Trade Deficit

Obama And Romney Both Favor A One World Economic System That Kills American Jobs

Either way this election turns out, American jobs are going to continue to get slaughtered by the millions.  During this campaign, Mitt Romney and Barack Obama have both attempted to portray each other as the “outsourcer in chief“.  Unfortunately, they are both right.  Barack Obama and Mitt Romney have both participated in the outsourcing of American jobs, and both are openly admitting to the American people that they favor the emerging one world economic system which will continue to destroy millions of American jobs.  In fact, they argue with each other about which of them will be more aggressive in pursuing more “free trade” agreements over the next four years.  Unfortunately, the “free trade” agreements that the U.S. government enters into are never “fair trade” agreements.  As a result, over the past decade we have lost tens of thousands of businesses, millions of jobs and trillions of dollars of national wealth.  This year alone, we will buy about half a trillion dollars more stuff from the rest of the world than they will buy from us.  This trade deficit will be about 7 times larger than the trade deficit of any other nation on earth.  Our economy will continue to bleed jobs at a horrifying pace, but Obama and Romney insist that the answer to our problems is even more “free trade”.  What makes all of this even more dreadful is that most Americans continue to fall for this nonsense.

It doesn’t take a genius to figure out that merging our labor pool with the labor pools of nations where it is legal to pay slave labor wages was going to kill American jobs and drive down wages for the jobs that remain in the United States.

Why should some giant predator corporation pay you 15 dollars an hour plus benefits when they can pay a worker on the other side of the planet a dollar an hour with no benefits to do the same job?

During the second presidential debate, when Obama was asked why high tech products such as the iPhone could not be made here in the United States, Obama openly admitted that there are some jobs that aren’t ever going to come back.

But why does that have to be so?

Why can’t those jobs come back to America?

It seems to me that if you cracked down on nations that are cheating such as China, imposed a system of common sense tariffs and cut the corporate tax rate to a level more consistent with the rest of the world that you could get a lot of those jobs flooding back in by the end of next year.

But Obama is so blinded by his faith in the emerging one world economy that such measures are unimaginable to him.

In recent years, the Obama administration has entered into new “free trade” agreements with Panama, South Korea and Colombia.  In addition, the Obama administration is making the Trans-Pacific Partnership (“the NAFTA of the Pacific“) a very high priority.

Considering what a nightmare the first NAFTA was, do we really need another one?

The Trans-Pacific Partnership is a treaty that would essentially ban all “Buy American” laws.  It is being touted as one of the most comprehensive “free trade” agreements in history, and it would open up the door for millions more good jobs to be shipped out of the country.

The workers of America simply cannot afford another four years of Barack Obama.

In fact, the Obama administration has actually spent billions of taxpayer dollars to create jobs in other countries.  The following is from a pro-Republican website…

Over his four years in office, Obama promised that he would focus on creating “jobs that pay well and can’t be outsourced.” However, as he racked up trillions in new debt, billions of dollars did go to create jobs that were outsourced or spent overseas. Whether it is electric cars made in Finland or solar panels in Mexico, taxpayers would be astonished to learn that their hard earned money went abroad for jobs that weren’t created in the United States.

You can get all the details right here.  Needless to say, the Obama administration has been an absolute disaster on these issues.

So would Romney be an improvement when it comes to trade?

That is very doubtful.

The truth is that Mitt Romney was involved in outsourcing jobs while he was at Bain Capital.  The following is from a recent article posted on Forbes.com…

David Corn of Mother Jones reports that “according to government documents . . . Romney, when he was in charge of Bain [Capital], invested heavily in a Chinese manufacturing company that depended on US outsourcing for its profits—and that explicitly stated that such outsourcing was crucial to its success.”

This didn’t happen after 1999, when Mitt Romney says he left Bain Capital to run the Salt Lake City Olympics (Corn was one of the first reporters to raise questions, now gaining wide exposure, of whether Romney really left Bain then), but the year before. On April 17, 1998, Brookside Capital Partners Fund, a Bain Capital affiliate of which Romney was the sole shareholder, sole director, president, and chief executive, invested an estimated $14.2 million in Global-Tech, an appliance maker in Dongguan, China. Global-Tech made products for American companies like Sunbeam, Hamilton Beach, Mr. Coffee, and Proctor-Silex. In September 1998 Global-Tech’s CEO announced that the company was postponing a factory expansion because Sunbeam was slowing its rate of outsourcing, and said, “Although it appears that customers such as Sunbeam are not outsourcing their manufacturing as quickly as we had anticipated, we still believe that the long-term trend toward outsourcing will continue.”

Since Romney left, Bain Capital has become even more aggressive with outsourcing jobs.  In fact, Bain Capital has been forcing American workers to train their Chinese replacements even in the midst of this campaign.  Aren’t they concerned that they are making their former boss look bad?  The following is from an article written by an American worker that is having his job shipped to China by Bain Capital…

On Monday, November 5th Bain Capital is outsourcing my job to China. On Tuesday, November 6th I’m casting my vote against Mitt Romney.

Yes, I blame Mitt Romney for the loss of my job. Here’s why.

I’ve worked at the same factory in Freeport, Ill. for thirty-three years, making sensors and controls for the auto industry. It’s tough work, but it pays a living wage with health benefits that folks can count on, and it fuels our town’s economy and tax base.

That’s been changing since Bain Capital came to town. Two years ago, our factory was sold to Sensata Technologies, a company created by Bain Capital, and they told us that by December 2012, all 170 of our jobs would be shipped to China. They even made us train our Chinese replacements.

Layoff notices have been sent out, and some folks have already been laid off. Where there was once lots of people and energy and life, now there’s only the discoloration on the floor where the machinery used to be. It’s depressing. They’re not just dismantling the equipment and the plant; they’re dismantling our community.

All of this outsourcing is killing America.

Back in 1950, the population of this country was less than half of what it is now, and yet there were more Americans working in manufacturing back in 1950 than there are today.

The decline in manufacturing jobs in the United States has been really dramatic since the year 2000.

