Economic Imbalance

Brad Setser is an excellent economist, and this article proves it by presenting a effective summation of the Trade data. Now, that said, it is time for the other Shoe to drop. The reality of the U.S. Trade imbalance: The American economy has become "Monocrop", as agricultural economies used to be described. American industry has abandoned competition in the Labor industries, even of profitable sectors because Business management did not want to resolve the Health and Retirement Benefits issues. This has left about 12 million Workers jobless, and caused Imports to skyrocket. No amount of increased American Exports, based solely on technological products and agricultural production, will cancel the escalating American loss of the American Retail market. We must spread Our Production spectrum.

What happens if We do not spread Our Production?

Education, first of all, is not the Road to Full Employment. A basic tenet states that the higher the level of Specialized Labor, the more Capital must be vested in such Labor to maximize the potential of that Labor. The News is full of success stories–Nerds who hit it big! This is a limited market for Labor, as Wealth concentrates solely in the Royalty recipients and Purchasers farm the skilled labor connected to Patents’ exploitation out to cheaper foreign labor. The sheer amount of Capital necessary to employ all Specialized Labor effectively ranges even greater than the Trade imbalance; the American economy will never keep pace with any increased Volume of Graduates in any area of Specialty. The Push to Education only guarantees Our Unemployed and Underemployed will have a vast number of educational Degrees.

The Devaluation of the Dollar stands as the worst farce. It simply means that American Consumers will not be able to afford the Imports which they are now dependent upon. Economists often doubt my evaluations, but the Dollar could be devalued until the American lifestyle could equal Our Grandparents of the late 1930s, and We would still not have achieved a sustainable Trade balance. (Hint: Foreign economies will not outsource production to the United States, if they can produce equal or better Product at equivalent Price.) The American economy must again learn to support itself, and do so with resumption of domestic production of the greater majority of common Products utilized in the United States.

Economists have ranted against Protectionism since the Great Depression. The fact of the matter can be summed up as: No amount of Trade could possibly have forestalled the Great Depression, because of Worldwide shortage of funded Consumers. The Smoot-Hawley Act was simply a convenient Scapegoat for the disaster of Overcapitalization, Overstocked Warehouses, and lack of a Retail market. I am not suggesting We should adopt such a Protectionist tariff system, but Economics stands as a balancing act, one in which Extremes must be avoided else Sectors will begin to fail. A sensible Policy to limit Import usage and growth stands as long overdue. lgl