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Opinion Archive Our Opinion Archive lists all articles written by AmericanEconomicAlert.org columnists, as well as Op Ed articles submitted by you - our readers. For facts, figures, and an introduction to U.S. international economic and trade policy, be sure to check out our Globalization Bulletins. |
| December 2008 |
| After Near Zero Rates, What's Next for the Fed? |
| Bush's Auto Plan Will Test Unions' Influence with Obama The Bush auto plan calls for readjustment in the UAW's salary structure, benefits packages, and work rules. If these are not rationalized to bring the Big Three and the UAW more in line the foreign transplant auto makers asembling cars and trucks in the United States, it is doubtful that the Big Three can become viable. They, in turn, will then be asking for more federal money to survive. The auto industry is a very cyclical business. The current downturn is a golden opportunity for management and labor to strike a deal that looks forward toward long-term profitablilty, not backward to the heyday of the U.S. auto industry. It will ultimately be up to then President Obama to enforce a rational plan gong forward. |
| U.S. Records Huge Current Account Deficit; Risk of Deeper Slowdown Increases The trade deficit continues to show that the U.S. economic crisis cannot be resolved until America starts producing here at home the manufactured goods that its people need and want. There are three main ways to create wealth: manufacturing, agriculture, and resource extraction. Unless the Obama administration takes drastic steps to restore our domestic manufacturing base -- including reentry into whole industries that we have lost -- all the money that the Fed can print and Congress and the Executive can hand out will have been wasted. |
| USBIC Decries Senate Republicans' Torpedoing of Big Three Automakers Restructing Package Kevin L. Kearns Here is the latest USBIC press release on the auto rescue package. Senate Republicans put ideology and party loyalty first and American factories and workers last in their disgraceful submarining of the auto company restructuring plan. The most vocal Republican senators just happen to come from states that have paid millions of taxpayer dollars to lure foreign auto assembly plants to those states. Where is the Republican cost/benefit analysis showing that it would cost more to extend guaranteed bridge loans to the Big Three automakers than to take millions of currently employed, tax-paying Americans and turn them into tax consumers in the form of unemployment benefits, food stamps, and Medicare services -- not to mention transferring their pensions to the Pension Benefit Guarantee Corporation to be funded by the remaining taxpayers. |
| Congress Must Ensure that the Big Three Bailout is Made-in-America Alan Tonelson In the auto bailout hearings and discussions, far too little attention has been paid to the Big Three automakers' proven tendency to offshore their work to try to save costs. In passing this bailout, Congress must stipulate with a great deal of certainty that any monies received be spent in America -- and that, since money is fungible, other funds available to the Big Three also not be used to offshore production. If we are to save the American auto industry, which we should, it must behave like an American auto industry. |
| Meanwhile, Meltdown in Motor City Kevin L. Kearns Here is a piece on the plight of the U.S. auto industry that I published in June, 1991 in the Washington Post Sunday Outlook Section. All the same issues exist today, except that the current recession is much more severe than that of 90-91 and the foreign automakers have made much greater inroads into our economy. Make no mistake, if the Big Three go under, much of domestic American manufacturing goes with them. Their suppliers also supply other industries, but cannot survive without the auto component of their businesses. These other industries then must turn offshore. The manufacturing know-how, the R&D, the process engineering, the individual skills all go -- and cannot be reconstituted simply by throwing money at business. "Trillions for finance, not a red cent for manufacturing" seems to be the battle cry on Capitol Hill. American self-hate may destroy American manufacturing and with it the American middle class way of life. |
| Job Losses Accelerate: Is the Economy Headed for Depression? Kevin L. Kearns The choices for the new president are simple. It’s either renaissance or decline. Fix the banks, trade with China, and energy policy or become America’s Nero. |
| If Detroit Dies, So Does the Nation's Manufacturing Economy Kevin L. Kearns Hey, Congress and the Executive! Want to try to manage our nation's way out of a depression? You've done really well in helping to create the current recession with your hands-off, let-free markets-be-free attitude; your too-little-too-late stimulus; and your inept attempts to bailout the banking system. Why don't you let the Big Three automakers go under and see how you do getting the country out of a full blown depression -- after domestic manufacturing collapses and the real economy dies? |
| November 2008 |
| CHINA DEFICIT KEEPS RISING AS U.S. EXPORTS TANK Alan Tonelson The decline in the September trade deficit masks a serious decline in manufacturing. U.S. exports to China fell sharply. The figures in general show that the so-called "export boom" highly touted by free trade advocates is over -- although it never existed in the first place. |
| Dire Economic News Present Immediate Challenges for President-Elect Alan Tonelson The dismal jobs report today confirms that the U.S. economy is sliding deeper into recession. Unless President Obama hits the trifecta of fixing the banks and financial system, curbing oil imports significantly, and reducing the trade deficit by, inter alia, ending predatory Chinese trade practices, we are in for an economic free-fall that will make the current economic situation look like a walk in the park. |
| Fatal Flaws in the Theory of Comparative Advantage Alan Tonelson David Ricardo's two-century old Theory of Comparative Advantge still rules in the world of trade theory. But does it rule in the real world? In many cases it does not. Ricardo knew that some of his assumptions were unrealistic. And he feared that certain situations would render his theory inapplicable. In fact, some of these have occurred. So while still useful, the Theory of Comparative Advantage is no longer dispostive. |
| October 2008 |
| Export-led Growth Remains a Panacea for Many Businessmen and Policymakers Alan Tonelson In spite of massive and continuing trade deficits, and the fundamental role that off-shoring and globalization is playing in the current worldwide financial crisis, free trade true believers still have no doubts that salvation lies just around the corner -- with the passage by Congress of the latest free trade scheme with another impoverished country, in this case Colombia. Never mind taking back the world's largest and most lucrative market, the American market, from all those who target it knowing that it is the real prize. |
| Needed: A Comprehensive Strategy to End the Economic Crisis Alan Tonelson The current steps taken by Treasury and the Federal Reserve to end the economic crisis deal with symptoms not underlying causes. The economy will continue to spiral downward unless much more direct action is taken, including, first and foremost, the rebuilding of our manufacturing base, with its ability to create good jobs and wealth while satisfying consumer demand from factories here at home. |
| Trade Deficit Remains Roughly 5 Percent of GDP in August; Job Losses Mount Alan Tonelson Simply put, money spent on Middle East oil, Chinese computers, televisions and coffee markers, and Japanese and Korean cars can’t be spent on U.S. made goods and services unless offset by a comparable amount of exports. However, this is not happening due to foreign trade barries, currency manipulation, subsidies, intellectual property theft, and a host of other foreign unfair trade practices. Since U.S. imports exceed exports by about five percent of GDP, the trade deficit creates an enormous drag on demand for U.S.-made goods and services. Along with the credit crisis and resulting slowdown in new housing and commercial construction, the trade deficit is closing American factories, driving up unemployment, and adding significanty to the current economic crisis. |
| Why Federal Reserve Policy is Failing Alan Tonelson Over the last twenty years, a high-risk, unregulated, parallel banking system has emerged alongside the traditional banking system. For at least ten years, since the Federal Reserve was forced to act to bailout the failing hedge fund Long Term Capital, policy makers, banking officials, politicians, and the more financially oriented among the general public have known of this parallel system and its very substantial flaws. Yet it has remained unregulated. Until Paulson and Bernanke move to deal with this system, there can be no real financial stability. |
| Latest Economic Data Confirms Hard Times Lie Ahead Alan Tonelson The financial bailout may help with the credit crisis, but it does not address the crisis in American wealth creation caused by the offshoring of our manufacturing base. The most recent economic statistics indicate that we are in for some very hard times ahead unless the fundamental problems with manufacturing and offshoring trade policies are addressed forthrightly. |
| September 2008 |
| After the Bailout, Congress Must Get Down to the Real Economic Policy Work Alan Tonelson The difficulty of crafting an acceptable bailout package for the financial services industry demonstrates in part why nothing has been done about the much deeper and more serious long-term national crisis in American manufacturing. Many of manufacturing's problems are the result of decades of misguided U.S. trade policies, which have sent productive capacity, good jobs, essential R&D, and wealth creation offshore. Excesses in the finacial sector -- most of them overlooked for years by the Fed, regulators, and the Congress -- must be addressed. But just as a nation can't consume its way to renewed prosperity, it can't generate economic growth by swapping largely worthless financial instruments between banks and the Treasury. The goods-producing sectors of the economy must be restored as the basis of economic growth and wealth creation. To do so requires a complete overhaul of U.S. trade and international economic policies. That must be the number one job of the new presidential administration and the new Congress. |
| Few Differences Exist on China Policy between Obama and McCain William R. Hawkins Recent position papers issued by the two US presidential candidates in Beijing on the American Chamber of Commerce website indicate no critical new thinking on China and very little difference between the Obama and McCain policy prescriptions. It appears as though neither the Beijing regime nor the US multinationals in its thrall have much to worry about from the next US administration. |
| Can the US Depend on an "International Defense Industrial Base?' William R. Hawkins The Europeans have long wanted the American taxpayer to bail out their shrinking defense industries. That's why they have wheedled their way into the DOD procurement process. But make no mistaks. These are competitors to American defense firms and do not have American national interests at heart. In short, we are risking the health and longevity of our defense industrial base by treating these so-called allies as equals to our own firms. |
| Reasons to Cheer Lehman's Demise William R. Hawkins Banking used to be about raising capital that could be put to productive use elsewhere in the economy. The nexus between American banking and a healthy and thriving domestic manufacturing establishment has long been broken. Banking today, especially Wall Street investment banking, is about financial gimmickery and big bonuses for those that think up the gimmicks. This situation has to change radically for the U.S. economy to return to anything resembling good health. |
