The U.S. public and politic is becoming polarized by money. There are those who still believe in our system of late, degenerate capitalism…and those who don’t believe. The former are represented, more or less, by the Republicans, and the latter, more or less, by the Democrats.
Choose your illusion.
Of the fifth annual record trade deficit, an administration spokesman said it reflected “more rapid growth” in the United States. We don’t know what air they breathe in Washington, but we suggest it be checked. The biggest single segment of the trade deficit is with China, a country that is growing at least three times as fast as the United States. The trade deficit with China alone reached $232.5 billion last year – up 15% from the year before.
Democratic spokesperson Nancy Pelosi, meanwhile, said this:
“The consequences of these persistent and massive trade deficits include not only failed businesses, displaced workers, lower real wages and rising inequality, but also permanent devastation of our communities.”
She and 13 of her colleagues addressed a letter to the White House, noting that more than three million manufacturing jobs have been lost since Bush took office, with about one-third of those losses attributed to the rising deficit in manufactured goods.
This may be true, but it is not BECAUSE of the trade deficit. Rather, both the trade deficit and the financial damage Pelosi sees are symptoms and consequences of ailments. Now, will they be cured by the Democrat’s horse pills?
The Republicans maintain that the trade deficits are natural and healthy. Stick with ‘free trade,’ they say.
But there’s nothing in the theory or the history of free trade that describes what is going on today. The central bank of the world’s largest economy has fixed the price of its currency at artificially low levels. The central bank of the world’s second largest economy has fixed the price of its currency even lower. And with all this artificially cheap money and credit available to them, the world’s financial intermediaries have run wild.
But do the Democrats have any shadow of understanding of what is going on? Do they have any chemical trace of real will to do anything about it – that is, to put the dollar or the U.S. government on sound financial footing?
Ha…ha…ha… Oh stop it! You’re going to make us crack a rib, laughing so hard…
The Daily Reckoning Australia