The American Spectator : Currency Cretinism

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Currency Cretinism

By Ross Kaminsky on 10.7.11 @ 6:09AM

What is Mitt Romney doing siding with Chuck Schumer in his protectionist pandering against China and the American consumer?

When the front-running Republican presidential hopeful agrees with Senator Chuck Schumer (D-NY) on an economic policy, you know we have a problem. Unfortunately, that's the situation we find with former Massachusetts Governor Mitt Romney agreeing, at least in principle, with legislation proposed by Schumer and Senator Sherrod Brown (D-OH) that threatens China with trade tariffs if it does not devalue its currency, the yuan.

Indeed, last month a Wall Street Journal blog wondered aloud whether the legislation should be termed the "Schumer-Brown-Romney Bill." To be sure, Romney has not said that he supports this bill, but his "Believe in America" economic plan is quite specific: In a section entitled "Five Executive Orders for Day One," Romney tells us that he will "[d]irect the Department of the Treasury to list China as a currency manipulator in its biannual report and direct the Department of Commerce to assess countervailing duties on Chinese imports if China does not quickly move to float its currency." And nearly half of the "Trade Policy" section of Romney's plan comes under the heading of "Confronting China."

Allow me to offer you an analogy:

If Store A sent you a coupon for a ten percent discount on anything in the store, anytime you shopped there, would you scream at the utter unfairness to Store B which is also trying to get your business? Or would you say "Thanks, that savings really helps! Now I have more money left over for a better car or a better school for my kids or the vacation I otherwise couldn't afford."

China's keeping their currency at a lower value than it would likely trade at in a free market is their equivalent of giving every American just such a coupon, at least for the many items we buy every day that are made in China. They are in effect taxing their own citizens to subsidize American (and other non-Chinese) consumers.

Let's put this another way: According to U.S. Census Bureau data, the U.S. is on track to import about $375 billion of goods from China in 2011. If everything we buy from China is ten percent underpriced because of "currency manipulation," that means the Chinese government has made a $37 billion gift to Americans at the expense of its own people.

And we're supposed to be angry about this?

Currency demagogues, like both Mr. Schumer and Mr. Romney, are playing to the economically poorly informed, to put it kindly. They make two particular protectionist arguments that are excellent sound bites but are completely false.

First, they claim that a higher-valued yuan will create manufacturing jobs in America. That is simply false. For low value-added items where much of the product's cost is labor -- which is the vast majority of what we import from China -- if China becomes less competitive those jobs may move to Thailand, Vietnam, or Brazil, but not to the United States. Therefore, our trade deficit with China will decrease but our total trade deficit will not. Indeed, to the extent that those other countries are less cost-competitive than China is now, but still competitive enough that prices of goods to be made there are not so much more expensive than Chinese goods that it would cause a decrease in demand, our overall trade deficit would likely rise.

And that brings me to the second point, inherent in the term "trade deficit." A trade deficit is not, unlike our federal budget deficit, a loss to the American people. Unless the Chinese are stuffing their export-earned dollars into mattresses, they must use them to buy something, and much of what they buy will be American, whether financial or physical assets. And if they buy from foreigners, then those foreigners must spend their dollars. Eventually all dollars must return to the U.S. (except those being hoarded or kept as collector's items to recall the day when a dollar was worth something).

Whereas a budget deficit represents money that must be collected from taxpayers sooner or later, a trade deficit has no such implication. It is not a liability to be repaid by Americans. It is not surprising, however, that since both terms contain the word "deficit," many Americans think that both are a problem.

As economist Don Boudreaux explains, the trade deficit is often little more than an accounting convention -- though one that is routinely used by politicians to scare voters into supporting bad, protectionist policies:

Consider two cases. First, Americans buy $1 million worth of textile imports from the Chinese who then buy $1 million worth of pharmaceutical exports from Americans. The result: balanced trade.

Second case: Americans buy $1 million worth of textile imports from the Chinese who then buy $1 million worth of land in Texas. The American seller of the land immediately spends this $1 million on American-made pharmaceuticals. (Perhaps the Texan is opening a pharmacy.) The result: a $1 million U.S. trade deficit.

In both cases, Americans producers sell an additional $1 million worth of output as a consequence of Americans importing $1 million worth of goods. So -- although America runs a trade deficit only in the second case -- the employment effects in both cases are identical.

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About the Author

Ross Kaminsky is a self-employed trader and investor and is a senior fellow of the Heartland Institute. He blogs at Rossputin.com and is the host of The Ross Kaminsky Show on Denver's NewsRadio 850 KOA at 11 AM on most Sundays.

Letter to the Editor View all comments (145) | Leave a comment

kzat| 10.7.11 @ 6:36AM

All protectionism is horrible Ross. Uber free trade libertarianism, open immigration is good in theory and always popular with the Beltway Punditry but in reality, those policies if carried out in extreme, only benefit the political class.

That's why most common sensed Americans favor small, reasonable amounts of so called "protectionsim" and modest reductions in immigration (the importation of cheap labor), especially in a time of high unemployment and a sour economy.

PCC| 10.7.11 @ 8:44AM

By the way, a lot of those Chinese imports are being produced by American-owned or American-financed manufacturing facilities operated by the likes of Nike, Apple, Black & Decker, etc.

PCC| 10.7.11 @ 8:47AM

A much more sensible policy, especially if protecting or creating American jobs is one's principal concern, would be to cut the corporate tax rate to no more than 15% and ease up on overly restrictive government regulations.

PCC| 10.7.11 @ 8:51AM

Indeed, for all the hot air expelled by bloviating politicians, the US-China trade relationship, overall, is mutually advantageous one. We'd be far better off devoting our energies to fixing our own problems rather than scapegoating China and its currency policy.

Quartermaster| 10.7.11 @ 6:37PM

One thing you need to understand is the attitude of China toward the US. IT is not friendly, and we are paying to build a military power that hates us, and has stated that we are an enemy.

They have stolen our technology and it is being incorporated into their military technology. There is nothing wrong with free trade (something that really doesn't exist anywhere except the minds of utopians), but the trade with China isn't free. It is costing us a lot, and denigrating our country and changing the military balance against us. But, the chances of changing the industrial environment to bring the manufacturing plant back to the US is pretty much nil, and China already has much of our technology to use against us.

John Navratil| 10.7.11 @ 9:03AM

kzat,

Kaminsky's article was very good, and on point. It could have been written by Walter Williams - especially the example of Chinese buying land in Texas and the subsequent example of the grocery store.

Where I disagree with him, and you, it where Kaminsky defends anti-dumping rules. How can production costs be tested in a closed economy and when currency is purportedly manipulated? It cannot and this is nothing more that your argument that all protectionism is bad but some is strategically required.

Americans always favour protectionism when it is to their favour. Get rid of the Mexican labourer so I can hang drywall! Oh, wait, I'm a plumber. Get rid of the Mexican labourer so my competitor in the plumbing business can quit plumbing and start hanging drywall. It just never works out quite right.

Americans could all simply say "We're boycotting Wal-Mart until the Chinese raise prices!" Dream on!

kzat| 10.7.11 @ 11:56AM

John, I'm an American, I'm not overly concerned about the plight of the Mexican Indian. They are not my concern. Nor am I obsessed with the plight of the Somali Muslim, nor the Russian, nor the Irish. They have their own nations, their own cultures. I have no problem with immigration - if it's legal and it's in low numbers.

I like the majority of Americans today, favor strict enforcement of immigration laws (deportation) for illegals and believe it or not, most Americans favor a reduction in legal immigration. Yeah, we're all stoopid and need Beltway Buddies to re-educate us rubes and boobs, still "clingin to our guns and religion".

John Navratil| 10.7.11 @ 5:13PM

kzat,

As you wish! Keep jacking up the price of American labor and protecting the market and see how quickly it crashes. It won't be because you can't buy lettuce or a house. It will be because you can't by a Toyota and will be stuck buying a Gov't Motors car for a years salary. Remember the Trabbant.

Alan Brooks| 10.7.11 @ 11:11AM

Long as you admit that China is in no way a democracy- not by the Western standards you practically worship.

Ross Kaminsky| 10.7.11 @ 11:19AM

kzat,

Reduction in legal immigration is terrible, self-destructive economic policy.

best,
ross

kzat| 10.7.11 @ 11:53AM

No it's not Ross. Only economic libetarians, obsessed with myth of "free markets" and who think people are just economic widgets, would want endless immigration and endless "free trade".

People, culture, language, religion, values are more important than cheap consumer goods from a quasi slave labor nation like China.

Jeff Perren| 10.7.11 @ 12:09PM

I love traditional American culture. That is one reason I do not want the Federal government trying to effect it one way or the other through immigration policy.

The most traditional and most important aspect of American culture is a love of freedom.

Derek Leaberry| 10.7.11 @ 1:02PM

Absolutely correct, kzat. Mr. Kaminsky is no conservative.