| John McCain: Free Trade Poster Boy in the White House? Alan Tonelson John McCain's record on free trade couldn't be clearer -- or worse. He has never met a free trade agreement he didn't like. His entire political career has been one long paean to free trade and a series of attacks on anyone whose views differ from his as protectionist. In short, McCain is the perfect poster boy for free traders, mercantilist countries, outsourcers, and multinational corporations. |
| August 2008 |
| Is the Federal Reserve Still A Central Bank? Alan Tonelson The Federal Reserve and the Treasury Department, managed by Ben Bernanke and Hank Paulson repsectively, have badly mismanaged the subprime and credit crises -- with the attendant banking crisis -- by not imposing the necessary reforms on the money center banks on Wall Street and the banking industry in general. Instead they have entered the probably permanent business of propping up these banks through loans at the "discount window" taking collateral in the form of questionable or even worthless securities. Is this any way to run a banking system in the world's largest, most important economy? Hint: NO! |
| Trade Deficit Continues to Show U.S. Competitiveness Problems Alan Tonelson Although the U.S. trade deficit shrank in June, the gap widened in manufacturing and high-tech goods. The trend for U.S. competitiveness in these vital areas is not good. |
| US Must Adopt New Approach to Deal with Chinese Economic and Strategic Challenge William R. Hawkins The current Olympics are eerily reminiscent of the 1936 Berlin Olympics -- when another rising, authoritarian power sought to showcase for the world its capabilities. China is posing an increasing economic challenge to the United States and the global trading system. Unless the United States begins to recognize that fact and adapt its trade and economic policies to deal with the reality of Chinese cheating -- whether through currency manipulation, IP theft, illegal subsidies, etc. -- global imbalances will grow even greater and the entire world economy will be put at risk. |
| Trade Deficit Eases Slightly in June; Job Losses Mount William R. Hawkins Overdependence on Mid-East oil, currency manipulation by China to keep its goods cheap, and sharp practices by Japanese and Korean automakers along with mismanagement by the U.S. Big Three automakers are the major factors in our gargantuan trade deficit. The Bush administration and Congress dither while the longer-term prospects for the U.S. economy and living standards for average Americans get ever worse. Cutting the trade deficit in half would boost U.S. GDP growth by one percentage point a year. Lost growth is cumulative. Thanks to the record trade deficits accumulated over the last 10 years, the U.S. economy is about $1.5 trillion smaller. This comes to about $10,000 per worker. When will Washington act? |
| Latest US Productivity Gains Are Good News for Inflation William R. Hawkins Solid gains in productivity should allow the Federal Reserve to stop fretting about inflation -- especially that caused by oil prices, which it can't control in any case. Instead, the Fed should turn its sights toward banking reform and regulation in order to end the subprime and credit crises. If the Fed can't act quickly and decisively -- and so far it has dithered, then Congress must get serious and step in as soon as it returns from recess with real reform, not more get-reelected rebate checks that have nothing to do with the structural reforms needed to allow the economy to grow. |
| Personal Income Up, but Consumer Spending Lags William R. Hawkins The economy is still chugging along thanks to the stimulus checks, whihc largely hit in May. Some of the money was saved, but consumers are not in a spending mood with all the troubles that beset the economy. The Fed seems oblivious to its main task, regulating the banking system to ensure that the loans it generates are worth something to investors -- which today they are not, so the mortgage and credit crises continue. |
| A Federal Reserve with Its Eye on the Rear View Mirror William R. Hawkins The scoop on the Fed's likely unhelpful action. |
| What the Demise of the Doha Trade Talks Really Means Kevin L. Kearns and Alan Tonelson The collapse of the Doha Round of world trade talks creates an opportunity for the United States to recraft it misguided trade policies and try to bring sustainable growth to the U.S. and world economies. Unless it does so, the current, export-to-the-United-States-to-grow policy of the rest of the world will ultimately end in the implosion of the world trading system. |
| Economy Loses 51,000 Jobs in July; Prospects Worsen Kevin L. Kearns and Alan Tonelson Bernake and Paulson don't get it. Congress is largely asleep at the switch. The burning questions are how to reinvigorate domestic manufacturing (new, unilateral, and effective trade policies) and how to bring massive malfeasance in the financial and banking sectors under control (regulate these industries more comprehensively). If various banks and Wall St. investment firms are "too big to fail," why doesn't the same principal apply to many large domestic manufacturers -- especially the automakers? |
| July 2008 |
| How to Interpret the July 31 GDP Data and the August 1 Jobs Report Kevin L. Kearns and Alan Tonelson The economy is likley to get worse before it gets better. Professor Peter Morici shows how to interpert the latest government data. |
| When Will Henry Paulson Learn? Kevin L. Kearns and Alan Tonelson The various government rescue plans are ill-advised and inadequate to address the underlying causes of the multiple crises facing the U.S. economy. Treasury Secretary Henry Paulson and Fed Chairman Bernanke don't seem to understand the nature and causes of the crisis -- which means more rough sailing ahead. |
| USBICEF's Tonelson Testifies on Inadequacy of Government Trade Help for Domestic Manufacturers Alan Tonelson U.S. government assistance to smaller domestic American manufacturers is largely non-existent as they try to penetrate foreign markets or respond to foreign predatory trade practices at home and abroad. |
| Despite Slight Drop in May, Massive Trade Deficits Continue to Suck Growth out of the US Economy Alan Tonelson Although the U.S. trade deficit narrowed ever so slightly in May - due to a drop in oil imports, it is still running at gargantuan levels. The effect is to destory more productive jobs and industries in internationally competitive sectors, which add to national economic growth, and shift economic activity into less productive, lower-paying, and non-internationally competive sectors. |
| June 2008 |
| Current Account Deficit Surges in First Quarter Alan Tonelson In the first quarter, foreign governments loaned Americans $173.5 billion or 4.9 percent of GDP. That well exceeded net household borrowing to finance homes, cars, gasoline, and other consumer goods. The Chinese and other governments are essentially bankrolling U.S. consumers, who in turn are mortgaging their children’s income. |
| April Trade Deficit Jumps; Exports to China Sink Alan Tonelson Another monthly disaster in trade. How long can we keep borrowing cash from foreigners to buy their foreign-made goods? The current U.S. trade position, a continuing deficit in excess of five percent of GDP, gives even Ponzi schemes a bad name. |
| What to look for in Tuesday’s Trade Deficit Data Alan Tonelson Although the devil is always in the details, one doesn't need a magnifying gless to know that the financial position of the United States in the world econoy continues to deteriorate substantially. Our debt to foreigners stands at $6.5 trillion. Each month we borrow $50 billion to buy their manufactured goods. The borrowing, which is enabled by the fact that there is currently no good alternative to the dollar as the world's reserve currency, cannot go on indefinitely. Even economic superpowers get tapped out. The respective downfalls of Spain, Holland, and Britain in past centuries points the way to our future. |
| Extending the Fed's New Emergency Credit Facility is a Threat to Market Stability Alan Tonelson It may have been necessary for the Federal Reserve to intervene recently in credit markets with a new borrowing facility to prevent an overall market meltdown. But the Fed, the Executive, and the Congress have been asleep at the helm since the failure of the hedge fund Long Term Capital in 1998. That incident revealed that there were large, unregulated sectors of the financial industry whose misjudgements, shenanigans, and outright lies threatened the entire U.S. economy. Before willy nilly extending the new credit facility, a much more comprehensive regulatory structure than has so far been proposed is an absolute necessity. |
| May 2008 |
| Trade and the White House Race Part II: Does Obama Really Care? Alan Tonelson Does Barack Obama really care about trade policy -- or are his newly found, but very limited critiques merely political rhetoric? His famous "bitter" remark to well-heelded San Francisco funders indicates he still does not comprehend the issue the way a serious presidential candidate should. |
| The Sorry State of the U.S. Banking Industry Alan Tonelson Although the U.S. banking system has been kept afloat by unprecedented Federal Reserve intervention, the fundamental need for reform is not being paid more than lip service. Until stringent reforms are put in place - reforms that stop Wall St. banks from pushing incomprehensible packages of loans designed to put hugh bonuses in the hands of their creators, the credit crisis will continue to haunt the economy. |
| U.S. Trade Deficit in March Reduced by Import Slowdown, not "Export Boom" Alan Tonelson A close look at the March trade figures highlights the leading role played by a slowdown in imports in reducing the U.S. trade deficit. The media and other free trade boosters have overstated the role of the so-called "export boom" in reducing the deficit. And surprisingly, it is commodities, due to higher farm prices , that are pacing foreign sales, not manufactured goods -- which produce higher-paying jobs, more R&D, greater numbers of patents, greater productivity growth, and a higher standard of living for Americans. |
| What to Watch for in Wednesday's Consumer Price Data Alan Tonelson Professor Morici takes us behind the numbers in the Consumer Price Index and tells us what the key figures mean for businesses, consumers, and the Federal Reserve. |
| U.S. Productivity Advances 1.9 Percent: Good News for Inflation, Wages, and the Stock Market Alan Tonelson Productivity growth helps keep inflation at bay and allows the Federal Reserve more latitude to lower interest rates and combat the subprime crisis and slower economy. It also allows for moderate wage growth, an important factor in our consumption economy. |
| Key Trade Deficit Data Due from Commerce Department Friday Alan Tonelson More bad news is likely on the trade front on Friday, when the March trade data are released by the U.S. Commerce Department. Whatever the exact figures, the deficit is likely to exceed 5 percent of GDP, adding further to the mountain of foreign debt and displacing more Americna jobs. |
| Trade and the White House Race (Part One): Hillary the Trade Warrior? Alan Tonelson Has Hillary emerged as the champion of American manufacturers and their employees -- or is her rhetoric merely campaign bluster designed to win indusrial states away from her rival? So far she's taken halting steps in the right direction, but American voters need to hear her set out a much more solid and comprehensive program. |
| April 2008 |