In 2000, there were more than 17 million Americans working in manufacturing, but now there are less than 12 million…

I think that it is interesting to note that China joined the WTO in 2001.  Since that time we have been losing jobs to them at an astounding pace.  According to a new report by the Economic Policy Institute, U.S. trade with China “cost more than 2.7 million jobs between 2001 and 2011”.

The Chinese slap huge tariffs on many of our goods, they manipulate currency rates to make sure that U.S. companies cannot compete, they steal our intellectual property and they deeply subsidize their own businesses.

And yet Obama and Romney insist that this is “free trade”.

What a joke.

And our tax structure is absolutely killing us as well.  The following is from a recent article by Ernest F. Hollings…

A U.S. manufacturer exporting to China pays the 35% Corporate Tax and a 17% VAT when its exports reach Shanghai.  A China manufacturer exports tax free to the U.S.

Are you starting to get the picture?

Our trade policy is a complete and total disaster, and yet Obama and Romney continue to insist that we just need to become even more integrated with the emerging one world economic system.

Well, in a previous article I listed 22 statistics which prove that the current path that we are on has been absolutely disastrous for American workers…

#1 One professor has estimated that cutting the U.S. trade deficit in half would create 5 million more jobs in the United States.

#2 The United States has a trade imbalance that is more than 7 times larger than any other nation on earth has.

#3 Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the globe since 1975.  That 8 trillion dollars could have gone to support U.S. businesses and pay the wages of U.S. workers.  Federal, state and local taxes would have been paid on that 8 trillion dollars if it had stayed in the United States.

#4 When NAFTA was passed in 1993, the United States had a trade surplus with Mexico of 1.6 billion dollars.  In 2010, we had a trade deficit with Mexico of 61.6 billion dollars.

#5 In 2001, American consumers spent 102 billion dollars on products made in China.  In 2011, American consumers spent 399 billion dollars on products made in China.

#6 The Chinese undervalue their currency by about 40 percent in order to gain a critical advantage over foreign competitors.  This means that many Chinese companies are able to absolutely thrive while their competition in the United States goes out of business.  The following is from a recent Fox News article….

To keep Chinese products artificially inexpensive on US store shelves, Beijing undervalues the yuan by 40 percent. It pirates US technology, subsidizes exports and imposes high tariffs on imports.

#7 According to the New York Times, a Jeep Grand Cherokee that costs $27,490 in the United States costs about $85,000 in China thanks to all the tariffs.

#8 The U.S. trade deficit with China during 2011 was 295.4 billion dollars.  That was the largest trade deficit that one nation has had with another nation in the history of the world.

#9 Back in 1985, our trade deficit with China was only about 6 million dollars (million with an “m”) for the entire year.

#10 U.S. consumers spend about 4 dollars on goods and services from China for every one dollar that Chinese consumers spend on goods and services from the United States.

#11 The United States has actually lost an average of about 50,000 manufacturing jobs a month since China joined the World Trade Organization in 2001.

#12 According to the Economic Policy Institute, America is losing about half a million jobs to China every single year.

#13 The United States has lost more than 56,000 manufacturing facilities since 2001.

#14 During 2010 alone, an average of 23 manufacturing facilities closed their doors in America every single day.

#15 Since the auto industry bailout, approximately 70 percent of all GM vehicles have been built outside the United States.

#16 As I have written about previously, 95 percent of the jobs lost during the last recession were middle class jobs.

#17 According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades if current trends continue.

#18 The percentage of working age Americans that are employed right now is actually smaller than it was at the end of the last recession.

#19 The average duration of unemployment in the United States is nearly three times as long as it was back in the year 2000.

#20 Due in part to the globalization of the labor pool, only about 24 percent of all jobs in the United States are “good jobs” at this point.

#21 Without enough good jobs, more Americans than ever before are falling into poverty.  Today, more than 100 million Americans are on welfare.

#22 In recent years the U.S. economy has embraced “free trade” and the emerging one world economy like never before.  Instead of increasing the number of jobs in our economy, it has resulted in the worst stretch of job creation in the United States in modern history….

If any single number captures the state of the American economy over the last decade, it is zero. That was the net gain in jobs between 1999 and 2009—nada, nil, zip. By painful contrast, from the 1940s through the 1990s, recessions came and went, but no decade ended without at least a 20 percent increase in the number of jobs.

At this point, more than 41 percent of all working age Americans do not have a job, and the vast majority of the new jobs that are being created are low paying jobs.

Median household income has fallen for four years in a row.  In fact, median household income is down by more than $4000 since Barack Obama entered the White House.

One recent survey found that about 40 percent of all Americans have $500 or less in savings.  We are a country that is full of broke people.

What we need are more good jobs.  But Obama and Romney are both determined to keep shipping good jobs out of the country.

The path that we are on will only lead to disaster.  Please wake up America.

Will Toledo, Ohio Be The First Major American City To Be Owned By China?

It has been said that there are two ways to conquer and enslave a nation.  One way is by using the sword, and the other is by using debt.  Fortunately, America is not in danger of being conquered by the sword right now, but America is being conquered by debt.  The borrower is the servant of the lender, and today we owe China more than a trillion dollars.  By running a gigantic trade deficit with us, China has been able to become incredibly wealthy.  We have begged them to lend us back some of the money that we have sent them and this has made them even wealthier.  Now China is gobbling up U.S. real estate and U.S. assets at an astounding pace.  In fact, some cities are in danger of becoming completely dominated by Chinese ownership.  One of those cities is Toledo, Ohio.  In many “rust belt” areas, real estate can be had for a song, and the Chinese are taking full advantage of this.  America was once the wealthiest nation on earth, but now we are drowning in debt and we are being sold off in chunks to the highest bidder.  Is this the legacy that we are going to leave for future generations?

According to a recent Fortune article, Chinese investors have been very busy purchasing distressed commercial real estate in Toledo lately….

In March 2011, Chinese investors paid $2.15 million cash for a restaurant complex on the Maumee River in Toledo, Ohio. Soon they put down another $3.8 million on 69 acres of newly decontaminated land in the city’s Marina District, promising to invest $200 million in a new residential-commercial development. That September, another Chinese firm spent $3 million for an aging hotel across a nearby bridge with a view of the minor league ballpark.

