The foreign trade deficit and the 'recession'

         As worries increase over a possible recession this year, fair trade groups in Washington are making new calls for greater watchfulness on unfair trading practices by China and other competitors.

          Among these groups is the U.S. Business and Industry Council, which represents small and medium-sized manufacturers. A recent USBIC study shows that American manufacturers are not only losing ground to imports in such labor-intensive areas as toy manufacturing and apparel, but in "advanced" or high-tech industries as well.

       Alan Tonelson, senior analyst for USBIC said the "report shows that, even in so-called high-tech industries, where we're supposed to have a natural advantage, U.S.-based manufacturers can't compete effectively on their home turf.  And if they can't prevail at home, how can they compete effectively abroad?"

        "This report shows that dozens and dozens of our key industries are facing the same kinds of import floods that have pushed the U.S.-owned auto industry close to bankruptcy," Tonelson said.

           The fault, he says, lies with the failure of the Bush administration to deal with currency manipulation by Communist China, theft of intellectual property, and the willingness of American companies to move even their most capital intensive production overseas.

          Another group, the Alliance for American Manufacturing, says China's central and provincial governments "have been boosting China's steel production with massive, hidden energy subsidies that include supports for" coal, electricity and natural gas. These subsidies are illegal under China's commitments to the World Trade Organization.

            With the help of these subsidies, China shipped 5.4 million tons of steel to the U.S. in 2006 --more than double the amount in 2005.

               Overall, China accounted for nearly $26 billion of the U.S. trade deficit last October--a five-fold growth in six years. Peter Morici, the University of Maryland economist, says China still devalues its currency by 50 percent.

             Despite this, the Bush administration refuses to cite China as a currency manipulator, an action that would bring about sanctions against U.S. imports of Chinese goods.

           Morici says "apologists for Chinese currency and trade practices point out that U.S. consumers benefit from less expensive products at Wal-Mart and other purveyors of subsidized imports.But these bargains come at high cost--we are saddling our children with debt to foreigners and slashing economic growth."

           So far, the presidential candidates of both parties have said little about China's behavior, about trade deficits, or possible American responses. The exceptions are Rep. Duncan Hunter, R-Calif., and Rep. Ron Paul, R-Texas.

            Both these men have finished far behind the leaders in the Iowa caucuses and the New Hampshire primary, indicating the American people are not much interested in economics. Are you?

                    --Douglas Turner

Comments

[Mark]

If you have lived in WNY for any period of time and dig into it, in spite of what our politicians say the economy here has been bad for a long time. It does not need a genius to figure that in an area which has a lot of people making $9, 10, 11 or 12 an hour that the increased cost of gas, the rise in food prices and the cost of heating a home have a deep impact. I am a small business owner, the recession is already here in WNY.

[bobbycat]

The Republican National Committee can't get Ron Paul off the stage fast enough. He does an unforgivable thing - he criticizes Republicans for violating the very principles of their party. How can you deify Ronald Reagan and genuflect to conservatism while plunging into needless wars, spending the country into bankruptcy and stealing from Social Security and mortgaging our future to our bankers - China?, asks Paul.

(and lest we forget - trashing the Constitution!)

He does something else that irks Republicans. He talks about monetary policy and the falling dollar - things that the average Republican/Fox News viewer knows nothing about. And that's the way Republicans want to keep it.

Of course NBC and ABC won't ask the DEMS about an issue that want to avoid - immigration, but that's another story.

Ron Paul also explains another piece of Republican mythology - that the "surge is working", when no accords have been reached - the whole point of the surge.

And Paul points out another embarrassment - The GOP has no exit strategy.

And Paul reminds the GOP that he is the only REAL Republican left. So where does that leave all the others?

Neither the Republicans, and to a lesser extent, the DEMS want to paint a true picture of America in 2008 and beyond. Neither do the networks. If the subject needs more than a soundbyte explanation - like monetary policy - they skip it.

At least Ron Paul is keeping them honest. Good for him.

(BTW, some disclosure: My vote would have gone for Joe Biden, with Edwards and Obama close behind.)

[BlueStatePrison]

If the surge wasnt working - it would be all over the news and Hillary would be saying "I told you so". All is quiet in the mainstream media. This means less American casualties, and progress in Iraq.

I watched the debate - I thank Ron Paul for bringing comic relief - he thinks he knows it all - but the guy is a clown.

[bobbycat]

The whole point of the surge was to flood an area with troops to quell the violence to buy time - a temporary cessation of violence- in order to negotiate a lasting peace. A peace accord is the goal, or permanent truce, if you will.

A massive infusion of troops quelled the violence, true, but no accord was reached. None.

But every candidate knows that 95% of Americans do not understand what the surge was intended to accomplish. It's not complicated, but too complicated to explain in a sound byte. For the Republicans to admit that the surge didn't work, is to admit that the Bush policy failed.
It's easier for them to lie about it. Besides, the public believes it.

The Dems have pollsters and understand that the public is mis-informed. So rather then argue against the myth, they remain silent.

