The American dollar has hit a new low versus the Euro. That means that Americans have to pay more dollars to get foreign goods or goods made in other countries. So companies that buy foreign stuff to use in the making of pasta for example have to up their prices. They are having a hard time. Contrawise, companies in the USA that sell stuff over seas are having a good time since the price of US goods is dropping relative to other currencies.
But overall even though we are selling more abroad, our trade deficit is now 811 billion dollars, twice what it was in 2001. In the last six years we have been buying foreign goods like crazy and not producing enough goods that other countries might want to buy. It’s hard to remember, but there was a time when things were the other way around. We were a producer nation; other nations bought far more of our stuff than we bought of their stuff.
That’s the funny thing with a service economy which we have now. Services are not goods; they cannot be sold abroad, unless we start shipping Cox Cable Guys overseas or something to install Cable in Eastern Europe. But there’s no sense in that. Obviously, the guys in Eastern Europe have their own Cable Guys.
Call me a dope, but I think that if an economy is to prosper it has to have something to sell. At one time, we made all the TVs in the world. Now we don’t. At one time, we made the only cars that really worked. This last year Toyota became the number 1 car company in America. At one time, we made clothes and shipped them to the rest of the world. Now every piece of clothing I have is made in China. We used to dominate the computer chip market; but as the first Bush said it doesn’t make any difference whether you sell computer chips or potato chips. So now other countries make our computer chips and nobody is buying our potato chips.
Not only are we not producing the stuff we once did, we are also now buying like crazy, even though the price of foreign goods is going up relative to the dollar. We are still able to spend like crazy because our banks seem willing to extend credit to anything that walks and has half a brain. Take what is happening in real estate. They were selling houses to people with no credit or background checks at all! It was like, I want to buy a house, and they were going, here, buy this house and here’s the money to do it. Hey, we will give you this special deal. You don’t have to do anything but pay off the interest on this huge amount of money we are loaning you—for a while at least.
Is this fiscal responsibility? How can anybody expect the American people to exercise fiscal responsibility when the banks don’t even seem to grasp the concept, of fiscal responsibility I mean.
Somebody is making money off all of this, and tell you what it ain’t Joan Blow or Joe Six-Pack.
The capitalists are crazy.