The Great Currency Wars, Return of 1930’s Style Protectionism?

I think that you are only deluding yourself into thinking that the United States can not prevail from an economic warfare with China and other third world regimes. However, it's questionable whether national orchestrated currency devaluations will ever attain the desired result. Moreover, any battlefield commander is aware that one simply doesn't score points from taking half measures.

Therefore, what is urgently needed now is a broad consensus among the highest levels of the federal government to implement a program levying stiff punitive duties on all imported goods and services. There will never be a more opportune time than now to restore the country to its once industrial might, and the envy of the world.

Rick

The whole point of economic activity is to build / profit.

All you are proposing is the destruction of capital, where no one gets richers.

Wars (real or economic) destroy, no one wins, the economic losses are immense, which is why we have gone out of our way to prevent a third world war!

what is the point of protectionism if 90% of capital will be wiped out in a crash as occured during the 1930's ?

Nadeem:

The point of protectionism is not only to provide the environment for preserving 'living wage' domestic jobs, but actually supplying the catalyst for future robust job expansion as well.

You seem to be again inferring that the 1930 Smoot-Hawley Tariff Act was somehow responsible for the Depression of the 1930's, and that could be no further from the truth. Once again, the level of trade at that time between the United States and its trading partners was simply too low as to have any measurable effect on the economy.

In retrospect, had the level of trade in the 1930's been considerably greater, this could have provided the necessary impetus for the country to recover faster from that debilitating quagmire.

So what would you have us do now? Do we continue with the "more of the same" nonsense that can do no other than to further enrichen the pocketbooks of the oligarchs while simultaneously condemning a vast segment of the U.S. population to a future of perpetual debt and servitude?

Well, we've followed that yellow brick road before, and it obviously did not lead anyone on Main Street to the promised land of milk and honey. So don't you think that it's long overdue for the nation to try a different approach? At this point, I don't think that the country has anything to lose by levying duties on all imported goods and services. This could very well be the missing ingredient in securing the country's future to a nation of hope and prosperity for all.

While we're on the same subject, allow me to pose yet another question to you. Why do you suppose that corporate officers and labor chieftains collectively crafted the 1930 Smoot-Hawley Tariff Act? Do you think that they did it for their health? Of course not. Those were extremely desperate times back then, and people were willing to try virtually anything that could pry the country out of the abyss.

Well, those desperate times are back to haunt us unfortunately, and I think that we should take heed from those solution makers of the past.

How will protectionism equal more jobs ?

As protection will result in far higher inflation as the price of imports soars.

YOu say living wage ?

The chinese in the factories work for approx 1/5th that which american's are willing to do so, so what will that mean for U.S. wages ? Again real terms loss of purchasing power.

And with high if not hyper inflation comes total wealth destruction, capital is destroyed, industries are destroyed.

Those that advocate protectionosm NOT thought out the consquences of protectionism. Instead of creating jobs protectionism will lose ten times as many jobs !

The ONLY way is to compete by cutting taxes the taxes for small business and average workers to ZERO!

You need to think it through.

Raise tarrifs by 50%, thats 50% jump in prices, produce the goods in the US that NO ONE WILL BUY ! Because they are over priced.

Instead realitary actions will mean the likes of Intel / Microsfot / Cisco will be priced oUT of foriegn markets.

Protectionism would be a disaster for any economy, especially the US as it needs to become more competitive rather than less.

Nadeem:

How will protectionism provide living wage jobs and reduce unemployment? Well, prices on most imported goods will definitely rise as a result of punitive custom duties; that much is certain. However, this would actually be a desirable outcome, and definitely a blessing in disguise. Allow me to explain.

As imported goods would no longer be affordable (as a result of the punitive custom duties), this would provide the necessary incentive for thousands of new domestic industries to spring forth across the land. With the punitive tariffs in place, these domestic enterprises would now be able to manufacture the same goods for less (since imported goods would be prohibitively expensive).

Consequently, since the American laborer will no longer be forced to compete with indentured slaves from third and fourth world sweat shops, wage hikes in American industries would soon follow. As a result, the consumer will not only be able to afford the new American made products, he will also receive the satisfaction of getting his money's worth for a change (the universal definition of American made quality goods).

This is no rocket science. It's simple economics.

Hi

your making contradictory sttements, your not making any sense.

> As a result, the consumer will not only be able to afford the new American made products, he will also receive the satisfaction of getting his money's worth for a change

How can the US manufacture the same goods for less when the wages are 5 times higher ?

How can US manufactrure the same goods for less when the price of imports will soar i.e. your materials.

And where is the US going to get rare earths and oil from and at what price ?

Nadeem:

Exactly what was there that was "contradictory"? It's immaterial whether the indentured slaves working in those decrepit third world rat traps earn even 10-15 times less than their American counterparts. Whatever the retail prices of the new American made products will ultimately end up being on the nation's shelves, foreign made goods will still be priced well out of the market.