Ross Kaminsky| 10.7.11 @ 7:24PM

Mr. Kaminsky is a libertarian. He never claimed to be a conservative. Nevertheless, conservatives should be mindful of the tradeoffs they are making when they say they want to limit legal immigration or free trade. I think the price you are willing to pay for your "traditional values" is far too high...and in some respects unAmerican.

Occam's Tool| 10.10.11 @ 4:08AM

Kzat:

we are going to need young people having babies over the twenty-thirty years who swear allegiance to our country. Legal immigration is a good idea.

This does not mean I encourage the illegal immigration of druglords from mexico, but legal hardworking eduicated people, from, say, India.

Before you slam me, please go to the CIA Factbook site, look through the Demographics of Western Europe and those of Islamic States. think long and hard about what it means.

Red Phillips| 10.7.11 @ 1:43PM

But importing a new voting base and bringing about the demographic dissolution of the country as we know it is just swell. I'm sure Davos Man agrees with you, but American conservatives shouldn't.

Republicans who support immigration can't do simple math. Look at voting patterns. More new immigrant voters equals more Democrats in office. This is not disputable.

And conservative who support mass immigration aren't. NOTHING is inherently more transformative than mass immigration. Conservatives are not about rapid transformation. Conservatives are about conserving things. Go figure. There is NO policy more inherently conservative than restricting immigration.

William R| 10.7.11 @ 2:10PM

Please. Hilarious. Mass immigration with a welfare state only grows government. We have been importing poverty. Family reunification.

Even Milton Friedman understood this. Ron Paul understands it.

Ross Kaminsky| 10.7.11 @ 7:25PM

By the way, I completely agree with this. I am for more legal immigration but it must go hand in hand with walling off the welfare state from immigrants, at least for some number of years after gaining citizenship so that the welfare state is not the magnet but rather the opportunity to work and prosper is.

Red Phillips| 10.8.11 @ 12:16PM

On no issue does libertarian ideology blind people to reality more than immigration. People are not simply interchangeable cogs in some grand economic machine. There is a reason the left celebrates the demographic dissolution of this country. Go to a website such as imagine2050.org. (The year America is projected to no longer be majority white.) Read Tim Wise's post 2010 election white hating rant. These people intuitively understand that an America where whites are no longer in the majority will no longer be America as we know it, and they are dancing on our demographic grave. They recognize that the opposition to the "progress" they crave is primarily embodied in the white middle class that resides in fly-over country. That why they so despise us and want to see us demographically marginalized. If you think that that country is going to be friendly to your libertarian Utopia then you are a deluded fool. It might be friendly to lawless anarchism because it will be ungovernable, but I suspect that is not what you have in mind. Wake up.

John Navratil| 10.9.11 @ 9:24AM

Red Phillips,

A serious problem with the immigration discussion is that it a mish-mash of xenophobia, protectionism, and legalism. What seems missing is some sense that immigration policy should serve the interests of the nation while addressing the concerns of security, culture and economics.

Purely for example and not to pick on the Mexicans... they've been crossing that border in great numbers since Henry Ford began paying them $5/day a century ago. They picked our crops (still do) and did all manner of jobs while American sons were off fighting WWII. Five years ago, when unemployment was 4% (i.e. full employment) the estimate was perhaps 5% of the work-force was illegal. Today you see few border crossings because the economy is so bad.

Five years ago (the argument has been going on for decades - Simpson-Mazolli was in 1986) some argued for deporting all the illegals as if removing 5% of the labor force was possible without wrecking the economy. Bush was excoriated for the Z visa as tantamount to amnesty as if it is possible to deal with this issue without knowing who is here.

Completely ignored was the notion that the number of visas permitted was completely at odds with reality.

I don't want a welfare magnet. I don't want welfare at all, but that is a problem purely of our making. When you pass a law saying that an emergency room cannot turn a sick person away, can one not expect the indigent to begin using all the expensive free care they need?

On the other side of the coin, we graduate a Ph.D in Computer Science at MIT and tell him that he has to go back to India. Then we lament to export of software development to India.

The system is broken at all levels and simple platitudes won't feed the bulldog.

Peter Schaeffer| 10.8.11 @ 8:08PM

Folks, this is dumb. America is a vast loser in our trade with China. A long time ago, we understood that "free" trade can be a dangerous burden. No less than Abraham Lincoln once said

"I don't know much about the tariff, but I know this. If I buy a coat in England, I get the coat and England gets the money. If I buy a coat in America, I get the coat and America gets the money."

That was more than 150 years ago. Sadly, things haven't changed. See "The China Syndrome: Local Labor Market Effects of Import
Competition in the United States.⇤" (http://econ-www.mit.edu/files/6613)

"We analyze the eﬀect of rising Chinese import competition between 1990 and 2007 on local U.S. labor markets, exploiting cross-market variation in import exposure stemming from initial diﬀerences in industry specialization while instrumenting for imports using changes in Chinese imports by industry to other high-income countries. Rising exposure increases unemployment, lowers labor force participation, and reduces wages in local labor markets. Conservatively, it explains one-quarter of the contemporaneous aggregate decline in U.S. manufacturing employment. Transfer beneﬁts payments for unemployment, disability, retirement, and healthcare also rise sharply in exposed labor markets. "

Cheap towels don't pay for low wages or zero wages (unemployment). Lincoln understood this. Today's "free" traders don't. Of course, I could point out that the economics of immigration are stunningly bad of late...

Intelligent Design| 10.7.11 @ 7:04AM

It is only natural that the author of Romneycare, the blueprint for Obamacare, would be pals with Schmuck Schumer. Romney would make a good running mate for Obama.

arlo price| 10.7.11 @ 8:11AM

The obamagedon PIMP thugocracy chugs along.....

It's pretty obvious that the rino elitist and the lame stream media are doing everything possible to get 'smitten smiley' Romney the nomination. Seems like you never see or hear a 'hit piece' on smitten smiley Romney.
Certainly the BOGUS 'occupy wall street' movement would be fond of smitten smiley Romney, right? Or have the elitist exposed their hand in order to get the pimp-n-chief re-elected?

I ain't votin' for him even after he picks Bachman for his running mate.

Let's Roll

squalis| 10.7.11 @ 10:05AM

Hit pieces will come if he is nominated.

arlo price| 10.8.11 @ 2:10PM

The implication of my comment is that at this time, the lame stream media is assisting the rino elitist in deciding who the GOOP nominee will be by NOT trashing 'smiley'. Granted, after 'smiley' has been nominated the 'hit' pieces will be there on a routine (daily?) basis.

Romney is likely worth in the neighborhood of a Half- BILLION dollars! He is an astute investor who has done well, very well! Bain Capitol being the tip of his wealth iceberg. So is it merely coincidental that the pimp-in-chief and his cabal are promoting the Occupy Wall Street movement? GEEEEEEEEEZZZ, how convenient.

The question is: "Are we (non-rino's/true conservatives/Tea Partiers/independents) once again, going to allow the lame stream, drive by, White House stenographer media, determine the GOOP party nominee?

Let's Roll

Carol| 10.7.11 @ 9:54AM

I agree.

Romneycare is the white Obama.

Teaghan| 10.7.11 @ 7:04AM

Send Romney packin' back to Kennedy liberal land. I can't believe any conservative would vote for this RINO.

Herman Cain for President.

Intelligent Design| 10.7.11 @ 7:05AM

Rick Perry is the best candidate.

NedB| 10.7.11 @ 8:11AM

Anyone but Obama...Or Romney!

Buck Ofama| 10.9.11 @ 3:10AM

Well, not Biden.

POST American| 10.7.11 @ 7:35AM

----Well, at least SUB--Mitt ROME-knee
managed to, for now, ditch that capstone
Globalist, RED China TREASON OP crooked
smile.

oldfart| 10.7.11 @ 7:35AM

Senator Schmuck's bill (excuse me I mean Schumer's bill) is a red hearing. It will never get through the Congress. It is only there so they (the Democraps) can wash their hands in front of the screaming crowds before the crucifixion of American Democracy. The fact that Romney favors this bill is very telling about his true colours.

tsd| 10.7.11 @ 7:46AM

Romney the progressive lite, if selected to represent the Republican ticket will show me the Republican Party is not worth much for the conservative cause. Where have all the real leaders gone?

Quartermaster| 10.7.11 @ 6:42PM

The progressive movement began in the Republican Party which was a statist party from its founding. The Republican Establishment is still pretty much Progressive. Nothing much has changed.

rssg| 10.7.11 @ 8:10AM

The political elites are concerned about everything and everyone except the American people (native born Americans; foreign born Americans, immigrants, are worshipped).

