Saturday, January 06, 2007
Memo to Lou Dobbs: You don't know nothin'
Pat Buchanan is not the only right-leaning talking head whose grasp of economics is woefully lacking. Lou Dobbs, who fancies himself a populist firebrand for the "working class," could also use a tutorial in basic supply-and-demand issues as well.
Mr. Dobbs feels that the United States' lage trade deficit is a sign that the overall economy is hoisted on weak stilts. This open letter to Dobbs demonstrates that nothing could be a longer distance from the truth. A sample:
"Admittedly, the word 'deficit' sounds ominous. In fact, though, America's trade deficit is evidence of its economic vigor and promise. Here's why:
"When Americans buy foreign-made goods and services, foreigners earn dollars. The only way America would run no trade deficit is if foreigners spent all of these dollars buying goods and services from Americans. Instead, though, foreigners invest some of their dollars in America. They buy American corporate stock, they build their own factories and retail outlets in the US, they lend dollars to Uncle Sam, and they hold some dollars in reserve as cash.
"Aren't you proud that so many people the world over eagerly invest their hard-earned wealth in America?
"As an American, I'm proud and optimistic. Foreigners invest in the US so readily because its economy is so strong. And even better, these investments strengthen the economy by creating more capital for American workers. These investments raise workers' productivity and wages.
"Remember: A trade deficit is not synonymous with debt."
Mr. Dobbs feels that the United States' lage trade deficit is a sign that the overall economy is hoisted on weak stilts. This open letter to Dobbs demonstrates that nothing could be a longer distance from the truth. A sample:
"Admittedly, the word 'deficit' sounds ominous. In fact, though, America's trade deficit is evidence of its economic vigor and promise. Here's why:
"When Americans buy foreign-made goods and services, foreigners earn dollars. The only way America would run no trade deficit is if foreigners spent all of these dollars buying goods and services from Americans. Instead, though, foreigners invest some of their dollars in America. They buy American corporate stock, they build their own factories and retail outlets in the US, they lend dollars to Uncle Sam, and they hold some dollars in reserve as cash.
"Aren't you proud that so many people the world over eagerly invest their hard-earned wealth in America?
"As an American, I'm proud and optimistic. Foreigners invest in the US so readily because its economy is so strong. And even better, these investments strengthen the economy by creating more capital for American workers. These investments raise workers' productivity and wages.
"Remember: A trade deficit is not synonymous with debt."
# posted by Joltin' Django @ Saturday, January 06, 2007 
