Trade — Much Ado About Nothing?
The perception of trade damaging our economy is entirely the result of economic ignorance and political propaganda. If business can import goods for less than it can manufacture them the net effect of that is positive as long as consumers are compensated sufficiently to allow them to purchase the cheaper products. It is only when trade is used as a weapon in the continuing war between labor and capital that both end up suffering. Some production that affects national security should never be totally outsourced, but most do not and their source is not so critical that we can’t simply resume making them here if supply lines are cut.
Trade is always net neutral in macro-economics. We receive real resources and labor in the form of goods for paper that we mostly pull out of our backsides. Given that US dollars never exit our banking system it is only China’s ability to use our Federal Reserve as its clearing bank for other payments that justify the arrangement at all from their viewpoint. We are definitely on the right side of this, but our collective econ ignorance and political manipulation may change that.
If America can ever give up its assault on the working class ongoing since the ’80s, and simply offer good-paying public purpose jobs with benefits to anyone who wants one, where goods are made would be mostly moot to our economy. This would be dependent on several factors, not the least of which is ending the oligarch’s control of our government by making “any” corporate influence on government at any level illegal and enforce it strictly.
Beyond that, we “must” begin managing our economy according to the realities of our monetary system and not myths left over from the gold standard and outright lies perpetuated by ignorant or corrupt politicians. The US government, specifically Congress, is the sole monopoly issuer of the US dollar and is not revenue restrained. It can afford anything that is for sale priced in dollars it can produce at will, including any labor the private sector rejects. As long as goods and services are available to accomplish the purpose the money is deployed to accomplish it will not incur inflation, as the market will always ramp up production to meet demand until it can’t.
Our government has, due to fear mongering over the irrelevant “debt”, abdicated its responsibility to create its currency “for the general welfare” to the private sector banking system. This has created extreme instability in our economy and devastated our ecology with the constant need to grow sufficiently to “roll over” private sector debt that only public money created by deficit spending can net retire. This has been responsible for most inflation and the many bubbles that inflate and pop in cycles, doing great harm to the people who are supposed to be the beneficiaries of the monetary system, not its victims to be harvested as the banking system sees fit.
