Diary

The Dirty Little Secret Behind The Job Market Sucking

The jobs will not return until the factories do.

US World trade deficit from 1987 – 2010……………………..Negative 8.8 trillion dollars

http://www.census.gov/foreign-trade/balance/c0015.html

The largest transfer of wealth in history has gone from the America Middle Class into the pockets of despots & multinational corporations due to our trade policies.

Since 2007 we have sent the Chinese over 1 trillion dollars of our money in a dollar draining (never to return) negative trade deficit.

DOLLAR DRAIN DEFINITION

A country that imports more goods from overseas than it exports to foreign countries is, in effect, sending its currency overseas in return for those goods. This can lead to a shortage of currency in circulation at home, creating a tight money situation in which companies have difficulty obtaining the loans and funds they need to grow or to continue operations. Consumers feel the effects of dollar drains as well, since they cannot obtain loans for the purchase of property or for other immediate needs; a shortage of currency in the home economy affects every aspect of that economy.

MAJOR RISKS OF DOLLAR DRAINS

A ready supply of circulating money is necessary for economies to engage in setting monetary policies; loosening or tightening the supply of money in the market is one of the most important tools government has in determining fiscal policy. When there is a shortage of currency in the economy, the government cannot exercise this control over the economic situation. If the dollar drain continues for a significant length of time, the government may be forced to curtail foreign purchases or to borrow heavily from other countries in order to meet its obligations. This can lead to inflation and devaluation of the currency on the international FOREX market.

METHODS FOR ADDRESSING DOLLAR DRAIN

Governments experiencing dollar drains are left with limited options. They can attempt to control imports through tariffs or barriers to foreign trade; existing agreements may make this option impractical, however.

**Most analysts believe the long-term solution to dollar drain is to promote and encourage consumers to purchase goods manufactured in their own country where possible; this can stem the flow of currency out of the country and lessen the trade differential over time.**

My new favorite quote

“pernicious indulgence in the doctrine of free trade seems inevitably to produce fatty degeneration of the moral fiber.”

Republican Teddy Roosevelt

President Reagan’s pragmatism contrasted strongly with the utopian dreams of free traders today. Ever since Edmund Burke criticized the French philosophers, Anglo-American conservatism has rejected ivory-tower theories that disregard the realities of everyday life.

Modern free traders, on the other hand, embrace their ideal with a passion. They allow no room for practicality, nuance or flexibility. They embrace unbridled free trade, even as it helps China become a superpower. They see only bright lines, even when it means bowing to the whims of anti-American bureaucrats at the World Trade Organization. They oppose any trade limitations, even if we must depend on foreign countries to feed ourselves or equip our military. They see nothing but dogma — no matter how many jobs are lost, how high the trade deficit rises or how low the dollar falls.

Conservative statesmen from Alexander Hamilton to Ronald Reagan sometimes supported protectionism and at other times they leaned toward lowering barriers. But they always understood that trade policy was merely a tool for building a strong and independent country with a prosperous middle class.

I wonder how many other conservatives here on Red State think like me and see our trade policies as severely lacking in good negotiating technique?