February 8, 2012

Posts Comments

You are here: Home / Archives for trade deficit

Free Trade Isn’t Always Fair Trade

September 3, 2010 By Leave a Comment
Free Trade and Fair Trade Global Policies

A few days ago, I wrote a five-part essay called How to Solve the Trade Deficit in response to a reader question about trade policy in the United States. The reader, Adam, responded on his blog.  Here is my followup to his commentary. I Would Love to Run Trade Surpluses But It Isn't Going to Happen If the United States were to run trade surpluses, as opposed to going trade neutral, we would be accused of mercantilism (rightly).  This would immediately cause our trade partners around … [Read more...]

Filed Under: Economics, Making Money Tagged With: , , , , , , , , , , , , , , , , , ,

American Manufacturing Profits Are the Same After Inflation As In 1960

September 3, 2010 By Leave a Comment
Profit by Industry in the United States of America

The manufacturing sector in the United States generates the same inflation-adjusted profits it did in 1960.  Surprised?  Consider this: In 1960, the United States manufacturing sector generated total profits of $23.8 billion. In 2008, the United States manufacturing sector generated total profits of $175.5 billion. If we adjust for inflation, 2008 profits from manufacturing should have been $171.17 billion, so we are actually ahead of the game a bit.  The problem is, at the same … [Read more...]

Filed Under: Case Studies & Profiles, Economics Tagged With: , , , , , , ,

How to Solve the Trade Deficit – A Five-Part Essay on the American Trade Imbalance

August 31, 2010 By Leave a Comment
How to Solve the Trade Deficit in the United States of America

When American citizens buy more foreign goods (import) than we sell to foreigners (exports), we have to transfer part of our national wealth to foreigners.  The amount we have to transfer to foreigners is called the trade deficit. Think of it like a big, international credit card.  When we buy more from the world than we sell it, the world takes our dollar bills and has to invest them.  That means they are earning interest, dividends and rents and, over time, own an ever-expanding piece of … [Read more...]

Filed Under: Economics, Featured Tagged With: , , , , ,

How to Solve the Trade Deficit – Part V

August 31, 2010 By Leave a Comment
Money Doesn't Actually Exist

There were a few questions that went beyond the scope of the trade deficit in the question Adam sent me, so I decided to wrap them up here, in a final article. If you want, you can read How to Solve the Trade Deficit Part I, Part II, Part III, and Part IV. You asked, "What starts the initial flow of money in an economy?" As I wrote a few days ago, money doesn't actually exist.  It is an idea - a concept we use as humans to describe an exchange mechanism to trade one thing we have for … [Read more...]

Filed Under: Economics Tagged With: , , , , , ,

How to Solve the Trade Deficit – Part IV

August 31, 2010 By 2 Comments
I Want My Country Back

This is part of my special on How to Solve the Trade Deficit. You can read Part I, Part II, or Part III if you missed them. The Increased Competition for Jobs Is Domestic, As Well You mention that standards of living have fallen, despite gains in things like iPods with 25,000 songs and the ability to connect instantly through the Internet.  The thing is: In many respects, it isn't true - standards of living haven't fallen - unless you fit one specific demographic, which we'll talk about in a … [Read more...]

Filed Under: Economics Tagged With: , , , , , , , , , , , , ,

How to Solve the Trade Deficit – Part III

August 31, 2010 By Leave a Comment
Knowledge Worker

This is Part III of my special on How to Solve the Trade Deficit.  If you missed the earlier parts, you can read Part I or Part II first. How to Solve the Trade Deficit - Knowledge Workers vs. Manual Workers In many ways, your question about the trade deficit has very little to do with global trade policies and everything to do with the rise of the "knowledge worker" class that Peter Drucker predicted in 1959. Drucker, the management guru who is to executives what Warren Buffett is to … [Read more...]

Filed Under: Economics Tagged With: , , , , , , , , , , , , , , , , ,

How to Solve the Trade Deficit – Part II

August 31, 2010 By Leave a Comment
Supporting our manufacturing base is important to stop the trade deficit

This is the second part of my essay on How to Solve the Trade Deficit. You should start with Part I if you haven't already read it. How to Solve the Trade Deficit - The Medium Answer My personal preference for solving the remaining minority of the trade deficit after solving the imported petroleum and oil problem includes rebuilding the manufacturing base.  Part of this is a national security consideration.  By ensuring we have enough production capability within our borders, we would be … [Read more...]

Filed Under: Economics Tagged With: , , , , , , , , , , ,

How to Solve the Trade Deficit – Part I

August 31, 2010 By Leave a Comment
The Products the Come from a Barrel of Crude Oil and Petroleum Based Resources

I received a question from a reader named Adam, who asked about the threat the United States trade deficit poses to our long-term financial health. It was an excellent, intelligent, well-articulated question that happened to arrive at the precise moment I was in the mood to talk about such an issue. The result is a five-part essay called How to Solve the Trade Deficit that explains what the trade deficit is, why the trade deficit threatens our safety, and why the loss of manufacturing jobs, … [Read more...]

Filed Under: Economics Tagged With: , , , , , , ,

A Reader Question About the Trade Deficit

August 31, 2010 By Leave a Comment

A message from a reader named Adam about the trade deficits.  I responded in a five-part essay on How to Solve the Trade Deficit. Joshua, I follow your personal blog, and find your articles very informative, it’s a great reference, and you inspire me, as I feel I am very similar to you, minus the internet business cranking out good money lol. One problem that I am constantly thinking about that this great county is facing is the trade deficit and "free" trade. Our nation really … [Read more...]

Filed Under: Economics Tagged With: , , ,