Re: [NZ_Banking_Reform] (unknown)

["William B. Ryan" <william_b_ryan@xxxxxxxxx>]

Referencing
http://www.geocities.com/new_economics/manning-05-31-02.htm

Lowell,

I must take issue with the following:

"There is a wider aspect where Margaret refers to Americans being financed by the rest of the world.  Since the second World War, US has printed US$ signs to "pay" for imports.  Trillions of them now slosh around the world as the world's 'reserve' currency.  That means the US hasn't 'paid' at all for those goods and services in any real sense.  Not yet anyway."

The US dollars sloshing around the world are the result of trade "deficit" which means that the US paid more in dollars for what the rest of the world exported to the US than the US was paid in dollars for what the US exported to the rest of the world.

How was this accomplished?

I would say that it was accomplished through trade "liberalization" and the irrational financial system that accompanied it.

American markets were opened to suppliers from throughout the world.

That is to say, an American manufacturer, who, let us say, paid decent wages, maintained a safe and pleasant working environment and a clean smokestack was put, in his own marketplace, to a competitive disadvantage to a foreign manufacturer who could enslave his workforce under subsistence conditions, squander his natural resources and pollute his environment.  The American manufacturer, no matter how efficient or productive he became, continually lost market share in the American market to his foreign "competitor."

Only in financial terms-most certainly not in real terms-was the foreign manufacturer the "lower cost producer."

In financial terms it was profitable for the foreign manufacturer to exploit his factors of production.  It was profitable to import dollars and export goods, not withstanding in real terms it was a loss.

It was also a real loss to the net importer, for his industrial base was continually degraded.

Bill

--

On Fri, 31 May 2002 10:17:24
 lowell manning wrote:
>I received this from Margaret Legum of SANE (South Africa Neww
>Economics),which is affilliated to the New economics Foundation in London.
>
>Its her current week's newsletter.
>
[cut]


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