In plain arithmetic, the duties that would be levied on foreign imports would be set at such levels as to make those goods prohibitively expensive. It would be of no consequence whatsoever as to what the prevalent U.S. wage scale would ultimately end up being; foreign goods would still be priced as to be unaffordable.

In response to your other question, what basic materials would the new U.S. industries need that can't possibly be obtained here? The United States was founded on improvisation and entrepreneurship; this is what set our nation apart from the others. Moreover, the nation is endowed with mammoth reserves of natural gas that can power the nation's vehicles well into the future. Besides that, the country is blanketed with massive coal deposits that serve to light the nation's homes, and keep the nation's factories humming.

Furthermore, the country still has sufficient domestic oil reserves that can be earmarked towards the manufacture of specialized needs such as plastics, fertilizers, paints, medicines, lubricants and synthetic rubber.

Incidentally, even though the U.S. had depleted its stock pile of some rare earth elements during the 1990's, this does not imply that the country can not obtain more of those elements domestically.

Quoting from former President Richard M. Nixon to his Secretary of State William P. Rogers, "Is this answer enough"?

Rick, Dude,

You do have to think on something. What does america produce? You are not what you used to be to much has changed. You USED to produce things.

Now your main export is inflation, drug addict celebs, bad tv, food stamps and debt.

Drive around the suburbs of a place like detroit, remember there USED to be people that worked there, now they work in china. If it was still viable for a company to be there, they would, but they leave because it is cheaper, hence more profitable.

If i produce a product in USA and it costs me $100 and in china it costs $20

if you put on a %300 tarriff, it is still cheaper ($80 vs $100) to make in china, and WTF do I care the consumer can pay for it and if they cant they will take on debt to do it.

War means death, in this case to an/the economy of the nation or many nations. Why not go to war with the rest of the countries that provide your oil? how about oil tarriffs? You are also not the only market anymore. China is on the rise via money printing or otherwise.

Notice how for the past decade they were number 10 then 6 then 3 then 2, this trend is not stopping. Notice how the usa has been moving in the opposite direction? trading countries can smell this. Even your "allies" hate your policy

USA is virtually all retail and credit. Do you honestly believe any retailer will stay in business eating a %200 tarriff?

So who eats it? the consumer, which as we know wages are not going up (because all the jobs got shipped to china) so that means less money for the consumer.... Is this a PLUS for jobs?

Less spending or more cautionary spending, is not a positive for jobs ever.

Put your tarriffs on as well, guess what china would simply subsidize everything and it will still cost them %50 less to do and make and ship to you everything, so you still cant compete with them.

You make it sound as if china is the only country your country permits slaves to work for you? There are multiple countries where slaves toil so you can buy useless items so they can stay employed.

To reset up your factories will take years so not good even in the short term, and no business in their right mind would set up in an environment where perceived foolishly or otherwise wages would be expected to rise in any way, whether it be healh care (USA) or any other reason. (NEEDING TO PAY 5X or 10X the price in labour)

When americans will or would accpept $5/week as sufficient for labour companies would consider going or coming back, at which point in a consumer based economy reducing wages by %80 wouldnt exactly be helpful either.

This is a war (like all wars) you cannot win either way. Slave will always exist, in fact may even be the reason for many wars.

Slavery is alive and well in the USA you guys just get paid more!!! when prices go up %3 - 15 a year and wages stay the same, the inevitable result is slavery

Sadly the guys who are in charge of funding for economics, war,agriculture science, education have no experience in any of these fields and will vote any way they think will get votes.

IF the crowd is angry and mad they will make decisions based on that, and as we all know as traders emotional decisions are usually always the most costly, in this case however we all pay not just the one.

AMericans beleive they can take down or take on everyone and everything while at a times this was true this time is no more, many countries have the upper hand now (CHINA ETC.) which of course pisses USA off because they should be the only ones that can exploit cheap labour etc.!!!!

Like any trade they can be long and fun rides, but you have to know when the ride is over, or when the winds are changing, USA, this is your biggest problem.

Best case scenario the bailouts just get bigger for the companies and taxes get higher for you while the companies use the bailout money to ship operations to the next cheapest country (thailand, cambodia, mexico, jamaica, african countries so on and so on)

You will also need water to survive, the more nat gas you need the less water you will be able to drink due to pollution (SEE GASLAND) Got Shale oil? come up to alberta and so how GREAT this is. You cant do rare earths for years to set up mines etc, then deal with the environmental hurdles as well.

Simply put i guess i must assume you are in congress because only a politician would think like you do

You can have all the coal you want, you have very little in the way of factories, maybe you can get the realtors and insurance agents to produce something.

Your answer is enough, for someone who has no logic and cares not for common sense, sense of history and facts.