Toledo is being promoted to Chinese investors as a “5-star logistics region“.  From Toledo it is very easy to get to Chicago, Detroit, Cleveland, Pittsburgh, Columbus and Indianapolis.

With a population of 287,000, Toledo is only the fourth largest city in Ohio, but it lies at the junction of two important highways — I-75 and I-80/90. “My vision is to make Toledo a true international city,” Toledo’s Mayor Mike Bell told the Toledo Blade.

For some reason the Chinese seem to be very interested in that area of the country.  Last month, I wrote about how one Chinese group plans to develop a 200 acre “China city” just 40 minutes away from Toledo….

A Chinese group known as “Sino-Michigan Properties LLC” has bought up 200 acres of land near the town of Milan, Michigan.  Their plan is to construct a “China City” with artificial lakes, a Chinese cultural center and hundreds of housing units for Chinese citizens.  Essentially, it would be a little slice of communist China dropped right into the heartland of America.  This “China City” would be located about 40 minutes from both Detroit and Toledo, and it would be marketed to Chinese business people that want to start businesses in the United States.

But it is not just the rust belt that is being bought up by the Chinese.  A recent Forbes article documented several of the huge real estate deals that the Chinese are doing in New York right now….

According to a recent report in the New York Times, investors from China are “snapping up luxury apartments” and are planning to spend hundreds of millions of dollars on commercial and residential projects like Atlantic Yards in Brooklyn. Chinese companies also have signed major leases at the Empire State Building and at 1 World Trade Center, the report said.

In addition to real estate, the Chinese are also buying up businesses and natural resources all over the United States.

For example, the Dalian Wanda Group recently bought U.S. movie theater chain AMC Entertainment for 2.6 billion dollars.

Also, the Obama administration has been allowing companies owned by the Chinese government to gobble up U.S. oil and gas deposits worth billions of dollars.

On top of all that, the Federal Reserve recently announced that it will now allow Chinese banks to start buying up American banks.

So how in the world did we come to be so completely and totally dominated by China?

Well, the key to all of this is the trade deficit.

Most Americans can’t even tell you what a trade deficit is, but it is at the very heart of our economic problems.

Basically, we buy far, far more from other countries than they buy from us.

Most Americans don’t realize this, but the truth is that the United States has a trade imbalance that is more than 5 times larger than any other nation on earth has.

Overall, the U.S. has run a trade deficit of more than 8 trillion dollars with the rest of the globe since 1975.

If you go into a Wal-Mart of a dollar store today and you start looking at product labels, you will notice that hundreds of products say “made in China” and very few of them say that they were made in this country.

Every single month, China sends us gigantic mountains of plastic crap to sell in our stores and we send them gigantic mountains of our money.

The U.S. trade deficit with China during 2011 was $295.4 billion.  That was the largest trade deficit that one country has had with another country in the history of the planet.

Sadly, so far our trade deficit with China in 2012 is about 12 percent larger than it was last year.

So things are getting even worse.

To get an idea of how far things have come, let us take a look back at the 1980s for a moment.

Back in 1985, the U.S. trade deficit with China was only 6 million dollars for the entire year.

All of this imbalanced trade is absolutely killing us.

Today, the United States spends about 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.

So why doesn’t China buy more stuff from us?

Well, there are a whole lot of reasons.  One of the main reasons is that they slap huge tariffs on many American-made goods.

For example, according to the New York Times a Jeep Grand Cherokee that costs $27,490 in the United States costs about $85,000 in China thanks to all the tariffs.

So why do we allow China to keep doing this to us?

That is a very good question.

Meanwhile, China is continually getting wealthier and we are continually getting poorer.

All of the money that is leaving this country and going to China could be going to U.S. businesses and U.S. workers instead.  In turn, those businesses and workers would pay taxes on that money to support the government.

Instead, we have to go beg China to lend us the money that we just sent to them.

At this point, China now holds approximately 1.17 trillion dollars of U.S. government debt.

None of this ever had to happen.

But it did happen because we were stupid.

Now China has mountains of money to literally buy us up.

But China is not the only country that we have an imbalanced trading relationship with.

For example, the new “free trade agreement” between the United States and South Korea that Barack Obama has been touting went into full effect on March 15, 2012.

So how has that “free trade agreement” turned out so far?  The following is from a recent article by Pat Buchanan….

The U.S. trade deficit with Korea tripled in one month. Imports from South Korea jumped 15 percent to $5.5 billion in April, while U.S. exports to South Korea fell 12 percent to $3.7 billion. Suddenly, the U.S. trade deficit with Seoul surged to an annual rate of $22 billion.

Shades of NAFTA. When it passed in 1993, we had a $1.6 billion trade surplus with Mexico. By 2010, our trade deficit with Mexico had reached $61.6 billion.

Ouch.

The truth is that these free trade agreements are not fair and balanced.

U.S. workers end up competing for jobs with workers in countries where it is legal to pay slave labor wages.  And other countries often have far fewer rules and regulations to follow as well.  In his recent article, Buchanan described why all Americans should be economic nationalists….

Global free trade means U.S. workers compete with Asian and Latin American workers whose wages are a fraction of our own and whose benefits may be nonexistent. Global free trade means U.S factories that relocate to Indonesia or India need not observe U.S. laws on health, safety, pollution or paying a minimum wage.

Global free trade means that companies that move factories outside the United States can send their products back to the United States free of charge and undercut businessmen who retain their American workers and live within American laws.

Free trade makes suckers and fools out of patriots.

Unfortunately, both major political parties in the United States are absolutely married to the one world economic agenda that the elite are pushing.

So we will continue to bleed wealth, businesses and jobs at an astounding pace.

You can get a really good idea of the horrific manufacturing job losses in the United States over the past 40 years by checking out this map right here.

Overall, the United States has lost a total of more than 56,000 manufacturing facilities since 2001.

According to the Economic Policy Institute, since 2001 America has lost approximately 2.8 million jobs due to our trade deficit with China alone.

There seems to be absolutely no concern with protecting American jobs these days.

If you can believe it, Chinese corporations are even building our bridges.  The following is a brief excerpt from a recent ABC News article….

