Check out Dobbs' newest editorial on CNN. I wish I could get by not knowing shit about economics and still getting people to listen to my thoughts on the economy.
http://www.cnn.com/2006/US/11/28/Dobbs.Nov29/index.html


Dobbs: New Congress must show courage

Quote :

"NEW YORK (CNN) -- Victorious Democrats will, with the opening of the 110th Congress, have a historic opportunity to right the course of a country that has been hell-bent on permitting free-trade corporatists and faith-based economics to bankrupt the nation. As the New Year approaches, newly elected Democrats in the House and Senate will be battered by calls, even demands, to stay the course, rather than right it. And we can only hope they and their new leadership in both houses will have the courage and character to be rationalists and realists and overcome their partisan political debt to corporate America, and U.S. multinationals in particular. Eye-glazing stuff, international trade. But the consequences of faith-based free-trade will be eye-popping in the disaster it wreaks on our economy and working Americans. The facts are anything but dull: For 30 consecutive years the United States has run a trade deficit, and our trade deficit has surged to record highs in each of the past four years. Our monthly deficits have reached record levels in two of the past three months. Our current account deficit -- the broadest measure of international trade -- is on track to approach $1 trillion this year. And our current account deficit is almost 7 percent of our nation's gross domestic product, considerably above the threshold at which Federal Reserve studies have acknowledged our economy must make policy adjustments or face major financial crisis. We're borrowing about $3 billion a day just to pay for our imports, and our trade debt now stands at $5 trillion. (which studies are those Lou?) We will no longer have to be patient to see the impact of these faith-based policies in free trade. Signs are already beginning to mount that a reckoning is nearing. Our trading partners in Europe are counseling "vigilance" in the currency markets, as their anxiety rises with the value of the Euro against the dollar. For the first time, the Chinese government is publicly expressing its concern about the more than $1 trillion it holds in reserves. But most disturbing of all are the comments of new Treasury Secretary Henry Paulson, who said in London Tuesday, "A strong dollar is clearly in our nation's interest and I feel very good today about the strength of the U.S. economy," as the U.S. dollar hit a 20-month low against the Euro. Treasury secretaries are not paid for their candor, but Paulson's rejection of our current reality won't bolster his credibility with either our trading partners or the new Democratic-led Congress. (Yes Lou, but a weaker dollar adjusts the current account deficit that pisses you off so much, how about let the economy do what it does?!!?) The new Congressional leadership understands that, at least in part, their majority was won as a result of growing middle-class concerns over job insecurity, stagnant wages and disgust at a class of elites that has subordinated the well-being of our middle class to the dictates of corporate masters. (Yes, you're right. Low unemployment and right-on-time cyclical increases in wages are something we ought to be terrified about) I hope they can acknowledge that so-called free trade has come at an inordinate cost to working men and women in this country. We've lost three million manufacturing jobs as a result of these so-called free trade agreements that enable corporate America to export plants, production and jobs to cheap foreign labor markets. Millions more American jobs remain at risk of being outsourced. And wages in industries where jobs are being created, on average, pay 21 percent lower than industries in which jobs are disappearing, according to the Economic Policy Institute.(Don't worry about mentioning that many of those jobs were lost to productivity increases OR the net gain we've had due to lower prices of goods. Also, why not starve the fucking foreigners Lou? They took our jobs!) Amazingly, even our own top trade officials admit that U.S. free-trade policies aren't working. U.S. Trade Representative Susan Schwab appears to understand the consequences of the past few administrations' free trade policies, but she's shown little willingness to shift that policy. Schwab said, "...Our trade deficits are too high. We can't...pretend that the trade imbalance can just keep getting bigger with no cost." That doesn't sound like the free-trade policies bother her at all. What is sounds like is a concern over a current accounts deficit, which is a silly thing to be very concerned about anyhow, given that the U.S.'s financial assets are of more interest to foreigners BECAUSE the U.S. economy is so strong) Ambassador Schwab's Deputy Trade Representative, Karan Bhatia, says outright, "From Chile to Singapore to Mexico, the history of our [Free Trade Agreements] is that bilateral trade surpluses of our trading partners go up." And yet we persist with our historical ignorance, and we continue to enter poorly negotiated agreements that pose great threats to the U.S. economy and the middle class. NAFTA, for example: In 1993, we had a $9.1 billion total trade deficit with Mexico and Canada. Last year we ran a $128.2 billion deficit with our North American neighbors, and we're on pace to break that record again this year. Instead of opening new markets to U.S. products and services, the U.S. government over the past 10 years has negotiated nothing more than a series of outsourcing agreements. Aside from agriculture, our trade representatives have consistently steered clear of negotiations with Western Europe and Japan. We'll never achieve a tangible reduction in our trade deficit without significant exports to those markets. The new Democratic-led Congress will be called a lot of names by the devoted servants of corporate America and the U.S. multinationals who have no regard for the standard of living or quality of life for working Americans and their families. I hope that we'll be able to call this new Congress true reformers and servants of the people. "

