It's really amazing sometimes when you see the shallow level of thought that goes into the current reporting on economics. Or for that matter what comes out directly from the economics community or our lawmakers. (No surprise on the latter.)
I came across this headline on Yahoo! Finance: "Can natural gas help America's trade balance?"
Apparently, like so many other people, the author is quite perturbed by the negative sign in front of our nation's trade balance. He's obviously been influenced by the rest of his colleagues in the mainstream media or by the usual, bullshit propaganda coming from the clueless economics profession or perhaps the greedy crooks and liars on Wall Street.
His"big idea" is to erase that horrible, terrible, negative sign in front of our nation's trade balance by selling off our cheap, abundant, supply of natural gas.
I'm always amazed at the lack of even the slightest bit of follow-through in the reasoning process of most people. They get some idea in their heads (usually planted there by some cynical, manipulative, person or entity) and rather than think it through all the way to its logical conclusion they'll just take it as given and run with it.
Hey, yeah...getting rid of that horrible, terrible, negative sign in front of our trade deficit would be great (that's what he's been told, of course), but he fails to follow through and see what the ultimate consequences of that plan would bring. Remember, his plan was to sell off a large portion or maybe even all, of our cheap, abundant, natural gas supply.
What these clowns are proposing (and FYI there is currently a bill floating around in Congress that proposes to do exactly this) is to rid ourselves of all of our cheap, abundant, natural gas, which we use as a fuel to power our electric generating plants, heat our homes and propel a large part of our municipal transportation fleet, so that we can have a plus sign in front of our trade balance. Can he not see the ridiculousness of this? Can others not see the ridiculousness of this? This is NOT how we look after our interests, it's how we IMPOVERISH ourselves!!
Look...the negative sign in front of our trade balance is really a positive to us in real terms. It means we get the stuff--clothes, cars, television sets, computers, electronics, fuel...in essence, all the things we use in our everyday lives and which define our standard of living--in exchange for our paper money that we can print all day long. It's the foreigners who are the clear losers in this, not us. Yet this guy and many others like him, including a majority of members of Congress along with our own president, want to turn it around the other way and send away our real assets for the benefit of foreigners so that we can earn some...yuan?? Really???
All I can say is, we are screwed.
10 comments:
why do they want to send the US real goods in exchange for dollars?
Probably so that they have the $$ to buy oil, which is paid for in $$$.
But really, who knows? As long as they want to keep doing it, why not keep it that way?
One reason, I have heard, for some foreign gov'ts to hold dollars is so that they will not ever have to borrow dollars from the IMF.
"What these clowns are proposing (and FYI there is currently a bill floating around in Congress that proposes to do exactly this) is to rid ourselves of all of our cheap, abundant, natural gas, which we use as a fuel to power our electric generating plants, heat our homes and propel a large part of our municipal transportation fleet, so that we can have a plus sign in front of our trade balance. Can he not see the ridiculousness of this? Can others not see the ridiculousness of this? This is NOT how we look after our interests, it's how we IMPOVERISH ourselves!!"
Cui bono, Mike. Cui bono? The idea is profit for some, poverty for all.
I'm sorry Mike but you have this wrong.
The technology that goes into extracting natural gas is the only real resource which cannot develop without a export market. A resource undeveloped is no resource at all.
The Chinese have a far larger amount of Natural gas and Shale gas but lack the technology that United States has developed so in either case they will have to import from us at point in the future.
Our wealth isn't defined by mere consumption. It's defined more so by the potential for future higher consumption.
A farmer eating his seed corn increases his consumption but decreases his wealth. Importing often does the same.
Exports aren't a loss if they require higher quality inputs to develop.
Nominal monetary goals in trade are meaningless. The question is defining what is a gain in terms of "real trade" which is a qualitative question for which statistics of the quantities of consumables or money are useless.
MMT doesn't have a proper theory of production so it can't have a proper theory of gains from trade.
You can't claim to a complete theory unless you have a complete theory of real gains which isn't equal to mere consumption.
We are importing more consumables than ever before but the living standards for Americans continues to decline. What determines an improvement in the standard of living is more than large piles of imported crap most of which ends up in land fills.
The technology that goes into extracting natural gas is the only real resource which cannot develop without a export market. A resource undeveloped is no resource at all.
This is true if your definition of development is "exploitation at maximum rapidity".
Some of us consider development a process of sustainable husbanding of resources for the good of the American people.
Septus:
I'm not talking about not developing the resource. I am talking about the total lack of understanding that WE can consume our own product and do not need foreigners to do that.
The technology to develop gas is not dependent on foreign demand. In fact, foreign demand had has little or no influence thus far in the development of that technology.
Good Mike.
@septeus. We are the ones allowing our living standards to decline. We have twenty five million looking for work. Think maybe that has something to do with it? Think maybe we could change that if we wanted to? Just sayin.
Most media has it backwards? Don't forget the electorate, and schools, and textbook industry.
If you want to turn this titannic ... where do your start?
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