Trading Away the United States of America

Cross posted at Dailykos

The United States is giving us away and she's doing it through incredibly bad trade policy.   Since 1993, we have over $5 TRILLION dollars in trade losses.  Pause for a second and contemplate that number.  If you stacked silver dollars to 5 trillion you would have a height 28,305,000 times taller than the Empire State building.  
That is INSANE!

Empire State Building

If that fact boggles your mind, hold onto your seat, for the next graph dropped my jaw....

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Globalization from the Ground Up - Republicans wrong on IP policy

Having formally left NDN at the end of last year, I am now travelling round Asia for a while before returning home to Britain. And, well, given I used to work with Rob on the Globalization initiative, I thought I'd offer a few occasional thoughts on globalization from the ground. This is the first of these, and hopefully not the last. For what its worth, this is posted from Bombay, India.

NDN rightly raises the issue of IP protection, and the problem of its constant flouting in developing countries. The problem here is simple. It is not in the long-term interest of developing countries to flout IP regimes. But, crucially, it is definitely in their short term interests. China does not want to pay for copies of Windows Vista, even if it understands in the long-run that growth is positively correlated with respecting IP rights. The trick, then, is what strategy should the rights holding countries (US, EU and Japan) prosecute to try and get the rights abusing countries (India, China, others in Asia, Brazil, etc) to get to the point in their development when they see that protecting IP is in their immediate interests. This point is roughly where Singapore is You know this because it is impossible to find counterfeit good in Singapore, while they are abundant - almost comically so - in neighbouring Malaysia, and Thailand. And, of course, in China.

And this is where it gets interesting. Because at the moment the US is following the wrong strategy. It is demanding that the developing countries just stop it: obey the rules, and get with the programme. This is clearly not going to work, as the US and its IP-holding allies have no powers of enforcement. Instead, it is clear that different strategies need to be followed for different regions. And here is the interesting thing: the private sector really gets this, even if the government doesn't.

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Praying for Interest Rate Cuts

If you're sincerely worried about too many people getting jobs, we respectfully suggest you lighten up a bit.
--Alan Abelson in Barron's

The received wisdom is that the market swooned on Friday because the participants decided that there was a sufficient amount of good economic news to permit the Federal Reserve to keep interest rates where they are.

Interest rates are the price of money.  So this translates into the Federal Reserve keeping the supply of money where it is.

In addition, the Chairman of the Federal Reserve is famous for his focus on and determination to prevent deflation.

So, we can summarize.  Deflation is out of the question because:

A) Bernanke will never let it happen, and

B) It is only a matter of time before the Fed opens the monetary spigot

And nothing else matters:

The fact that the real estate market is imploding.

The fact that China holds a trillion dollars of our debt.

The fact that we are embroiled in a war for oil costing a billion dollars a day.

Allow me to close by asking the, perhaps theoretical, question: do the Chinese care about United States interest rates?

Why should they?

First, they directly affect income on the dollar-denominated debt they hold. Second, US interest rates control the value of the dollars they hold. So, even if Mr. Bernanke is tempted to cut US interest rates, his hand may be stayed by the Middle Kingdom. When you're in debt up to your eyeballs, you sometimes have to kowtow [http://en.wikipedia.org/wiki/Kowtow] to your creditors.

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Money Makes the World Go Round

Money, as we think of it, is a relatively recent invention. While coinage is quite old, money is more than simply bits of metal for exchange. It includes banking, contracts, corporate law, savings, stocks and everything which an abstraction that is mediate in terms of exchange. The world went round a very long time before money, as we know it, even existed. Periodically the world of money gets so tangled up, generally in the course of a general war, that it is necessary to crash the whole system and start over again. After the Napoleanic Wars, Britain essentially recoined their entire money supply. Lincoln redid the dollar. And after the Second World War, institutions were created to recreate the global economy around the dollar.

However, in the short term few can stand against the tide. Thailand tried to slow down hot money from coming in, and was greated with a short, sharp, and terrifying sell off in their stock market. This is why brute force approaches to international finance are usually bad ideas.

One of these bad ideas, forcing a rapid revaluation of the Yuan, is one whose time has come.

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BUSH RULES OUT 'GRACEFUL EXIT' - FOR HIMSELF AND CHENEY

Reprinted from The Satirical Political Report http://satiricalpolitical.com

Addressing the increasing violence and chaos in Iraq, President Bush announced today that there would no "graceful exit" for U.S. troops, and also, more significantly, no "graceful exit" from office for either the Vice President or himself.

"We're gonna' stay until the job gets done," Bush insisted, "regardless of any timetables for the next Presidential election." Bush added that he couldn't even gracefully exit China when he tried, so why expect him to leave a nice cushy job like President.

Bush further asserted that according to a secret opinion given to him by Attorney General Gonzales, Bush had the power during wartime to suspend the Twenty-Second Amendment to the Constitution -- governing term limits for Presidents - along with the First, Fourth, Fifth and Sixth Amendments as well.

The President contended "that we'd be sending the wrong message to the terrorists if Cheney and I just `cut and run,' just like the Democrat party wants us to do."

CONTINUED at: http://satiricalpolitical.com/?p=441

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