| McCain Confirms GOP Short on Ideas -- but so are the Democrats Alan Tonelson Winning elections with catchy slogans is part of the U.S. political process. But that's where it stops. A president can't govern with slogans - although he might try. All three top candidates have demonstrated no grasp whatsoever of the dimensions of the economic crisis facing this country, a crisis that the winner will have to grappple with on day one of his or her presidency. Forget about experience when the red phone in the White House rings at 3:00 AM. The real challenge comes when the mailman arrives with the nation's bills in mid-morning. |
| March 2008 |
| Congress Sidetracked on Patent "Reform" and Colombia FTA while Recession Accelerates Alan Tonelson With the U.S. economy rapidly slowing and the Fed printing money to bail out unscrupulous Wall Street investment bankers, Congress has much more urgent considerations than an innovation-killing, market-roiling patent bill and a job and factory outsourcing trade agreement with Colombia. Yoo-hoo, anybody at home on Capitol Hill? |
| Controlling Imports Would Yield the Biggest Stimulus Alan Tonelson The stimulus package -- whatever the political payoff for those running for reelection, or a place in history -- is certainly too little, too late. Staring Congress and the Administration in the face is our gargantuan trade deficit. Reducing the trade deficit would provide years of additional economic growth, which in turn would be cumulative -- not a one-time, anemic booster shot. The advantges are obvious but apparently the political courage is lacking. Instead, the nation is increaslingly put into hock to foreign countries and companies, who no doubt have our best interests at heart. |
| February 2008 |
| U.S. 2007 TRADE DEFICIT DROPS ON FALLING IMPORTS Alan Tonelson Here is USBIC's Press Release analyzing the 2007 trade figures released on February 14, 2008. As expected, the United States is still running a gargantuan trade deficit, at a very dangerous 5.1 percent of GDP. The claims of orthodox free traders that the country is experiencing an export boom, always suspect, are proved specious by our in-depth analysis of the trade figures. Read 'em and weep for the state of our industrial base and economy. |
| Sovereign Wealth Funds Adversely Impact National Security Alan Tonelson Sovereign Wealth Funds (SWFs) are foreign government-owned investment funds that are now buying up interests in American's strategic and economic assets with all those trade deficit dollars that have flowed overseas for a generation and a half now. It took twenty generations to build America into an economic and military suprepower, but, at the current rate, we are likely to have squandered most of the hard work and wealth our forebearers in two generations. SWFs are an increasing threat to our security as a nation, but no one seems to have much of a handle on the problem. Kudos to the U.S. China Commission for holding its recent hearing and trying to get a good fix on the problem. What follows is USBIC's analysis presented to the Commission by our Senior Research Fellow Alan Tonelson. |
| Half-Right Reich: Real Problems, Nitwit Solutions William R. Hawkins A loony academic strikes again -- this time in the person of Robert Reich, Bill Clinton's Secretary of Labor. His solution to the problem of stagnant wages that have plagued the American economy since the mid-1970s, when our trade posture began to spiral out of control, is to redistribute the wealth that remains. Great idea, Bob. Let's not solve the real problems at the bottom of the trade deficit like foreign currency manipulation and subsidies. Let's instead put a socialist scheme in place and expect better results than the Soviet Union or Maoist China got. |
| U.S. Oblivious to Day of Reckoning William R. Hawkins Jack Davis, a member of the U.S. Business and Industry Council and a successful businessman, provides his perspective on the economic crisis facing America. As the politicians drone on about free trade or fixing trade agreements with tougher labor and environmental standards, Mr. Davis sounds the alarm on America's perilous economic state. |
| Stimulus Package: It's the Election, Stupid! William R. Hawkins Stimulus packages don't work the way they used to. Neither do rate cuts by the Federal Reserve. Why? We don't make what gets bought with the money -- China does. (Or we create a housing bubble.) So instead of sending the Chinese more dollars to put into Sovereign Wealth Funds that return to buy up America, let's devise a plan to bring manufacturing and good-paying jobs back to the United States. When the money circulates in our own economy, it can actually do some good. But that's not the case under current circumstances. |
| January 2008 |
| South Carolina Democratic Voters Must Show Presidential Candidates They Care About BetterTrade Policies Alan Tonelson South Carolina Democrats must stand up for better trade policies when they go to the polls in the Democratic primary. Many of their Republican counterparts told Washington and the Republican candidates that they don't care about trade, manufacturing, and jobs by electing John McCain -- although the case could be made that the combined vote for Huchabee, Romney, Thompson, and Hunter, which far outstripped McCain's vote, showed that many do care about trade since the four abovementioned losers all had something worthwhile to say about the trade topic. But McCain won and he has been absolutley terrible on trade, manufacturing, and jobs for the entire time he has been in Congress. His statement to Michagan voters that they should in effect get over manufacturing job loss tells everything a voter needs to know about McCain's trade policy. Hopefully, S.C. Democrats will send a different message when they vote in their separate primary. |
| The Bali "Roadmap" and Environmental Double Standards William R. Hawkins The recent environmental conference in Bali continued to set double standards for developed and developing countries. The less-developed are free to pollute, while the latter must curb drastically their emissions. The same jaundiced thinking that led to the Kyoto Protocol continues to infect the environmental movement, which would like nothing better than to see living standards fall in the West through deindustrialization, while allowing living standards to rise in the less-developed world through massive and ongoing pollution. |
| The U.S. Chamber’s Phony Rhetoric and False Claims on Trade and Competitiveness William R. Hawkins U.S. Chamber of Commerce boss Tom Donohue is at it again. Dissembling like it is going out of style, Donohue and the Chamber's wordsmiths are trying to paint the Chamber as the champion of domestic businesses and their workers. Nothing could be further from the truth, as the Chamber represents the cream of "American" multinational outsourcers, and spends a ton of money to defeat pragmatic, pro-American candidates for public office. |
| December 2007 |
| Peru's President Lays Bare the Big Lie at the Center of U.S. Trade Policy Alan Tonelson It has been remarkably easy to stifle any criticism of American trade policy for the past two decades simply by calling anyone with reservations "protectionists." Rather than meeting the intellectual challlenge of defending their (admitttedly knee-jerk) position, free traders have dismissed all critical comers by name calling. Now comes Peru's president, Alan Garcia, saying exactly what the critics of unfettered globalization have been saying all along: free trade agreements are about increasing opportunites for U.S. multinationals to outsource fatories and jobs to lower cost, less environmentally conscious countries. Welcome to the Protectionists Club, President Garcia. |
| Third Strategic Economic Dialogue with China a Dangerous Failure William R. Hawkins The series of Strategic Economic Dialogues that the United States is conducting with China is designed by Treasury Secretary Hank Paulson to dissipate efforts here at home to take strong action against Beijing's mercantilist practices -- rather than to change those practices. Paulson is a man of limited vision (limited to Wall Street and the financial services sector), whose concerns do not encompass the survival of domestic American manufacturing or the geopolitical threat to the United States posed by a rising China. |
| Has the U.S. Navy Become the Forgotten Service? William R. Hawkins Much more thought must be given to the future size, shape, and equiping of the U.S. Armed Forces. The Congress and the public are so preoccupied with getting out of Iraq that a healthy debate on the structure and cost of the nest-generation forces is found only fleetingly in professional publications. The Navy, in particular, is getting short shrift -- although it is the very foundation of America's ability to project power and defend herself in an increasingly dangerous world. |
| Has the U.S. Navy Become the Forgotten Service? William R. Hawkins Much more thought must be given to the future size, shape, and equiping of the U.S. Armed Forces. The Congress and the public are so preoccupied with getting out of Iraq that a healthy debate on the structure and cost of the nest-generation forces is found only fleetingly in professional publications. The Navy, in particular, is getting short shrift -- although it is the very foundation of America's ability to project power and defend herself in an increasingly dangerous world. |
| November 2007 |
| Will Congress Sell Out the American People at "U.S." multinational CEOs' Request? William R. Hawkins If there is any lingering doubt whose side so-called American multinational corporate leaders take in U.S.-China controversies, the letter they signed to the Congressional leadership last week erases all doubt. To dispel any suspense, it is not the American side. These corporate whores are taking full advantage of unfair Chinese trade practices -- including Chinese currency manipulation, the Chinese Value Added Tax rebates for their exports to the United States, labor completely controlled by the government, many other subsides and tax breaks, a complete lack of environmental, health, and safety regulations, etc. As Lincoln said, "A house divided against itself cannot stand." Too bad he didn't predict how long it would take to fall. |
| Foreign Investors in the United States Haven't Forgotten National Loyalties Alan Tonelson Why would anyone expect foreign firms operating here to have the US national interest at heart? Or to do things that are good for America and Americans, instead of making business decisions that benefit the foreign business owner and its home government? It's a peculiar and destructive American trait to think that other peoples like us and want to be like us, i.e., adopt our values. Other governments and foreign companies march to their own drummers and follow their own visions. This is apparently one of the best kept secrets in Washington - because policymakers and politicians are too narrowly focused on repeating the free-trade-is-always-good mantra rather than dealing with the realities of trade and the consequences of the gargantuan US trade deficits. |
| Paulson's Treasury Trying to Undermine New National Security Act on Foreign Investment William R. Hawkins The Foreign Investment and National Security Act of 2007 was signed into law last July by President Bush. It is Congress's response to several recent political firestorms surrounding attempted foreign acquisitions of prominent American assets, including the Dubai Ports and UNOCAL deals. No sooner than the law was put on the books, however, than the Treasury Department began trying to undo its intent by having Treasury remain as "the decider" -- cutting out critical Executive Branch agencies that have national security charters, such as Defense and Homeland Security. Treasury is backed in its efforts by the transnational business community, which does not want any restrictions on its deal-making anywhere in the world. In the new global economy, U.S. national security and national interests seem destined to take a back seat to the needs of so-called American multinational corporations. |
