Posts Tagged ‘trade’

Updated: March 23, 2010

The two most important issues facing this nation are now very clear.  These two issues have now risen past all other issues previously highlighted in this blog.  The first big issue is:

We now have a House of Representatives where the progressives hold just about all committee chairmanships; A Senate with progressives from both parties holding key committee positions; we have an extreme progressive as Speaker of the House; an extreme progressive as Senate Majority Leader; and an extreme progressive, near socialist, as President of the United States.  I use the term progressive, because I believe the progressives have taken over the Democratic Party – it is certainly not the party of John F. Kennedy and not the party that my mother and father admired.  To digress a bit, just take a good look at the advisors with which our President surrounds himself.  These are for the most part radical revolutionaries with the pedigrees to match.

Their agenda is simple, provide as much social legislation without regard to the debt and to our ability to pay the bill.  This is the first big issue facing America.  The means used to pass the Patient Protection and Affordable Care Act demonstrated that this group of progressives believes that the end, that they seek, justifies the means with which they achieve the end.

They stopped at nothing in their effort to push a piece of legislation by going outside the rules of each House of Congress, by buying votes from legislators with our money, by a complete obfuscation of the true facts about the bill when informing or rather ill informing the public.  They wrote provisions into the bill to force the Congressional Budget Office (CBO) to provide a dollar amount that was on the surface revenue neutral, even a debt reducer, when it is neither.  They did this by double counting supposed savings in a number of areas, with an egregious mis-count on Medicare savings to the tune of $563 Billion.

They sold this bill to the public as a bill to insure thirty-two million uninsured Americans, yet they do not cover these Americans for years.  In fact, the thirty two-million includes illegal aliens, but we were told that no illegal aliens would be covered.  What we were not told was that the next bill up in Congress, and they have started to work on this, is to provide amnesty for these illegal aliens, so they will be covered as well.

In this bill the Democrats have given the Secretary of Health and Human Services the authority and the marching orders 1,200 times to write her own rules for all sorts of health care, from payments to procedures, to insurance, to who is covered, to rationing, since thirty-two million newly insured will need to be covered by the same number of doctors who now practice – rationing will be necessary.  The Secretary has now been given the ability to write law without Congressional oversight. Remember the Secretary is Kathleen Sibelius, who refused to take action against “Tiller the Baby Killer” when she was governor, because he contributed heavily to her campaign.  “Tiller The Baby Killer” was one of two or three doctors in Kansas who would routinely abort late-term babies for frivolous reasons, before he was assassinated – these were babies who could have lived outside the womb.

This bill is actually a violation of Roe v. Wade – the Supreme Court decision that protected a women’s right to do with her body as she sees fit.  This also applies to men who wish to do with their body as they see fit.  Should men or women choose to not have health insurance and not to seek regular medical care, they have that right under Roe v. Wade. Read: Roe v. Wade to the Rescue: right to privacy or health care mandates.

One last item about this bill, is that you can search it high and low and you will find nothing in it that attempts to control the cost of health care.  Why?  Well, this bill is only intended to drive the health insurance companies out of business, leading to single payer universal health care, just as found in Canada and Great Britain.   Until this happens, the Secretary of Health and Human Services is in control of the insurance companies.

The second big issue facing this nation is even more dangerous to us than health insurance reform:

The flagrant disregard for our Constitution by Congressional leaders and our President should be a warning to all.  Speaker Pelosi actually laughed at a reporter who seriously asked if what she was proposing was Constitutional.  At the minimum they have flouted the spirit of the Constitution and at the most egregious they have simply ignored it.  The President is on record with his disdain for the Constitution, in that it does not offer mandates of what the government must do for its citizens.

It is clear that he and his cadre wish to rewrite our storied Constitution that currently prohibits our federal government from taking over the rights of people.  This document prohibits the federal government from diminishing the states and Congress to roles as bit players in the governing of this country.  It is clear that the current leadership in Washington feels inhibited by this Constitution – they cannot ignore the whole thing.