Gotta love class-warfare scare-mongering without more than two shreds of fact mixed with bad economics!



[Edited on November 29, 2006 at 9:04 PM. Reason : .]

11/29/2006 9:03:15 PM

^

Lou Dobbs is his own niche market. Say what you will, it has worked for him. Most honest people should call him a demagogue.

11/30/2006 3:12:26 AM

I'll admit up front that I don't know enough about economics to be able to accurately guage what he has said there. But it does sound like it makes sense....

bgmims would you care to explain why his points are inaccurate?

thanks

11/30/2006 8:53:11 AM

Well, for starters, he assumes that free-trade has a net negative impact on society. He takes the "he took our jobs" mentality that simply isn't correct. We benefit through a decreased price level AND by taking people out of jobs where they are inefficient (compared to global makers) and could be put to a more productive use.

Quote :

"The facts are anything but dull: For 30 consecutive years the United States has run a trade deficit, and our trade deficit has surged to record highs in each of the past four years"

Big fucking deal. You can have a negative current account (trade deficit) forever so long as people like investing in your financial assets more. Look at it like this: When we say to China "We want to buy your electronics" they say to us "Ok, well we don't want anything you have to offer right now, we don't really consume that much of what you sell. Instead, we'll take some bonds and financial assets, which looks like a much better deal right now."

The thing about a trade deficit is that it is ALWAYS counterbalanced by a capital-accounts surplus, meaning net investment from abroad in the economy. That isn't a big deal, it simply means that they think the United States is such a great place to invest that they're willing to forego current consumption in favor of an investment.

He then asserts a Federal Reserve study without any sourcing and my guess, without really understanding what the report says. He then freaks out about the currency "crisis" looming. What he ignores is that a decrease in currency value is how trade deficits reverse themselves. You see, as people don't want our dollars and investments anymore, the value of the U.S. dollar will fall relative to other currencies. This boosts U.S. exports, by making them relatively cheaper and decreases U.S. imports, by maing them relatively more expensive. Thus, the mechanism for changing from the world being a net investor in the U.S. to a net consumer is in the currency and interest rate markets.

His bitching about stagnant wages is simply ludicrous. The economy is a cyclical beast. We've had a recession in 2001 that we've fully recovered from. The last part of an economic recovery is wage inflation, or where working people get pay increases. This is simply part of that. If you look at wage inflation it has taken off now in real terms. It rose 0.6% in the month of September and another 0.6% in the month of October. That was on top of already impressive increases and likely more to come.

He also whines about our loss of manufacturing jobs. He neglects to mention that the U.S. increases in productivity are a major cause of that loss of manufacturing. We actually have MORE manufacturing output than before, even though we do it with millions fewer workers. If you equate having manufacturing jobs with a great economy, then instead of shovels, we should give people spoons and let them dig with that. That way we get WAY less done and we need WAY more workers. (That is an allusion, although my memory has failed me on the reference, I apologize.)

For a quick reference on how stupid Lou Dobbs really is when he says this kind of trash, check out
"The Choice: A Fable of Free Trade and Protectionism" by Russell Roberts. It will take you less than a couple hours to read and will enlighten you on why it is ok not to be terrified of free trade.

The problem is that trade economics are not intuitive. In many cases, it is downright counter-intuitive. This is bad for the general population who listen to Lou Dobbs and take his word for granted.

11/30/2006 9:12:08 AM

On a very general level...