People are more than just economic inputs, we have language, religion, customs, values, etc. I'm an American first and a "citizen of the world" dead last.

scythe| 10.7.11 @ 8:36AM

Hey I got news for you. That might be the one issue that attracts many more people to Romney. In fact, I gave Schumer who is the personification of the greasy pandering slimeball poll a faint cheer when I heard what he was up to. We need to deal with China and the fact that we are being devoured by them. Oh yeah - we'll hear the RINO accusations of protectionism! nativism! and you know what? Big deal. What is wrong with protecting YOUR OWN and wanting the best for your own first and foremost? The right who pretends to get all bent out of shape about multiculturalism has just as big a name calling playbook as the left. Trump, before he blew himself up with the F-Bomb certainly got a lot of attention and interest when he spoke quite frankly about the Chinese predators. And he is right. Whenever there is any talk about this topic the right goes on the offensive and labels all talk left wing. Bull Sh-t. Read what the Founding Fathers had to say about "free trade" and in fact, Karl Marx was a bid advocate because he understood HOW IT WOULD TEAR APART NATIONS making them RIPE FOR REVOLUTION. He regarded protectionism as "conservative" and "free trade" a "tool for the revolution". So the right has got some Marxist boot lickers as well but we aren't supposed to know that. We are, like Pavlov's dog supposed to salivate when they ring the bell of free trade and abjure potectionism because they say so and they are making the rules as to who is and isn't conservative. And they think that by labeling those opposed to it as being not "conservative" that will be enough to sucker everyone into their camp, they've got another thought coming. Some of us are onto them as well. Wouldn't that just serve them right if the Chuckster from the Senate managed to attract some grateful applause from the right? Free trade is killing us, killing our manufacturing, jobs, and it's a double whammy because while the jobs are being shipped overseas, the pols in office keep importing people. Export jobs/import people. What a disaster as anyone with half a brain and no hidden agenda can readily see.

Bill Walker| 10.7.11 @ 12:07PM

The comment by scythe is right on. The usual analogies defending free trade are as full of holes as Swiss cheese. I have watched the decline of the American economy for 40 years. What am I supposed to believe, my lying eyes or some elitist telling me how I am really better off. Inflation has been understated for years. If the true inflation rate was used, our economic growth would be reported much lower. I also remember when free trade was considered liberal. I wish someone would comment on our 500B+ trade deficit. That is a deficit almost as dangerous as our budget deficits

StanO| 10.7.11 @ 2:13PM

First of all the American economy has far from declined in the last 40 years. It's skyrocketed not declined.

The inflation comment isn't true either. Practically or numerically. Even anectdotally, how has it changed? Health insurance, ok, gas prices? No. Food, more selection, lower relative prices.

Did you even read the article?

The point is currency is not the issue. The issue is not why are they selling cheap goods here, but why won't they allow us to sell goods to them without technology sharing and manufacturing in China? That's the issue.

Quartermaster| 10.7.11 @ 6:47PM

StanO, Bill is correct. Inflation has been understated by a lot. Yes some things have declined in price in real terms, but not most things. Sorry.

You do, however, recognize the technology theft problem with China. It is a very serious commercial and security problem for us. The free trader, however, is an ideologue and won't let go in the face of reality. Instead, we sink deeper in crony capitalism, and we can't get a goodly number of laws that are leaching our commercial life, repealed because of the establishments of both political parties.

Both parties are the problem.

kurt| 10.9.11 @ 10:56AM

Scythe,
I am with you on the "RINO" free trade proponants, "being as liberal as it gets" and far from being anything "CONSERVATIVE"!!! If selling out your working class to ship their jobs to third world hell holes like "RED" China that pay their slaves next to nothing, so "OUR" investor class can make bigger bucks on wall street, THEN COUNT ME OUT AS A CONSERVATIVE REPUBLICAN, BECAUSE YOU SUCK WORSE THAN THE DEM'S!!! You do not sell your working class out to your enemies "for profit"...,PERIOD!!! Ross, I know you are not smart enough to figure that out, but oh well....

martin j smith| 10.7.11 @ 8:54AM

Pandering to populist sentiment and working the the Socialists gives Romney one of many black eyes
in my view. He seems to me to be too much like McCaine. I would only vote for Romney if I had no choice. I would prefer some one else. Also not Ron Paul or John Huntsman--Ricl Perry I also have issues with.

oldfart| 10.7.11 @ 9:18AM

Amen to that. He is another McCaine. The only thing Romney has going for him is he has spent most of his adult life in business, and was successful at it.

Quartermaster| 10.7.11 @ 6:49PM

Alas, Ron Paul is the only one running that really understands the problems we face. The Neocons hate his guts, however, just as they would hate Washington, Jefferson, or Jackson.

David W| 10.7.11 @ 8:56AM

Perhaps instead of going the protectionist route, we should encourage the workers in China and elsewhere to demand better working conditions. It would increase our costs to buy, but it might be more effective in the long run.

The way I look at it in 50 years or so the workers in these countries will be making more money, enough so that when a company looks at where it wants to produce, it looks for quality and ease of manufacturing, not just cost (having been laid off from a company that moved production to China and experienced a lot of problems, including industrial espionage, I know that low-cost China may not always be the best choice). Maybe our stupid democrats and RINOs will ease back on regulation and corporate taxes - that might be a more effective way of getting jobs back here.

Jack London| 10.7.11 @ 9:04AM

Don't use the word 'cretinism' - it is an outdated term for a real medical condition. It's important not to propagate offensive language like this.

oldfart| 10.7.11 @ 9:21AM

Jack - go back to writing books about Alaska. I believe the author's intent is to say that this policy is not as it should be - and as such is quite appropriate since it does not apply to a specific person.

Jack London| 10.7.11 @ 9:41AM

Well the author may not have written the headline so he may not be to blame. But cretinism is congenital hypothyroidism - when we casually bandy these sort of words around we should be aware of people with conditions such as congenital hypothyroidism and find an alternate word from the many available. Would you use the words spastic or mongol as casual terms of abuse, if you're happy with cretin?

Shill Watch| 10.7.11 @ 10:41AM

Thanks Jackie. You could be of some use at almost every progressive political event correcting the participants from being offensive. Occupy Wall Street needs you now.

oldfart| 10.7.11 @ 10:51AM

I know what the term means. My point is that the use of that term, as it applies to a financial situation is appropriate and to the point. So, according to you it is not appropriate to use any medical term? That smacks of 'newspeak' from 1984.

Drunken Sailor| 10.7.11 @ 10:52AM

Why yes I would Jack, just as I would use the term "retarded" to discribe your argument. Retarded as in lacking or of diminished intelligence. Your over the top concern for PC makes me think you have come up with a case of Cranial Rectal Inversion.

Ross Kaminsky| 10.7.11 @ 11:21AM

The use of "cretinism" in this article is my doing, and after further consideration I still like my use of the term.

John Navratil| 10.7.11 @ 11:29AM

It derives from French 'creitin' meaning 'Christian'. The perjorative was intended.

Funny (curios, not amusing) thing (idea, not object) about (concerning, not near) words (a unit of language, not a personal warrant). They generally have meanings which are easily differentiated by context, No? (meaning, of course)

Jack London| 10.7.11 @ 12:37PM

That would be 'pejorative' John. If you're trying to be clever at least get it right: the derivation seems to be that because of mental shortcomings people with the condition were deemed Christ-like, in that they could know no wrong. In which case the pejorative use only later came into being thanks to people like Ross.

John Navratil| 10.7.11 @ 12:59PM

pardn my misplleling.

The mind! Handy thing to use!

Jack London| 10.7.11 @ 12:30PM

That's disappointing. It's one thing writing far-right propaganda. It's another using abusive words that have rightly been retired by both the medical community and newspaper style editors owing to their connotations. Being charitable, in your case it was probably just lazy and thoughtless.

White Fang| 10.7.11 @ 1:14PM

Jack--Get back in the tent and stop exposing yourself.

Riff Raff| 10.7.11 @ 1:38PM

One could also say that such concern also applies to words like "moron", and "idiot", which also used to be clinical terms, but this is overreacting, as is the objection to "cretinism." Someone who might say "President Obama is a moron!" is not speaking literally, because clearly Obama is not a clinical moron, but this usage to point out Obama's actual intellectual limitations and/or the abject stupidity of his stubbornly adhered-to "economic" policies, is quite legitimate and fair.

Occam's Tool| 10.10.11 @ 4:22AM

"Cretinism" is advanced severe hypothyroidism, Jack. However, outside of a medical specialist, no one uses that. One of the things it is characterized by is, for example, myxedema. One can also become demented by this condition, as well. However, most aren't aware of this. Cretin is also part of the name of a high school in St Paul, MN. Were you aware of that?

Just like Schizophrenic has NOTHING to do with split personalities (although I'm sure you have used it that way), the "split" refers to ambivalence, as per Blueler's 4 A's of schizophrenia: Autism, Ambivalence, Associations, Affect.

Please, less pilpul, more reasoned arguments.

Occam's Tool| 10.10.11 @ 4:27AM

No, it is NOT simply congenital hypothyroidism---it is advanced hypothyroidism, with severe sequelae. But that would still not be the common term---in fact, the 1st definition of it according to my Compact Oxford English Dictionary is "a stupid person."