This progressive cadre wants to rewrite the Constitution and the way to do that is to create a national economic emergency the size of which has never been imagined.  They will spend us into oblivion until our economy is broken and our free markets are teetering on collapse.  Then and only then, to solve a national emergency, they will offer a solution to the problem that includes an even bigger federal government driven by an even bigger centralized executive branch.  They will attempt to use the tragic events of a broken economy to rouse public interest to rewrite the Constitution.

Read an indepth look at how the progressives have attempted to marginalize and discard our Constitution in a bookblog dedicated to looking at what is wrong, why it is wrong, and what we need to do to fix the problem at U.S. Constitution – “Sine Die”.

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If we look for leadership from the founding fathers of this nation, we have an abundance. These were people who would risk their own necks and personal wealth building to achieve a goal for the betterment of their, state, soon to be nation, and countrymen. These were people who could and would compromise to strengthen this country – they put the country and the goal of freedom and prosperity first over partisan rancor.

Where are the leaders with a true overarching future vision of where this country needs to be and the leadership and knowhow to make it happen, like Alexander Hamilton, rising from a poor and orphan like childhood to become the trusted compatriot of George Washington, to firmly set this fledgling country on a sound financial footing? Where are the Thomas Jefferson’s, who despite maintaining a very literal view of the Constitutional powers of the Presidency, took the opportunity, to acquire what became know as the Louisiana Purchase and worry about it later – the Constitution did not cover the acquisition of land for the United States? He did this because he knew it was the right move to better this nation and he had the leadership capability to pull it off. Where are the Teddy Roosevelt’s, who had a true vision of this nation as a great player among the great nations of the world? He saw the need to extend the growing power of this nation to influence world events, saw an opportunity, and initiated the great white fleet. He sent the U.S. Navy in modern formidable white ships around the globe as a means of demonstrating just how mighty the U.S. had become. Where are the Franklin Deleanor Roosevelt’s who had the vision and leadership to take on the national rebuilding to end the depression and then to lead this nation and the world through the largest coordination and assemblage of people and machinery in the history of mankind to defend the world against the tyranny of the Axis Powers? Where are the Ronald Reagan’s who had a vision of a world without the totalitarian iron curtain and who had the temerity to fight for and lead the world to the tearing down of the symbol of the iron curtain – the Berlin Wall? All these leaders did more for the country that the acts listed above – they were visionaries, leaders, and statesmen.

Today we are faced with three major choices and soon to be two major choices for the Presidency of the United States. Can we honestly say that any of these choices have a true vision of where this nation needs to be in 25 or 50 years? Or, more importantly, have the capability of leadership and understanding of the facets of the changes we need to make as a nation to retain the position as the nation with the greatest standard of living. Does any one of them understand that we may walk and talk like the world’s military super power and a nation possessing a consummate standard of living, but that the underpinnings of this strength and status are rapidly failing. The world knows this, but do we? Can we honestly say that we have the best and brightest in the Presidential race and in our Congressional and Senatorial races? Have any of them laid out where we should be, how we can get there for the second half of the twenty first century, and how they will lay the ground work to achieve the goal?

This country faces the combination of a complex and very dangerous foreign policy coupled with our ability to compete in the world to maintain our financial strength. Currently we operate like the rich playboy who spends his wealth, but has no means of replacing the wealth he spends.

Our populace is no longer being given heavy doses of history or civics in school. Without the preponderance of history and civics knowledge can we make good decisions about our legislators and Presidents? Can we fully understand the events that shape our world? The early childhood discipline coming from the schools and then from service in the military is gone. Today, discipline in schools is a dirty word – our children must be free to make their own choices as they have rights, despite solid scientific evidence that the brain is not fully developed in matters of judgment, until these children are will into their twenties. Without the discipline to expect what is right and to walk the tough walk, we seek the easy way – the short term solution to our problems. The mortgage crisis is an example of those seeking the short term solution to their problems without regard to the long term consequences.