We have two choices. Either we are free to buy whatever we want from whomever we want at market price or we allow politicians to decide for us what we may buy.

11/30/2006 10:00:49 AM

I agree with free trade to a degree, but my main contention with it is that we don't enforce some kind of labor standards on the countries we trade with. This reduces the ability of american labor to compete and gives foriegn labor a defacto advantage over domestic labor.

11/30/2006 10:16:58 AM

Here comes Kris with the "Fair Trade" schpiel. Please 2 ignore this, as it is one of those counter-intuitive points again.

Not to mention a very ethnocentric one.

11/30/2006 10:45:10 AM

It's not ethnocentric. It's our government's job to provide for our welfare, providing for other people's welfare is great, but providing for it's own people takes priority.

11/30/2006 10:47:22 AM

^ Kris, as I've explained before, American labor in no way is competing with Mexican labor. American television makers are competing with American airplane makers. This is thanks to a floating exchange rate. If America made bad airplanes then Mexico would buy airplanes from Europe and Americans would not have pesos to buy televisions from Mexico.

11/30/2006 11:02:09 AM

Quote :

"American labor in no way is competing with Mexican labor"

That's idiotic.

11/30/2006 11:30:41 AM

I think he is right.

11/30/2006 11:32:09 AM

Quote :

"It's not ethnocentric. It's our government's job to provide for our welfare, providing for other people's welfare is great, but providing for it's own people takes priority."

No, that's no ethnocentric, the ethnocentricity comes in the "These people are too stupid to choose what is best for them, we have to enforce our own standards on them" part of the bargain.

11/30/2006 11:40:37 AM

We're not forcing our standards on them, we're just saying, if you want us to buy your products, you have to at least have these things in place. I mean we won't trade with countries that openly support terrorism, is that ethnocentric?

11/30/2006 11:44:30 AM

Yes, you're absolutely right. It isn't ethnocentric at all to say "We're going to starve you guys out if you don't practice the labor standards that even we didn't decide to adopt until we were far past your level of development"

11/30/2006 12:36:11 PM

Quote :

"It isn't ethnocentric at all to say "We're going to starve you guys out if you don't practice the labor standards that even we didn't decide to adopt until we were far past your level of development""

It's bad for both of our economies to try and trade without a minimal set of standards so that the labor markets can compete fairly. The survived for quite a while without us feeding them, I think they'll make it just fine should they refuse to adopt minimial standards.

11/30/2006 1:57:47 PM

Quote :

"It's bad for both of our economies to try and trade without a minimal set of standards so that the labor markets can compete fairly."

Say what? Its actually a net gain to BOTH of our economies.

We benefit through reduced prices which allow us to increase our standards of living and they benefit through better wages than were previously available which allow them to increase their standard of living. That is true regardless of how many hours a week the first generation has to work in miserable conditions in order to increase it. Please stop masquerading a social agenda as economics, it is unfair to those around you that don't know economics.

11/30/2006 3:01:59 PM

Quote :

"I agree with free trade to a degree, but my main contention with it is that we don't enforce some kind of labor standards on the countries we trade with. This reduces the ability of american labor to compete and gives foriegn labor a defacto advantage over domestic labor."

understand this.

just because another country can produce a certain product at a much lower cost than america, it doesn't mean that it "reduces the ability of american labor to compete". the american labor can always compete.. in other certain demand. (i.e. if we can't make clothes at a lower cost, than we'll make medicine at a lower cost than others.) there will be certain industries in america to fall, but that only open up more resources for other industries to flourrish.

labor standards is not an economic issue. it's ethics and it can only be changed through the government.

11/30/2006 3:23:19 PM

Don't mind Kris, people are born auto workers (or appointed them by the Central Planning Commission--if we're so blessed) and deserve those jobs. Adjusting skills is something unfair.

11/30/2006 3:38:48 PM

Quote :

"Its actually a net gain to BOTH of our economies."

Theres a larger long term effect than that. It shifts their economy onto dependence of ours, which leads to instability, and numerous other effects.

Quote :

"Please stop masquerading a social agenda as economics, it is unfair to those around you that don't know economics."

I don't have a social agenda, if I did, I probably wouldn't be a communist.

