My advice to the president on the state of the economy
The economy as a rollercoaster
Dear Mr. President: A suggestion to reduce the trade deficit.The economy as a roller coaster If the body mass of a coaster is the economy, then the stimulus package is the force that pushes the economy to roll on the track of the roller coaster. Therefore, it is the track of the roller coaster on which the economy roll that we should redesign so that it create a loop that brings the coaster back to us without having to apply force to push it again. Our failure to create such loop may cause us to encounter brake runs along the track which can slow or even stop the economy from rolling again. We must create jobs that bring money back into the US economy. Trade deficit is the key component here; the more goods we can export to other countries the more stable our economy will become. It is the result of our trade deficit that will determine whether or not we can sustain the waves of this economy outbreak. A reduction in trade deficit is that which we look forward to.
One of the many jobs that can help reduce the trade deficit is in the sector of agriculture. As it is now, there is a growing demand for organic produce. Americans wants to eat healthy again, they’re looking into foreign markets to buy organically grown produce. We can invest a small percentage of this stimulus money in farming, by stimulating small farmers to cultivate organically grown produce. We do not have to be the consumer we can become the supplier; supplying to our population while keeping the money recirculating. We can make our neighboring country, Haiti and Republic Dominique the organic paradise; encourage Haitians, Dominicans to produce organic food to sell to foreign markets. We can attract investors for them while at the same time setting rules to guard small organic farmers against giant corporations. We can protect their grains from being patented to secure the process of organic farming. We can encourage American investors to buy organic produce from Haitian and Dominican vendors at market price. By building partnership with the Haitian people, we’re making them part of the loop system upon which their economy and that of ours run. Which mean their economy is tied in with ours via the coaster within the loop system.
Other jobs that can help reduce the trade deficit are in the green energy sector. Creating environmental friendly automobiles (electric cars ) is one of the many proposals that you have outlined as a mean to reduce the trade deficit. It will work for the reason being the more option the American people have the lower the reduction on public cost. And if you can manage to reduce public cost you'll ended up increasing the money supply. However, to create green cars at a cost that is affordable; you may have to make it a government subsidy. What I mean by that is to compete against foreign market. Government will have to take charge if the tax payers money are being used to bail private companies. It will not be possible in the private sector’s hands if they continue to pay workers so much money to produce a car when their competitors are paying far less. It will eventually cause manufacturing jobs to be outsourced overseas; looking for the cheapest cost of production.
When government take charge; they're making domestic goods and services artificially competitive against imports. That is the strategy that we need to employ if we want to off-track this growing trade deficit. A further option is to create jobs in foreign countries. What I’m talking about here is government acting as a corporation. It’s very much like what Procter & Gamble has done in some foreign countries; which is creating a market to consume your own goods. It is a little different from outsourcing; when we outsource it is mostly for cheap labor US products are not necessarily being sold in high volume in places where we outsource jobs, unless there exist a different market strategy for economies of scale. What I'm talking about here is US companies creating products to sale in foreign lands where the factory is situated; these products may not necessarily be sold to US consumers. The only thing that is coming back to US is the profit.
This strategy is very much like the paradox killing two birds with one stone. You create the market for your goods and services. You create the manufactures, and the producers for your goods and services then you sale. You see, in a global economy; government can’t depend on corporation to improve their economic situation. Corporations are separate entities owned by individual stockholders; those individuals are part of the world economy. They have no tie to any state, and they’re there to make a profit where they see fit, so whether the factories are in China, Japan, Haiti or Africa, makes absolutely no difference to them.
We can encourage green energy manufacturers to build factories in Haiti as a mean to raise the minimum wage of the poor to a level that is above their current living standard. As Americans, it has become known that it is only when we have a stake in a country that we become concern with their conduct of operation. Why? because Americans care about their investments.
I believe that you have to give to receive, so for that reason if the Haitian people are willing to welcome foreign investors in Haiti; we encourage them to build resorts that are affordable and not exclusive to anyone. Hire Haitian residents to work at these resorts, build schools and restaurants while educating local citizens for these types of services.
To reduce the trade deficit in the US, government should act as a corporation looking for return on investment where they see fit. China is successful because they’re one of the biggest corporation in the world. As you clearly stated “they’re not a democratic society, so they don't debate". Although we do like our democracy, but I understand your point since too much debate tends to slow progress. But this is also part of the reason why they're not wasting any time. They export a great amount of their products by creating partnerships across the globe as a mean to move their goods and services faster while minimizing on import. So it is true, the New York Time was right “China is not waiting, it is moving" They send their affiliates to other countries to produce markets for China to sell to. As you can see MR. President this is why we need to re-evaluate ourselves and implement suitable measures to counteract if we must continue riding this economic wave.