Without the basics of understanding world events, we are more susceptible to undo influence by the media disguised as fair purveyors of truth, when they are making every effort to steer our thinking with selection of articles, selection of news items, and slanted interpretation of the happenings of the world, rather than just accurately and fairly presenting what has happened. The media disguises opinion commentators as news journalists to manipulate the populace. How are we to know the difference, unless we have the necessary background?

Our Congress is filled with people who are there, not for the public good, but for what they can get out of it. Why then would we have Congressman in office for many multiple terms, unless they are doing very well for themselves in office? If you do not believe me, just count the number of disgraced Congressman who have had to leave the Congress under sordid circumstances. We have political parties more concerned with the party than the country.

This country is facing challenges of the like that we have not faced before. We astoundingly have no comprehensive energy policy that factors in all sources of energy and the transformation over time from fossil fuels to renewable energy. Renewable energy is simply not ready to be the energy motor of this nation, so we need interim solutions. Energy is the motor that makes this country work. Without energy we will never achieve our objectives in this world today. We have allowed the world to dictate our cost of energy and yet we still will not start using our own resources on an interim basis. Our President recently went to Saudi Arabia to ask them to produce more. Had I been King Abdul, after I stopped laughing, I would have said “Let me get this right, you want me to produce more and you will not produce more in your own country – you will not drill in ANWR or on your east and west coast continental shelves, you will not build refineries, and you will not build nuclear reactors. You have the audacity to hope that we will deplete our reserves so you can retain yours. No! Go hug a tree!” We have no trade policy other than free trade, yet we are ill equipped to trade in a free market. What shall we trade with – do we produce for trade, do we make a guided national effort with leadership to determine what our national comparative advantage is and exploit it or improve it – No?

Without true nonpartisan leadership at all levels, we will not be and cannot continue as the nation with the world class standard of living and the ability to influence world events through both financial and military might. Are the candidates running for President the leaders with a true vision for not only what they will deliver to the country, but also how they will get it done. It is easy to promise much and deliver little – it is easy to limit your focus and promise on a few things, but it is another thing to size up a gargantuan task and have the vision to know where we should be, how to get us there, and the leadership and experience to pull it off.

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Way back in the old days after the Republican debacle of Richard Nixon and Gerald Ford, the Country wanted a CHANGE. Coming forward was a candidate from Georgia, a Governor. Jimmy Carter appeared on the scene as a Democratic Party unknown running for President. He talked of changing Washington business as usual, changing foreign policy business as usual, and being an outsider.

The Country narrowly gave him a victory over more experienced people because his message was seen as a breadth of fresh air. In our haste to put Watergate, the beginnings of an inflation problem, and a gas shortage behind us we never stopped to look at the credentials of this candidate with a fresh outsider message. We just knew that Jimmy Carter represented a fresh start and that he was not of the beltway. Sounds like another candidate running today, doesn’t it?

Jimmy Carter was elected with 50.1% of the vote, but a clear majority of Electoral votes. His handling of the economy resulted in a 40% increase in prices over three years, the prime rate moving from 6.75% to 21.5%, and mortgage rates of 17.5%. Oil prices skyrocketed and Carter instituted an energy policy. This ill conceived energy policy was based on conservation and high prices to help reduce U.S. consumption. It was a policy that simply punished this nation for using oil. The Carter administration economy proved to be the catalyst that brought a “misery index” to the voters in the next Presidential election.

Jimmy Carter’s foreign policy, consisting of “we can talk with our enemies” and “work things out” was perceived as weak in many areas of the world. He did accomplish the Camp David Peace Accord. We lost respect among other Middle East nations, especially Iran. This unprepared, inexperienced administration run by a novice in international affairs may have fostered the Iranian Hostage Crisis. Iranian students seized our Embassy and took our State Department staff hostage. Fifty two State Department diplomats assigned to the Embassy were taken captive by Iranian students in support of the Iran Revolution. This was a violation of a long standing principle of international law, which granted diplomatic immunity to our representatives in Iran. These hostages were held for 444 days and were only released after it was clear that Ronald Reagan would be elected President and would take large scale overt military action against Iran.