And, by the way, you're a spaz.

David | 10.7.11 @ 9:24AM

--I suppose it all depends. If Store A is doing so in order to increase market share, perhaps. But if Store A is doing so in order to drive Store B out of business, so that in can then impose Store A's radical vision of Tyranny, upon the world, I might not be buying Store A's products.

--As I have told you before your anology of Stores for Countries, is NONSENSE! Countries are not analogous to stores, and the motivations of Countries are more sinister and detrimental to my health and they health of my country than a store.

--Now as I have also explained to you before Mr. Kaminsky, on this issue you are irrational fanatic, and I dislike wasting my time on irrational fanatics. The American Spectator would be far better off preventing you from sounding off your nonsense on this issue, since you are not interested in engaging in debate, but on demagouging anyone who disagrees with your narrow straw man arguments.

John Navratil| 10.7.11 @ 9:33AM

David,

Your problem is that you could choose not to buy from A. You could ask or exhort me not to buy from store A. I could buy from store A, anyway.

The only way you can keep from from buying from Store A is a law. Which store B would fully support.

It's sort of like the law you propose that The American Spectator prevent Ross Kaminsky spouting nonsense. It seems you are the only one who is the arbiter of nonsense. It would, therefore, makes no sense for me to suggest the nonsense is yours.

Darrell Judd| 10.7.11 @ 9:33AM

It is sad to see that American Spectator has such a limited set of economic writers that merely parrot the orthodoxy that has resulted in the largest voluntary transfer of wealth and power in the shortest time in history from the U.S. and China (2000-2010).

What we do with China has nothing to do with freedom or trade. Transferring production from the U.S. to China is not trade. Walmart is just a Trojan Horse to dump underpriced Chinese crap on the U.S. to inflate corprate profits (unsustainable). The kind of policy that Ronald Reagan would sanction against (see Sematech).

AS should have to cojones to have Clyde Prestowitz educate Mr. Kaminsky. Alas, corporate sponsorship, won't allow such a thing.

Simple answer apply a VAT on ALL imports based on where the value is added. Problem solved.

John Navratil| 10.7.11 @ 9:35AM

Darrell Judd,

No accounting problem there. Check the relative costs of engines used in Japan to be installed in cars assembled in the U.S. Depending on the VAT you proposes, those engines will vary in "price" from zero to the full price of the car.

axbucxdu| 10.7.11 @ 1:17PM

International "Free Trade" simply cannot coexist with central banking. For example, see the Tables of Results from the 2005 ICP.

Free Traders have a valid point when it comes to say, a country like Japan, where the yen is actually weaker inside Japan than is reflected in its official exchange rate against the FRN.

However, their argument disintegrates when it come to China, where the RMB is more than two times stronger domestically than PLA Inc.'s international dollar peg.

This chicanery has to have consequences. A tariff that is proportional to the difference between PPP and a sovereign's official exchange (clamped below at zero) is a reasonable approach. In the case of Japan, no tariff would be applied while China would face charges that are directly related to their government's currency manipulation.

It's a way out between the Free Trade and Protectionist camps even if the undeserving beneficiary happens to be the USG.

Ross Kaminsky| 10.7.11 @ 11:24AM

We have not net-transferred wealth to China. We are buying things from them that we think are worth more than what we are paying or we wouldn't buy them. Do you complain about your transfer of wealth to the supermarket or any other place you buy things you need?

By the way, please tell us what part of what Walmart's business model is unsustainable. You might hate Walmart, but your statement is economically ignorant.

Kelly Staples| 10.7.11 @ 9:36AM

Willard "Mitt" Romney is a perfect example of why the Tea Party exists. 100% Pubbie; 100% phoney. Cain was on Kudlow's show last night, and the man sounds better all the time.

Derek Leaberry| 10.7.11 @ 9:45AM

The reason Karl Marx supported absolute free trade was that it breaks down traditional culture so that a world culture can be forced upon the people. Needless to say, he wanted a socialist world culture and did not get exactly what he wanted. Yet the Gramscian Marxist worldview has won out. Western Civilization is in ruins and moral decadence rules. Karl Marx has won much of what he wanted. And he would support such anti-conservative structures as the European Union, the United Nations, GATT, the World Bank(run by Bush crony Robert Zoellick, the DC headquarters boasts 8 story high posters with various feminist claptrap statements proclaiming a need for "equality") and the IMF.

Of course, most libertarians and liberals despise traditional culture and that is why both are enemies of true conservatism. They have no use for the little platoons Edmund Burke wrote two centuries ago. If the little platoons can not keep up, so say the libertarians, let them be crushed economically. But that sort of cold-heartedness is why libertarians are not only not conservative but why socialists and welfare staters win office most of the time.

It is readily apparent that free trade has led to a winnowing of industrial American workers, most of whom have a conservative bent culturally. The winners in free trade are the cognitive elite, most of whom are worthless when it comes to working with their hands, and tend to work parasitical "jobs". Politically speaking, almost all states and areas that have de-industrialized have become havens for flabby liberals and their libertarian cousins- Silicon Valley, Seattle, Farifax County, Virginia, Montgomery County, Maryland, the whole state of Massachusetts etc., etc.

America should continue free trade with nations similar to our own. The nations of Europe. Canada. Australia. New Zealand. And maybe Japan. Otherwise tariffs should be used to protect our industrial workers against cheap Third World labor.

Ross Kaminsky| 10.7.11 @ 11:37AM

Marx's views on free trade are far more complicated than you suggest. He was basically against free trade except that he thought it would create international tensions. However, the opposite is true. Countries which trade with each other are much less likely to go to war.

Here's a quote from Marx: "But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favor of free trade. "

from here: http://www.marxists.org/archiv.....t.htm#marx

Derek Leaberry| 10.7.11 @ 1:01PM

So you admit that you think destroying the old conservative and traditional order is a good thing. That is why cultural conservatives must go to war with those who are radical libertarians. Libertarians must be evicted from the conservative movement because you are not conservative.

Ross Kaminsky| 10.7.11 @ 7:27PM

I most certainly do not admit that. What I said is that the price you are willing to pay for a likely-to-fail-anyway position of protecting some "traditional order" is too high.

And aren't you the guy who said you don't want to pay any income taxes because you have so many kids, and therefore you wouldn't support Herman Cain? Sounds like a conservative in name only to me.

Red Phillips| 10.8.11 @ 11:50AM

Huh? What is unconservative about not wanting to pay taxes or having a lot of kids? In fact, both, especially having a lot of kids, are highly conservative.

GOPNYC| 10.7.11 @ 2:31PM

That's exactly right, Leaberry. The Republican rank and file have been so misled by bought n' paid for "conservative" thought leaders/opinion makers/think tanks that they can no longer distinguish genuine conservative on trade from the praddle paid for by the Koch Brothers et. al.

"Mr. Conservative" himself, Bob Taft of Ohio, was a strict protectionist. Republicans had historically been the party of protectionism, going back to the Civil War. And Ronald Reagan was a regular target of the CATO Institute gang because he carried out protectionist measures to preserve American industry. It was George H. W. Bush and the rest of the Rockefeller/"One Worlders" who ushered the US into NAFTA and the WTO (although the final legislation passed under Clinton.)

Free trade is NOT a conservative notion. It is a CORPORATIST notion. And if you ever want to get the GOP back to being a Main Street party again, you'll support efforts to restore America's traditionally protectionist measures. We can trade with some, but not with all. And we should never trade with outlaw regimes like China or with most others whose sole "comparative advantage" is that they have have a near slave-labor wage.

PJ| 10.7.11 @ 9:46AM

I believe there should be free trade in principle. The concept of free trade would apply if both trading partners obeyed the laissez-faire rules, which they don't. For instance, while US generally accepts goods from China with no or a minimum amount of tariffs attached to them, the Chinese slap excessive tariff amounts on American goods entering their country or down outright blocking the American imports.

The idea about the Chinese buying pharmaceuticals from the USA & the USA buys their textiles to prove there exist a balance of trade is misleading. American pharmaceutical companies are moving many of their manufacturing plants & drug development departments to China (high tech jobs). The Chinese business climate which is manipulated by the government is obviously a cost-effective environment for the American companies.

The USA can do much to bias trade in its favor w/out slapping any huge tariffs on Chinese products, although that will work in the short term. I believe the USA is more ethical compared to China & should create a working environment w/out directly harming other countries' business climate. The US should lower all taxes by alot & eliminate unnecessary govn't regulations that American companies must comply with in order to stay in business. This will not only create a great working environment for American companies but would also lure foreign companies to this country.

Many business owners prefer to keep their operations on American soil. They know that the American worker, their local competitors, & sometimes the govn't are more ethical compared to their Chinese counterpart. Who wants to work in a country where there is alot of "greasing of the palms", back door deals, extortion, & other unethical activities? -----(Right now it's China but the USA is heading in that direction & has been for many yrs.)