| The Patent Reform Act: Boon to Chinese Pirates William R. Hawkins Big Tech companies like Microsoft, Intel, Apple, Dell, HP, Cisco and Oracle are attempting to push through Congress a patent "reform" bill that favors their particular business model. They are opposed by most other economic sectors, which use diferent business models -- including domestic manufacturing, high-tech and bio-tech firms, universities, non-profit research centers, pharmaceuticals, venture capitalists, and individual inventors. A pitched battle is raging for control of the 217-year-old American patent system, the world's best. However, far too little attention is being paid to the international implications of radically changing the system. The fact that Lenovo, the giant Chinese computer firm, is firmly on Big Tech's side speaks volumes about how the "reforms" will benefit China, already the source of 70 percent of the world's intellectual piracy. |
| October 2007 |
| Detailed Trade Analysis Debunks Globalization Cheerleaders' Claims of an Export Boom Alan Tonelson A slight improvement in the U.S. trade deficit in recent months has led the free-trade-at-all-costs crowd to produce studies that purport to show that the American economy, and American manufacturing in particular, is finally going to export its way out of the 30-year deep hole in which free trade policies have placed it. If only it were so. In fact, our detailed analyses show that the current "boom" affects only a relatively small number of industries. It is likely the result of extraneous factors such as the weakness of the dollar, slower U.S. growth, and stronger foreign growth rather than the success of free-trade, market-opening efforts. There are no significant trends evident or policies in place that will sustain American manufacturing over the long run. |
| A New Chapter in China's Commercial Warfare: China's Strategic Investment Campaign Targets Dual-Use American Technologies William R. Hawkins China is now running multifacted campaigns to undermine U.S. global leadership and emerge as the world's dominant military, scientific, manufacturing, and commercial power in the 21st century. The emergence of Strategic Investment Funds, backed by the $1.3 billion in hard currency that China has "earned" through its mercantilist, surplus-producing trade policies, is a frightening development. China is using these funds to gain "back-door" access to informationa and technologies that it could not acquire outright. As usual, the White House and Congress are asleep at the switch. |
| U.S. Senate Should Reject the Law of the Sea Treaty William R. Hawkins Like a bad penny, the abominable Law of the Sea Treaty continues to circulate in American political circles. Correctly rejected by President Reagan as a masive encroachment on U.S. sovereignty and freedom of action, the Treaty remains a favorite of those seeking to bind the US in nautical matters -- just as bad trade agreements like the WTO have bound us in economic matters. Please use the letter above to tell your Senator to reject the treaty. |
| 21st Century Warfare Will Outstrip the Capabilities of Our Declining Defense Industrial Base William R. Hawkins The United States has paid and continues to pay a terrible price for the large cuts in military forces that took place in the Clinton administration - partially on the basis of the post-Cold War euphoria. The Bush administration's "short-war strategy" -- promulgated by Defnse Secretary Rumsfeld and his neo-conservative cohort -- was an historic blunder that matched the errors of Robert McNamara and his whiz kids. Both administrations were seduced by ideological free trade theories that have stripped away much of the U.S. defense industrial base, a sine qua non of successful war fighting. The country now finds itself in a very questionable position to fight the types of conflicts likely to continue to come its way in the 21st century, regardless of the outcome in Iraq. |
| September 2007 |
| U.S. Senate Needs to Rethink Patent "Reform" William R. Hawkins The U.S. Congress is about to strangle the American patent system -- the envy of the world and the chief engine of innovation, and thus material progress, since the Constitution was written. Why? To please a few Big IT firms and Big Financial firms. Letting Microsoft rewrite patent law to suit its rapacious business model is a particularly bad idea. How can it be that a Democratic Congress, presumably elected to look out for the little guy, feels sorry for Bill Gates and his ilk? Their new patent "reform" law gives a green light to intellectual property thieves while stiffing domestic manufacturers and working Americans. |
| What Bin Laden, Chavez, and Chomsky Have in Common -- and Have Wrong William R. Hawkins Osame Bin Laden's newest diatribe against the United States sounds a lot like Hugo Chavez's rant against America at the UN last fall. They both copycat the perenial hard left criticisms of Noam Chomsky against American democracy and capitalism. However, all three are muddled thinkers -- simply because modern, so-called American multinational corporations are in fact not American at all, but deracinated entities whose only loyalties are to their own bottom lines. |
| August 2007 |
| New Propaganda from The Club for Growth (in China) William R. Hawkins The Club for Growth is a libertarian organization dedicated to electing public officials who parrot its free trade ideology. It serves as a globalization cheerleader for multinational corporations that engage in labor arbitrage, substituting cheap Chinese workers for more expensive American ones -- not to serve the Chinese market but to export back to the American market. The Club tried to make headlines recently by trumpeting a petition signed by one thousand "economists," all of whom apparently believe that it is fine for China to engage in protectionism, but are horrified at the thought that the U.S. Congress might takes steps to counter that protectionism. |
| Stopping the New Chinese "Hoard" From Dominating the World William R. Hawkins China has acquired over $1 trillion in hard currency reserves, courtesy of employing its predatory trade practices against the United States and others. Those reserves will reach $2 trillion in the not too distant future. Rather than having them sit passively in U.S. Treasury bills, the Chinese have begun to deploy this economic power strategically, buying up natural resources around the world and technologically advanced companies here in the United States. American policymakers seem oblivious to the long-term consequences of the Chinese strategy. |
| Stemming Imports Is the Only Effective Way to Re-balance U.S. Trade Alan Tonelson Free trade ideologues have insisted that each new free trade agreement would re-balance U.S. trade through increased exports. This blind hope has not been realized because the rest of the world is either too poor to afford U.S. exports or doesn't want them competing with the products of their domestic producers. Any objective observer of the world trade scene since the signing of NAFTA 14 years ago would have to conclude that the free traders' hope in increased exports re-balancing our trade has been a bet-the-farm gamble that has failed miserably. The only way to re-balance trade and to increase substantially American output, economic growth, and standards of living is to limit imports and take back lost market share in our domestic market from foreign producers and expatriate "American" multinationals. An emergency, temporary import surcharge, such as that enacted by President Nixon and Treasury Secretary Connally in 1971, is the only way to go. It is also "legal" under Article XII of the WTO. Let's hope that our policymakers and politicians understand that reality before it is too late. |
| July 2007 |
| U.S. Corruption and Cowardice Feed the Rise of Superpower China William R. Hawkins Francois Jullien, a French scholar of Chinese philosophy, has argued, “Chinese strategy aims to use every possible means to influence the potential inherent in the forces at play to its own advantage, even before the actual engagement.” Trade -- built on currency manipulation, subsidies, and intellectual property theft -- is thus not an alternative to conflict, it is part of Beijing’s constant struggle to “rise” and overthrow American preeminence. |
| June 2007 |
| Congressional Leaders Break New Ground With Proposed Korea FTA Fixes Alan Tonelson Street smarts and unilateralism are what make Congress’s Korea plan so unusual and so exciting. Legislators should now move vigorously to apply these principals to the rest of America’s wrongheaded trade policies -- including the immediate renegotiation of prior trade agreements. |
| Trade Policy-making Corruption with a New Face Alan Tonelson "Idea laundering," a Washington constant in which countries, corporations, and individuals fund research that supports their parochial points of view,is back Chinese-style, bigger and better than ever. |
| Combat Lessons of Iraq, Not Rumsfeld's Theories, Will Shape Future U.S. Military Procurement William R. Hawkins Donald Rumsfeld. like his predecessor several times removed, Robert MacNamara, brought to the Pentagon abstract notions about the size and shape of U.S. forces, as well as a corporate CEO's notion about how the military establishment should be run. Both men proved abysmal failures as Secretary of Defense. The current House Armed Services Committee is in the process of re-shaping the military with the real-life lessons learned in combat in Iraq. |
| May 2007 |
| Democratic Trade Policy Critics Need A New Game to Play on Center Court Alan Tonelson Trade policy critics on the left in general and in the Democratic Party in particular need to change their focus from the peripheral issues that seem to concern most of them most of the time. Labor and environmental provisions, while important, are not the crux of our trade defict problems and their inclusion in future trade agreements will do little to alter current trade flows or stem the loss of factories, R&D centers, and good, middle-class jobs. Concentration on much more significant problems -- such as currency manipulation, subsidies, VAT rebate inequities, and other unfair trade practices that give our foreign competitors a significant edge -- is required if we are to stem the hollowing out of our industrial and technology bases, and see Americans broadly prosper again. |
| Strategic Economic Dialogue With China Ends in Failure William R. Hawkins The Strategic Economic Dialogue between the United States and China is a hoax, pure and simple. It is designed ostensibly to solve disputes and points of contention between the two nations. It's real purpose is to lull Congress and the American people to sleep with the notion that critical issues are being addressed forthrightly. Nothing could be further from the truth. And we have seen these high-level dialogues fail before. Just look at the MOSS (Market Oriented Sector Specific) or SII (Strategic Impediments Initiative) talks with Japan. Years of yaking, no useful result. Treasury Secretary Hank Paulson is leading the current chit-chat diplomacy so that his friends on Wall Street can get some small share of the Chinese financial market, while the much more important Amerian manufacturing center is going out of business waiting for its government to end Chinese subsidies and other unfair trade practices. With a government like ours, who needs foreign adversaries? |
| U.S. Policy Elites Supine in the Face of Chinese Trade Cheating William R. Hawkins US policy elites are asleep at the switch while domestic manufacturers and American workers continue to suffer the effects of the former's negligence. East Asian currency manipulation must be addressed immediately, while the United States still has some clout left. Treasury Secretary Hank Paulson is doing a spectaclar job -- for the Chinese. Since he refuses to address the undervaluation of the yuan -- which is his job, he should resign and become China's Finance Minister or Central Banker, roles in which he would undoubtedly be much more comfortable. |