Build partnerships across the country, tie in our economy with theirs, and build a relationship on mutual ground. That is to say we’re not looking to take advantage of the small countries, but making them partners so that we can rebuild our economy from the bottom up. Since their treasures are also part of our treasures; we must help elevate their economy to show gratitude and respect. Their citizens should not have to come to the US looking for a job. This is globalization, if the loop system we’re creating has no brake runs along the track their economy and ours will intertwine; making it possible for anyone to live the American dream.
The result of the loop would have distributed wealth across the globe; the land of opportunity wouldn’t necessarily seize the most middle class people, and other developing countries would have also given rise to their own middle class group. This in effect will cause Americans to be skeptic about globalization for the reason being that it offers advantages to all upper class society regardless the country.
Why do I talk about this? Well, as a parent and tax payer; I am a stakeholder and so are many Americans like myself who have come to accept this country as our home. In order to make the United States a bread winning state in the future economy; it must create an economic loop and be incorporated. United States incorporated during business in the world economy as a separate entity, where the stakeholders are citizens of the world economy. Some may refer to it as a socialist idea, but others will see it as an opportunity for US to regain leverage in the world economy. The United States doing business as a corporation will help reduce the trade deficit while creating a loop to keep the money recirculating into the country.
*The negative effects of trade Barrier.* Jan 2 / 2015
If the body mass of a coaster is the economy, then a good trade policy or a stimulus package is the force that pushes the economy to roll on the track of the roller coaster. Therefore, it is the track of the roller coaster on which the economy roll that we should redesign so that it create a loop that brings the coaster back to us without us having to apply force to push it again. Any failure to create such loop may cause us to encounter brake runs along the track which can slow or even stop the economy from rolling again.
*We must create jobs that bring money back into our economy.* Economic segregation is not a good strategy for any developing country. Naturally nature teaches us wherever the river flows fresher, within a set parameter all plants are bound to blossom even the ones that are distances away from the others. But more importantly nature teaches us that when the soil is good it is good for all plants in the area, even neighboring plants that are furthest away.
Likewise, when neighboring countries economies are prospering it isn't only good for them, but also for every country they trade with. In that respect, the advantage of your neighbor's good economy is directly related to your growth potential as a developing country. The only time the above statement is not true is when you have nothing to sell foreign countries. But so long that you have something for sale and choose not to participate in trade; you've placed yourself at a disadvantage position for not selling to them.
If they choose not to buy everything from you they would be within reason; simply because it is their right to do so. Precisely because they must protect and secure the lives and living standard of their people. But to exclude them from the competition would imply that your investors could not have profited by any other means than your most pressing issue against their will. Which to some extent may be regarded as a mistake. If the soil is good in neighboring economies; it is also good in the neighboring countries that you've excluded from the competition. So long that trades are possible economic prospects are promising.
Placing sanctions against countries that doesn't agree with your political views will not stop market flow. If you believe that where there a will there's a way then you must believe that supplies will always find a way to satisfy market demand whether it be sanction or a war. Economic sanction cannot stop the forces of market demand. It only offer the country that is sanctioned an opportunity to strategize ways to implement fiscal policies that can be used to reduce public and government cost. In the long run these countries who are sanctioned would have become more self sufficient, while at the same time reducing on import.
Economic sanction is a direct violation of globalization. Economic sanction is proof that market forces are controlled, and that there is no such thing as a free market system. In order to have a free global market system there must be no sanction and less regulation. You do not punish an entire country; you punish a corporation of a country. Globalization is comprised of corporations who shares interest in global market economies. Russian companies invest heavily in America, American companies invest heavily in China. Chinese companies invest heavily in countries of Africa. Indian companies invest heavily in America etc. It isn't a country to country battle but instead corporation who uses their political power and influence to have their government defend their economic interest abroad.
Example: Russian Television ( RT ) function on American soil. Employs American people. Likewise, American TV stations such as CNN, and other radio broadcasters operate on Russian soil, hires Russian people. The US government require that RT register as a,foreign agent so that they can be regulated; as retaliation RT uses their political power in Russia to have the Russian government regulate American broadcasters such as CNN in Russia
Sept 5 / 2012
It would appear to me that if the role of the government beside creating laws & policies is to balance the interest of businesses with that of the people, than the principle of checks and balances as it relate to the three branches of the US government displays within its path the will for government to regulate business practices to maintain that balance. Nevertheless, we can all agree that not all government regulations coincide with every interest group, because if it did the function of government would have been considered a check without the balance http://artistscrafts.com