Clint| 10.7.11 @ 9:48AM

"At the very least, American consumers will immediately feel the strengthening of the yuan in the form of higher US retail prices. This will disproportionately affect Americans of lower incomes and, as a consequence, slow the economy and increase the hardship of those struggling to get by."

Simon Templar| 10.7.11 @ 5:00PM

Another quote? I am beginning to think you are a computer program and not actually a person. Not one original thought in your head?

RCV| 10.8.11 @ 4:37PM

I wish they would fix the initial caps glitch on the Clint computer.

Simon Templar| 10.7.11 @ 5:01PM

Maybe, Paulbot is really what you are.

Clint| 10.7.11 @ 9:26PM

Apparently, It Upsets The Livin' Hell Outta You Faux Conservatives, Pimpler.
That Quote Was Our Tea Party Co-Favorite Presidential Candidate, Dr.Ron Paul.

The Tea Party Rebellion Is Here

Carol| 10.7.11 @ 9:53AM

Ross:

Thanks for this article. It's about time someone point out the hypocrisy of the RINO Romneycare who I will never, ever vote for.

Anybody aligning with Chuck You Schumer deserves to be called a Democrat.

OregonBuzz| 10.7.11 @ 10:18AM

Mr. Romney is not a true conservative, nor is he a committed Republican. He represents 'Democrat Lite'.

Proud Mormon| 10.7.11 @ 10:40AM

No matter how much right wing propaganda filth your pour on Mitt, Willard Milton Romney will be our next President. Come on tea types get in line and vote for Romney HE is the best candidate.

Drunken Sailor| 10.7.11 @ 10:55AM

And do you say this because you agree with his views or because you agree with his religion? The first I can live with, the second, makes you no better that our black population that votes for Obama simply because of his skin color.

Ross Kaminsky| 10.7.11 @ 11:38AM

I think he's the most electable candidate. I would like him to be the best candidate when it comes to principle. I can imagine supporting him; I don't dislike Romney. But when your screen name is about your religion, one must be suspicious whether you are even close to objective.

Simon Templar| 10.7.11 @ 4:52PM

Right wing propaganda filth? Get lost, troll. No, I do not think he is so electable. McCain was the last establishment, RINO that was touted to be so electable. He lost. My guess from your style and your rhetoric, you are a liberal leaning Mormon troll that is out here to spout off and offer nothing but subterfuge.

ImissBuckley31| 10.7.11 @ 11:07AM

As the election gets closer all the parallels between 1980 and 2012 seem to get dimmer and dimmer. More and more it seems like where heading into another 1916 with a Democratic President who has a complete disregard for individual rights and capitalism, and a Republican Nominee whose lack of charisma and "me too progressive" policies led to four more years of crappy Democratic rule. God help us : (

Mormon Girl| 10.7.11 @ 12:15PM

I'm glad to see Proud Mormon back haven't seen that name in a long time. I took off a semester at BYU and volunteered to help out Mitt's campaign in Iowa. What a beautiful state, rolling green hills and now the change in color. Iowa is very important to us, a win here and Florida too and Mitt wins the nomination. Some of my schoolmates are in Florida, a little warmer for them no doubt but I just love Iowa and the people. Vote Mitt Romney for President!

Simon Templar| 10.7.11 @ 4:54PM

Well ,we are not glad...and why should we vote for Romney when his supporters clearly are not conservatives and talk like liberals?

Kelly Staples| 10.7.11 @ 12:46PM

Zogby's latest poll has Cain up by 20 points over Willard Romney. Why is Willard called the "front-runner"?

Simon Templar| 10.7.11 @ 4:57PM

Because the liberal media and the DC establishment want him nominated. He poses less of a threat to the established order and business as usual. Polls are only good when they serve our purpose. So, when the polls show Americans want something other than Mitt than Mitt is still more electable. Right, Ross?

George S| 10.7.11 @ 1:05PM

If it wasn't for China, we could never borrow on the scale to run up a debt of 14 trillion. Where do you think they get the scratch to buy our treasury notes?

Applying a tariff or VAT will increase the cost of goods imported from China. If Americans will pay the VAT, then why won't they pay the regulatory cost and labor premuiums on US goods -- which was the reason China was able to sell their goods here in the first place?

Democrats assume that the economy and economic decisions are static, that is, impose costs on businesses and everyone will continue to either pay more on the consumption end or eat the cost on the production end.

axbucxdu| 10.7.11 @ 1:24PM

Do they have the scratch, or is it just that we can print the international reserve currency out of thin air and as a result that new scratch has to end up somewhere?

GOPNYC| 10.7.11 @ 1:41PM

Mr Kaminsky obviously has little understanding of either Economics or National Security. Has he questioned WHY China keeps its currency exchange artificially low? Its to provide FULL EMPLOYMENT of China's masses. And while Kaminsky mentions that labor costs would move to Vietnam or some other jurisdiction if China free-floated its currency, he makes no mention of the global imbalance China causes by keeping its currency artificially low.

At the end of WWI and during the Suez Crisis, the United States used its position as creditor nation to influence the policy decisions of the UK. Does he not recognize that China now has the same leverage over us vis. Taiwan or the South China Sea, should China decide to exercise it.

People need to stop reading nonsense by an uninformed day trader/blogger and start reading more thoughtful analysis of China's currency manipulation by people who actually understand Economics. Clearly, he does not.

Ross Kaminsky| 10.7.11 @ 7:32PM

GOP, I sure wish people who pretend to represent the Republican Party would learn to read. You say that I have little understanding of economics (although I've been studying it and living it for 25 years) by saying that I asked why China keeps its currency low. You said it is to provide "full employment" to China's masses.

Here is a partial quote from my article: "its practice of keeping the yuan undervalued -- in part to try to prevent the social unrest that would come with massive unemployment in a basically poor country..."

So which part of that implies to you that I don't understand the point which you're so desperate to show the world that you understand?

Please show me any evidence that China has any influence over American policy decisions based on its position as a US bond holder. That's a myth.

I did enjoy your comment though because you make yourself look so bad, which is always fun to see my critics do.

GOPNYC| 10.8.11 @ 12:06AM

First, I'm a Republican activist of 35 years. I have been a Republican committeeman and a delegate -- twice -- the the quadrennial Republican National Convention. I have shaken hands with (or been in the same room with) every GOP nominee since Jerry Ford. I'm pretty certain my Republican and conservative credentials would far surpass yours. I also have a BS in Economics and Finance (cum laude) and an MBA from NYU's Stern School. What's your credential in the area in which you purport to have expertise -- I didn't see any listed?

Second, you only need to follow the current discussion about Taiwan arms sales to see China's influence on US policy. To describe the Obama Administration's replies as "timid" would be an understatement. Taiwan wanted F-16 C/D replacement aircraft to maintain air superiority against fourth generation Chinese fighter aircraft. Instead, Obama gave China "upgraded" F-16 A/B technology that leaves the country vulnerable. Even as the Obama White House cowered in fear of its biggest creditor, China nevertheless still retaliated, calling an end to planned military exchanges.

But you don't have to even go to defense issues. You need only look at Obama's stealthy handling of the April 15th reporting of whether China is a currency manipulator under the existing Exchange Rates and Economic Policy Coordination Act. First, Obama/Geithner "delayed" the report; then, they released their decision that China "was not" manipulating its currency in a classic "take out the trash" moment: 4:00PM on the Friday of Memorial Day Weekend, where it would not be noticed or questioned by an electorate who knows better.

But let me guess: you're a "conservative", right? And in your mind it is far better to let China undervalue its currency "to prevent the social unrest that would come with massive unemployment in a basically poor country". That certainly sounds like a plan Americans can embrace. After all, every TRUE American conservative wants to make sure that there is no social unrest in China --- like another of those unpleasant Tianenmen Square uprisings -- that might interfere with the glorious Communist Party rule of China, do they? No, we certainly don't want a free, democratic, capitalist China now, do we? It might interfere with all that cheap stuff you and your "conservative" pals buy at Wal*Mart, eh?

Red Phillips| 10.7.11 @ 1:50PM

Trying to link Romney to Schumer is crude guilt by association. Repeated surveys show that self-identified Republicans, conservatives and Tea Partiers are MORE LIKELY to oppose trade deals than Democrats, with Tea Partiers the most likely to oppose them. The GOP establishment and elites are clearly out of touch with the base of their party.

GOPNYC| 10.7.11 @ 1:57PM

If you like, read commentary by someone who actually knows what he's talking about, Peter Morici, an actual Economist. http://www.thestreet.com/story.....erica.html

Riff Raff| 10.7.11 @ 2:11PM

I can think of a simple solution to the "China problem." Congress could require that products imported from China (and other countries for that matter) be manufactured under the same circumstances that US located companies must comply with. Chinese plants would have to comply with OSHA regulations. Chinese workers would have to be paid minimum wage. Subject Chinese plants to product liability laws and hazardous materials and waste regulations. Tariffs and protectionism are not needed, just level the playing field. If the Chinese were made to comply as American facilities are, perhaps the cost differential would be reduced and the incentive to move to China erased.

