Thursday, August 28, 2003
I read a couple of articles recently that really gave me pause about where the world and in particular the US may be going in the future from an economic point of view.
Robert Samuelson's "A Crackup for World Trade?" in the August 25th edition of Newsweek magazine, which you can read here, examines the implications for the world economy and the US's standing within it based on the growing negative balance of trades the US had been building up in recent years. He paints a pretty scary picture about how, if other countries don't replicate the US economy’s ultra consumerist pattern of spending and debt build-up, instead of hoarding their trade surpluses, the global free-trade market will eventually collapse. He makes some arguments for how the free markets only help make poorer countries richer if everyone does their part by buying goods from each other. He points out that this will only happen if Europe, and the Far East buy more US goods and Latin America gets out of debt. In the meantime, the US loses more jobs, our trade deficits continue to grow as we buy more than we sell to others and the dollar depreciates. Now the latter factor makes imported goods relatively more expensive to US shoppers which should slow down their thirst to consume but if foreign shoppers don’t pick up the slack by buying more US exports which should be now relatively cheaper, there could be real problems.
An August 17th Op-ed column in the New York Times by Louis Uchitelle entitled "As Factories Move Abroad, So Does U.S. Power" (you can read an abstract here but may have to pay a small fee to read the whole thing), talks about exactly what some of those problems are. Manufacturing companies, from cars and computer chips to clothes and sneakers, have moved their factories out of the US to take advantage of cheap foreign labor and we buy those goods when they are exported back to us. His argument goes that as this trend continues, we increasingly lose our power to buy from others if we are not actually manufacturing goods to export to other countries and make money from.
Now I am far from a socialist or radical left-wing thinker and think that a free-market economy is probably as good a system as you’re gonna get if it’s working right and everyone plays fair (hello heavily-government subsidized US farmers!). But reading these articles, it's pretty clear that the seeds for future problems with US economy (from which all other power a country can wield, political, military or otherwise flows) seem to be getting sown now. As the current government snowballs us with scare tactics about “possible” future attacks on the US by terrorist or foreign “evil-doer’s”, half-truths to justify pre-emptive military actions and chips away at everyone's civil liberties under the guise of protecting those same "freedoms" (thank you John Aschroft & co.), the looting of the economy with tax cuts that don't benefit anyone but the super-rich (check your property, state and municipal tax bills next year before you jump for joy about getting a rebate check) and record breaking federal deficits continue unchecked and unquestioned.
I live a pretty good life now even as I have time on my hands to write because I don’t work full time. On the other hand, it scares me a little wondering whether it'll always stay this good or if anyone else even cares about what’s happening to the US in the long term. This is really way too much stuff to tackles in a web log but I think y’all get the idea. Sh!t is very real. That’s enough ranting to cover the musings on politics party of my web log mandate for a while. Back to the regularly-scheduled glib talk about music some time soon.
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Robert Samuelson's "A Crackup for World Trade?" in the August 25th edition of Newsweek magazine, which you can read here, examines the implications for the world economy and the US's standing within it based on the growing negative balance of trades the US had been building up in recent years. He paints a pretty scary picture about how, if other countries don't replicate the US economy’s ultra consumerist pattern of spending and debt build-up, instead of hoarding their trade surpluses, the global free-trade market will eventually collapse. He makes some arguments for how the free markets only help make poorer countries richer if everyone does their part by buying goods from each other. He points out that this will only happen if Europe, and the Far East buy more US goods and Latin America gets out of debt. In the meantime, the US loses more jobs, our trade deficits continue to grow as we buy more than we sell to others and the dollar depreciates. Now the latter factor makes imported goods relatively more expensive to US shoppers which should slow down their thirst to consume but if foreign shoppers don’t pick up the slack by buying more US exports which should be now relatively cheaper, there could be real problems.
An August 17th Op-ed column in the New York Times by Louis Uchitelle entitled "As Factories Move Abroad, So Does U.S. Power" (you can read an abstract here but may have to pay a small fee to read the whole thing), talks about exactly what some of those problems are. Manufacturing companies, from cars and computer chips to clothes and sneakers, have moved their factories out of the US to take advantage of cheap foreign labor and we buy those goods when they are exported back to us. His argument goes that as this trend continues, we increasingly lose our power to buy from others if we are not actually manufacturing goods to export to other countries and make money from.
Now I am far from a socialist or radical left-wing thinker and think that a free-market economy is probably as good a system as you’re gonna get if it’s working right and everyone plays fair (hello heavily-government subsidized US farmers!). But reading these articles, it's pretty clear that the seeds for future problems with US economy (from which all other power a country can wield, political, military or otherwise flows) seem to be getting sown now. As the current government snowballs us with scare tactics about “possible” future attacks on the US by terrorist or foreign “evil-doer’s”, half-truths to justify pre-emptive military actions and chips away at everyone's civil liberties under the guise of protecting those same "freedoms" (thank you John Aschroft & co.), the looting of the economy with tax cuts that don't benefit anyone but the super-rich (check your property, state and municipal tax bills next year before you jump for joy about getting a rebate check) and record breaking federal deficits continue unchecked and unquestioned.
I live a pretty good life now even as I have time on my hands to write because I don’t work full time. On the other hand, it scares me a little wondering whether it'll always stay this good or if anyone else even cares about what’s happening to the US in the long term. This is really way too much stuff to tackles in a web log but I think y’all get the idea. Sh!t is very real. That’s enough ranting to cover the musings on politics party of my web log mandate for a while. Back to the regularly-scheduled glib talk about music some time soon.