Mahmūd Ahmadinejād, the current President of Iran, was a ring leader of this stain on our foreign affairs history. Yes that right, Mahmūd Ahmadinejād, was the Mayor of Tehran and was a ring leader of this reckless disregard of international diplomacy. He denies it was him, but many of the hostages and the former Iranian President Abholhassan Bani-Sadr have asserted that Ahmadinejād was a ring leader.

The lesson here is that our rush to make CHANGE for the sake of change caused this Country to suffer the naivety of a “Washington Outsider” President with no foreign policy experience. He did have Gubernatorial Executive experience – one term, and one term as a State Senator. Change we did receive, but it was an unpleasant change.

The populace sometimes in its ill informed zeal to start fresh and fix the ills of Washington fell for the smooth talking great message Washington Outsider called Jimmy Carter. This agent of change left this nation to be a veritable basket case on the domestic and international scenes.

Due to the reappearance of a misery index economy, we are now hurtling down this same path. The current candidate of CHANGE, Barack Obama, wants to sit down, right out of the chute, with Mahmūd Ahmadinejād. Senator Obama wants to raise taxes and spend heavily against the backdrop of a fragile economy. He wants to stop free trade rather than prepare us for free trade. This is a formula for an exponential increase in misery index.

While experience is not a formula for success, it is much better than uninformed good intentions. We have too much to lose to just blindly make change. We need to address change with a blend of judgment and experience – even a poor history of experience is a learning tool. The very limited experience of a local politician with just two years in the U.S. Senate, less experience then Jimmy Carter held, should be weighed very carefully.

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In November we will have an election to fill 435 seats in the House of Representatives and 33 seats in the Senate. I have been compiling my wish list for the new Congress. Yes it is early, but since the current Congress has decided to accomplish nothing but continued earmark spending and the discussion of a misguided housing legislation, I thought I might as well get a start on what they will not accomplish in the 111th Congress.

Let’s see! This country needs a sound coherent energy policy that considers our exposed national security, with oil being our Achilles Heel and all. It is a shame that the current Congress does not want to attempt this, other than to tell oil companies they charge too much and to bring prices down or they will lose the tax benefits that helps to moderate prices – makes sense to me. Instead they gave us ethanol which is proving to burn as much carbon as oil after the growth cycle, transport cycle, the refining cycle, and the second transport cycle. It does not pack as much punch as oil and the MPG is not as high, but the farmers are happy since they get great subsidies to plant corn for ethanol. This has led to a shortage of corn to feed our cattle and a shortage of an assortment of other farm products raising food prices rapidly around the country – nice work there Congress!

Our trade deficit might be a good thing to address, after all, China represents an unfair, unrelenting trade behemoth with an artificially devalued Yuan. It ships any kind of quality or non-quality to our consumers, especially our kids. It has been trying to steal our industrial and technology secrets to boot. China is an unfair trade threat, but our Congress has not adjusted tariffs to compensate for China’s scurrilous unfair trade advantage. My wish list includes placing our domestic businesses on a competitive trade footing with other nation’s businesses. Perhaps we could try in the next Congress to change the tax structure and other impediments to our businesses so they can compete, grow, and develop new and good paying jobs. It is a shame the 110th Congress has ignored this problem.

It is depressing that they could not spend a substantial amount of time discussing health care and the current tax code in the 110th Congress – they must have had more important things to do! The illegal immigration resolution discussion must have taken up much of their time or did it? Remember, they could not find time to re-visit this tough issue after they slapped together a poor “comprehensive” bill and then when it fell apart, decided they could not spend anymore time on it. It is apparently not important to the American people, whom they represent.