In New York there is a $400 million renovation project on the Alexander Hamilton Bridge.

In California, there is a $7.2 billion project to rebuild the Bay Bridge connecting San Francisco and Oakland.

In Alaska, there is a proposal for a $190 million bridge project.

These projects sound like steps in the right direction, but much of the work is going to Chinese government-owned firms.

“When we subsidize jobs in China, we’re not creating any wealth in the United States,” said Scott Paul, executive director for the Alliance for American Manufacturing.

Americans need to start understanding that our trade deficit is causing us to lose massive numbers of businesses and jobs and that this is making us poorer as a nation.

As I wrote about the other day, the median net worth of families in the United States declined “from $126,400 in 2007 to $77,300 in 2010” according to the Federal Reserve.

Even if you take away the effect of the housing collapse, household net worth still declined by 25 percent between 2005 and 2010.

A lot of that decline in wealth was due to the recent recession, but the point I am trying to make is that we are getting poorer as a nation.

A decade ago, the United States was ranked number one in average wealth per adult.  By 2010, the United States had fallen to seventh.

And when you factor in our debts, we are a complete and total mess.  U.S. consumers are more than 11 trillion dollars in debt and the federal government is nearly 16 trillion dollars in debt.

We are getting deeper in debt at the same time that our ability to service that debt is declining.

The reality is that our economy is completely falling apart and it no longer produces enough jobs for everyone.

In fact, it isn’t even close.

Right now there are about 3.7 workers that are “officially” unemployed for every single job opening.

So what we are doing right now is clearly not working.

We need to fundamentally change direction as a nation.

Unfortunately, that is not going to happen any time soon.

So where do we go from here?

The Worst In The World – The U.S. Balance Of Trade Is Mind-Blowingly Bad

Did you know that we buy about a half a trillion dollars more stuff from the rest of the world than they buy from us?  The U.S. balance of trade is not only mind-blowingly bad – it is the worst in the world.  It is being projected that the U.S. trade deficit for 2011 will be 558.2 billion dollars.  That would be an increase of more than 11 percent from last year.  As I have written about previously, the United States is the worst in the world at a lot of things, but as far as the economic well-being of our nation is concerned, our balance of trade is particularly important.  Every single month, far more money goes out of this country than comes into it.  Tax revenues are significantly reduced as all of this money gets sucked out of our communities.  The federal government, state governments and local governments borrow gigantic piles of money to try to make up the difference, but all of this borrowing just makes our debt problems a whole lot worse.  In the end, no amount of government debt is going to be able to cover over the fact that our national economic pie is shrinking.  We are continually consuming far more wealth than we produce, and that is a recipe for economic disaster.

The “current account balance” is one key indicator of how a country is doing economically.  The following is how the CIA World Factbook defines “current account balance”….

This entry records a country’s net trade in goods and services, plus net earnings from rents, interest, profits, and dividends, and net transfer payments (such as pension funds and worker remittances) to and from the rest of the world during the period specified.

If someone were to ask you what countries in the world have strong, thriving economies right now, what countries would you think of?

Would countries like China, Germany, Russia and Saudi Arabia come to mind?

Well, all of those nations have huge positive current account balances.  In fact, China has the best current account balance in the world at +$305 billion.

So who is on the other end of the scale?

The following information comes directly from a CIA World Factbook chart….

190 Turkey $ -48,420,000,000

191 Canada $ -48,500,000,000

192 India $ -51,780,000,000

193 France $ -54,400,000,000

194 United Kingdom $ -56,190,000,000

195 Spain $ -63,650,000,000

196 Italy $ -67,940,000,000

197 United States $ -470,200,000,000

The United States is rated dead last at number 197.

Just take a close look at those numbers for a minute.

The U.S. had a current account balance of negative 470 billion dollars in 2010.  That figure was almost 7 times worse than the next worst country (Italy).

Not only does the United States have the worst current account balance in the entire world, the truth is that no other country is even in the same ballpark as us.

We are bleeding wealth so fast that it is hard to even describe it.

But perhaps a real life example can help put this all into perspective.

One 22-year-old Saudi Arabian student has a collection of sports cars that is worth more than 12 million dollars.  Reportedly, his collection includes at least three Lamborghinis, five Ferraris and five Porsches.

And guess who paid for it?

You did.

Every month, billions of dollars go out of the United States to help pay for the insane lifestyles of the ultra-wealthy oil barons of the Middle East.

Meanwhile, dozens of major U.S. cities are degenerating into hellholes.

Once upon a time, Detroit was one of the greatest industrial cities that the world has ever seen.  It was the envy of the entire globe.

But now Detroit is an utter nightmare….

*An analysis of census figures found that 48.5% of all men living in Detroit from age 20 to age 64 did not have a job in 2008.

*If you can believe it, the median price of a home in Detroit is now just $6000.

*Only 25 percent of students in Detroit graduate from high school.

So what happened to Detroit?

Well, just as has been happening in so many other U.S. cities, industry has been leaving at an astounding pace.

As I have written about previously, an average of 23 manufacturing facilities a day were shut down in the United States during 2010.

Overall, the U.S. has lost a total of more than 56,000 manufacturing facilities since 2001.

This country is bleeding middle class jobs profusely, and neither major political party seems to care.

American family budgets are being stretched tighter and tighter these days.  There are not nearly enough good jobs to go around and yet the cost of everything just seems to keep going up.

Many families are going into massive amounts of debt in an attempt to make ends meet.  According to a recent CNN article, credit card use in the United States is experiencing a major upswing once again….

Purchases made with credit cards rose 8.2% in the first quarter of 2011, 9% in the second quarter and 10.6% in the third quarter, according to First Data.

Of course American consumers were out in force on Black Friday once again this year.  They gleefully filled up their carts with cheap plastic crap made overseas, and many racked up huge credit card balances in the process.

But most of us never stop to think about those that make all of these cheap plastic products for us.

Thanks to the globalization of the economy, big corporations and corrupt governments can make stuff in countries where it is legal to pay slave labor wages and then ship their products into the United States for free.

It is important for all of us to learn what actually happens to these people that are working so hard for slave labor wages.  The following comes from a recent article in the Guardian….

