"Cheng Siwei, vice-chairman of China's parliament announced that China will shift the country's reserves out of dollar-denominated investments and into the euro and other strong currencies."With the ruling elite’s WTO-GATT-NAFTA coup d’tat the ability of the United States to adjust its economy via historic and classical tariff policy was taken away. As a consequence, without free and rational tariff adjustments (necessary and wise in a still very disparate and undemocratic world) we are left with only monetary policy to deal with trade issues – a huge mistake.
The result is our declining dollar, now no longer brings the low "free trade" prices but rather rising prices, inflation, higher interest rates and the ownership of many more US properties and businesses by foreigners. In effect, you may soon be working for the ruthless Chinese army via their "sovereign" investment funds. Isn’t that grand?
We forget the United states, Germany and Japan did not become the greatest economies of the world via free trade but, rather, via sensible tariff policies allowing domestic production capacity to grow. Today, as a result of "free trade" we have now lost a great deal of our manufacturing capability, and even with the dollar decline we cannot compete with Chinese wages nor their dollar peg routine.
In short, current trade policy is a very big mistake. Nor do not have to give up tariff freedom because all international companies can easily get their global growth by investing, producing, and selling abroad, within each market. However, what "free trade" did was to arbitrage labor across the globe and force you to compete with the lowest of wages and standards. Without the freedom of tariff policy, and incentivizing entry into First World markets, you have nothing to do but destroy the value of your own currency "in order to compete."
Compete with whom? On what terms? To what end?
What "free trade" was really designed to do was to remove any domestic control over one’s economy, thus relieving the great majority of citizens of any influence over their own country and economy. Do you elect your representative to the WTO? No, you are simply subject to the dictates of three, ruling-elite apointed, guys meeting in Belgium in secret, who extend you no right of appeal.
Democracy was the first thing to go. We call this fascism, and they call it "globalization" to which you must submit. You see, only capital must enjoy protectionism while labor - i.e the vast majority - must get screwed, have no recourse, and be unable to change the system.
What we have today is clearly forced trade – resulting in global oligarchy and oligopoly - the worst of worlds. It is forced trade with the greater slave resulting in the rewarding and empowering the lowest of democracy, human rights, and environmental standards – a toxic, un-economic, stew if there ever was one.
In short, "we" have created a Totalitarian Capitalism, the economic fascism of the 21st century. This tragedy emerges from a severe, societal, imbalance between the "factors" – i.e., labor and captial. It is this "factor imbalance" which I note and describe in my 1993 book Cap-Com, The Economics Of Balance. It is factor imbalance which destroys democracy, disfigures economy, and ruins our environment. It’s the structure, stupid.
In the ruling elite’s race to enclose mankind in capital’s net, war is always a good distraction and cover for the corporate mafia to complete their global gulag – i.e., one in which the vast majority of wage-earning citizens have lost control over their lives and economies.
Today we are told, in corporate media, that we are fighting for "democracy" in Iraq. What utter impeachable nonsense. In fact, its business as usual, as the USA has been fighting democracy – particularly any form of economic democracy - around the world. Our CIA, and "economic hit men," have been involved in assasinations of labor leaders and the rewarding of corrupt dictators via massive corruption for decades on end.
With free trade, however, the target is you and I. In the great propaganda onslaught, we were told by simpleton, and complicit, economists that we would all become "symbolic analysts" and not to worry. We are going to be "harmonized" into a beautful free trading world – against your will, of course. It’s all classic ends-justifes-the-means tyranny... and, unfortunately, we don’t yet have a National Initiative process to get us out of it and gain control over our money-grubbing, capital-corrupted, legislators.
A look back in time tells us that even Karl Marx liked "free trade" because, as he remarked, "the free trade system is destructive... it breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. It is in this revolutionary sense alone, that I vote in favor of free trade."
Indeed. Marx was clearly hoping for maximum social upset and, as he recognized, free trade was a good way to get there. Given the "blowback" on globalization around the world, he was right. Further, I presume, he would be so pleased that we have given away all our marbles to China – a communist dictatorship (now more aptly described as a totalitarian capitalist dictatorship) who now hold enougth of our money to tell us what to do, or else.
The brutal irony of free trade doctrine is that it is supposed to remove the potential for tariff wars. Nonsense, with the removal of tariff freedom, it simply institutes currency wars, all of which hurts far more people than any targeted tariff policy.
Another idiotic result of "free trade" is the fact that we have no distance tarifff, and idea proposed by this writer in an earlier article. So, a product that travels 10,000 miles to market - in fossil fuel vehicles serving to provoke ruinous climate change and destroy environments - is treated equally as domestic products which may travel only 100 miles to market. The "exogenous" factors, excluded from dismal free trade theory, are killing us.