Economy Solutions
Posted on Nov 12, 2007 - 3:14am by Wayne Weisser in Economy
With oil about to hit $100 a barrel and our rising trade imbalance, especially with certain countries (that don’t like us) a few Mexican trucks and even the housing market are the least of our worries.
Fleetowner.com summarizes the problem in this post The real free trade fear about how our trade imbalance is a bigger problem than anything we have right now.
I kind of agree. I think if you read between these lines:
Saudi Arabia, Iran, and Russia in particular are stockpiling wealth by the billions as oil prices inch ever closer to $100 a barrel, while China continues to benefit from its low cost manufacturing enterprises
What that really means is they are going to use all that cash and manufacturing power against us.
And what are we doing about it? Mostly a lot of talk. We can’t talk too harshly, cause someone might get mad at us, dump their dollars on the market and destroy our economy overnight.
Buy More Stuff
Right now, our economy is based on people buying stuff. The more stuff people buy, the more stuff gets made in China and shipped to the US. Even though it’s not made here, the process involves a lot of Americans, from dock workers to truckers to store owners and even the cashiers. Any hint of recession or inflation and people are going to stop spending or won’t be able to spend because their credit cards and loans are maxed out.
Made in the USA?
We need our manufacturing to be moved back to the USA. Great idea! But because corporate taxes are the highest in the US than anywhere in the world, what incentive does any company have to make stuff here?
The same article goes on:
Now, free trade ostensibly helps countries open their borders to the rest of the world and — hopefully — acts as the springboard to freer, more democratic societies.
How’s that working out for us so far? We play by the rules, so we expect others to play by the rules. In the end, we always end up on the short end of any trade deal. That needs to stop.
We have the Energy right here
And we need to become energy independent, period. Wind and solar can’t do it by themselves. We need to start drilling offshore, Alaska (Alaskans don’t mind, really!) and anywhere else. Some states like Colorado and Wyoming have seen another oil boom, but that’s still not enough.
What about Hybrids?
Hybrids, great idea, but they still need oil. They still run on gas and they still have parts that are made of petroleum based products. Oil free technology is too far away to do us any good right now.
And a nuclear power plant on every corner. Maybe not every corner, but more than we have right now.
We could do it except there are too many of our own citizens against us. So, what do we do right now? I really don’t know. Voting, calling Congress, that works sometimes, but they have to be hit over the head to listen to us. They listen to the people one minute, then they turn around and sneak in enough disastrous earmarks, programs and treaties to choke a horse.
One of the things we should be doing as individuals and small business owners is cleaning up our own debt. Interest rates (all rates) will go up, the question is how fast. Cut your expenses, business and personal expenses. Which are always good things to do, but now it’s really important.
Other than that, I’m really open for suggestions on this one.
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Yes, Hybrids need oil, but coming out of Denton, Tx last month, I got behind a lowboy hauling what I thought may have been a wrecked bobtail. When he passed me, it was a green Pete 386. As he passed by me, I saw the word Hybrid in white letters on the back of the sleeper. We started talking about the truck. He told me the Pete engineers were there when he loaded it, taking pictures like a mother sending her baby off to their first day of school. He told me the MPG was 17 with 30,000lbs
of freight in the trunk. He told me he was no expert, but those were the numbers they gave him. 150 gallons of fuel each side, tells me that truck can run give or take 5000 miles between fill-ups, depending on the weight. Yeah, it needs oil……. BUT NOT MUCH!
I needed gas as I went to work this morning and I had left my debit card at home. I had my lunch money so I thought that I would put that in my car. I had $9.00 and got less than three gallons of gas. I am fed up with it! I need a raise just so I can afford to drive to work!
[...] If your house is in order you can do this and survive. But you have to know you’re not going to get the rates we got last year or even the year before. Tough times are coming if you haven’t already noticed. Fuel is only a piece of the puzzle. [...]
I started to read the article and didn’t get very far.
“the shift of wealth occuring right now via trade to the nations in Asia and the Middle East,”
Was as far as I got. Not even the third paragraph.
Why? Because it shows a sore lack of understanding of economics. That excerpt indicates someone who is thinking “zero sum” …wealth is NOT zero sum.
For example.
Years and years ago I was an electronic tech for SAC at Offut AFB near Omaha. We had a whole room…biiiig room….think basketball court size….full of Winchester 30/30 hard drives. They were called winchester because they had two 30 megabyte platters. Thirty-thirty.
Let that sink in for a second. Each Drive was the size of a dishwasher. I don’t know how much power the whole room took but it was a LOT…plus the special airconditioning required.
I say that to say this. Today my wife “impulse bought” a 2 gigabyte Secure Digital Flash Memory “drive” for less than thirty dollars.
Think about it. In 1970’s terms she bought several MILLION dollars worth of random access computer memory for about what?….an hour…two hours…three? worth of work at Burger King?
That’s wealth creation. Wealth is NOT a zero sum game.
So I didn’t read the article.
And I WANT a hybrid. I’d even settle for a Pete.
I don’t think we need an exact trade balance with everyone, but the main point was that the trade imbalance is so huge we are hurting ourselves and now we can’t fix it no matter what we do.
We can’t have an economy based on people buying stuff. After 9/11 GW said (paraphrasing) in order to keep the economy moving, we need to go the mall and buy stuff. What kind of economy is that? What if something happens and we can’t always buy a lot of stuff?
And the stuff we’re buying, is made by using slave labor. Making stuff in the US used to be a good job now we ship it overseas on trade agreements that only make the dictatorships richer and turn their people into slaves, but nobody wants to think about that, because we only care about how much crap we can buy for our soon to be worthless dollar.
This guy seems to have a different view of the trade deficet.
http://www.cato.org/testimony/ct-dg061198.html
One other thing. The TD is computed strangely. A whole bunch of things that we SELL overseas…like movies….are not counted. Neither is the education that we sell to the rest of the world. Ever notice how many foreigners are in our engineering colleges? Isn’t an education worth something? The perceived TD is thus skewed. The US is becoming post industrial. Lots of jobs that we have today didn’t exist ten years ago….and STILL don’t exist anywhere else.
I…for one….am not worried.
all of the oil gonna have to change to hybrid?? i just bought my new truck for my farm and i dont think this will help me at all. for the sake of oil for another 50 years please…