Trinacria| 10.7.11 @ 2:13PM

I pretend to no particular expertise in international trade or monetary policy and I admit to being rather far over my skis on this issue, but if the central issue hinges on the fact that US businesses are operating at a competitive disadvantage to the Chinese, it strikes me as rather self-evident that the most effective solution would be to focus on legislation that will make US business more competitive (rather than forcing the Chinese to be less competitive). If we burden US businesses with the world's highest corporate tax rate, the highest regulatory compliance costs, and the mind-numbingly high costs of astonishingly ill-conceived legislation like Obamacare, how does one claim with a straight face that the Chinese are the problem?

The Chinese haven't had a single significant innovative idea or a technology that hasn't been stolen or pirated in the last several hundred years and we think they're our biggest competitive threat? I'm not seeing it...

Bob From District 9| 10.7.11 @ 2:33PM

"In a section entitled "Five Executive Orders for Day One," Romney tells us that he will "[d]irect the Department of the Treasury to list China as a currency manipulator in its biannual report and direct the Department of Commerce to assess countervailing duties on Chinese imports if China does not quickly move to float its currency." And nearly half of the "Trade Policy" section of Romney's plan comes under the heading of "Confronting China.""

You seem to have a problem with telling the truth. It is true that China is coming out ahead on trade by manipulating currency.

You also have a problem with reality. China gets away with that "discount", but the US is not allowed to compete because the WTO says we can't. It's called unfair trade when we do it, and yet it's legal when China does it.

I am not a Romney supporter, but he is right in that China is getting an unfair advantage in trade. He's right to try to eliminate that advantage.

Ross Kaminsky| 10.7.11 @ 7:34PM

You miss my point. China does have an advantage, but that advantage is passed on to the US consumer. Your statement is like saying that when Target puts everything in the store on sale by 10% to get customers who might otherwise go to Walmart, that Target is getting the advantage. Sure, Walmart might see it that way but the real beneficiaries are the consumers, as I said always the "forgotten man" in these discussions.

kwinterkorn| 10.7.11 @ 3:00PM

Our trade imbalance with China is largely a consequence of our budget deficits and the Chinese belief that US government debt is more worth buying than our goods and services (Though they buy a lot of those too). If the Chinese did not run a surplus with the US in goods and services, they could not buy US debt. Conversely, if the US did not try to sell so much debt, the goods and services accounts would balance. The dollars we send them when we buy Chinese goods and services ultimately have to be used by the Chinese to by something from us to have value. Right now, consistent with the 25% personal savings rate of individuals in China, the Chinese prefer to by our debt and defer consumption of goods and services. Americans, on the other hand, are collectively consuming our way into poverty.

The solution is to shrink the US government's borrowing needs, not to engage in fantasies that somehow, this time, a trade war will benefit the trade warriors. Every other time in history, most notably the Smoot-Hawley-induced Great Depression, all the trade warriors are harmed, and they take down the rest of the people with them.

Ross Kaminsky| 10.7.11 @ 7:35PM

Our trade imbalance is most certainly NOT a consequence of our budget deficits.

Ground Control| 10.8.11 @ 2:07AM

Duh! At least part of the trade imbalance is due to the cost differential of production, due in large part to government regulation (not deficits). Our government does not promote business and consequently, jobs. It hinders these things. THIS is the paramount problem we face today, our own government. Blaming business is blaming the victim, while the perpetrator is celebrated.

Simon Templar| 10.7.11 @ 4:18PM

Ross, you are usually spot on, on most topics, but this one you I believe you are not. First, I thought we wanted the Chinese to stop devaluating their currency?

Nevertheless, the flaw in all this debate and thinking is the idea that free trade somehow does not include fair trade and self interest. Business makes deals with other business in accordance to what both parties consider fair and serves both their interest. When another nation is playing by a seperate set of rules and the other is not representing its interest in fair trading treatys, you do not have a free market. When you have one nation laughing its ass off at the stupidity of another's elected officials that just do not seem to get it nor act rationally in their own interest, you do not have a rational free trade arrangement. Perhaps, tarrifs are not the answer but please no violins for China.

Simon Templar| 10.7.11 @ 4:27PM

Ross, why when this subject is brought up, does no one mention why our businesses are over there, in a communist nation that has sought our destruction.

Nor does anyone address the economic forces that have brought this about? Nor does any of this discussion seem to delve into the mountain of regulations and taxes that drive these businesses overseas, in the first place. Have we just given up on ourselves?

No. All I hear is cheap shots, distracting arguments, and screams of protectionism.
There seems to be no honest conversation here or a willingness to look at the whole picture.

Ross Kaminsky| 10.7.11 @ 7:37PM

Simon, I think the answer here as was implied in a comment above is that US companies are not competitive with China, but that the primary reason is not necessarily Chinese policies or even cheap labor (though that would be determinative in very low-value added products), but due to American taxation and regulation.

The thing with protectionism is that it harms millions with the state intention of helping dozens or hundreds.

It's public choice economics perfectly rendered.

Pat| 10.7.11 @ 4:37PM

Two things spring to mind reading this article. First, Kaminsky doesn’t mention that the Senate, based on a passing vote in April, 2005, authorized a move to consider sanctions against China for manipulating the price of the yuan. Sorta deja-vu all over again, except it is now 6 years later and nothing constructive has been done. Romney’s role in this little comedy is to put the “bi” in “partisan” because whenever legislation is “bi-partisan” the media immediately jumps on that word as unspoken code for “this legislation will benefit the entire nation”.

Unfortunately, folks like Kaminsky may suspect but are never privy to which specific people the proposed legislation is actually intended to benefit. And the reason is because they weren’t a fly on the wall when the backroom deal was struck. If they were that proverbial wall-clinging fly, the words “tariff” and “government subsidy” would have been heard frequently from the meeting participants. And, as so often is the case nowadays, this proposed legislation is intended to enrich very specific individuals, not the nation as a whole – we call it “crony capitalism” in the new Latin.

Second, buying land in Texas is one example but let’s consider a different theoretical example. America increasingly imports more and more manufactured goods from Asia, domestic industries like automobiles, steel or textiles layoff their workers in the tens of thousands. All these laid off workers immediately return to college, earn advanced technical degrees and then find jobs in hi-tech industries where these industries, in turn, proceed to turn out many innovative and highly advanced tech products which are exported all over the world increasing the nation’s wealth at the individual worker level due to their new higher paying tech industry jobs. Basically, a very good thing occurs.

But you’re probably thinking to yourself: “wait a minute, that’s definitely not what happens. Those laid off workers will actually take jobs as Walmart greeters, sell party supplies out of their kitchen on Ebay, work part time as security guards at the local mall or just live off unemployment and their relatives’ charity”. Right you are, the nation’s wealth doesn’t increase at the individual level, the former high paid manufacturing employee is now a low paid retail or service industry employee, assuming they’re lucky enough to have a job. See the problem now?

BackToBasics| 10.8.11 @ 12:14PM

One thing is for sure and that is that China IS acting on behalf of it's own self interests.

It is often burried in the "free trade" talk that America currently has fewer total jobs now than in the year 2000 by about 1.5 million and that actual real wages have dropped as well.

Some of this is caused by our own bad tax and immigration and mortgage policies, etc. Yes, our own government is very culpable and short-sighted as well. But the defenders of current free trade policies defend the status quo by saying that we are able to buy things more cheaply and that if we do anything to make trade laees free we are guaranteed to enter another Great Depression. In defense of free trade, Smoot-Hawley is almost always cited. But there are other trade barriers that can be erected besides actuall tariffs and China's Yuan-Dollar peg is just one example.

Economic variables are many and thus complicated and I am not advocating high tariffs. But, bottom-line to it all is that it would be good to hear an America-first approach to arguements about "free trade." Somehow, there's a sense, myself included, that America-first is missing from the proponents of our current free trade policies.

And for Pat's post, so well put, it is more than being about numbers, it is about people's lives and getting decent jobs again.

Simon Templar| 10.7.11 @ 4:40PM

Ross, I believe in free markets and free trade among nations. Does this mean I have to accept any kind of trading treaties even when those treaties put my nation at a long term loss, make me a debtor nation, and reduce my capacity to be economically independent and produce those things necessary for my survival? Is it appropriate that I can expect my government act in my best interest both long term and short term in the matters. What role do tariffs play and when is it appropriate to use them?

Ross Kaminsky| 10.7.11 @ 7:39PM

Simon, here's my take: The freer the trade, the better for our nation in the long run. The analysis that says trading treaties which increase freedom damage the nation is basically a static analysis which ignores how our economy reacts to the trade. In general, we should never impose tariffs (except to prevent dumping), even if our trading partners do impose them. See my paragraph about dumping boulders in the harbor...