| Chinese Counter-Attack After US Files WTO Cases on IP Theft and Ilegal Subsidies William R. Hawkins The Chinese have been cheating on trade in violation of their WTO obligations since the minute they joined that ineffective organization. After years of chit-chat diplomacy, the United States has filed cases with the WTO to try to halt the Chinese transgressions. Let's see if the U.S. paper tiger actually has teeth, carries through the cases, and imposes sanctions on Chinese products -- that is assuming that the feckless WTO knows cheating when it sees it. |
| April 2007 |
| Bush Administration Takes Halting Steps on Unfair Chinese Trade Practices William R. Hawkins The Bush Adminisrtation believes wholeheartedly in free trade -- except when it comes to China. China is allowed to restrict trade in its currency to control its value, or more accurately to undervalue the yuan. It is allowed to steal as much American intellectual property as it wants. It is allowed to subsidize its manufacturers with low or no cost loans. Etc. Yet for six years the Bushies have done nothing, believing apparently that it is written somewhere in free trade annals that manufacturers in Ohio, for example, must go out of business in order for China to "develop." Now for the first time the Bush Administration has filed some trade cases with the almost worthless WTO -- in spite of the fact that China has violated its WTO obligations from the moment it joined seven years ago. The Bush actions are likely to be too little, too late -- given the current state of domestic manufacturing. Because China continues to cheat, many domestic American manufacturers have their backs to the wall. They cannot compete with the Chinese on price given the masive Chinese subsidies, but must rely on just-in-time techniques and superior knowledge of the U.S. market. But China is not far behind on this power curve either. More drastic actions are necessary, but the Bush Administration is unwilling to address the China problem comprehensively. . |
| Oil, Autos, and China Are Keys to February's Massive $58.4 Billion Trade Defict William R. Hawkins Continued massive monthly trade deficits, which have roughly doubled since 2001, are cutting U.S. economic growth dramatically and shifting U.S. workers into less productive, lower wage industries. The Bush administration is largely asleep at the switch, content to do the bidding of American multinational corporations, who take advantage of East Asian currency manipulation and other forms of subsidies to fatten their profit margins. |
| China Apologist : U.S. Must Decline as China Returns to Former Greatness William R. Hawkins According to one prominent China apologist, Chas Freeman, the United States must inevitably decline as China rises to its former glory. Democratic liberalization of China doesn't factor into this rise as economic progress is what counts the most - not democracy, human rights, or religious rights. Further, according to Freeman, the United States has lost its way in the world, while China is just beginning to hit its stride. This point of view is strongly reminiscent of the school of thought that trumpeted the decline of the United States and the rise of Japan in the late 1980s. It didn't prove to be true in that case, but Japan, at least a nominal U.S. treaty ally, wasn't pouring billions into its military forces either. |
| Democrats' Trade Plan Needs More Work Alan Tonelson House Democrats recently unveiled their plan to fix America's trade policy. Unfortunately, the plan comes up short on effect actions that the Congress can take to protect American factories and their workers from the unfair trade practices of China and other foreign competitors. |
| March 2007 |
| Defense Offsets are Spreading Protectionism Across Commercial Sectors William R. Hawkins Offsets have long distorted free trade and destroyed American comparative advantage in the defense industry. But as is the case with currency manipulation, the free traders in the Bush Administration and elsewhere won't hear of free trade in defense systems and allow offsets to continue to impact negatively U.S. trade flows. |
| Treasury Secretary Paulson Still Sees His Mission as Building Up China's Economy William R. Hawkins Hank Paulson, former CEO of Goldman Sachs and current Treasury Secretary, was at it again this week, trying to rationalize China's economic development as somehow in the interest of the United States and the rest of the world. His goal is apparently to secure greater access to the Chinese banking system for his former Wall Street colleagues. Unfortunately, even if allowed to purchase controlling interests in Chinese banks, Wall Stret firms will not be able to control China's rapidly increasing military build-up or the potential use of its forces against the United States in future years. Paulson, investment banker that he is, appears oblivious to the larger strategic picture, i.e., that the People's Liberation Army is one of the chief beneficiaries of China unbriddled economic growth -- much of which comes through unfair trade practices such as currency manipulation, intellectual property theft, outright subsidies, and the use of a Value Added Tax system to provide producers in China with a competitive edge. |
| GAO Report:: Uncoordinated Federal Technology Policies Put Nation At Risk William R. Hawkins The end of the Cold War brought with it the mistaken belief that major challenges to the security of the United States had vanished. What actually occured was the fragmentation of the security arena into multiple, worldwide challenges. According to the latest Government Accountability Office report, the Executive Branch is doing a poor job of addressing those challenges, especially in the area of technology critical to national security. |
| February 2007 |
| A New Approach to Budget and Trade Deficts William R. Hawkins Our national competitiveness would be given a big boost if Congress would eliminate the unfair advantage created by the different treatment of direct (i.e., income taxes) and indirect (i.e., value added taxes) taxation in the world trading system. Over 130 of our trading partners use a Value Added Tax, which is rebated at the border for exports or imposed at the border for imports. We have no such rebate or border tax. That means our domestically made products take two hits -- one in our home market against products carrying no income or VAT taxes and another in foreign markets, where they carry both our income tax and the foreign country's VAT. We could take a large step toward bringing down both our budget and trade deficits by imposing a border equalization tax to eliminate the disparity and unfairness caused by the VAT. |
| Sen. Dodd Seeks to Strengthen the Defense Production Act William R. Hawkins As the U.S. defense industrial base continues to wither away and European defense contractors replace their American competitors as Pentagon contractors, the Bush administration remains asleep at the switch, oblivious to the national security implications. One good development to come out of the change in the Senate's leadership is the emphasis being placed on the renewal and updating of the critical Defense Production Act by Sen. Chris Dodd, new Chair of the Banking Committee. |
| January 2007 |
| China Tests an Anti-satellite Missile and America's Mettle William R. Hawkins President Eisenhower's farewell speech, in which he warned of the dangers of the "military-industrial complex" was prescient for about thirty years, but is now dated. Ike, of course, could not have forseen the military industrial-financial-multinational corporate complex that would emerge after the rise of trade-agreement globalization and the resultant collapse of domestic American manufacturing. Nor would he probably have believed that a Republican administration, dominated by globalist cheerleaders, would contribute so heavily to rise of China as America's main rival and the 21st century's superstate. |
| Will the Democrats Move Quickly to Re-shape Our Broken Trade Policies? Alan Tonelson and Peter Kim The China Currency Act, also known as the Hunter-Ryan bill, attracted some 170 co-sponsors last session of Congress. If passed, it would give domestic American manufacturers a major new weapon with which to defeat predatory Chinese currency mainpulation. One of the first tests of the new House Democratic leadership's willingness to alter America's dismal and defeatist trade policies will be its commitment to secure the early passage of this critical bill. |
| A New Security Arc in East Asia William R. Hawkins Does the U.S.-India nuclear deal make strategic sense? The argument presented here it that it does, given the necessity for the United States to counter China adventurism and proliferation activities, and also to create a bulwark against radical Islamist states. The United States, Japan, and India can form a de facto alliance of stability and security in the Pacific and Indian Oceans if the appropriate political and economic structures are put into place. The nuclear deal is just one piece in a larger framework. The only fly in the ointment: Toshiba of Japan now owns the once mighty U.S. Westinghouse, and is seeking a corner on nuclear power generation. |
| December 2006 |
| U.S. Defense Industry Succumbs to Outsourcing National Security William R. Hawkins If there is any industry that ought to resist pressures to outsource its work, it is the defense industry. The only reason for its existence is to protect the American homeland. How can this mission be accomplished if the defense industry is dependent on foreign sources for its weapons systems. Defense outsourcing is non sequitur, but unfortunately it is not a non-starter, as it ought to be. |
| U.S. Domestic Producers Lose Increasing Share of Home Market to Foreign Competition Alan Tonelson and Peter Kim Ground-breaking research by USBICEF Senior Fellow Alan Tonelson and Research Associate Peter Kim shows convincingly that domestic U.S. producers are fighting a losing batle against foreign competition here in the U.S. market -- especially in the higher-value, good-paying-job sectors. The situation has deteriorated significantly over the past decade. The complete indifference of policy makers to the current dire state reminds one of the old joke: I want to die peacefully in my sleep like my grandfather, not screaming and terrified like those in the back seat as his car went over the cliff. Would that we had the blind faith of the free traders! |
| U.S. China Economic and Security Review Commission Highlights Beijing's Unfair Trade Practices and Military Build-up William R. Hawkins There are only a few outfits in Washington that actually understand the full ramifications of what the ruthless regime in Beijing is up to with its unfair, mercantilist trade practices and its resulting military build-up. Both are intended to replace the United States as the world's commercial and military leader. Most of Beijing's trade and industrial policies are in clear violation of its obligations as a member of the World Trade Organization. Yet, the Bush administration, multinational corporations, their hired guns -- both in DC and in academia, and the general run of free traders and globalization cheerleaders in the media and elsewhere blithely ignore what the Chinese are up to, blinded as they are by either their free trade ideology or their corporate and personal greed. Thanks to the China Commission for continuing to set the record straight. |
| November 2006 |