At the Hung Hing factory the researcher found that the 8,000 workers put in up to 100 hours of overtime a month, far in excess of the legal maximum. Workers say they have to sign a document agreeing to work additional overtime on top of the legal maximum. The basic wage was £132 a month (up to £250 with maximum overtime payments) but wages were paid up to three weeks late.

Workers complained of inadequate training with the factory machines and last year one worker died when he fell into a machine. They said there were frequent injuries and concerns over the chemicals used. There were also complaints about the standard of the dormitories, where water for washing and flushing toilets is turned off at 10pm.

How in the world are American workers supposed to “compete” for jobs at those wage levels?

As I have written about previously, Professor Alan Blinder of Princeton University is warning that 40 million more U.S. jobs could be sent offshore over the next two decades if nothing is done to stop this.

But instead, our “representatives” in Congress just keep pushing more “free trade” agreements as the answer to our problems.  Congress has passed new free trade agreements with South Korea, Colombia and Panama, and the Obama administration has made “the NAFTA of the Pacific” a very high priority.

Well, if “free trade” is supposed to create so many jobs, then why was last decade the worst decade for the creation of jobs since the Great Depression?

If you can believe it, zero jobs were created between 1999 and 2009.  The following comes from an article in Washington Monthly….

“If any single number captures the state of the American economy over the last decade, it is zero. That was the net gain in jobs between 1999 and 2009—nada, nil, zip. By painful contrast, from the 1940s through the 1990s, recessions came and went, but no decade ended without at least a 20 percent increase in the number of jobs.”

But our leaders don’t care about us.  In fact, even the members of Obama’s “jobs panel” have been shipping jobs out of the United States at a very rapid pace.

The U.S. has run a negative balance of trade with the rest of the globe every single year since 1976.  During that time, the U.S. has run up a total trade deficit of more than 7.5 trillion dollars with the rest of the planet.

That 7.5 trillion dollars could have gone to support U.S. workers and U.S. businesses.

But it didn’t.  Instead, it went out of the country and it made foreigners wealthier as our own cities slowly rotted.

Now we are actually passing laws that encourage wealthy foreigners to come in and buy up pieces of the United States.

For example, there is actually a bill in Congress that would automatically give residence visas to any foreigners that are willing to spend at least half a million dollars to buy houses inside the United States.

The idea behind the bill is that this will get the housing market moving again.

There aren’t enough Americans with good jobs to buy houses, so we have now decided to beg foreigners to buy them.

How bizarre is that?

Until our horrendous balance of trade is fixed, the employment situation in this country is going to continue to get worse.

Any politician that tries to sell you on a “jobs plan” that does not address our balance of trade is either totally incompetent or is straight out lying to you.

The economic infrastructure of America is crumbling a little bit more every single day.  If something dramatic is not done, we will continue to bleed businesses, bleed jobs and bleed wealth.

Please share this information with as many people as you can.  The American people need to understand what is happening to the economy.  We need to work to wake up as many people as we can before it is too late.

The Number One U.S. Export To China: Waste Paper And Scrap Metal

Historians tell us that by the very end of the Roman Empire, goods were pouring into Rome from all over the known world, but about the only thing being sent out of Rome was human waste and garbage.  America has not yet reached that point, but we are certainly well on our way.  In 2010, the number one U.S. export to China is “scrap and trash”.  Yes, you read the correctly.  The number one thing that China buys from us is our garbage.  According to author Clyde Prestowitz, China’s number one export to the U.S. is computer equipment (nearly $50 billion) while our number one export to them is waste paper and scrap metal (approximately $8 billion).  When it comes to world trade, China is literally wiping the floor with the United States.  In August, the U.S. trade deficit with China set a new one month record of $28 billion dollars.  Our insane trade policies are making China (along with several of our other “trade partners”) incredibly wealthy, and the U.S. government ends up begging China to lend that money back to us to fund the exploding U.S. national debt.  That just isn’t stupidity – that is insanity.

The truth is that our “twin deficits” are literally bankrupting this nation.  We are completely and totally destroying the economic future of our children and grandchildren.

But hey, the Vikings beat the Cowboys, Dancing With The Stars is heating up and we all have a bunch of DVDs to get caught up on so why worry ourselves, right?

Unfortunately, the reality is that we can’t afford to be “comfortably numb” any longer if we hope to have any kind of a future.

It is time to wake up people.

Sadly, a significant percentage of young Americans these days can’t even tell you what a “trade deficit” is. 

If you don’t believe this, just try a little experiment some time.  Just go up to a few young Americans on the street and ask them to define “trade deficit” for you.

But fortunately, the vast majority of the readers of this column are quite informed.  Unfortunately, I still don’t believe that most of you really understand how incredibly dangerous the trade deficit is.

So just how dangerous is the trade deficit?  Well, world famous investor Warren Buffett once put it this way….

“The U.S trade deficit is a bigger threat to the domestic economy than either the federal budget deficit or consumer debt and could lead to political turmoil… Right now, the rest of the world owns $3 trillion more of us than we own of them.”

Between 2000 and 2009, America’s trade deficit with China skyrocketed nearly 300 percent.  Wealth, factories and jobs are leaving the United States at an astounding pace.  The danger that this represents to our economy is so vast that it is hard to even describe.

If you ever find yourself in a debate with proponents of “free trade”, you can almost always get them to eventually admit that “free trade” will raise the standard of living for workers in countries like China while significantly lowering the standard of living for U.S. workers, but that this must be done for the good of the emerging “global economy”.

Of course U.S politicians never really mention this nasty little fact when they give speeches about how wonderful our trade policies are.  They never really get around to mentioning that “free trade” is one of the key foundations of “globalism” and that we are being merged into a one world economy.

Today, American workers do not just compete with other American workers.  Instead, U.S. workers now find themselves in direct competition for jobs with workers in China that makes less than a tenth of what an American worker would make.  In China, a garment worker makes approximately 86 cents an hour.  Apple iPhones are manufactured in China by workers making about 293 dollars a month (and that was after a big raise).

So exactly how long do you think you and your family would be able to survive on 293 dollars a month?