Popular mythology is usually much more powerful than the truth. That's why myths are popular and the truth is boring. It's easier to go with the flow and adopt a popular myth rather than swim against the tide.

But if you care about the truth (and I'm not sure how many people do) the surge hasn't worked.

[Rick]

The surge HAS worked. BlueState is right- if it hadn't, it would lead every network newcast and every Dem candidate would be talking about its failure. Violence has dramatically fallen in areas where the surge has been implemented. Sunnis and Shias have worked together in those areas to keep the peace and forge local governments. While the national government hasn't come together as hoped, there has been plenty of success both from a security standpojnt and political standpoint at the local levels in Iraq.

[Barton Keyes]

The Bush Administration is "going easy" on China for a number of hard reasons:
# China holds billions of US dollars and US debt obligations. If the US starts to play tough, China has the ability to raise and call.
# Bush needs China to put pressure on North Korea and ensure the current negotiations with them succeed.
# The Chinese population is restive. The Chinese need a surging economy to maintain stability and control. And the Bush Administration fears any internal chaos. It could lead to the military taking control, it could lead to the Chinese stepping up the heat on Taiwan to divert the attention of their people from a stalling economy.
# The business community is exerting pressure on the White House to go easy on China because they still hope to sell billions of widgets to billions of Chinese, and fear any undue pressure will kill the possibility of huge profits.

[MS]

no worries people we have high tech printers that can keep printing dollars when things get bad. Sure China and Saudi arabia own us but it could be worse... :(

[MS]

Im sick of hearing "the surge has worked" We should have had a surge from the start of the war. now 6 years later we say the surge is working... cmon we had generals who told rumsfeld that we needed more troops from the start and he was too dumb to understand. They will shower us with flowers and sweets is all they kept on saying... cant have chicken hawks managing a war when they have zero military experiance...

[MaryLou]

I urge everyone who is reading this to buy or rent Micheal Moores film "Sicko" please watch this film and draw your own conclusions especially in the elcetion year!!!

[Chancellor Carlyle Roberts, II]

Mark said, "If you have lived in WNY for any period of time and dig into it, in spite of what our politicians say the economy here has been bad for a long time. It does not need a genius to figure that in an area which has a lot of people making $9, 10, 11 or 12 an hour that the increased cost of gas, the rise in food prices and the cost of heating a home have a deep impact. I am a small business owner, the recession is already here in WNY."

Mark, there hasn't been an economic recovery in Western New York my lifetime (and I was born in the early 1960s) - it isn't a recession in Western New York, it's a depression!

The federal government's involvement is in its foreign trade policy of buying of allowing the U. S. to buy more from other countries than they buy from us. The rest of it has to do with things a bit closer to home such as: labor unions pricing American workers out of the job market; state, county and local governments regulating and taxing things to death; and this ridiculous 1970s mentality that so many in Western New York still have that somehow manufacturing jobs are the only thing that's going to save us (oh, and that $10 an hour is "really good money").

[Mark]

Chancellor,

I too was born in the early 60's and I could have used depression instead of recession and no recovery ever. And a bunch of second rate politicians with the exception of Brian Higgins who at least askes the questions. The second rate politicians are more concerned with feathering their own nests than moving us forward. My only hope is that Chris Collins proves himself and proves the News dead wrong.

[John]

Chris Collins six sigma program will not save this town but it sure makes more sense then to keep running business as usual.

[DP]

I agree with the poster about China. They have a lot of leverage over us with all the government debt. They need us to keep thier economy going though. Definitely need more fair trade. Ron Paul wants to repeal NAFTA, and CAFTA. Ross Perot was right about this in 92. Why are the Democrats not hammering on this issue besides Edwards??I believe we will see Ron Paul, Mccain, and Romney at the convention. He will definitely make some waves.He will have delegates, and the possibilities to pick up Huckabee`s, etc. when they drop out.

[dp]

Ron Paul wants to repeal NAFTA, and CAFTA. Ross Perot was right about this in 92. It has killed our industry. China would not have so much leverage over us if we would start paying the 9 trillion dollar national debt down. I believe the GOP convention will be brokered with Mitt, Mccain, and Ron Paul. It will be real interesting then.

[James Ziolkowski]

Ron Paul is a fanatic and a loser. Mary Lou must be a ditz. She believes in that cut and paste Michael Moore SOCIALIST fat man garbage.

Go live in Cuba Mary Lou. No one will miss you.

Yeah, the surge is working and Iraq is having a housing boom, because people are coming back.

[dp]

I think Ron Paul really loves this country. From not voting for any taxincreases, unbalanced budgets, or unconstitutional laws. He doesn`t even take his full salary, or participate in the pension plan. He can see the handwriting on the wall.National debt $9 trillion, $54 trillion in entitlements coming, and being the worlds policeman. The man wrote 6 books on economics, and serves on the congressional finance committee. He knows a lot more than any of the other candidates. If he doesn`t get in the other candidates are going to increase the deficit further, and keep printing $$. How much longer can we get away with this??