tag:blogger.com,1999:blog-5525860072815092371.post3188240192649497032..comments2024-02-04T05:14:33.559-05:00Comments on Steve Blitz Morning Notes: War on Capitalism? Taking Aaron to Task and Policy TooSteve Blitzhttp://www.blogger.com/profile/11097177577987597255noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-5525860072815092371.post-90953908953236145912009-07-13T16:09:05.201-04:002009-07-13T16:09:05.201-04:00So you are for more H1B employees? There are many ...So you are for more H1B employees? There are many employable people that would take lower wages in States with lower cost of living.<br /><br />Until the creeping double digit un-employment situation changes, the housing market will continue to fall. No incomes, no ability to buy a house. Loss of a job, need to sell a house and inventory creep up. That simple is<br />the equation. The third addition way overtaxed even AMT which must be eliminated. <br /><br /> Last the whole expectation of the American Economy must be changed. The Tech bubble from 1996 just into 2001 was not real. Now the housing bubble. Way to much excess. Dr. Doom sees little in way of investing in fundamental products and way too much in the new sporting event, buying stocks.<br /><br />Rambling post but it's a new world with two new giants in the world economy that this country must keep with.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5525860072815092371.post-84875797849444908532009-07-10T10:36:45.559-04:002009-07-10T10:36:45.559-04:00thank you both for commenting. my issue about doll...thank you both for commenting. my issue about dollar is not that it fixes the trade deficit the way we learned about it in school. for a country like ours, the capital account drives the current account when it comes to trade. so while a cheaper dollar vs yen or yuan may mean little in relative pricing, a cheaper dollar with those countries would raise real interest rates here and thereby slow credit creation and thus consumption and thus the trade deficit has to narrow -- just as it is right now. as for the population density argument, i would say it the way i have for many years -- it is not the american consumer that is in love with foreign product it is the american manufacturer that is in love with cheap foreign labor. you can also add the caveat that the u.s. trade deficit is the price for restrictive immigration policies. let every in to work and watch imports go down.Steve Blitzhttps://www.blogger.com/profile/11097177577987597255noreply@blogger.comtag:blogger.com,1999:blog-5525860072815092371.post-29065433678204358382009-07-09T08:44:15.515-04:002009-07-09T08:44:15.515-04:00Contrary to popular belief, a falling dollar will ...Contrary to popular belief, a falling dollar will do virtually nothing to reduce the trade deficit because the trade deficit is driven primarily by disparities in population density. (Consider that, in the past four decades, the dollar has declined vs. the yen by over 300% while, at the same time, our trade deficit with Japan has exploded.) Overpopulated nations desperately dependent on exports to sustain their bloated labor forces aren't going to let something trivial like currency valuation erode their share of the U.S. market.<br /><br />At this point, I should introduce myself. I am author of a book titled "Five Short Blasts: A New Economic Theory Exposes The Fatal Flaw in Globalization and Its Consequences for America." My theory is that, as population density rises beyond some optimum level, per capita consumption begins to decline. This occurs because, as people are forced to crowd together and conserve space, it becomes ever more impractical to own many products. Falling per capita consumption, in the face of rising productivity (per capita output, which always rises), inevitably yields rising unemployment and poverty.<br /><br />This theory has huge ramifications for U.S. policy toward population management (especially immigration policy) and trade. The implications for population policy may be obvious, but why trade? It's because these effects of an excessive population density - rising unemployment and poverty - are actually imported when we attempt to engage in free trade in manufactured goods with a nation that is much more densely populated. Our economies combine. The work of manufacturing is spread evenly across the combined labor force. But, while the more densely populated nation gets free access to a healthy market, all we get in return is access to a market emaciated by over-crowding and low per capita consumption. The result is an automatic, irreversible trade deficit and loss of jobs, tantamount to economic suicide. <br /><br />One need look no further than the U.S.'s trade data for proof of this effect. Using 2006 data, an in-depth analysis reveals that, of our top twenty per capita trade deficits in manufactured goods (the trade deficit divided by the population of the country in question), eighteen are with nations much more densely populated than our own. Even more revealing, if the nations of the world are divided equally around the median population density, the U.S. had a trade surplus in manufactured goods of $17 billion with the half of nations below the median population density. With the half above the median, we had a $480 billion deficit!<br /><br />Our trade deficit with China is getting all of the attention these days. But, when expressed in per capita terms, our deficit with China in manufactured goods is rather unremarkable - nineteenth on the list. Our per capita deficit with other nations such as Japan, Germany, Mexico, Korea and others (all much more densely populated than the U.S.) is worse. My point is not that our deficit with China isn't a problem, but rather that it's exactly what we should have expected when we suddenly applied a trade policy that was a proven failure around the world to a country with one fifth of the world's population. <br /><br />If you‘re interested in learning more about this important new economic theory, then I invite you to visit either of my web sites at OpenWindowPublishingCo.com or PeteMurphy.wordpress.com where you can read the preface, join in the blog discussion and, of course, buy the book if you like. (It's also available at Amazon.com.)<br /><br />Please forgive me for the somewhat spammish nature of the previous paragraph, but I don't know how else to inject this new theory into the debate about trade without drawing attention to the book that explains the theory.<br /><br />Pete Murphy<br />Author, "Five Short Blasts"Pete Murphyhttps://www.blogger.com/profile/16549342862438864973noreply@blogger.comtag:blogger.com,1999:blog-5525860072815092371.post-87464856186376983112009-07-08T15:40:19.039-04:002009-07-08T15:40:19.039-04:00Your point about currencies of China and India are...Your point about currencies of China and India are true.<br /><br />However to take you to task ( no pun regarding the aforementioned "journalist" name)... so you think an economy can grow based on the web and websites? And cell phones of which most components are built in the far east.<br /><br />Doubtful. Economies grow on fundamental manufacturing which is gone from this country. Blog software, Twitter silliness does not an economy make!Anonymousnoreply@blogger.com