Quote :

"just because another country can produce a certain product at a much lower cost than america, it doesn't mean that it "reduces the ability of american labor to compete""

It gives foriegn labor a defacto advantage over domestic labor. American labor has certain labor laws in place, thus another foriegn country should have at least some (not neccesarily equivilent) minimium labor standards.

Quote :

"there will be certain industries in america to fall, but that only open up more resources for other industries to flourrish"

That's the hope at least. It is completely possible that no other industries open up, we get poorer, stop buying their clothes, they lose their jobs, and then we start the cycle all over agian.

11/30/2006 3:43:26 PM

Quote :

"That's the hope at least. It is completely possible that no other industries open up, we get poorer, stop buying their clothes, they lose their jobs, and then we start the cycle all over agian."

Not likely. Of course, if you see it happening then you can make yourself ungodly rich by shorting the American dollar before the correction. Regretfully, your actions would cause the dollar to fall early, encouraging Mexicans to find American products they want to buy, ending the imbalance, and you might end up losing a lot of your money. But such is the life of capitalism: your greed makes you serve the rest of mankind.

Quote :

"Theres a larger long term effect than that. It shifts their economy onto dependence of ours, which leads to instability, and numerous other effects."

Must not be that unstable since the frequency and severity of recessions has been cut in half since the inception of globalization. Empirical evidence appears to imply that international trade breeds stability, film at 11.

[Edited on November 30, 2006 at 3:57 PM. Reason : .,.]

11/30/2006 3:55:39 PM

Quote :

"Not likely."

It's not like we've had recessions before or anything

11/30/2006 3:57:16 PM

RIght, and like I said, back when international trade was rare recessions were more frequent and more severe. Of course, they were no where near as severe as they were during the progressive era, but I digress.

11/30/2006 4:09:16 PM

Quote :

"It gives foriegn labor a defacto advantage over domestic labor. American labor has certain labor laws in place, thus another foriegn country should have at least some (not neccesarily equivilent) minimium labor standards. "

So how big a 'de facto advantage' should we accept? It is clear from your sentence there that they can still have cheaper labor due to lower standards. Who gets to decide how much a 'de facto advantage' is acceptable? CPC?

11/30/2006 4:14:45 PM

Quote :

"So how big a 'de facto advantage' should we accept?"

I'd say we try to make it relative.

Quote :

"Who gets to decide how much a 'de facto advantage' is acceptable? CPC?"

Some sort of government trade commission or such, maybe international, maybe just the US, either would work. Oh, and you can save me the whole government corruption, bureaucracy thing.

11/30/2006 5:30:09 PM

this guy is so in denial that he is wrong.

11/30/2006 5:44:59 PM

yet I could still think of a better response than that

11/30/2006 6:23:46 PM

Quote :

"I'd say we try to make it relative. "

Relative to what? lol what kind of answer is that?

Save you the whole corruption thing? Yes, you're right, we ought to overlook the incredible flaws that have historically plagued that idea. Here in la-la land we can do whatever the fuck we want.

11/30/2006 8:19:56 PM

There is so much wild speculation and generalization going on in this thread. I guess when no one is an economics expert, everyone is an economics expert.

11/30/2006 8:26:50 PM

Quote :

"Relative to what?"

To their economy.

Quote :

"we ought to overlook the incredible flaws that have historically plagued that idea"

We also should overlook the benefits, and of course the fact that every peice of land in the world falls under some kind of government's control.

12/1/2006 12:03:14 AM

i don't think it matters what kind of smart ass answer you can give me. you're still in denial. i can spend all day disproving you, but i'll be wasting my time because you're too stubborn.

12/1/2006 5:56:13 AM

Quote :

"There is so much wild speculation and generalization going on in this thread. I guess when no one is an economics expert, everyone is an economics expert."

Just to point out, I graduated as valedictorian in Economics (B.S.) at NC State in 2006. I do know my economics.

12/1/2006 7:28:18 AM

[Edited on December 1, 2006 at 8:23 AM. Reason : []

[Edited on December 1, 2006 at 8:23 AM. Reason : []

12/1/2006 8:23:01 AM

^^ PS: You do, indeed, appear to know your economics. And I think you made an excellent point in this thread that a lot of economics is counterintuitive.

