Gullible Americans... Walter E. Williams

[mystery-ak]

http://townhall.com/columnists/walterewilliams/2016/02/24/gullible-americans-n2123281/print


Gullible Americans

2/24/2016 12:01:00 AM - Walter E. Williams

Jonathan Swift (1667-1745), satirist, essayist and political pamphleteer, is a favorite of mine. He wrote "Gulliver's Travels." One of Gulliver's voyages was to Laputa, where he visited the grand academy of Lagado, whose scientists have visions not unlike today's politicians who exploit mankind's gullibility.

Before getting around to our politicians, how about a quick synopsis of Gulliver's visit to the grand academy of Lagado, where scientists were trying to solve important problems? To wage war against famine, one scientist was trying to convert excrement back into food. For eight years, another scientist was engaged in a project to extract sunbeams from cucumbers. An architect was trying to find a way to build houses starting from the roof down so as to provide shelter for construction workers as they completed their work during inclement weather. Then there was sheer lunacy in the case of a professor who claimed that conspiracies against government could be discovered by studying the excrement of subjects. All of these projects of the grand academy of Lagado scientists were doomed to failure primarily because of the immutable prohibitions of the first and second laws of thermodynamics.

How, you might ask, do these laws apply to politicians and gullible Americans? The first law of thermodynamics, translated into plain English, states that "there is no such thing as a free lunch." Conservation of energy is a basic law of physics that cannot be violated. My question to Sen. Bernie Sanders and his supporters, with his promise of free college tuition, is: Has he discovered a way around the laws of physics? Or is he lying about getting something for nothing and really means that he plans to take the earnings of one American in order to provide "free" college tuition? Of course, he might have a more horrible method in mind as a way to provide free tuition, namely the enslavement of professors. One wonders whether Sanders would receive as much cheer from his youthful supporters if he were honest with them and told them he was going to provide for their "free" education by taking the earnings of another or by enslaving professors.

Presidential candidate Donald Trump promised, "I will be the greatest jobs president that God ever created." To assist in accomplishing that goal he has vowed to impose a 35 percent tariff on imported Ford vehicles from Mexico. More recently, he threatened to impose tariffs on Carrier air conditioners because its parent company, United Technologies Corp., announced plans to move to Mexico.

Trump's battle is not against Mexico, Ford or United Technologies. Instead, his real battle is against American people who would buy goods made abroad. This is readily seen by asking the question: Would Trump and other anti-free traders be concerned if Americans voluntarily refused to purchase foreign goods? Donald Trump and business and labor groups, who are against Americans purchasing goods made in other countries, can simply ask the American people not to purchase from abroad. Tyrants would never buy that strategy. Tyrants do not trust free markets and what they imply, voluntary exchange, because people acting voluntarily might not do what the tyrant thinks they should do. That is why they favor compulsion in the forms of tariffs and quotas to stifle peaceable, voluntary exchange with foreigners.

By the way, some of the political obfuscation about foreign trade is lifted when we recognize that it is not really nations trading with one another. In other words, the U.S. Congress does not trade with the federal government of Mexico, England's or France's parliaments or Japan's Diet. It's individual Americans who, through private intermediaries, trade with: Mexican Ford manufacturers, English clothing manufacturers, French wine producers and Japanese automakers.

Too many Americans believe in the possibility of a free lunch. Politicians exploit that gullibility. The unpleasant task of a good economist is to teach that fundamental principle: One cannot get something for nothing.

[HAPPY2BME]

America's Trade Deficit- The Job Killer

But there is another big factor that is not often mentioned and has a huge effect on both the manufacturing sector and jobs. That factor is the growing trade deficit which is really the ultimate determinant of job creation in the U.S.

All of our trading partners (competitors) understand trade deficits and they do something about them. When Mexico agreed to eliminate a tariff on imported goods from the U.S. they immediately enacted a 15% value added tax on U.S. imports. When the countries in the CAFTA agreement dropped their tariffs, most of these countries replaced the tariffs with a 12% consumption tax on imports. In fact, 148 of our trading partners have a value added tax (VAT) or goods and service tax (GST), and they range from 2% to 27%. These are a form of a consumption tax and they are levied in a number of different ways,

The U.S. has tried for many years to offset the VAT and GST by exempting our exporter’s income from U.S. taxes by up to 30%. In 1998, 2000, and 2004 the European Union appealed to the World Trade Organization (WTO) claiming that the exemptions were tax subsidies and the WTO ruled against the U.S. all 3 times. The only way we can offset the VATs is to implement our own. But the multi-national corporations and the Republican Congress are against raising taxes of any type (so far).

The so called free traders (be they Democrat or Republican) are not really free traders. They are supporters of mercantile trade where countries like China and Japan get to manipulate their currencies and use VATs against us to increase their exports and reduce their imports from us. Even though there is a provision in the WTO agreement that prohibits currency manipulation we do nothing about it.

As in most economic issues there are winners and losers. The business group that is the biggest winner are the multi-national corporations. They have built plants in China and other foreign countries to sell products to the country and back to the U.S. They have the same advantages as our competitors to sell cheap products back to the U.S. as imports. They do not want the U.S. government or the WTO to interfere with their foreign partners (particularly China) and they spend huge amounts of lobbying money on Congress to maintain the status quo. The multi-nationals are profiting from our ongoing trade deficit even if the country is not.

A February 2014 report from the Economic Policy Institute shows that trade deficits have contributed to the elimination of 5.7 million American jobs over 15 years.

http://www.forbes.com/sites/scottmendelson/2016/02/24/will-pacific-rim-2-sans-guillermo-del-toro-directing-have-same-appeal-for-fans/#2e148db8558f

[HAPPY2BME]

$365,694,500,000: U.S. Merchandise Trade Deficit With China Hit Record in 2015

By Terence P. Jeffrey | February 9, 2016 | 12:54 PM EST

CNSNews.com) - The merchandise trade deficit that the United States ran with China in 2015 hit a record high of $365,694,000,000, according to data released Friday by the U.S. Census Bureau and the Bureau of Economic Analysis.

“The deficit with China increased $22.6 billion to $365.7 billion in 2015,” the BEA said in a press release. “Exports decreased $7.5 billion to $116.2 billion and imports increased $15.1 billion to $481.9 billion.”

The $22,615,700,000 increase in the merchandise trade deficit the U.S. ran with China last year was a 6.6-percent jump from the $343,078,800,000 merchandise trade deficit the U.S. ran with China in 2014.



In 2015, the Census Bureau reported Friday, the U.S. exported $116.1863 in goods to China while importing $481.8808 billion—running a merchandise trade deficit with China of $365.6945 billion.

Even when the historical annual merchandise trade deficits that the U.S. has run with China are adjusted for inflation and put in constant 2015 dollars using the Bureau of Labor Statistics inflation calculator, the $365.6945 billion merchandise trade deficit the U.S. ran with China last year is still the largest recorded by the Census Bureau.

As calculated by the Census Bureau, the U.S. ran an overall trade deficit in goods in 2015 of $736.1719 billion.

The largest contributor to that deficit was China and its $365,694,500,000 bilateral deficit with the U.S. The second largest contributor was Germany, with whom the U.S. ran a $74,192,600,000 merchandise trade deficit. The third largest contributor was Japan, with whom the U.S. ran a $68,647,900,000 merchandise trade deficit. The fourth was Mexico, with whom the U.S. ran a $58,363,700,000 merchandise trade deficit. And the fifth was Vietnam, with whom the U.S. ran a $30,921,400,000.

http://cnsnews.com/news/article/terence-p-jeffrey/365694500000-merchandise-trade-deficit-china-hit-record-2015