| Trade and the 2006 Election: A Complicated Picture Behind the Spin Alan Tonelson As usual, behind the hype that accompanies every election, there lies a more complicated reality on issues of trade policy. Some new representatives and senators clearly made their dissatisfaction with the direction of current US trade policy the centerpiece of their respective campaigns. Other victors made only more passing references to trade and outsourcing issues. Yet all of the 15 Democrats who voted for CAFTA survived, and the two prominent Democrats who will run the trade-related committees, House Ways and Means and Senate Finance, are not exactly globalization critics. Finally, if the Democrats do nothing more than insert stronger labor and human rights provisions into new trade agreements, the current account deficit will continue to skyrocket, and domestic manufacturing and agriculture will continue to disapper. |
| Voters Aware that GOP is Losing the Trade War Too William R. Hawkins Exit polling shows that Iraq and corruption in Washington were not the only issues on voters' minds. The state of the economy and trade were also uppermost among the electorate's concerns and played a decisive role in many contests. |
| Panama as a Bellweather of U.S. Fortunes: the Storm Gathers William R. Hawkins As much of Latin America slips from the U.S. orbit and too much of its population slips across our southern border, the selection of Panama as the compromise candidate for a UN Security Council seat is not a harbinger of good things to come for the United States. Neither is the current plan to widen the Canal to allow more Chinese goods to flood the American market. Teddy Roosevelt's decision to build an American Canal in order to fulfill his vision of America as a Pacific power has been completely subverted by poor strategic and economic decisions. |
| What Will China Do for Ford that Mexico Didn't? Alan Tonelson According to Bill Ford, the future of his company lies in China. Sound strangely familiar? Well, twelve years ago the combination of NAFTA, American technology, and cheap Mexican labor were going to be the salvation of the American auto industry. So Ford started outsourcing jobs to Mexico, setting up assembly plants there, buying parts there, and shipping cars back to the United States. Apparently that plan didn't work, but Ford's China strategy is a slam dunk. Or is it? |
| October 2006 |
| Massive US Trade Deficits Have Not Made China Cooperative William R. Hawkins In spite of the fact that our trade deficits with China keep breaking all-time records, the Beijing regime sees them as a sign of American weakness and decline. Thus Beijing is not inclined to cooperate with the United States on any issues of concern because it beleives it has the upper hand. It public statements in the wake of the North Korea nuclear test bear this out. China still supports Kim's rogue regime, taking only those actions necessary to prevent harm to China itself -- like a flood of North Korea refugees acrosss the border. Short of a China-impacting event, Beijing is content to let Kim give the United States and its allies fits. |
| Corrosion-resistant Steel: A Primer on the Incoherence of U.S. Trade Policy Alan Tonelson To see major U.S. industries like steel and autos pitted against one another in the face of our gargantuan trade deficit is indeed disheartening. Steel needs to start thinking more comprehensively and more strategically about trade policy, and autos needs to start completely re-thinking its trade positions. It’s difficult to imagine solving the nation’s trade crisis unless American manufacturing industries get together to solve problems in a way that works for all the stakeholders involved, including employees. Right now, in the case of corrosion-resistant steel, confrontation rather than cooperation is the order of the day. |
| September 2006 |
| The "Goldman Sachs Effect" Transfers the Strategic Advantage to China William R. Hawkins The various news headlines tell a scandalous story: The People's Liberation Army fires anti-satellite lasers at U.S. military satellites; The new Treasury Secretary, Hank Paulson, returns home from China empty handed; Iran and North Korea continue their nuclear programs; Goldman Sachs, Paulson's former firm, continues to make a ton of money in China. Can you connect the dots and spot the conflicts of interest that the Bush Administraiton can't? |
| Why is Hank Paulson acting as though China is still his Client? William R. Hawkins Just whose side is Hank Paulson on? Is it ethical for a Treasury Secretary to maintain his former clients once he takes office? USBIC opposed the Paulson nomination because we believed that he was too compromised to serve a Treasury Secretary because of his close relationships with the Chinese political and economic elite. His public remarks and actions since he took the helm at Treasury have unfortunately borne out our worst fears. Don't look for any meaningful action on China while the Bush administration holds office. |
| The Speech that Treasury Secretary Paulson Needs to Give but Won't Alan Tonelson Brand-new Treasury Secretary Paulson heads to Beijing shortly to try to talk the Chinese into floating their currency and behaving more responsibly to preserve the global trading system. After listening to his testimony and first public speech, his Chinese hosts must be thinking, "This guy is going to be even easier to roll than his predecessor, Snow." When a government offical launches pre-emoptive attacks on domestic "protectionists," foreign governments know they are home free. Don't expect much from Paulson. |
| Is Rumsfeld's "Revolution in Military Affaris" Finally Over? William R. Hawkins Defense Secretary Donald Rumsfeld came to the Pentagon with plans to transform the U.S. military into a 21st century fighting force -- a much lighter, more mobile, and more easily deployable force. His 10-30-30 plan -- 10 days to deploy, 30 days to fight, and 30 more days to secure the peace and return home ready for the next battle -- is a major casulaty of the wars in Afghanistan and Iraq. Additionally, rational observers learned that longer wars require a healthy, domestic defense industrial base to supply the troops and sustain their efforts -- a truism that has been known for centuries, but forgotten in this one. The burning question is whether Rumsfeld and the Bush Administration have learned any lessons about the type of military we need and the type of wars it may have to fight in the 21st century. More importantly, have they any inkling that the defense industrial base, which undergirds any successful war effort, continues to slip away to China and other trading partners? So far, the clues are not promising. |
| August 2006 |
| The U.S. Senate's Kow-Tow Caucus William R. Hawkins The recent visit to China of a U.S. Senate delegation and the public statements of the Senators show clearly why nothing is being done in Washington to curb unfair Chinese trade pracitces -- whether currency manipulation, intellectual property theft, subsidies to manufacturers, etc. It also explains why the United States remains supine in the face of the Chinese military build-up, aided by American-supplied capital and technology. Perhaps there ought to be a new verb in the English language: Instead of being shanghaied, American politicans and government officials are now being beijinged, i.e., turned into parrots who squawk that China's rise is totally benign and somehow in America's national interest. Polly want a fortune cookie? |
| A Dismal Mid-Year Report on U.S. Trade Flows Alan Tonelson Read 'em and weep. This familar refrain generally applies to the monthly U.S. trade statistics released by the Census Bureau. Those for the month of June are no exception, chronicling America's continuing long-term decline in manufacturing and its inability to replace manufacturing with other exportable forms of economic activity to make up for the masive foreign borrowing necessary to pay for the vast influx of foreign goods. |
| The Real Lessons in the Doha Round's Failure Alan Tonelson Rather than mourn the demise of the Doha Round of international trade talks, Americans should rejoice that their interests were not further compromised by incompetent, ideologically driven, free-trade U.S. negotiators. Instead, greed in Europe, Japan, China, India, and most of the developing world was so out of line that it prevented the U.S. government from giving away more of the store. An objective analysis of the talks and the rest of the world's hidden agendas, along with our own wrongheaded approach, shows the way to the future. |
| U.S. Business Should Treat Castro Like the Enemy He Is William R. Hawkins The sell-anything-to-anybody multinational business crowd is at it again, trying to break down barriers to doing business with Cuba's aging tyrant. Castro's current illness should suggest to rational and patriotic people here that there is an upcoming struggle for power in Cuba and that American business should be on the right side of it, i.e., by witholding financial assistance and technology from the communist thugs who run the island and by betting on a free and democratic Cuba in the long term. Unfortunately, multinational waterboys like Kirby Jones of the U.S.-Cuba Trade Association and Bill Reinsch of the National Foreign Trade Council insist on putting the interests of tyrants and their multinational corporate members ahead of the interests and aspirations of the Cuban and American peoples. |
| July 2006 |
| "Rich country, strong army" William R. Hawkins The United States, due to the decline of its industrial base and the advanced technology and national wealth that it generated, faces a stark choice in a world of terrorist organizations and rogue nations: Either find a way to preserve the industrial base, create national wealth, and field a military of superior size and capability -- or withdraw from its role as world superpower and policeman. Through ill-advised trade, international economic, and defense policies, that choice is being made daily for U.S. policymakers -- in Tehran, Damascus, Pyongyang, Beijing, Moscow, and in various caves and safe houses around the world. Ironically, it is also being made for us in the capitals of alleged American allies, whose adversarial trade policies are hollowing out our economy. The real problem is that U.S. policymakers, politicians, and pundits don't see the connections and don't have a clue what is happening. We are barreling down a road to oblivion as we ignore the wisdom of the Japanese Meiji era proverb: "Rich Country, strong army." |
| Growing Imbalances in the "Global Economy" Threaten to Sink All Boats Alan Tonelson With the United States still on a consumption and government spending tear -- financed by domestic credit and massive international borrowing, it is clearer than ever to dispassionate observers that the current "globalized" trading system is in deep danger of collapse. Unfortunately, those who negotiated the trade agreements that lie at the heart of the imbalances are too blinded by their adherence to free trade theory to begin to think about appropriate solutions. To save the international trading system from its current excesses, radical new thinking and appraoches are necessary. |
| Latest Monthly Trade Figures Don't Justify Complacency of Economics Establishment and the Bush Administration Alan Tonelson In spite of some superficial good news, the latest monthly trade figures are among the worst in U.S. history. Yet to judge by the pronouncements of the Bush Administration, orthodox economists, and certain leading politicians, one would think that there were no problems with the trade picture. It as though standing on one foot balanced on the edge of a high cliff is a good deal because the wind died down a notch. It's not a position in which we want to see the economy or the nation. |
| NAFTA "Superhighway" Spells the End of NAFTA Countries Manufacturing Alliance William R. Hawkins The creation of a NAFTA "Superhighway" -- with new rail and road links from Mexican Pacific coast ports to the Midwest -- spells the end of the US-Mexican economic alliance and its replacement by the Chinese juggernaut. The Superhighway has nothing to do with NAFTA as conceived at all, but rather is designed to facilitate the flow of Chinese-made goods into the American heartland. The Superhighway's roadkill is more Mexican and American manufacturing plants and their workers. |
