IMF (International Monetary Fund) chief Dominique Strauss-Kahn today, while expressing concern about the deepening global financial crisis, also took note of the role of the trade deficit in the demise of America’s economy. Of course, he would never suggest that America reduce its imports and produce more domestically, since that would drag down the parasitic economies that feed on America’s trade naivete. Rather, he suggested that America needs to export more. In other words, the world’s parasites – those grossly overpopulated nations that are dependent on exports to sustain their bloated labor forces – need to start buying more American products.
… the United States needs to boost net exports to offset weakening domestic demand, Strauss-Kahn said …
It ain’t gonna happen! They don’t have the capacity to consume even their own domestic productive capacity. How will they start consuming more from America?
And now one of the world’s leading economists is scrambling to explain why America’s trade deficit hasn’t responded to the plunging dollar, contrary to their predictions.
… Strauss-Kahn said a competitive exchange rate was not the only driver of exports.
“Prices are important, of course, but quality, service and other things that go with exports are more and more important,” he said. “It’s not only a simple mechanical question of the exchange rate.”
Anyone who understands the new economic theory I’ve proposed in Five Short Blasts would be amused at economists’ disillusionment at the failure of their theories about trade and exchange rates. Of course the trade deficit isn’t responding to the falling dollar. The trade deficit has nothing to do with currency valuations! Rather, it’s a result of giving away access to a healthy market and getting no equivalent access in return when we deal with overpopulated nations like Japan, Germany, Korea, China, India and so many others.
America needs to stop blaming others for its problems, acknowledge that the real problem is our own trade policy, and begin taking positive action to achieve the trade results it wants and needs. The time for trusting our trading “partners” to boost demand, stop manipulating currencies and, in general, to keep all of the old promises they’ve been making for decades is long past. It’s time to take our fate into our own hands and implement the population density-indexed tariff structure recommended in Five Short Blasts.