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Alan Greenspunk, Spanked
by Dick McDonald
Originally posted to BNN 3/12/2005
I take an uncommon delight in news uncovering the sheer idiocy of our economic betters who fill the airwaves and the papers, magazines and newsletters with hysterical prophecies of doom because of deficits, overspending, trade deficits, impending market meltdowns and other economic disasters waiting to happen. And so it is this morning with the news that the unheard of happened: our trade deficits widened right in the middle of a precipitous fall in the US Dollar.
Folks, this isn't the way the de-sighted prognosticate. When the dollar falls, American goods are cheaper, foreigners get less when sending their goods to America. What happened? Read the harbinger of all known intelligence on the planet, the Washington Post, and see if you think they have even the slightest clue as to what is happening..
The figures defied predictions that the deficit problem will soon abate thanks to the cheaper dollar. The drop in the U.S. currency, which began in early 2002, has helped boost the competitiveness of U.S. goods in world markets, and some economists, including Federal Reserve Board Chairman Alan Greenspan, have argued that the dollar's slide will start having a major impact on the trade figures as consumers and businesses adjust their behavior.
The impending disaster to American markets will not occur for a simple reason. Our behavior is not going to change any time soon. We have a $120 Trillion country with a miniscule $4.5 Trillion external debt (43% of which is owed foreigners) that couldn't be less significant in the scheme of things. On top of that the country's net worth is growing at the rate of $5 Trillion to $10 Trillion every year. Further, we are:
1…….benefiting from lower prices for so many goods (including those for our domestic businesses) it is straining the storage capacity of the average home in America.
2……..avoiding the additional tax burden that tariffs would have imposed on American consumers were it the government's policy to protect American jobs.
3……..helping to industrialize the poor nations of the world by financing them with a free trade policy and buying their goods and services
4……..promoting the democratic form of government through economics; promoting free markets to help emerging nations get on their feet
Oh, there's more, but why tarry. We are blowing the world's ignorance away in big pieces. Why we have to suffer these economic imbeciles is simple. If we didn't keep the pressure on these blank slates they would get into more mischief and spend us into oblivion like "Old Europe" did. So put up with their nonsense, just don't buy it We are milking the cow through the fence. Just enjoy. That is, of course, unless you're lactose intolerant. And get set for the "ownership society" that will make government less and less significant in the years to come. Just like our Founders would have liked it.
Dick McDonald blogs at The Right Scale.
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