GOPNYC| 10.8.11 @ 12:10AM

You make no sense, Ross. And you don't understand GATT, apparently. Dumping is no different, substantively, than export subsidies effected through currency manipulation. Moreover, they're prohibited by GATT, Article XV, Section 4.

Red Phillips| 10.8.11 @ 12:25PM

Even if someone is a purist free trader they should oppose these trade treaties because they are managed trade. Ron Paul who is an Austrian School uber free-trader recognizes this and opposes these trade deals on free trade grounds.

Beyond that, every self-respecting red-blooded American, especially anyone who calls himself a conservative, should oppose them because they sacrifice our sovereignty. (Ron Paul also recognizes this.)

Simon Templar| 10.7.11 @ 4:42PM

Ross, if these tariffs are evil, then why did our founding fathers support them and why are they written into our constitution?

Dmac| 10.7.11 @ 5:16PM

I stopped after two paragraghs. We've heard this before and it utter B.S. Those cheap goods come at the cost of American jobs, and in th elong term they are much more expensive than if they were made right here in the U.S. Add the cost of an un-employment check to those goods and they become rather expensive. Add how much defense spending will have to increase to keep China's aggressive military buildup at bay. Sorry, but buying Chinese is not buying cheap. One has to look at the whole picture from the viewpoint of a society., not a selfish I want it now child.

Dmac| 10.7.11 @ 5:28PM

What in the hell is mutually advantagous about this. Sure, I can buy a cheap Chinese TV and a little money. And I can have my taxes go up to help pay for neighbors un-employment check because Cutis Mathis went out of business and he lost his job.
I can buy cheap chinese toys for my kids, then watch how much my taxes go up so the government can pay an inspector to see how much lead is in them. Fact is, buying Chinese really does cost you more than you know.
The flip side, China takes American dollars and is now rapidly building a modern military machine. A military machine that we most likely will one day confront, just so we can buy cheap crap.
I'd rather pay just a bit more so my neighbor has a job. The more Americans we keep working, the more Americans that are paying into the system rather than being a burden to it. So lets start bringing the jobs back home. We should take care of Americans and let the Chinese worry about the Chinese.

GOPNYC| 10.7.11 @ 5:48PM

Dmac, the fact is that most goods you buy don't really have any savings for you at the consumer level. Chinese-made products produced by American manufacturers charge what the market bears, nothing less. Any "savings" from reduced labor costs is realized by the producer as additional profits, not by the consumer. Compare Chinese-made goods to comparable US-made goods; you'll see the prices are comparable.

Ross Kaminsky| 10.7.11 @ 7:40PM

Dmac, if that were true, you would not see the price of technology (big screen TVs, computers, lots of other stuff) falling all the time.

axbucxdu| 10.7.11 @ 8:41PM

Of course, technical innovation knows no borders. It no doubt causes TV prices to drop in China too, just not at the official rate of 6.40 RMB/$, but proportional to Chinese PPP/$ which is far less.

I for one will stop bellyaching about Chinese currency manipulation when their PPP/Official Exchange Rate matches Japan's and Germany's.

GOPNYC| 10.8.11 @ 12:17AM

Again, not true because you can't support the assertion. There's no telling what cost American-made TV sets would bear because none are made here. You're comparing apples to air kisses; "US Made" TV's no longer exist.

For products that ARE made here and in China -- e.g., New Balance sneakers -- one need only compare prices of the models like the 991 made up in Maine by skilled cobbler/craftsmen and the comparable sneaker made in China. The are priced within about $10 of each other, in my experience. I've even seen the Chinese model go for MORE than the US model in some instances.

carnot| 10.7.11 @ 10:03PM

this article is abject nonsense. better put...one would expect better from an AMPSEC author - the author is DELIBERATELY one dimensional in his analysis. Consumers aren't the only party to the equation. The Chinese have been practicing predatory tactics...including monetary policy...for decades. businesses are relocating to China in part because of these policies. they are raping American businesses and government - industrial espionage executed through stack overflows! We are in a low conflict war with China. wake up. the correct remonstration would have been to point a finger at the domestic burdens (e.g., excessive regulation) that exacerbate "relative advantage" disadvantages.

carnot| 10.7.11 @ 10:09PM

you know...Limbaugh is correct....at the end of the day....defeating Obama and undoing the damage he has exacted is the first charge. doesn't matter whether it's cain, perry or romney. it's sometimes worrisome that AMSPEC posters occasionally confuse priorities.

GOPNYC| 10.8.11 @ 5:54PM

Defeating Obama is indeed the priority, but don't pretend that China's currency manipulation is "Yankees v. Red Sox"; its not. If there are two things the political parties should mutually support, its the guys n' gals that wear our uniform and our retaliation at a communist regime's blatant -- and admitted -- currency manipulation to the detriment of our fellow citizens.

VIVIMAO| 10.7.11 @ 10:11PM

Is it appropriate that I can expect my government act in my best interest both long term and short term in the matters. What role do tariffs play and when is it appropriate to use them? The solution is to shrink the US government's borrowing needs, not to engage in fantasies that somehow, this time, a trade war will benefit the trade warriors. Every other time in history, most notably the Smoot-Hawley-induced Great Depression, all the trade warriors are harmed, and they take down the rest of the people with them.

POST American| 10.7.11 @ 11:41PM

-----------------BOTTOMLESS LINE-------------------

AGAIN, good to see the boys at the Tavistock
Institute got SUB-Mitt ROME-knee to dump
that Globalist-RED China TREASON OP
crooked smile.

----Makes all the difference!

REALLY

Peaches| 10.8.11 @ 12:25AM

CAN'T STAND ROMNEY. Is this all we have, ROMNEY? Might as well be McCain. How can anyone support him?

Clint| 10.8.11 @ 9:22AM

Wall Street & The Ruling Elite are setting us up for Their Frontman, Mittens Romney.

Follow The Money Trail.

The Tea Party Rebellion Is Here.

Keating Willcox| 10.8.11 @ 10:30AM

The premise of free trade is wrong. Fair trade should be our goal. Our error is making China our first fight. We should go after 20 smaller nations, offering truly fair trade, no dumping, no currency manipulation, or else we impose crippling tariffs to that nation alone. Once the little nations get in line, we can approach China and expect results.

Caroline| 10.8.11 @ 1:51PM

Mitt Romney won't get the nomination. The establishment want him, the people don't. In addition, there is this, and this:
Here is a new Rick Perry ad that hammers Mitt Romney for being a “carbon” copy of Barack Obama in his past record on supporting radical Environmental policies that killed jobs
http://freedomslighthouse.net/.....deo-10711/

Key Romney environment official now at Obama's EPA
http://www.freerepublic.com/fo.....3118/posts

Caroline| 10.8.11 @ 1:51PM

I know this is a bit off topic, but I felt it was important to put this out there. Before you watch the video contained in this article, read the article. The women, or girl in this video next to the man speaking, is Obama's mother in 1965. She is at the wake of Malcolm X. She has very short hair, almost boyish. There have been rumors that Malcolm X is Obama's true father.

I've included a link with photos of Obama and Malcolm X, side by side. The resemblance is hard to deny.
What go me looking into this tonight, was something Rush was talking about the other day. He mentioned the time Obama said he or his mother and father were in Selma Alabama. Well, Barack Obama Sr. wasn't but Malcolm X was. There is video of him there. Did Obama slip when he said that,revealing who his true father is.
Please pass this around, so others are aware of it.
http://terribletruth.wordpress.com/

Malcolm X in Selma Alabama
http://youtu.be/mg5uQQw2leU

Photos of the two to compare. http://octaman.com/comments/MalcolmO.html

RCV| 10.8.11 @ 4:43PM

Just when I thought the conspiracy theories on Obama couldn't get any mor preposterous, along comes Caroline.

West Houston| 10.8.11 @ 7:58PM

Mr. Kaminsky,
While you make some valid points, your supermarket analogy falls flat on its face. While I do not sell directly to supermarkets, I do search for oil that ultimately makes products and provides fuel to that same supermarket and their suppliers. An aspect you have overlooked.
To stretch your invalid analogy, the supermarket has a trade deficit with me, Finder of Oil.
The true disparity is when governments manipulate currency. With a relatively weak economy like Argentina (for example) was, the end result of currency manipulation was a collapse of the currency (which I enjoyed immensely on my one visit there. Seven dollar steak and wine lunches for two, e.g.)
Manipulation of a strong currency backed by strong industry - the Yuan, say - will force us into bankruptcy. China is now realizing that bankrupting their biggest customer may be a bad move. Hence the "float" - such as it is. Unfortunately, our currency is being debased by all the president's men. That, and our industry is being crippled with mindless regulations. It's a race to the bottom, at least until the "flush handle" is pulled in November, next year.
West Houston Geo

West Houston| 10.8.11 @ 8:14PM

Yeah, that's the ticket - Barry had some street cred from Dad. My true father was Howard Hughes. He's from Houston and my Grandma -in fact - worked for Hughes Tool. My father had to work several jobs because my mom spent every penny three or four times - so he was never around. Mom would have been a sucker for a rich man like Hughes. I've seen pictures and she was a hot babe at the age when I was concieved. She, in fact, looked a lot like Kathern Hepburn - a known Hughes consort.
They call me MISTER Hughes! ;--)

Dimitri Aleksandrovich| 10.9.11 @ 6:39AM

It's amazing that protectionism (protecting American manufacturing jobs) is considered a dirty word even though our "real" unemployment rate is somewhere around 16%. With all this free trade what kind of jobs do you neo-conservatives expect to create except for low wage service sector jobs that you can't raise a family on. Kaminsky you need to read a little more Pat Buchanan.