But unfortunately, millions more Americans will lose their jobs and millions more Americans will be forced to take a cut in pay in order to compete in the new global economy.

According to a disturbing new study by the Economic Policy Institute, if the trade deficit with China continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone.

The sad truth is that it is NOT a good time to be a blue collar worker in America.  If your job does not get offshored or outsourced, then it is likely to be made obsolete by computers and automation. 

The need for manual labor is rapidly declining in today’s world.  For example, there is a Japanese firm called Fanuc, Ltd. that actually has industrial robots manufacturing other industrial robots in a “lights out” factory.

How bizarre is that?

But things wouldn’t be quite as bad for U.S. workers if China was not cheating so badly.  The truth is that they just do not play the game fairly.

For instance, it is estimated that the Chinese government is keeping China’s currency valued about 40 percent lower than it should be.  This is essentially a de facto subsidy to China’s exporters.

There has been a little bit of rumbling in the Obama administration about this in recent weeks, but it is quite unlikely that they will push China too far on this issue.  After all, the Obama administration desperately needs China to keep loaning us massive quantities of money so that we can keep funding our runaway debt.

If you sit back and objectively analyze the facts, it quickly becomes undeniable that China is beating the living crap out of us economically.  In fact, one prominent economist is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040 if current trends continue.

This all could have been turned around a decade or two ago, but now China has us by the throat.  At any time, China could decide to start selling off massive quantities of U.S. Treasuries.  At any time, China could decide to cut off our supply of rare earth elements (of which they have a virtual monopoly).   

China is now even the number one supplier of components that are critical to the operation of U.S. defense systems.  How smart were we to allow that to happen?

It is a direct threat to national security for China to have so much leverage over us.  But you rarely hear anyone talking about this.

The truth is that trade with China is not a left/right issue.  As I have written about previously, it is impossible for any self-respecting conservative to justify our trade policies with China and it is impossible for any self-respecting liberal to justify our trade policies with China.

Yet very few current members of the U.S. Congress ever discuss the possibility of sweeping changes to our trade policies.

So we will continue to lose thousands of factories, we will continue to lose millions of jobs and we will continue to see the biggest transfer of wealth in the history of the world accelerate.

So do any of you think that I am wrong about this?  Please feel free to leave a comment with your opinion below….

The Trade Deficit Nightmare

When they hear the word deficit, most Americans immediately think of the U.S. government budget deficit which is rapidly spiralling out of control.  But that is not the only deficit which is ripping the U.S. economy to shreds.  In fact, many economists commonly speak of the “twin deficits” that are destroying the U.S. financial system.  So what is the “other deficit” that they are referring to?  It is the trade deficit.  Every single month, we buy much more stuff from the rest of the world than they buy from us.  That means that every single month there is a massive outflow of wealth from the United States.  Every single day, America becomes just a little bit poorer as Americans continue to run out and fill up their shopping carts with cheap plastic crap from China and dozens of other emerging economies.  Not that trade is a bad thing.  Trade can actually be a very good thing.  But the gigantic trade imbalances that the United States has been running for years are absolutely bleeding us dry.  Unfortunately, our politicians have just stood idly by as each month we continue to transfer massive amounts of wealth out of the United States.

The U.S. Commerce Department recently announced that the U.S. trade deficit increased by 18.8 percent in June to $49.9 billion.  Most analysts had expected the figure to be somewhere around 41 to 43 billion dollars.

In the month of June, imports rose to approximately $200 billion while exports fell to about $150 billion.

So can we afford to have a net outflow of 50 billion dollars each and every month?

Of course not.

We had so much wealth as a nation that we could afford to do this for a while, but the reality is that if this keeps up the rest of the world will eventually drain us dry.

So just how dangerous is the trade deficit?  Well, world famous investor Warren Buffett once put it this way….

“The U.S trade deficit is a bigger threat to the domestic economy than either the federal budget deficit or consumer debt and could lead to political turmoil… Right now, the rest of the world owns $3 trillion more of us than we own of them.”

But very few Americans talk about the trade deficit.

Why?

Number one, it is because our education system has become so dumbed down that most Americans (especially among the younger generations) do not even know what the trade deficit is.

Number two, most Americans are so obsessed with frivolous things such as American Idol, Dancing With The Stars, Lady Gaga and their favorite sports teams that they couldn’t care less about thinking about real issues.

But they should be thinking about foreign trade, because it is literally destroying the nation.

What we have done is we have allowed the monolithic predator corporations that dominate our economy to slowly but surely move their operations to countries such as China and India where labor costs less than a tenth of what it does here.  In the process, executives at those predator corporations are earning huge “performance bonuses” while millions of hard working middle class Americans are losing their jobs.

It is time to wake up.  Have you ever wondered why it is so hard to find a decent job out there right now?  Well, there is a good reason.  The giant predator corporations have decided that they don’t really need us anymore.

Once upon a time, great American companies provided great American jobs for great American workers.  We created the biggest middle class in the history of the world and great industrial cities like Detroit, Michigan were the envy of the world.

But have you been to Detroit lately?

One of the greatest cities in the United States has become a hellhole.  The mayor says that nearly half the people there are out of work.

So what happened?

Did the giant corporations who used to make stuff in Detroit stop making stuff?

No, they are still making lots of stuff.

They just aren’t making their stuff in Detroit anymore.

Now, the truth is that it is really easy to jump on Detroit.  It is a city that has been mismanaged for decades.  But Detroit is far from alone.

All throughout the “rust belt” you can find other Detroits.

At this point many of you may be thinking that people living in places like that should just move.

That may be good advice, but the truth is that what has happened to Detroit is going to be happening everywhere.  It is going to come to your own neighborhood soon enough.  The giant predator corporations are going to continue to try to outsource and offshore every job they can.

Your job may be next.

Perhaps you should start learning about the trade deficit.

Perhaps you should start asking your representatives about it.

Just look at what all of this “free trade” and “globalism” did to our trade deficit between 1991 and 2005…..

Are you troubled by that chart?

You should be.

The U.S. economy is bleeding and the top politicians from both political parties act as if they could really care less.