The 110th Congress was elected to change business as usual in Washington, to stop the out of control spending of the Republicans, and to bring ethics back to Washington. Well, the now Democrat controlled 110th Congress has accomplished nothing, spent more via earmarks than the 109th Congress, and avoided every tough but immanently critical issue facing this country – they are good at finger pointing after the fact.

At the beginning of this piece, I asked “What do I want from Congress”? Well, I want a Congress that is more responsive to the decay in the underpinnings of this country’s economy and strength, and less interested in pandering, getting rich, being re-elected to consolidate power. I want patriots in Congress. I want leaders in Congress. I want neither Republicans nor Democrats in Congress. I want concerned citizens in Congress. In the fall, we can and should change 468 House and Senate Fannies in Congress – they might then get the message.

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America needs to regain the fundamentals of a strong economy for a number of important reasons. National socio-economic health, political and diplomatic influence in the world for trade, defense, and standard of living all depend on a fundamentally strong economy. The fundamentals of a strong economy, from a non-economist’s view – mine, start with comparative advantage in world trade. This is something which our country and our leadership and labor unions have taken for granted over the last 20 years, letting this precious commodity dwindle away. We also have mistaken productivity and its usefulness toward comparative advantage with an effective trade economy. Remember, while productivity helps our trade advantage, it does little to help our trade related employment number or the quality of the trade related jobs. Simply put, the definition of comparative trade advantage is “what do we have to offer in the deal that makes us come out ahead of the other guy?”

We hear about free trade agreements and that trade is good – and it is! Entering into the world trade arena without a trade advantage or at least a trade equilibrium is just down right dumb and we have run headlong into this arena stark naked. We need to rediscover our comparative trade advantage or discover a new one, if we are to successfully compete in world trade.

Look around, the world has oil and we need it, the world has cheap goods and we need them to keep inflation down, the world has the capability to produce both quality goods and cheap goods that it could not produce 50 years ago, the world has cheap labor – shall I go on? What do we offer? Well we still have some bright minds, even though they may be heavily populated with foreigners, we still can grow food with the best of them, we still offer innovation, but we have no monopoly any longer on innovation. Our dollar is losing value which helps us produce relatively cheaper goods for the world market and thus lower the trade deficit.

A devalued dollar is a two edged sword as also it brings us a higher cost of living and a lower standard of living relative to the world. What do we plan to do about this obvious problem? Well Senators Obama and Clinton want to tax us more – mostly business and the rich – you know, tax the engines of investment and growth! Senator McCain wants to keep personal income taxes low and cut spending, but this will not bring us back to a fundamentally strong economy even though it is good start. It is how, when, and who we tax that is the problem. We are an economy that taxes income accumulation. We should be taxing the disposable money spent on “stuff” and not the money earned and used for growth re-investment.

Businesses pay a 35% Federal corporate tax rate and varying state corporate tax rates, bringing the total corporate income tax on profit to between 40% and 50% for the most part. Remember the corporations only collect the tax and anyone who buys their goods pays the taxes. If a corporation works on a 15% profit margin, and they make a set of golf clubs which they wholesale for $500, $65 is taxable profit of which the retailer pays $30 of the income taxes due on the item. When the item is resold at retail at $800, assuming a 15% profit margin, $105 is the taxable profit and $47 is the income tax due on the item paid by the end user, the consumer, you. Actually you pay a total of $77 of the corporation’s and reseller’s income taxes.

Granted, this example is clunky and probably filled with holes, but it does serve to demonstrate that when we tax corporations for manufacturing or reselling all we do is raise the price of the item. This works fine when all the competition is paying the same taxes. If does not work fine when world trade is involved, because our goods and services are then less competitive with the goods and services of other nations. We already start out with a disadvantage, in that we pay our workers more than the workers in far off lands receive, but this can be adjusted with productivity.

