Bank and Bust
On 22 July 1999 Robert Scott of the Economic Policy Institute gave testimony on the US Trade Deficit before The Committee on International Relations Subcommittee on International Economic Policy and Trade. The published document was subtitled Are We Trading Away Our Future?
In his concluding section on policy recommendations he notes that although “U.S. workers have been hurt by globalization, U.S. multinational businesses have prospered. The soaring prices of U.S. stocks reflect the renewed worldwide dominance of U.S. companies.” He attributes US corporate dominance to aggressive overseas investment and outsourcing backed by US trade policy: i.e. the government, which he apparently regards as a success.
At the same time he is worried about how the “U.S. has suffered a declining share of world production and trade over the past four decades. In 1970, the U.S. produced 18% of world exports, but by 1998 the use share had declined to less than 14%,” which only seems confused unless you see that the US corporate dominance he extols above is the actual cause. That dominance was bought with outsourcing: “soaring prices of U.S. stocks reflect the renewed worldwide dominance of U.S. companies.” Homegrown manufacture falls, stocks rise, dominance ensured.
Then he goes on to find fault with the decline in US export. Imagine. He states: “Mexico now exports more cars to the U.S. than the U.S. exports to the rest of the world. And Mexico's largest exporter is,” guess who? “Daimler-Chrysler.” Remember this the next time you hear talk of US trade deficits: A US company is probably behind it. In Daimler-Chrysler’s case especially if talk is about Germany, as Scott’s charts show.
To round up, read the September 6, 2004 article A Long Term US Deficit by Robert J. Chassell of rattlesnake.com. He begins: “On a recent trip, someone asked me the long term consequences of current United States deficits. I probably spoke too long; but my key point was that current deficits make no rational sense unless you expect to abandon the United States in a generation. However they make excellent sense for individuals who plan to cash out within 10 or 20 years and desert the country.” And guess what? They, the multinationals, they’ve already left. They’re gone.
So ask yourself, Who’s “trading away our future?”