What do you think is going to happen if tens of billions of dollars continue to pour out of the United States month after month after month?

The economic prosperity that we have all been enjoying is not guaranteed to last forever.

The system of world trade that has developed over the past few decades has provided us with gigantic mountains of cheap plastic crap, but it is not a good system for America or for middle class American workers.

Someday we will look back in horror at how incredibly stupid it was to ship our manufacturing base, our jobs and our prosperity to China.   

But the American people have made their choices.  They allowed the politicians to convince them that NAFTA, GATT and the WTO would be wonderful things for Americans.

They didn’t listen to the warnings about what would ultimately happen to our jobs and our economy.

They didn’t take the time to get educated about foreign trade and the exploding trade deficit.

So now we all get to pay the price.

25 Questions To Ask Anyone Who Is Delusional Enough To Believe That This Economic Recovery Is Real

If you listen to the mainstream media long enough, you just might be tempted to believe that the United States has emerged from the recession and is now in the middle of a full-fledged economic recovery.  In fact, according to Obama administration officials, the great American economic machine has roared back to life, stronger and more vibrant than ever before.  But is that really the case?  Of course not.  You would have to be delusional to believe that.  What did happen was that all of the stimulus packages and government spending and new debt that Obama and the U.S. Congress pumped into the economy bought us a little bit of time.  But they have also made our long-term economic problems far worse.  The reality is that the U.S. cannot keep supporting an economy on an ocean of red ink forever.  At some point the charade is going to come crashing down. 

And GDP is not a really good measure of the economic health of a nation.  For example, if you would have looked at the growth of GDP in the Weimar republic in the early 1930s, you may have been tempted to think that the German economy was really thriving.  German citizens were spending increasingly massive amounts of money.  But of course that money was becoming increasingly worthless at the same time as hyperinflation spiralled out of control.

Well, today the purchasing power of our dollar is rapidly eroding as the price of food and other necessities continues to increase.  So just because Americans are spending a little bit more money than before really doesn’t mean much of anything.  As you will see below, there are a whole bunch of other signs that the U.S. economy is in very, very serious trouble. 

Any “recovery” that the U.S. economy is experiencing is illusory and will be quite temporary.  The entire financial system of the United States is falling apart, and the powers that be can try to patch it up and prop it up for a while, but in the end this thing is going to come crashing down.

But as obvious as that may seem to most of us, there are still quite a few people out there that are absolutely convinced that the U.S. economy will fully recover and will soon be stronger than ever.

So the following are 25 questions to ask anyone who is delusional enough to believe that this economic recovery is real….  

#1) In what universe is an economy with 39.68 million Americans on food stamps considered to be a healthy, recovering economy?  In fact, the U.S. Department of Agriculture forecasts that enrollment in the food stamp program will exceed 43 million Americans in 2011.  Is a rapidly increasing number of Americans on food stamps a good sign or a bad sign for the economy?

#2) According to RealtyTrac, foreclosure filings were reported on 367,056 properties in the month of March.  This was an increase of almost 19 percent from February, and it was the highest monthly total since RealtyTrac began issuing its report back in January 2005.  So can you please explain again how the U.S. real estate market is getting better?

#3) The Mortgage Bankers Association just announced that more than 10 percent of U.S. homeowners with a mortgage had missed at least one payment in the January-March period.  That was a record high and up from 9.1 percent a year ago.  Do you think that is an indication that the U.S. housing market is recovering?

#4) How can the U.S. real estate market be considered healthy when, for the first time in modern history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together?

#5) With the U.S. Congress planning to quadruple oil taxes, what do you think that is going to do to the price of gasoline in the United States and how do you think that will affect the U.S. economy?

#6) Do you think that it is a good sign that Arnold Schwarzenegger, the governor of the state of California, says that “terrible cuts” are urgently needed in order to avoid a complete financial disaster in his state?

#7) But it just isn’t California that is in trouble.  Dozens of U.S. states are in such bad financial shape that they are getting ready for their biggest budget cuts in decades.  What do you think all of those budget cuts will do to the economy?

#8) In March, the U.S. trade deficit widened to its highest level since December 2008.  Month after month after month we buy much more from the rest of the world than they buy from us.  Wealth is draining out of the United States at an unprecedented rate.  So is the fact that the gigantic U.S. trade deficit is actually getting bigger a good sign or a bad sign for the U.S. economy?

#9) Considering the fact that the U.S. government is projected to have a 1.6 trillion dollar deficit in 2010, and considering the fact that if you went out and spent one dollar every single second it would take you more than 31,000 years to spend a trillion dollars, how can anyone in their right mind claim that the U.S. economy is getting healthier when we are getting into so much debt?

#10) The U.S. Treasury Department recently announced that the U.S. government suffered a wider-than-expected budget deficit of 82.69 billion dollars in April.  So is the fact that the red ink of the U.S. government is actually worse than projected a good sign or a bad sign?

#11) According to one new report, the U.S. national debt will reach 100 percent of GDP by the year 2015.  So is that a sign of economic recovery or of economic disaster?

#12) Monstrous amounts of oil continue to gush freely into the Gulf of Mexico, and analysts are already projecting that the seafood and tourism industries along the Gulf coast will be devastated for decades by this unprecedented environmental disaster.  In light of those facts, how in the world can anyone project that the U.S. economy will soon be stronger than ever?

#13) The FDIC’s list of problem banks recently hit a 17-year high.  Do you think that an increasing number of small banks failing is a good sign or a bad sign for the U.S. economy?

#14) The FDIC is backing 8,000 banks that have a total of $13 trillion in assets with a deposit insurance fund that is basically flat broke.  So what do you think will happen if a significant number of small banks do start failing?

#15) Existing home sales in the United States jumped 7.6 percent in April.  That is the good news.  The bad news is that this increase only happened because the deadline to take advantage of the temporary home buyer tax credit (government bribe) was looming.  So now that there is no more tax credit for home buyers, what will that do to home sales? 

#16) Both Fannie Mae and Freddie Mac recently told the U.S. government that they are going to need even more bailout money.  So what does it say about the U.S. economy when the two “pillars” of the U.S. mortgage industry are government-backed financial black holes that the U.S. government has to relentlessly pour money into?