Unless we seriously look at our tax structure and make changes sooner rather than later – maybe move to a consumption tax or a fair tax and get away from inhibiting investment, growth, and production with income taxes, we can expect to have a lower dollar value, a lower standard of living, etc. Income taxes on domestic corporations foster a comparative trade disadvantage for us. Our government must find ways to domestically foster healthy manufacturing and servicing sectors so we can compete with the rest of the world without giving up good paying jobs. If the tax burden shifts from corporations to individuals, their will be no real change in who pays the taxes, except we will compete in the world trade markets effectively, create good jobs, and restore a fundamental of a good economy.

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Sounds confusing, doesn’t it. The cry around this country to “get those dastardly corporations – they are the cause of all our troubles” is so misplaced that it is almost like saying don’t put prisoners in prisons, because prisons are unsafe because there are too many dangerous people in prison.

Have I now cleared all this up? Okay it is simple, even if Senators Obama (now President) and (now Secretary of State) Clinton appear to not get it. Corporations factor in the income tax rate into their cost of sales and thus the price they set on what you buy at the point of sale. So, go ahead and tax the living day lights out of these corporations, they just collect their income tax for the government from you. There is one hiccup with this plan. These corporations are unable to incorporate their income tax into the price on sales overseas or in Canada and Mexico.

Senators Obama (now President) and (now Secretary) Clinton, please pay attention here as this is important and you act like you have never heard this before. When you tax a corporation and it cannot pass on that tax it either cannot survive internationally or it adapts by closing plants in the United States and opening these plants in another country. Are you still listening? When they do this, they create jobs in other nations and terminate jobs in the United States. This is called free enterprise. We could try to regulate corporations and force them to keep the jobs in the United States, but then they will not make any money and the investment capital will move to a company in another country and not here. It is like squeezing a balloon. Squeeze one end and it gets bigger on the other end – squeeze too hard and it breaks.

Our tax code and the fact that we tax our corporations at the second highest rate internationally may have something to do with out trade deficits and the loss of good paying jobs in this country. So yes, when we tax a corporation they bill us for the tax through domestic sales or sell us merchandise made in another country where the bulk of the profit is taxed at the other country’s favorable rate and the taxes go to the other country.

Senator (now President) Obama has a socialist solution for this conundrum. Instead of lowering taxes on domestic corporations so they can manufacture in the United States and create good paying jobs. These are jobs that make you more financially viable, jobs that make our economy healthier, and jobs that help us export to other nations. Senator Obama’s solution is to support the Patriot Employer Act. This act is right out of the socialist play book – we all know that the socialist economic system is failing all over the world. It is the second worst economic system, on how people benefit, only when compared to communism.

The Wall Street Journal quotes Peter Merrill whom they refer to as “…an international tax expert at PriceWaterhouseCoopers…” as saying “…Apparently Mr. Obama believes that by making U.S. Companies less profitable and less competitive world-wide, they will somehow be able to create more jobs in America.” http://online.wsj.com/article_email/SB120407121574294919-lMyQjAxMDI4MDI0ODAyNzgxWj.html

Honestly, they must have taught international economics at either Columbia or Harvard when Senator (now President) Obama attended. If he knows better and is sending us down the wrong path just to get elected, then he does not deserve to be President. If he does not know better, then he does not deserve to be President. The same should apply to Senator (now Secretary) Clinton. The solution, Senators Obama and Clinton, is to help these corporations become as competitive as we possibly can and then turn them loose on the world. This will create the right kind of jobs for this nation – we will not have to settle for jobs where you must learn the phrase – Do you want fries with that?

Senator (now President) Obama, drop your support of the misnamed Patriot Employment Act which is a form of reverse protectionism – it protects the world from us – and lower or eliminate corporate taxes. Yes, we all will personally pay more income tax which will be offset by lower prices for goods, since the tax will no longer be included in the price. This will stimulate domestic production of all kinds of goods and improve our standard of living by allowing us to hold better jobs. Aren’t you and Senator (now Secretary) Clinton about jobs?