| Competing House and Senate Bills to Reform Process of Foreign Acquisitions of US Defense Firms Leave Much to Be Desired -- Yet Multinational Lobbyists Seek to Weaken Them William R. Hawkins Remember the political firestorm over the Dubai Ports deal? (By the way, we still don't know whether the proposed divestment by Dubai Ports World has been resolved satisfactorily.) Well, it spawned separate House and Senate bills, both of which leave much to be desired. Yet the multinational business lobby is working hard to see that the weakest possible bill emerges in this Congressional session -- proving once more that the nation's security is too important to be left in the hands of internationalist CEOs and their henchmen. |
| June 2006 |
| Is Fed Chairman Bernanke Missing the Opportunity to Step Out of Greenspan's Shadow? William R. Hawkins U. of Maryland professor Peter Morici believes that it's time for the new Federal Reserve Chairman, Ben Bernanke, to move beyond the Greenspan era and try to salvage something from the current economic expansion, weak as it is. Without the setting of a new agenda by the Fed, not just the expansion, but the whole future course of the American economy faces some deeply troubling patterns. |
| "Banking" on China: Stephen Roach's Panda-nomics William R. Hawkins The pronouncements of Stephen Roach, the Morgan Stanley economic commentator, are widely followed on the subject of globalization. However, he is badly mistaken on the cause of our massive and growing trade deficits, which he blames on our low savings rate. It is rather the thirty-year hollowing out of manufacturing base -- with its high-paying jobs, R&D, and wealth creation -- that is at the heart of the problem. Americans need to produce more here at home and keep the money used to buy the products circulating in our own economy -- rather than sending it overseas to be used by foreigners to buy up still more of our productive assets. This truth may be upsetting to Morgan Stanley and it clients in China, but it is the only way out of the current, unsustainable situation in which we find ourselves. |
| New US Trade Representative Susan Schwab: The Same Old Spin, Ideology, Ignorance and Contempt for the American People Alan Tonelson The faces and names have changed repeatedly over the last thirty years, but the trade deficits remain and grow. It would seem that instead of criticizing those who question USTR's uncompromising commitment to pursuing so-called free trade agreements, the newest US trade ambassador, Susan Schwab, ought to be explaining why the agreements have only produced massive and mounting deficits, and what she plans to do to reverse that trend. |
| May 2006 |
| Treasury Nominee Paulson Has Supported China's Rise to Power William R. Hawkins President Bush has nominated Goldman Sachs CEO Henry Paulson to be the next Secretary of the Treasury, replacing the inept John Snow. While Snow was outwitted and publicly insulted by his Chinese counterpart at every possible turn, Paulson has been actively involved in raising capital and investment funds for the Chinese government and all manner of Chinese firms, including state-owned enterprises. Given his involvement with China and the fact that his job at Treasury should require him to stand up for domestic American firms and attack Chinese mercantilism, currency manipulation, intellectual property theft, and other unfair, anti-competitive Chinese practices, one wonders how Bush could have ignored the obvious conflicts of interest. It is almost impossible to imagine a worse selection. |
| Immigration and Outsourcing: How to Pit Cheap Labor Against the American Middle Class William R. Hawkins The broad middle class, one of America's singular accomplishments, is under a two-pronged attack -- from illegal immigration and outsourcing. Cheap labor is imported, driving down wages and displacing workers here, and jobs are outsourced, creating additional surplus workers and again surpressing the wages of remaining workers, who fear their jobs too will soon be sent overseas. |
| America's Biggest Exporters Can't Reverse Our Massive Trade Imbalances Alan Tonelson Think we're doing well as a nation economically because the trade deficit figures showed slight improvement in March? Well, think again. Most of our industrial sectors are losing ground to foreign competitors right here in our home markets. And even those doing relatively well are not robust enough to bring down the trade deficit substantially through their exports. |
| Multinational Corporate Lobbyists Seek to Improve Private Profits at the Expense of U.S. National Security William R. Hawkins Lobbyists from multinational and defense corporations are trying to limit the scope of U.S. government controls on the export of military and dual-use items to China. The dictatorial Chinese government is all for it. Their ongoing military build-up is aimed at expelling the "hegemon," i.e., the United States, from East Asia. To increase their firms' profits, the corporate lobbyists do the bidding of the Chinese government, without considering the larger consequences -- which is what a real government is supposed to do. This drama will play out over the next several months. Will the lobbyists be successful and leave the American taxpayer to foot the bill of increased military costs needed to defeat the technologies newly gained by the Chinese? |
| Ways and Means Chair Thomas Tries to Rally Pro-Globalization Forces Alan Tonelson In the face of growing public opposition to new freee trade agreements and continued outsourcing of good American jobs, House Ways and Means Chairman Bill Thomas delivered an exhortion to his pro-globalization, multinational corporate forces. He speech is a patent attempt to frighten them into concerted action to pass free trade agreements currently pending in Congress, a scare tactic given their considerable resources and a generally supine Congress, but in another way it is a genuine recognition that the American public has had it with free trade and outsourcing and is increasingly ready to fight back. |
| Global Economic Meetings Show Need for Unilateral US Action to Save Global Trading System Alan Tonelson The IMF and G-7 international meetings last month revealed that the United States cannot expect any substantive assistance from its major trading partners in correcting the current major imbalances in the global trading system. Simply put, the rest of the world cannot grow rich by indefinitely exporting to America, whose deficts and debts are growing exponentially. Unless corrective aciton is taken soon, the system will collapse under the weight of its own imbalances and inequities. The intransigence evidenced by China, Japan, and Europe only serve to underscore the necessity for unilateral and immediate U.S. action. |
| April 2006 |
| Bush vs. Hu: Free Trade, China, and the Road to Ruin William R. Hawkins Blind adherence to free trade ideology led England to continue to follow policies that allowed her to be surpassed by Germany and the United States. In fact, but for American assistance, England would have been destroyed by Germany in the early 1940s. Today American leaders wear the same ideological blinders, which are allowing China to rise as an unchallenged economic, political, and military power. Unfortunately for America, there is no other world power standing in the wings ready to replicate her role in assisting England. |
| China Seeks to Perpetuate Advantages, Not Solve Problems William R. Hawkins China is attempting to assure the outside world that its surging economic growth and global influence do not pose a threat to anyone, particularly to the United States. This has been the aim of Beijing’s statements leading up to the Hu-Bush summit. Unfortunately, Beijing cannot be believed. |
| The Bush-Hu Discussion That Should But Won't Occur Alan Tonelson and Peter Kim China continues to grab an ever increasing share of the U.S. domestic market for manufactured goods. The current summit between the U.S. and Chinese presidents should be the natural place to address Chinese market manipulation -- whether in its undervalued currency, theft of American intellectual property, export subsidies, entry barriers to U.S. products, etc. But since George Bush does not understand what is happening to American manufacturing or, more importantly, the consequences, don't look for any changes in the lopsided trading relationship in any timeframe that would make a difference for America's domestic manurfacturers or their employees. |
| Foreign Governments Attempt to Obtain Key U.S. Defense Technologies William R. Hawkins Americans are told by their political leaders and other assorted free trade cheerleaders that they must accept a loss in competitiveness in a number of consumer goods categories, from electronics to automobiles, and should concentrate their efforts in their areas of comparative strength. Yet, when the United States has a clearly demonstrated competitive advantage in a major sector, such as armaments, its customers demand offsets to prevent the American economy from fully realizing the gains from trade – and the free trade ideologues say and do nothing. As the Commerce Department’s Bureau of Industry and Security has reported, “Almost 80 percent of offset transactions reported for the 1993-2004 period fell in the manufacturing sectors of the U.S. economy, eroding U.S. production and workforce capabilities and the balance of payments benefits of the export.” |
| Trade Deficit's Sharply Negative Trend Signals Grave Problems Ahead for American Economy Alan Tonelson The explosion of the trade deficit since 1992 indicates that the American economy is steadily becoming less competitive and more subject to an international financial crisis. Yet our policymakers do not seem concerned at all and continue mouthing platitudes about how well the economy is doing. A review of the trends indicates that alarm bells should be going off loudly in Washington. |
| French Takeover of Lucent (including technology gem Bell Labs) should Come Under Close Scrutiny by CFIUS William R. Hawkins Many financial industry organization have signed on to a letter to Sen. Richard Shelby, Chairman of the Senate Banking Committee, asking him not to reform in any substantial way the Committee on Foreign Investment in the United States. In effect, they are requesting that he retain the status quo, i.e. that CFIUS remain a rubber stamp operation for foreign takeovers of U.S. defense- related firms. CFIUS was set up in 1975 to review inward bound investment in the wake of the 1970s oil crisis and expanded in 1988 to look at buy-ups of American defense firms. It has one turn-down to its credit out of 1500 plus cases over the years. (In addition, a few foreign firms have withdrawn their takeover bids when it was obvious they would be turned down.) Shelby needs to ignore the bankers, strengthen the operation of CFIUS to include economic security as well as national security in its mission statement, and to set it loose to investigate the proposed takeover of Lucent, with its technology gem Bell Labs, by the French (government-owned) firm Alcatel. Such a takeover would be banned in Paris and that model should be good enough for Washington. |
| March 2006 |
| Exports Controls: Yet Another Policy Arena Where the Bush Administration Is AWOL Alan Tonelson Throughout the Cold War, the United States rode hard herd on what technologies it permited to be sold to communist nations and other rogue states. It enlisted its sometimes recalcitrant allies in a multilateral system of export controls known as COCOM -- and the system largely worked. The Clinton Administration dismantled COCOM when "peace broke out" with the fall of the Berlin Wall. Since then, the profits-above-national-security crowd that runs the multinationals (and in fact, if the truth be told, the country as well) has sold billions in dual-use and outright military technology to lots of bad actors. The Clinton and Bush Administrations have simply looked the other way. Now is the perfect time to reexamine this critical area of national security policy -- while our feckless Congress struggles to reform the CFIUS process and connect the dots between economic and military security in the wake of the Dubai ports deal. |