#17) 43 percent of Americans have less than $10,000 saved for retirement.  Tens of millions of Americans find themselves just one lawsuit, one really bad traffic accident or one very serious illness away from financial ruin.  With so many Americans living on the edge, how can you say that the economy is healthy?

#18) The mayor of Detroit says that the real unemployment rate in his city is somewhere around 50 percent.  So can the U.S. really be experiencing an economic recovery when so many are still unemployed in one of America’s biggest cities?

#19) Gallup’s measure of underemployment hit 20.0% on March 15th.  That was up from 19.7% two weeks earlier and 19.5% at the start of the year.  Do you think that is a good trend or a bad trend?

#20) One new poll shows that 76 percent of Americans believe that the U.S. economy is still in a recession.  So are the vast majority of Americans just stupid or could we still actually be in a recession?

#21) The bottom 40 percent of those living in the United States now collectively own less than 1 percent of the nation’s wealth.  So is Barack Obama’s mantra that “what is good for Wall Street is good for Main Street” actually true?

#22) Richard Russell, the famous author of the Dow Theory Letters, says that Americans should sell anything they can sell in order to get liquid because of the economic trouble that is coming.  Do you think that Richard Russell is delusional or could he possibly have a point?

#23) Defaults on apartment building mortgages held by U.S. banks climbed to a record 4.6 percent in the first quarter of 2010.  In fact, that was almost twice the level of a year earlier.  Does that look like a good trend to you?

#24) In March, the price of fresh and dried vegetables in the United States soared 49.3% – the most in 16 years.  Is it a sign of a healthy economy when food prices are increasing so dramatically?

#25) 1.41 million Americans filed for personal bankruptcy in 2009 – a 32 percent increase over 2008.  Not only that, more Americans filed for bankruptcy in March 2010 than during any month since U.S. bankruptcy law was tightened in October 2005.  So shouldn’t we at least wait until the number of Americans filing for bankruptcy is not setting new all-time records before we even dare whisper the words “economic recovery”?

The Extreme Frustration Of Unemployed Americans

When Barack Obama visited Buffalo recently, he was greeted by a billboard advertisement with a very pointed message about unemployment.  In just a few words it summarized the frustrations of an entire region.  The billboard along I-190 had this very simple message for Obama: “Dear Mr. President, I need a freakin job. Period. Sincerely, inafj.org.”  As word about this billboard got out, it quickly made headlines all over the United States.  Why?  Well, the truth is that millions of hard working Americans are extremely frustrated about their lack of work right now.  When you don’t have a job and you can’t provide for your family, very little else seems to matter.  In fact, according to a recent Gallup poll, unemployment is now the second most important issue to American voters.  The number one issue is the economy.

The reality is that the American people don’t want excuses.

They want jobs.

And some are getting so desperate that they are even putting up billboards to express their frustrations.

So who sponsored the billboard in Buffalo?

Well, it was actually sponsored by a group organized by Buffalo businessman Jeff Baker.  It turns out that Baker lost his own small business 15 months ago.  His business had employed 25 people, and when he was forced to close it he described it as “the most heartbreaking situation” of his entire life.

Baker’s group, INAFJ (“I Need A Freakin Job”), says that they are not about playing politics.  What they want is only one thing.

Jobs.

They want someone to put the American people back to work.  Baker recently explained it this way….

“Nothing else matters unless the American people are working.”

In some areas of the United States, the situation is beyond desperate.  Detroit is a great example of this.  Not only does the city resemble a war zone at this point, but Detroit’s mayor says that the unemployment rate in his city is somewhere around 50 percent.

So how in the world is a major city supposed to function when 40 to 50 percent of the people living there can’t get the work that they need?

The sad thing is that Detroit used to be one of the most prosperous areas in the United States.  Once upon a time, the auto industry was booming and there were lots of great jobs available for blue collar workers.

But that all seems so far away now.

For decades, the politicians in Washington D.C. have allowed (or even encouraged) the offshoring of our manufacturing jobs, and now we are a nation with a dwindling manufacturing base that is rapidly bleeding cash.

In fact, the U.S. trade deficit widened for the second consecutive month in March to its highest level since December 2008.  Every single month we buy much more from the rest of the world than they buy from us.  That means that wealth is constantly flowing out of this nation, and no end to the bleeding is in sight.

The truth is that America’s twin deficits (the trade deficit and the massive U.S. government budget deficit) are absolutely destroying the financial condition of this nation.  For years and years economists have warned that these deficits would bring about a day of reckoning at some point, and now that day is here.

We are told by the media that we have entered an economic recovery, but with tens of millions of Americans not able to get the work that they need, most people are not convinced.  In fact, a new poll shows that 76 percent of Americans believe that the U.S. economy is still in a recession.

But this is nothing compared to what is coming.

The truth is that the United States is rapidly becoming a service economy.  Service jobs pay less than manufacturing jobs do, and the rapid advance of technology in recent decades has made human labor increasingly unnecessary.

That means that the “system” does not need our labor as much as it once did.

This is leading to a situation where there is a widening gap between the “haves” and the “have nots”.  In fact, the bottom 40 percent of those living in the United States now collectively own less than 1 percent of the nation’s wealth.

But not everyone has been hurting during this financial crisis.

Did you know that the number of millionaires in the United States rose 16 percent to 7.8 million in 2009?

Not only that, but an analysis of income-tax data by the Congressional Budget Office a few years ago found that the top 1% of households in the United States own nearly twice as much of the corporate wealth as they did just 15 years ago.

The elite are getting richer, while at the same time tens of millions of other Americans are finding it increasingly more difficult to survive.

That is why groups like INAFJ are becoming so popular.  They are tapping into the frustration of the growing number of Americans who are desperately trying to make it from month to month.  The following is a short video that INAFJ posted on YouTube about their organization….

So do have a story of economic frustration that you would like to share with the world?

Have you found yourself working harder and harder for less and less?

Does it seem like you come up short at the end of every month no matter how hard you try?

If you have a story, we would love to share it with our readers.  Please feel free to post your tale of economic frustration in the comments section below….

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