- A belief in free trade is part of being an economist,
and a belief in America's competitiveness is part of the economist's
commitment
to the global economy.
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- Economists note that no other country has the depth and
breadth of our capital markets, political stability, rule of law protecting
contracts and property rights, strong currency, and accumulation of
scientific
and technological knowledge that makes the U.S. the high-tech
leader.
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- All this stability and leadership causes foreigners to
send their money here for safe haven and secure investments. The inflow
of money keeps the dollar strong, which encourages imports from abroad
and a trade deficit year after year after year.
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- These arguments are reassuring and make sense. Still
it comes as something of a shock to discover that the U.S., the world's
high-tech leader, has the export profile of a 19th-century Third World
colony.
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- Twenty years ago when I was a U.S. Treasury official,
the U.S. trade deficit came mainly from oil imports. Today our trade
deficit
is driven by imports of energy, consumer goods, and manufactured
goods.
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- A table prepared by MBG Information Services in D.C.,
from Commerce Department data shows the U.S. trade balance for 85 separate
industrial and commodity classifications. The only high-tech goods of which
the U.S. is a net exporter are airplanes and airplane parts, military
technology
and specialized machine tools. In 2000 the U.S. was a net importer even
of spacecraft.
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- What does the high-tech U.S. economy export? Are you
ready for this? Hides and skins, metal ores and scrap, pulp and waste
paper,
tobacco and cigarettes, rice, cotton, coal, meat, wheat, gold, animal
feeds,
soybeans and corn.
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- We can't even make our own clothes. Clothing is the
third-largest
contributor to our trade deficit, after vehicles and crude oil.
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- Even our agricultural exports are declining as the
"green
revolution" takes hold abroad and U.S. farming shuts down.
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- The case for free trade rests on comparative advantage.
Each country is supposed to specialize in what it does best. Where does
the U.S. have a comparative advantage? Apparently, our comparative
advantage
lies in a political system that doesn't mind if foreigners buy up our
assets.
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- Very little of the foreign money flowing into the U.S.
is for the purpose of building Toyota and BMW plants. Eighty to eighty-five
percent of direct investment by foreigners in the U.S. economy goes into
mergers and acquisitions. In 2000, 97 percent of direct investment by
foreigners
went for the purchase of existing U.S. assets.
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- We are not only losing industrial jobs, we are losing
ownership of our companies.
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- This is bad news for Americans training for engineering
and high-tech occupations. The jobs are moving out. Recently, Motorola
announced the company was moving more of its manufacturing and research
and development jobs to China.
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- The jobs that remain in the U.S. are being filled with
engineers imported from India at half the salary.
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- As capital and technology are now completely mobile,
the only comparative advantage lies in labor costs. Companies are chasing
the lowest labor costs. For awhile, the move was to Mexico, but before
Mexico could get on its feet, the move shifted to China.
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- Propagandists call the move to China "free
trade"
and "globalization." But the Chinese don't see it that way. They
say, "You can't sell here unless you produce here." That's
blackmail,
not free trade.
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- Few companies are making money in China, but the hype
is that with 1.5 billion consumers China is the market of the future. If
it doesn't work out that way, equity shares will suffer another pricked
bubble.
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- The U.S. is on its way to becoming a country whose
corporations
are foreign-owned and foreign-based. The U.S. will decline as a consumer
market as there will be no high-productivity jobs to support consumer
demand.
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- The U.S. is importing a new population that will help
it on its way to Third Worldism. Every year millions of poor and uneducated
immigrants, both legal and illegal, pour into the U.S. from alien lands
that have never been part of the rational scientific culture of the West.
Today 20 percent of the U.S. population is foreign-born or children of
foreign-born.
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- This massive influx drives up the demand for
income-support
programs while driving down the taxable wages in retail and service sector
jobs, where Americans are forced to seek employment as higher-paying
automotive,
electronic, textile and manufacturing jobs leave the country.
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- The U.S. is still a superpower, but it is a country with
very little, if any, control over its future and its destiny, a country
whose time is running out.
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- ___
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- Paul Craig Roberts is a columnist for The Washington
Times and is nationally syndicated.
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- http://www.washingtontimes.com
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