Rogoff: Beware of Wounded Lions
by ilene - November 2nd, 2010 10:02 pm
Rogoff: Beware of Wounded Lions
Courtesy of Mark Thoma, Economist’s View
Kenneth Rogoff says the rest of the world should not ignore the recent threats of protectionist measures coming from the US:
Beware of Wounded Lions, by Kenneth Rogoff, Commentary, Project Syndicate: G-20 leaders who scoff at the United States’ proposal for numerical trade-balance limits should know that they are playing with fire. …
According to a recent … report…, fully 25% of the rise in unemployment since 2007, totaling 30 million people worldwide, has occurred in the US. If this situation persists, as I have long warned it might, it will lay the foundations for huge global trade frictions. The voter anger expressed in the US mid-term elections could prove to be only the tip of the iceberg…, the ground for populist economics is becoming more fertile by the day. …
True, today’s trade imbalances are partly a manifestation of broader long-term economic trends, such as Germany’s aging population, China’s weak social safety net, and legitimate concerns in the Middle East over eventual loss of oil revenues. And, to be sure, it would very difficult for countries to cap their trade surpluses in practice: there are simply too many macroeconomic and measurement uncertainties.
Moreover, it is hard to see how anyone – even the IMF, as the US proposal envisions – could enforce caps on trade surpluses. The Fund has little leverage over the big countries that are at the heart of the problem.
Still,… world leaders … must recognize the pain that the US is suffering in the name of free trade. Somehow, they must find ways to help the US expand its exports. Fortunately, emerging markets have a great deal of scope for action.
India, Brazil, and China, for example, continue to exploit World Trade Organization rules that allow long phase-in periods for fully opening up their domestic markets to developed-country imports… A determined effort by emerging-market countries that have external surpluses to expand imports from the US (and Europe) would do far more to address the global trade imbalances … than changes to their exchange rates or fiscal policies. …
American hegemony over the global economy is perhaps in its final decades. China, India, Brazil, and other emerging markets are in ascendancy. Will the transition will go smoothly and lead to a global economy that is both fairer and more prosperous?
However much we
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The Trade Deficit Nightmare
by ilene - August 15th, 2010 5:40 pm
The Trade Deficit Nightmare
Courtesy of Michael Snyder of Economic Collapse
When they hear the word deficit, most Americans immediately think of the U.S. government budget deficit which is rapidly spiralling out of control. But that is not the only deficit which is ripping the U.S. economy to shreds. In fact, many economists commonly speak of the "twin deficits" that are destroying the U.S. financial system. So what is the "other deficit" that they are referring to? It is the trade deficit. Every single month, we buy much more stuff from the rest of the world than they buy from us. That means that every single month there is a massive outflow of wealth from the United States. Every single day, America becomes just a little bit poorer as Americans continue to run out and fill up their shopping carts with cheap plastic crap from China and dozens of other emerging economies.
Not that trade is a bad thing. Trade can actually be a very good thing. But the gigantic trade imbalances that the United States has been running for years are absolutely bleeding us dry. Unfortunately, our politicians have just stood idly by as each month we continue to transfer massive amounts of wealth out of the United States.
The U.S. Commerce Department recently announced that the U.S. trade deficit increased by 18.8 percent in June to $49.9 billion. Most analysts had expected the figure to be somewhere around 41 to 43 billion dollars.
In the month of June, imports rose to approximately $200 billion while exports fell to about $150 billion.
So can we afford to have a net outflow of 50 billion dollars each and every month?
Of course not.
We had so much wealth as a nation that we could afford to do this for a while,…
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The Economic Elite Vs. The People of the United States of America (I – III)
by ilene - April 24th, 2010 4:41 pm
Full Report: The Economic Elite Vs. The People of the United States of America (Parts I-III)
Courtesy of David DeGraw, AmpedStatus Report
This report was originally released as a six-part series. The first part was published on February 15, 2010. The last part was published on February 27, 2010.
- I: Casualties of Economic Terrorism, Surveying the Damage
- II: The Rise of the Economic Elite
- III: Exposing Our Enemy: Meet the Economic Elite
- IV: The Financial Coup d’Etat
- V: Overcoming the Divide and Conquer Strategy
- VI: How to Fight Back and Win: Common Ground Issues That Must Be Won
> Download full report with graphics and links.
> Download printer-friendly version.
but the success of its disappearing act depends on equally strenuous efforts
on the part of an American public anxious to believe in egalitarian fictions
and unwilling to see what is hidden in plain sight.”
– Michael Lind, To Have and to Have Not
It’s time for 99% of Americans to mobilize and aggressively move on common sense political reforms.
Yes, of course, we all have very strong differences of opinion on many issues. However, like our Founding Fathers before us, we must put aside our differences and unite to fight a common enemy.
It has now become evident to a…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site