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Can you imagine Benjamin Franklin, Thomas Jefferson and our Founding
Fathers creating this debacle? They felt their job was to build a
country. That country is named the United States of
America. They were leaders. They would never gut the U.S.
economy and democracy by tolerating trade agreements that give away our
sovereignty, our environment, our manufacturing capacity and our
agriculture.
Citigroup and Merrill Lynch each lost $9.8
billion for the 4th quarter of 2007. This is very big money, even
for them. These globalization promoters thought they were immune
from the trade deficit. They were wrong. Now they are
selling themselves to the Saudi and Chinese sovereign wealth funds,
those that have the money.
Trade among nations will always continue and grow. Commercial
trade
is different than "trade agreements" - though many try to say you are
against "trade" if you oppose a "trade agreement". Trade
agreements just modify some
rules of commercial trade.
The rules we have now incentivize
offshoring jobs and factories and food production. The U.S. drops
tariffs, and other countries increase tariffs through currency
manipulation and value added taxes imposed upon us. Unilateral
disarmament. We drop our guns, they do not but pretend they do.
Our jobs are created in government, health care, home
construction, and burger flipping. Manufacturing and agriculture are a major part of
our economy, but shrinking because of trade policy, and do not create jobs anymore. Home construction
filled the gap in many ways. The gap filler was temporary, and
all should have known it.
Home equity has funded the deficient gap between U.S. citizens'
income and their expenses. The Fed helped create the housing
bubble, for better or for worse, with low interest rates. I like
low interest rates, by the way. But subprime mortgages attracted
new homeowners with low teaser rates that ballooned. The subprime
loans were packaged together and resold as a package to big financial
institutions.
Citigroup and Merrill Lynch got the shaft. They are supposed to be smart.
The bust has killed the home construction portion of our
economy. The bust has killed the home equity portion of our
consumption. Manufacturing and agriculture are being gutted and
cannot perform the function, as in the past, of stabilizing us and
helping the economy out of the recession. High tech cannot fill
the gap, because we have deficits there too. We buy a lot of high tech,
but sell much less. Someone tell John McCain.
Voters
need to ask their candidates what they will do about
this. It's not good enough to just give workers temporary payments for job loss.
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