For example, the results of comparative advantage--a country or other entity producing a good at a lower opportunity cost than that of a competitor--are counterintuitive to many. People cannot seem to grasp that some jobs going out of this country can, in fact, be good for our economy and the economy of the competing country. And no matter what, resources will flow to the most efficient outputs.

In any event, U.S. consumers haven’t stopped crowding into the Wal-Marts and K-marts and Targets to buy their inexpensive goods. I mean, c'mon, folks, the plasma screen and the DVD player and the computer and the clothes and so on were NOT made in Raleigh--or even in this country. THAT'S why they're inexpensive! And we benefit from that! In addition, "outsourcing" is not a one-way street out of our country, as Dobbs and others often portray it. Some foreign manufacturers "outsource" from their countries to the United States--to flee oppressive European labor laws, for example.

So, yes, Lou Dobbs should shut the fuck up. Maybe take a course or something, shit.

[Edited on December 1, 2006 at 9:01 AM. Reason : .]

[Edited on December 1, 2006 at 9:02 AM. Reason : .]

12/1/2006 8:59:49 AM

just to point out, lou dobbs graduated with a degree in economics from harvard in 1967. he does know his economics

12/1/2006 9:05:31 AM

^ Bill O'Reilly holds a master's in public administration from Harvard University. Do you agree with everything that he says?

12/1/2006 9:13:42 AM

^just because you might not agree with someone doesn't mean they don't "know their stuff." there are lots of incredibly smart people with whom i disagree vehemently.

12/1/2006 9:15:36 AM

And I just wanted to point out that I don't buy economics. I made an A in the only econ class I've ever taken and got an e-mail encouraging me to take more classes, but I never did because I thought and think it's mostly just a math/social science for a made up fantasy world.

12/1/2006 9:26:48 AM

Quote :

"just to point out, lou dobbs graduated with a degree in economics from harvard in 1967. he does know his economics "

In that case its all the more dispicable that he would ignore what he SHOULD already know in order to fire up a base.

Also, Bridget, I got an A in every economics course I took, you're Intro to Micro or whatever the fuck you took does not count as actual economics. That's like saying you took Intro to Physics and decided no one ever would use that shit.

What is your degree in, if you don't mind my asking?

12/1/2006 10:19:03 AM

Quote :

"What is your degree in, if you don't mind my asking?"

. . . so i can use it against from here on out.

12/1/2006 10:21:24 AM

Well, as Bridget was insulting Economics as a non-useful science, I just thought I'd ask to see if she was in a major that was more useful.

12/1/2006 10:44:13 AM

BridgetSPK is right, the first few courses in economics are quite made up and inapplicable to reality. This is everyones problem with Kris, all he has taken is the first course and has concluded from what he saw that no economics is ever applicable to reality. But this is how it goes in every field, the early learning is largely imaginary, even in Electrical Engineering.

12/1/2006 10:47:30 AM

Hell, do you know how many physics classes you take before they tell you "So that was Newton's take on it. It was wrong. Here's how it really works"

12/1/2006 10:49:40 AM

Quote :

"Just to point out, I graduated as valedictorian in Economics (B.S.) at NC State in 2006. I do know my economics."

In all fairness, you don't need an economics degree to know economics. Kind of like you don't need an accounting degree to know accounting. I took all of two economics courses in my life, everything else I learned from a few books and common sense.

Quote :

"In that case its all the more dispicable that he would ignore what he SHOULD already know in order to fire up a base."

I could say the same thing about you. You can't act as if there isn't a good bit of subjectivity on this topic.

Quote :

"This is everyones problem with Kris"

You mean this is your problem with me. Or better yet, this is your problem with not accepting basic economic principles of supply and demand.

Quote :

"all he has taken is the first course and has concluded from what he saw that no economics is ever applicable to reality"

I see the seperation. All sciences are theory, from math to economics to physics. You just can't seperate economics from history.

12/1/2006 11:46:04 AM

Quote :

"I could say the same thing about you. You can't act as if there isn't a good bit of subjectivity on this topic. "

Subjectivity on the economic benefit of globalization? Not a whole lot.

