Friday, November 14, 2008

Neither Fiscal Nor Monetary Policy Can Solve Economic Crisis

"What Reich and the American economic establishment do not understand is that the recession paradigm does not apply. There are no jobs waiting at US manufacturers for a demand stimulus to pull Americans back into work. The problem is not a liquidity problem. To the contrary, there have been many years of too much liquidity. Credit has grown far more than production. Indeed, US production has been moved offshore. Jobs that used to support the growth of American incomes and the tax bases of cities and states have moved, along with US GDP, to China and elsewhere....

Anyone who thinks that America still has a vibrant economy needs to log onto and face the facts."

We need to bring the jobs back. The only way to do that is through TARIFFS on imports. TARIFFS raise the end price to American consumers of foreign imports, which will make American products comparatively less expensive, increasing demand for American production, increasing demand for America labor to provide that production--thus increasing wages and employment.

And TARIFFS don't cost any money. In fact, they raise Federal revenue, while at the same time creating American jobs and raising wages.

The only way $18/hour American workers can compete with 49¢/hour Chinese workers is by putting Tariffs on the goods produced by those 49¢/hour workers.

read more | digg story

1 comment:

Alessandro Machi said...

I think there are other ways. Passing legislation that stores like Walmart agree to stock half of their store with american made products. Over time, what will happen is American made products will find a niche again.

Maybe I bought the 99 cent telephone cord made in China. But when it only lasts one or two years and I have to replace, maybe I will consider a 2.49 cord made in america if it will last longer.