in terms of the American experiment. I understand you have done some thinking on this but there is no better template for attacking the Right than via Americanism. (You might consider tracking some of my posts as well.)
Free Markets
Christian Democrat
Jim, I agree with you on Free Markets. However if capitalism is left unchecked, then eventually the wealth of the country goes into fewer and fewer hands over times. The Right would love nothing better than to have monopolies. It's the perfect rich get richer and poor get poor scenario for them. We know the Right think the poor are weak. They think the are poor because they are lazy or because "don't have what it takes." However my mother was born into poverty and she neither choose it or wanted to stay in it. I don't believe the poor wise to stay poor. However that is the view of the Right.
A Democratic Government has no choice but to balance the wealth of the nation with the poverty of the nation. We are only as good as we treat the lowest among us.
I don't believe in protectionism and I don't agree with "Free Trade." I believe in capitalism, as long as we have a tax system that will favor the middle and working class and allow the wealthest of society to pay for most of the cost of government.
Look closer at how I am
Look closer at how I am saying things. At how I frame the argument. I am specifically using the arguments and rhetoric of the Right against them. This has taken some time to come to and is not in common usage yet.
In addition I am making FULL use of American values and not just those selected by the Right. In addition I allude to efficiency arguments –in a way its “Trickle up” not “Trickle down”.
I believe that American Liberalism has two heads: intellectual and heart felt. The latter is only shared by those of a particular disposition and at times falls short of giving us election victories. I have concluded that our compassionate side should be put forth even more strongly AND rational arguments not relying on compassion should be developed across several issues. In this case, economics.
Poor people should not ask for charity in timidity. Americans, all Americans, are obligated to demand that America be AMERICA. The American dream is not for the few to make a killing but for the many to move into the middle class.
Please consider tracking my posts as there is so much to say.
Americans for All Americans
Christian Democrat
I'm with you Jim. Your right, we should use the words of the Right against them. They want to be "compassionate conservatives" however what is compassionate about weakening the middle class so the wealth can get wealthier.
The fact of the matter is the best scenario any wealthy person can have is for a strong middle and working class. It is the wealthy that own businesses and are big investors. The stronger the middle and working class is the more products that can be bought that will make the wealth even weathier. This is the trickle up economy that you mention.
I'm with you Jim, and I've got you tracked.
wbammons, Oh I think
wbammons,
Oh I think you thought my first post here was in response to your post. It was in fact in response to aztec. The indention is sometimes so slight it is hard to see.
Jim
Capitalism
Christian Democrat
I believe in trade, just not in "Free Trade." It is simply the transfer of wealth from the US to other nations, such as, China. The US had a trade policy before the chronic deficits of the 80's, 90's, and 2000's. That policy was one of global trade but not just selling out to corporate interests at the expense of the average American.
If we continue this self-destructive path of "Free Trade" the US will no longer be a superpower and we will lose most of the wealth that we currently have.
American became the most power country in the world as a manufacturing super power. As we see now, China has replaced us as the new manufacturing super power. China will surpass us in due time, unless we change our trade policy.
The Right say that buying imports is "Good for America." It is fine as long as we run a balanced trade account. However buying imports does not create more and new American jobs. That's a fact. For every dollar we spend in the US, that dollar recycles 7 times. For every dollar we spend on imports, that dollar is lost forever.
Look also
at how wages have not kept pace with inflation, and how dishonest the government has been in reporting the rate of inflation. Grab the figures on expendable income of a family of 4 , one working adult in the sixties, and compare that to expendable income of a family of 4 with 2 incomes now.
Mourn not the dead that in the cool earth lie, but rather mourn the apathetic throng, the coward, and the meek, who see the world's great anguish and its wrong, and dare not speak.
Ralph Chaplin
Income Inequality
Christian Democrat
CitizenJane, here's your answer. I pulled this from the US Census website on income inequality. Once again it points the time period of the mid 1970's when the US started running a trade deficit. Immediate after that, income inequality started to show up.
When did household income inequality increase?
Whereas the data on household in-come inequality between 1967 and 1980 are ambiguous, it is clear
that the household income distribution became increasingly unequal beginning in 1981. Although
between 1980 and 1981 the only summary measures to increase significantly were the Atkinson
(e = 0.75) and the MLD, these changes signified the beginning of a period marked by rising
household income inequality.
The 1980s have been widely characterized as a period of rising income inequality. While true,
some of the measures presented here suggest that the rise in inequality started earlier--in the
mid-1970s. While the Gini coefficient was unchanged from 1973 to 1980, the MLD index showed
substantial growth-it rose 5.6 (+/- 2.5) percent between those 2 years. From 1980 to 1986, both
the MLD and Gini measured an increase in income inequality. The Gini coefficient rose 5.5
(+/- 1.9) percent and the MLD increased by 10.9 (+/- 2.5) percent during the same period. The
Gini coefficient also increased from 1986 to 1992. (US Census website)