Re: [TNF] US Dollar is sliding

["Gary Santos" <evs@xxxxxxxxxxxx>]

Aren't the terms under which international trade is made a double-edged
sword -- even from a neoliberal standpoint? That the Chinese and American
economic interest are unified today, does not mean that their interests WILL
stay unified tomorrow. Indeed, it is arguable that the mirror image of
exploitative terms of trade is an over dependence on the production of
essential consumer items on foreign soil. Even today, it is patent, that
America is depending on China to be able to sustain a low inflation
environment not to mention the profitability of much of its multinational
corporations. Such a dynamic can be categorized in the same light as "food
security". Would it be good policy for America to forgo domestic production
of wheat, corn and soy beans assuming the same can be imported at a lower
cost? Comparative advantage only really works in a borderless and ever
peaceful world.

It seems to me then that the double edged sword is not. Neo-liberal trade is
not a simple one way street. It is exploitative today but gives one an edge
tomorrow, as one gains strength, over the exploiter.



----- Original Message -----
From: "J. Barkley Rosser, Jr." <rosserjb@xxxxxxx>
To: "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>; <pkt@xxxxxxxxxxxxxxxx>
Sent: Tuesday, May 06, 2003 2:41 AM
Subject: Re: [TNF] US Dollar is sliding


Henry,
       All of these items are double-edged swords.
>From an accounting standpoint, imports are "assets"
and exports are "liabilities," something we almost
never tell students or anybody else.  Trying to get
people to stop calling having more exports than
imports a "trade surplus," however, is an idiotic
waste of time.
      BTW, I regularly point out to students that although
one perspective on the bilateral, chronic trade imbalance
between the US and Japan is to bemoan the loss of
US jobs to foreign imports, a reaction one will certainly
find in Detroit and various other hard hit rust belt locales,
another is that Americans are exploiting Japanese
workers who are producing VCRs and play stations
and high quality automobiles while working hard and
living in small houses without indoor plumbing (25 %
of the population still), while Americans give them
promises to pay in the future that we might simply
default on, if we have a mind to do so.
Barkley Rosser
----- Original Message -----
From: "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>
Sent: Monday, May 05, 2003 12:38 PM
Subject: Re: [TNF] US Dollar is sliding


> I am in tune with Hugh Whinfrey.   There is a great deal of mislabelling
> in economic concepts that allow data to misrepresent reality.  The
> relationship between current account deficit and capital account surplus
> and the mainstream and official definition of these categories in fact
> stacks the cards in favor of the type of neo-liberal arguement put forth
> by Hummel.  For example, Hummel claims that trade is in the private
> sector, which is not entirely true.  One of the reason low wage
> manufacturing goes off shore is the existence of minimum wage
> legislation, which if repealed would see sweatshop return to New York
> and Los Angels.  The same is true with environmental regulations. On
> dollar hegemony, other nations cannot print currencies at will as long
> as the dollar remains the main reserve currency for trade, a status that
> is derived from geopolitical factors that make most commodities, most
> notably oil, denominated in dollars.  Then there is the change from GNP
> to GDP to distort the measurement of "growth", the implication of which
> I have discussed on this list in the past.  An economy can be "growing"
> at high rate, while social services collapse, and the enviroment
> deteriorates, as in China today. General Motors, or IBM, or
> JPMorgan/Chase are both importers and exporters at the same time in
> diffierent countries. General Motors is engaged in the production and
> marketing and financing of "world" cars when 60% of the auto parts came
> from all over the world, where it can buy at the lowest prices, which
> are set not always, in fact seldom, by market forces, but by regulatory
> regimes.  Then of course, there is the matter of factor income, which
> trade economists always avoid.  Ford owns Aston Martin, Jaquar, and some
> Japanese and Korean auto companies. GE is in the process of buying up
> 25% of China's auto sector.
>
> When the dollar slides in recent weeks, profit in most "US"
> transnationals went up.  For a decade, one of the reason corporate
> earning came under pressure was because the dollar was too high and it
> was not beacuse US exports suffered, but because non-dollar earnings by
> US companies were worth less in the annual reports, even as imports to
> the US increases.
>
> Life is not as simple as "if foreigners don't like it, they don't have
> to do it."  That is like the tobacco company claiming smokind is a free
> will activity. "Just say no" is not good economic analysis.
>
> Henry C.K. Liu
>
>
> Hugh Whinfrey wrote:
> > Barkley Rosser notes:
> >
> >
> >>      Well, I probably should not waste my time with this,
> >>and the subsequent discussion following this entry suggests
> >>that perhaps you are not totally confused.  But, just for the
> >>record, trade surpluses are when exports exceed imports,
> >>not the other way around as you seem to think in this
> >>message.  If you do not know this, then I would suggest
> >>that you at a minimum look at an introductory principles
> >>of economcis textbook, if not a book on international
> >>economics, before you proceed to engage in full throated
> >>denunciations of all of economics.
> >
> >
> > Thanks Barkley, but I'm well-aware of the 'definition'.
> > In fact, I even have, gasp, actual degrees in economics
> > and even mathematics for that matter from a top American
> > university. International trade was a specialty in that course
> > of study. So I've been there, and done that. My point seems
> > to have gone over the heads of a few folks, so I'll spell it out
> > for the inititated here:
> >
> > While I can certainly understand the claim that the name
> > assigned to a variable is distinct from the quantity it
> > represents, when 'newspeak' enters into the way we
> > name those variables *and* political/ideological advocacy
> > replaces the 'scientific' method as the judge of what is
> > correct and incorrect, then the names of such variables can
> > hardly still be said to be logically 'independent' of the
> > goal of the argumentation they are employed in. The term
> > 'trade surplus' is an excellent example of what has become
> > such an unquestioned deception.
> >
> > Hugh
> >
> >
> >
> >
>
>
>