| Dubai Ports Issue has Opened the Legislative Door for More Positive Change William R. Hawkins The United States has lost control of its critical infrastructure, as the Dubai Ports deal shows. Rep. Duncan Hunter has put forward a bill that will begin to reverse the trend. The proof of just how good a concept and bill this is can be convincingly demonstrated by the fulminations against the bill from that knee-jerk bastion of free trade orthodoxy, the Washington Post editorial board. Go Congressman Hunter! |
| 2005 Current Account Deficit Hits Another Record High William R. Hawkins The current account deficit hit a new record high in 2005. If you think that the Dubai Ports World deal was troubling, wait until the deficit exceeds $1 trilion a year, which could happen on a monthly basis in the second half of 2006. Foreigners awash in surplus dollars will be buying up additional chunks of America at an unsurpassed rate. |
| Politics and Strategy After the Dubai Ports Case Alan Tonelson Although we still don't know the final shape of the Dubai Ports World agreement to turn control over its American holdings to a "United States entity," we do know that there are host of issues to be addressed in the wake of the debacle. It remains to be seen whether the Administration and Congress have learned any lessons, and whether the economic insecurity manifaest by the Ameircan people in their reaction of outrage to the deal will be taken into account in future policy decisions. |
| Trade Deficit Hits All-Time High; Congress Must Act Alan Tonelson As the trade deficit hits a new all-time monthly high, it's time for Congress to stop abdicating its constitutionally-mandated responsiblity to oversee foreign commerce and act. Passing the Hunter-Ryan bill, and making foreign currency manipulation an "actionable offense" under U.S. trade law is the first place to start. |
| U.S. Monthly Trade Deficit Zooms 5.29% to New Record Alan Tonelson Want to know why foreigners have all those greenbacks with which to buy up our ports and everything else in sight? Here are the new trade figures -- read 'em and weep for our country. |
| Is Reality on Trade and Jobs Finally Penetrating the Federal Reserve? Alan Tonelson In some of his first Congressional testimony as the new Chairman of the Federal Reserve, Ben Bernanke gave some relatively lucid and candid answers to Congressional questioners on the potential damage caused by our massive and persistent current account deficits. He also fessed up that the platitude that what we need is to train more scientists and engineers may not be the answer to our competitiveness problem. Simply training more means we will have a greater supply -- which will further depress wages in the field. We need to create demand for their services by spawning new industries and new R&D, something that our outsourcing based trade policy -- with the mass movement of R&D centers overseas -- is not doing. Is someone finally home at the Fed? |
| February 2006 |
| Why The American Public Rejects the Bush Economic "Plan" (Part 2) William R. Hawkins The President's reaction to the furor generated by the Dubai Ports deal is first bafflement, then aggressiveness. He has threatened to veto any legislation blocking the deal -- or even calling for a more thorough review. Bush is puzzled and combatitive because (a) he is a dyed-in-the-wool free trader and can't understand how anyone would not believe in free trade, and (b) Congress for years has passed that trade deals that lead to the current situation. If Congress doesn't care about the massive trade deficits that have sent trillions of dollars overseas in the past decade, on what grounds do they object when foreigners use those dollars to buy up American assets, even strategic ones? The American public knows intuitively that the ports deal is only the tip of a massive iceberg -- one that will soon sink the entire American economy unless Congress makes an immediate mid-course correction. |
| Why the American Public Rejects the Bush Economic "Plan" William R. Hawkins The current polling numbers on the economic performance of the Bush presidency reflect a high degree of dissatisfaction among the public. The reason is relatively straightforward. Unlike an incumbent administration, the American people actually have to pay their bills each month and cannot "spin" their creditors until they leave office and turn the problem over to someone else. |
| Memo to Bush and McCain: National Security Requires Industrial Independence, Too Alan Tonelson President Bush believes that the country should not be addicted to foreign oil -- because the risks to national security are too great over the long run. He is also on record that we should be not be dependent on foreign powers for our food. Why then does he not hold a consistent position when it comes to manufacturing? Why are China, South Korea, Japan, and Europe reliable suppliers of our computers, auto and aircraft parts, machine tools, etc., when Saudi Arabia, Venezuela, Nigeria and others are not reliable suppliers of oil? |
| JCS Chairman Pace Engages in Wishful Thinking About Beijing's Military Ambitions William R. Hawkins Marine General Peter Pace, Chairman of the Joint Chiefs of Staff, has expressed his opinion that China is a diminishing rather than growing military threat to the United States on a number of occcasions. His wishful thinking contradicts other in-depth Pentagon studies of China's rising military capabilities. |
| Building An American Future Means Rejecting the "Davos Culture" William R. Hawkins Davos Culture is the creed of a self-imagined, cosmopolitan, jet-set elite. What many of these business and political elites do not want to acknowledge is that the current trade and commercial battles have wider consequences for the national societies within which most people live. According to UNESCO, only about three percent of people worldwide live outside the country in which they were born. Thus a prosperous, secure, and growing national economy provides more opportunities for the citizens of a specific country than an economy that is being beaten down by foreign rivals. This common sense notion applies even to "superpower" America, but it is one that the President and most of our political leaders do not grasp. |
| January 2006 |
| The Labor Shortage Hoax Alan Tonelson The outsourcing lobby has been hard at work in recent months producing studies that purport to show a labor shortage in skilled manufacturing workers. But the studies are counterintutitive at best and ignore the most important guidestar of the multinationals and their trade associations: free market economics. |
| The Measure of Ben Bernanke Alan Tonelson President Bush and Treasury Secretary Snow have abdicated responsibility for exchange rate and interest rate policies and instead let Beijing set them. That means that the Chinese can continue to undervalue their curency, lend us the money to fund our consumption binge, and help create an enormus trade deficit, which shaves points off of economic growth. Just as the economy and the housing market are cooling off, oil prices are rising again -- all of this threatening economic growth. Does incoming Fed Chairman Ben Bernanke have the political skills necessary to move Bush and Snow to action and save the current economic expansion, weak as it is? |
| China Business Cheerleaders Ignore National Security Threats William R. Hawkins American business leaders who have placed their bets and their companies' futures on outsourcing strategies and business development models involving China are exactly the wrong people to discuss the national security threat posed to the UNited States by this totalitarian government and rising military power. They ignore the obvious security threats as inconvenient to their business models and are attempting to unilateral disarm both U.S. government policy and American public opinion. |
| Some Good News on Inflation William R. Hawkins Inflation appears well under control outside the volatile energy sector. This fact should bring a halt to the current series of interest rate rises by the Federal Reserve. Oil and gas prices are determined by international markets, over which the Fed has no control. Pushing up interest rates too much further risks choking off current economic growth, and in fact, brings a risk of deflation. |
| Russia Cuts Off Ukraine's Gas: Great Power Politics As Usual William R. Hawkins Russia's recent decision to cut off the flow of natural gas to former Soviet province Ukraine was allegedly a squabble about price. In fact, Russian President Putin is quite serious about returning his country to great power status and assembling allies (including China) and vassal states on Russia's periphery. The gas play was much more about political leverage than market pricing. It's time U.S. officials begin to think strategically about America's position in the world nistead of blindly following free trade theory, which is depleting the country of its manufacturing, technology, and agriculture bases - and with them our ability to create wealth and chart an independent course in world affairs. |
| In 2005, US Economy Lost 51,000 Manufcturing Jobs and Wages Lagged Inflation William R. Hawkins Clouds loom on the horizon, even though the economy continues to grow. The real story is in the details, as it always is. There is little comfort for average wage earners or U.S. domestic manufacturers, especially given the troubles faced by GM and Ford. |
| Large Trade Deficit Spells More Difficulties Ahead for US Economy William R. Hawkins The trade deficit, now more than six percent of GDP, is a significant drag on the American economy. The unprecedentedly large deficit means fewer high-paying manufacturing jobs, cheaper imports, more expensive exports, and slower economic growth. |
| U.S. Monthly Trade Deficit Continues Sky-high; Services Surplus Plummets Alan Tonelson As the trade deficit continues to mount to new yearly highs, so does the eventual pain that we will have to endure as a nation once the day of reckoning comes. |
| Hong Kong Trade Ministerial: U.S. Plays "Stakeholder" and Again Gets the Short End of the Stick William R. Hawkins Any rational analysis of the decisions made at the recent trade meeting in Hong Kong would conclude that the United States is being played for a fool -- by the "developing world (which includes China and India), as well as by the developed world (the Europeans and Japanese). While every other WTO member country is trying to gain competitive advantage and advance its national interests, the United States is looking out for the "good of the international trading system" -- a house of cards built on exporting as much as you can to the American market. Trees don't grow to the sky, and American wealth is not unlimited. The system will eventually collapse, bringing untold misery, unless some reality and sanity intervene. However, don't expect current U.S. trade officials to be the source of that sanity, compulsively wedded as they are to the abstract theory of free trade. |
| December 2005 |
| American Farmers to Join Manufacturers in Trade Victim Ranks William R. Hawkins The American farmer is next in line to be sacrificed on the altar of free trade and globalization. The entire focus of the current Doha Round of WTO trade negotiations is on granting preferential treatment to third-world producers at the expense of first-world producers. The trade-off is supposed to be increased access to developing country markets for U.S. financial |