As for Romney and Schumer. I don't trust either of them and as far as I'm concerned we should have never entered a free trade agreement with China in the first place. NAFTA, CAFTA and our membership in the WTO are all very bad ideas that not only destroy American manufacturing and American jobs but also compromise American sovereignty.

Jim| 10.9.11 @ 4:35PM

Great article, but the author gets one thing wrong: Huntsman and Bachmann recently said that, as president, they'd sign the Schumer-Brown bill into law. Only Rick Perry has so far sided with sanity (and the American consumer).

Mike| 10.9.11 @ 9:55PM

Ross Kaminsky sucks Chinese dick. But, he is right in doing such. We owe them a ton of money.

What is the saying? Don't bite the hand that feeds you.

gopnyc| 10.9.11 @ 9:59PM

Maybe you had better bite that dick....HARD...unless you want your kids to have fight the bastards.

Mike| 10.9.11 @ 10:21PM

gopnyc,

Any idea which side you are on, asshole? (never end a sentence with a preposition)

GOPNYC| 10.10.11 @ 6:25PM

ooooh....guess I broached your latent homosexual sensibilities, eh? Taking offense there, Mike?

I'm on the side of the UNITED STATES and AMERICAN ECONOMIC NATIONALISM. You can cower in fear with your Chinese gay sex partners.

And by the way, your English teacher taught you wrong. There's nothing wrong with ending a sentence in a preposition. Its just an archaic, "old wives tale" rule for the anal retentive.

Oh, wait...that explains a lot in your case, huh?

Oh, and for the record,

Rich Birkett| 10.19.11 @ 3:08AM

Never end a sentence with a preposition? Never say "ain't"? Never use double negatives? Only language control freaks insist there is only one correct or "proper" way to say something. Common usage be damned? I say: If you can comprehend a sentence's meaning and intent, who cares? BTW, I've noticed that comments here and elsewhere are getting nastier and more vulgar. Not that I have a problem with vulgarity, I don't. I just think its use makes one less persuasive. "A speaker or writer says as much or more about himself or herself than the person or ideas they are talking or writing about."

Occam's Tool| 10.10.11 @ 4:13AM

Again, I think we will be fighting Islamists hard over the next 40 years, so we should be looking at immigration over a very long term, and making sure we have plenty of young couples having kids who are devoted to the American Constitution. That means quite a bit of legal immigration. I like people from India, by the way.

On a different note, what do you guys think about going to the Gold Standard. I am not well educated on this, and would like to know what you guys think.

axbucxdu| 10.10.11 @ 7:02PM

Nero had a gold standard, but it didn't stop him from perverting the aureus. When the monetary going got tough in the Great Depression, FDR had no reservations against confiscating the citizenry's gold.

Fiat gold standards, while not nearly as bad as paper, suffer from the same moral hazard: monopoly rights and government decree.

Just a thought in connection with a specie (gold/silver/copper, etc.) standard, consider looking up a hybrid system called Free Banking, or Competitive Note Issue. A system of local clearinghouses is used to provide a sort of negative feedback that maintains the correct number of certificates (a.k.a. banknotes) in circulation. The concept also has several historical examples for study that can be measured against today's freak show.

Rich Birkett| 10.10.11 @ 7:31PM

Another way to look at this issue: If the yuan is undervalued relative to the dollar, then the dollar is overvalued relative to the yuan. A simple solution is for the US government to buy yuans with QE'd dollars at a rate the US government deems fair. (BTW, QE means "quantitative easing", the electronic equivalent to printing money.) Actually, this solution would be as crazy as Romney's solution.

Brian Richard Allen| 10.18.11 @ 11:56PM

.... If the front-running Republican presidential candidate agreed with Chuck Schumer about anything at all, we would have a very serious problem ....

But thank God Almighty President and Armed Forces Commander-In-Chief-Elect Herman Cain doesn't see eye-to-eye with the lying, looting, thieving un-and-anti-American Schumer on any darned thing!

Nor is ever likely to!

Rich Birkett| 10.19.11 @ 2:19AM

Here's a list of issues Romney has played both sides (flip-flopped):
1. no new taxes
2. stimulus spending
3. auto bailouts
4. gun control
5. federal health care mandate
6. anthropogenic global warming
7. gays serving openly in military
8. same gender marriage
9. abortion
10. illegal immigrant amnesty
11. "timetable" for Iraq withdrawal
See: www.freedomactivist.net/person.....lardromney

Earle Belle| 10.20.11 @ 3:10AM

Paul v Romney – Donations Show Stark Difference
Paul raised most from active military, Romney tapped big banks

LAKE JACKSON, Texas – A recent independent analysis of candidates’ campaign contributions reveals an interesting disparity between the Ron Paul 2012 Presidential Campaign and frontrunner Mitt Romney’s campaign. Romney’s top supporters appear to be made up of big banks while, unsurprisingly, Paul’s top contributors were men and women serving in the U.S. Armed Forces.

“This fundraising analysis confirms Americans’ beliefs about Ron Paul and their suspicions about Mitt Romney. It is that Dr. Paul is extraordinarily popular and accepted by the everyman and by everyday heroes, while Romney relies almost exclusively on his big-business ties,” said Ron Paul 2012 National Campaign Chairman Jesse Benton.

According to the analysis, the top three organizations that employ Romney’s supporters are Goldman Sachs, Credit Suisse Group, and Morgan Stanley. Reflecting his popularity with the everyman and our uniformed service men and women, the top three organizations that employ Dr. Paul’s supporters are the U.S. Air Force, the U.S. Army, and the U.S. Navy.

The study notes that the organizations themselves did not contribute. Rather, “the money came from the organization’s PAC, its individual members or employees or owners, and those individuals’ immediate families.” The analysis suggests, then, that the use of PACs, bundling, subsidiaries and the like was not a feature of Dr. Paul’s grassroots fundraising.
Ron Paul Campaign Tops Others in Q3 Active-Military Donations
Outraises all other Republican candidates combined, outraises Obama

LAKE JACKSON, Texas – The Ron Paul 2012 Presidential Campaign raised more campaign donations from active military than all other presidential candidates—Republican or Democrat—including having raised more funds from this segment than all other GOP competitors combined, and more than incumbent President Barack Obama.

Dr. Paul, an Air Force veteran, raised more than $75,000 from active military in the third quarter. This comes after Dr. Paul out-raised all GOP candidates – including all GOPers combined, and President Obama singularly – in the second quarter of this year. Dr. Paul also outraised his GOP competitors in a head-to-head comparison during his 2008 run for the presidency.

This determination was arrived at using an independent campaign analysis of FEC filing data focusing on contributors who listed their occupation and employer when contributing.

“Ron Paul is the only candidate with a plan to end the growing number of unconstitutional undeclared wars, having an unclear connection to U.S. national security, end costly overseas nation-building that pays no friendship dividends, and stop subsidizing global security. Instead Dr. Paul will bring our troops home, secure our borders and lead the nation in practicing a traditional Republican noninterventionist foreign policy,” said Ron Paul 2012 Campaign Chairman Jesse Benton.

“Let me also submit that Dr. Paul out-raising all candidates in military donations demonstrates that his ‘Plan to Restore America’ might sit well among voters who are active-military or veterans,” continued Mr. Benton.

To view the Ron Paul 2012 Presidential Campaign’s latest veterans-themed ad, click here. To view its latest foreign policy-themed ad, click here.
Ron Paul’s Free Market Fix for Healthcare

Ron Paul on how we can substantively fix our healthcare problems:

Obama is just adding on more government…

Our problem is that we have too much government management of our healthcare…

If you want better competition and healthcare you should allow the American people to opt out of government healthcare…

When a government gets involved in an industry prices go up…

We need more competition in healthcare…

Let people have control over their own money…
Standing Above the Fray

Once again, it’s worth pointing out that all of these candidates are viciously attacking one other over each of their lackluster, big government records.

They all have them. Except one.

And that candidate continues to stand above the fray because there is nothing to attack.

http://www.revolutionpac.com/2.....er-snipes/