What you're seeing is someone bastardizing economics in order to promote what he feels is a social benefit. Lou Dobbs thinks protecting jobs is more important than efficiency, and that's ok. You think using labor and environmental standards in trade laws in order to encourage/force other countries to adopt different standards is a good idea socially, and that is ok. But trying to pass them off as economic arguments is absurd and unfair to those around you that don't really know economics.

And I would never claim that you've learned something that you can apply economically through "common sense." It is that kind of arm-chair economics that makes people think they know what the hell they are talking about.

12/1/2006 11:51:44 AM

Quote :

"Subjectivity on the economic benefit of globalization?"

Sure, and there's no subjectivity on the government's role in economics either.

Quote :

"What you're seeing is someone bastardizing economics in order to promote what he feels is a social benefit."

I have used economics to support my point, and you've yet to provide any sort of arguement agianst it more than "YOU JUST SUPPORT A SOCIAL AGENDA".

Quote :

"You think using labor and environmental standards in trade laws in order to encourage/force other countries to adopt different standards is a good idea socially, and that is ok."

It's not socially, US labor has a de facto economically competitive disadvantage agianst foriegn labor. This is imperfect competition, which as you know isn't the best for society, even in the short run.

Long term economic effects of most anything are subjective to some level.

Quote :

"It is that kind of arm-chair economics that makes people think they know what the hell they are talking about."

What the hell is with you getting all high and mighty all of the sudden? One day I "know what I'm talking about", the next I'm a lowly peasant in the world of economics that must bow before the great and powerful bgmims because he managed to get a degree from the ever-daunting business school at an engineering college. Stop using ad hominem. I know that I know a lot about economics. I know the books I've read. You're not going to be able to convince me that I don't know what I'm talking about.

12/1/2006 12:31:01 PM

Well it is always difficult to convince someone they don't know what they're talking about.

Kris, you generally do know your economics fairly well. An area where you have zero training, but is actually a very difficult field and is absolutely counter-intuitive is international economics and trade. You don't have the slightest clue about it and you don't want to have the slightest clue about it. In other cases, you generally use economics well, in this, however, you simply appeal to this "de facto disadvantage" which is ridiculous. Don't you think our insane amount of capital gives our workers an enormous advantage over low-wage labor in foreign countries? The only way they can compete (which is what you claim is important...competition) is by working long hours at shitty pay. That is their advantage. Ours comes in training and capital, theirs is in their sweat and labor.

You haven't used economics to support it at all. Your attempts to say that corporations damage the very fabric of poor societies is certainly not based on rational economics. Also, even if they were given a de facto advantage that allowed them to create goods at much lower costs than we could, why the hell should we be upset about that? They're doing us a favor. Poor countries are willing to take our pollution-heavy, back-breaking labor so that we can focus on more productive uses of our time AND then they will sell us the same goods at lower prices than we were producign them ourselves. There is absolutely no subjectivity in the economic efficiency offered through globalization. The argument comes in whether protecting jobs trumps efficiency. The best arguments you'll find anyone make on why globalization is a problem is those that claim we could be starved out by our dependence on imports. Even this is a lousy argument because we can simply begin to produce for ourselves again and/or substitute away from those goods.

Like I said, you generally do a pretty good job with your economics, but as far as the economic efficiency of global trade, you do have to bow to me, because you have no idea what you're talking about.

12/1/2006 12:41:32 PM

Quote :

"Like I said, you generally do a pretty good job with your economics, but as far as the economic efficiency of global trade, you do have to bow to me, because you have no idea what you're talking about."

you coudl have just stated your case, but no. you had to say this bullshit. and that is why you're a jackass.

12/1/2006 12:46:42 PM

Quote :

"Gotta love class-warfare scare-mongering without more than two shreds of fact mixed with bad economics! "

I'm so fucking sick of shit like this. There is class warfare going on in this country and the rich are winning. Forgive me if I don't cry for the rich and their current plight. As for bgmims, this is his classic line of action. If he disagrees with you he'll just say you don't understand the material and continue on his high horse.

I love to break this to you, but Lou Dobbs knows his economics.

12/1/2006 1:04:41 PM

Lou Dobbs apparantly knows it, but fails to use it.

12/1/2006 1:05:34 PM

You only say that because you disagree with him.

12/1/2006 1:06:36 PM