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In economics books it is called Comparative Advantage. It is the underlying key to successful trade among nations. In non-economist terms, it is what can I offer that the other guy can’t that will give me an advantage in trading so I come out on top.

When the United States was very young, we had unbelievable amounts of natural resources. As we approached the twentieth century we had a powerful work force achieved through the immigration of people looking for a better opportunity. These people were both adventurous and driven to succeed – they made a productive work force. Oh yes! we still had abundant natural resources. In the second half of the twentieth century, after the two world wars, Asia and Europe were devastated and without infrastructure, and they were in need of all things manufactured as they were rebuilding. The comparative advantage of the United States was its gargantuan manufacturing infrastructure resulting from the build up to produce for World War II, and the many technical achievements gleaned from the war arsenal. We had a customer – the world – ready to consume any and all that we could produce. In effect we not only had a comparative advantage, but also an absolute advantage – we could only prosper – we could literally phone it in. It was all about us!

By the close of the twentieth century both Asia and Europe, with the exception of the iron curtain countries and the Republic of China, had rebuilt their infrastructure, and in many cases with more up to date and productive manufacturing facilities than we had. The United States had fewer desirable / usable natural resources. Our coal reserves became unpopular and our desire to not spoil our planet kept us from fully developing our oil reserves. In the mean time, oil was becoming the key natural resource in the world for the later part of the twentieth century and the early part of the twenty first century.

In the second half of the twentieth century, we became oblivious to the world – remember it was all about us! We paid our people ever increasing wages in manufacturing, added many unproductive work rules, and taxed our companies to the point that all three events took away our comparative world trade advantage in manufacturing. We were now at a trade disadvantage – yet our appetite to consume was still feverish. During this period, it became more advantageous for our manufacturing companies to move manufacturing overseas. If they had not done so, they would not have been able to compete on the world stage and be profitable. During this period, one bright spot in our comparative advantage was our strength in technology and highly educated and well trained engineers. Our use of technology gave us a comparative advantage in productivity. We continued to utilize our comparative advantage in the trade of technology – we thought it up and it was manufactured overseas. Over the last quarter of the twentieth century and the beginning of the twenty first century, Asia caught up, only with a twist – same or better engineering with lower wages – the comparative advantage shifted in their favor. We also allowed our schools to lose their leadership in delivering a strong education from K through 12.

Today, what do we offer: restrained under utilized resources, a broken education system, uncompetitive costs on a world scale due to high wages on the remaining manufacturing jobs (auto industry), a declining infrastructure, comparatively high taxes on companies attempting world trade, and a voracious appetite to consume manufactured goods and oil from overseas? Yet our political leadership continues along as if we remained the pre-eminent holders of all things comparative trade. Our free trade agreements are good, yet we entered the trade arena with a handicap – we have no comparative advantage, so they are NOT good for us at this time. Protectionism will not work, because the nations of world can get along trading among themselves – they no longer need us.

What do we need to do?

  • Business: stop taxing our domestic businesses engaged in manufacturing, give them a financial trade advantage as they will still be paying higher wages for manufacturing workers than their world competition; remove the health insurance financial burden from business and move it to a national health insurance system; move to a consumption tax and stop taxing the businesses that need to trade to grow so they can build and offer more good paying jobs – we need to put our domestic businesses on a level playing field with the rest of the world.
  • Children: target our children by giving them all a top flight education and by challenging them with a tougher curriculum, and longer school years just as advantaged world trading nations do.
  • Energy: drill for and refine our untouched domestic oil reserves in the short term; utilize nuclear, clean coal, and solar in the mid-term; develop wind, geo-thermal, advanced solar, tidal and hydrogen fuel in the long term. We need to lower the cost to produce and transport.

If we don’t rebuild our lost comparative advantage we will never hold a free trade advantage, we will continue to become a nation of past successes and a second tier nation at that. Remember it is a world economy now and the competition is fierce.

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