Category Archives: Economy

Trade Deficits In The Context Of State-Managed Trade And Systemic Debt

Capitalism, Debt, Economy, Free Markets, The State

THE NEW COLUMN is “Trade Deficits In The Context Of State-Managed Trade And Systemic Debt.” It’s now on Townhall.com.

An excerpt:

… What goes for “free trade,” rather, is trade managed by bureaucratic juggernauts—national and international—central planners concerned with regulating, not freeing, trade; whose goal it is to harmonize labor, health, and environmental laws throughout the developed world. The undeveloped and developing worlds generally exploit and pollute as they please.

One of the promises Candidate Trump had made and hasn’t yet violated was to simply make these statist organs and trade agreements work for the American people. To wit, the president believes in reducing trade deficits.

Far be it from me to endorse tariffs as a means of reducing trade deficits. I am only here questioning the totemic attachment free-traders have to trade deficits, given that Americans live under conditions of systemic debt and state-managed trade that is anything but free.

If free trade is an unknown ideal, it is quite appropriate to question the alleged glories of an aggregate, negative balance of trade, in this “rigged system,” as Trump would say.

As to systemic debt: Yes, libertarians ought to oppose tax increases, which is what tariffs are. We hold that voluntary exchanges are by definition advantageous to their participants. Trader Joe’s, my hair stylist and the GTI dealer—all have products or skills I want. Within this voluntary, mutually beneficial relationship, I give up an item I value less, for something I value more: a fee for the desired product or service. My trading partners, whose valuations are in complementary opposition to mine, reciprocate in kind.

Ceteris paribus (all other things being equal), there’s nothing wrong with my running a trade deficit with Trader Joe’s, my hair stylist or my GTI dealer, as I do—just as long as I pay for my purchases.

And there’s the rub: The data demonstrate that we Americans, in general, are not paying for our purchases.

Americans, reports Fortune.com, actually have more debt relative to income earned than Greeks. “Indebted U.S. households carry an average credit card balance of $15,706, according to NerdWallet.”

Corporate America is likewise heavily leveraged.

The Federal government is the definition of debt. The U.S. national debt is over $20 trillion without federal unfunded liabilities. Those exceed $210 trillion, by Forbes’ 2017 estimate. Total public debt as a percent of Gross Domestic Product, announced the Federal Reserve Bank of St. Louis, is 104 percent.

Our improvident government’s debts, liabilities and unfunded promises exceed the collective net worth of its wastrel citizens.

Given these historic trends, it seems silly to dismiss the yawning gap between U.S. exports and U.S. imports as an insignificant economic indicator.

Because of decades of credit-fueled, consumption-based living, the defining, current characteristic of our economy is debt—micro and macro; public and private. Unless one is coming from the pro-debt Keynesian perspective, is this not an economically combustive combination? …

… READ THE REST. “Trade Deficits In The Context Of State-Managed Trade And Systemic Debt” is now on Townhall.com.

The Mercer Column can be read on WND, as well, titled “State-Managed Trade Is Not Free:” “The defining, current characteristic of our economy is debt.”

It’s also on The Unz Review, America’s smartest webzine.

Liberals Complain Trump Has Failed To Fill Many Jobs. But Every Oink-Sector Job That Remains Unfilled Is A Blessing.

Donald Trump, Economy, Government, Labor, Left-Liberalism And Progressivisim, libertarianism, The State

Leftists—in that label I always include most conservatives—continue to gripe that “hundreds of senior administration posts—including seven of nine top jobs at the State Department—remain unfilled. And positions that get filled often don’t stay that way.” (“Land of the flee: Staffing the White House,” The Economist.)

However, every libertarian-minded individual should grasp that government positions not filled is cause for celebration, not lamentation.

These jobs are invariably political appointments, unproductive and parasitical in nature, and a drain on taxpayers. For the most, workers in the Oink Sector are utterly dispensable.

Salvadorean Temporary Residents Are Not Being Deported, Only Stripped Of Special Status. For Now.

Crime, Economy, Homeland Security, Human Accomplishment, IMMIGRATION

On January 8th, 2018, “the United States’ Department of Homeland Security had announced that it would end temporary protected status (TPS) for nearly 200,000 Salvadoreans who got” a generous grant of privilege from the US government in the late 1990s:

… permission to live and work in the country after a pair of earthquakes struck El Salvador in 2001. the United States’ Department of Homeland Security had announced that it would end temporary protected status (TPS) for nearly 200,000 Salvadoreans who got permission to live and work in the country after a pair of earthquakes struck El Salvador in 2001. .. The Salvadoreans are not alone. Smaller numbers of Hondurans and Nicaraguans were granted TPS after Hurricane Mitch wreaked havoc in 1998 (see chart).

… Citizens of all three Central American countries had their status renewed every 18 months for nearly two decades. Donald Trump, who promised to get tough on immigrants when he was campaigning for president, has found TPS a convenient way to keep that pledge.

Ditto “Haitians who were stranded after an earthquake in 2010.” Hondurans may be next.

To emphasize, Salvadorean temporary residents are not yet being deported (I doubt they ever will); only stripped of special status.

One wonders: Is the revoking of temporary protected status (TPS) for central Americans an easy issue on which to appear tough on immigration?

Wondering whether El Salvador a shithole country? Of course not. No unless you consider the following facts a hallmark of shittyness:

* It’s gang-ridden, home to MS-13, which has branches across America.
* Its GDP is pitiful. In fact, “Remittances from Salvadoreans living in the United States account for a colossal 17% of GDP.”
* “[M]ore than 40% of workers are underemployed and two-thirds are in the informal sector. The economy creates 11,000 jobs a year for the 60,000 people who enter the workforce.”

But hey, “192,000 Salvadoreans children were born in the United States.” This means they can bring in those who may have to leave and many more. And in any case, “around half of the 195,000 Salvadorean TPS holders will be eligible to apply for permanent residence.”

So the question asked above is answered: TPS revocation represents more political optics than authentic change for Americans.

How much exactly do the American people’s legislators care about the American people?

Enough to write “four proposed bills [which] would offer permanent residency to temporary protected status holders from El Salvador, Haiti, Honduras and Nicaragua. Some of those have bipartisan support.”

That’s how much!

MORE in The Economist.

As I Said A Few Posts Ago Regarding Cyril Ramaphosa’s South Africa …

Economy, Federal Reserve Bank, Private Property, South-Africa

Via Zero Hedge comes the news that South Africa’s ruling African National Congress has just caused the Rand to plummet with the news that it will seek “constitutional changes for land expropriation (from whites) without compensation.” The ruling party, moreover, has decided that “the Reserve Bank must be wholly owned by the state.”

As my book, “Into the Cannibal’s Pot: Lessons for America From Post-Apartheid South Africa,” shows, the SA constitution already allows expropriation of private property, with only nominal compensation.

Facebook Friends were angry at me for raining on their parade, a few posts back, writing that the appointment of a new, South-African leader to head the dominant-party state was an insignificant game of musical chairs.

But already the news out of Cyril Ramaphosa’s South Africa is bad.

As for the alarm over the nationalization of the country’s Reserve Bank. Reserve Banks are private in name only. Who still pretends this is not the case? Central banks serve The State and are for The State and its cronies. Private shareholders are ensconced to put up a facade to the contrary.