U.S. Economy may be beyond repair.

March 29, 2022

On top of all of the other depressing developments in the world, this one was just too much for me, so I’ve been sitting on it all month. I’ve come to the conclusion that the only way to deal with it is to finally admit the obvious. America’s economy is broken beyond repair. There is no hope of fixing what’s wrong.

The January trade data, released earlier this month (February data will be released in early April), is the final straw. Here’s a chart of our total goods trade deficit. And here’s the deficit in manufactured goods alone. The records set in both categories in the previous month were bad enough, but they exploded further in January. It’s now abundantly clear that the U.S. has become totally dependent on foreign suppliers for our every need. They have a death grip on our economy.

I believe it’s reached the point where we can no longer fix this problem even if we wanted to which, sadly, no one seems to want to do, because no one cares. Even the basic things we’d need to even try would have to be imported. Even the tools we’d need to make the basic things would have to be imported.

Just this morning I came across this article about a senate bill to fund the rebuilding of the computer chip industry in the U.S.: https://www.foxbusiness.com/technology/us-senate-approves-52b-chips-bill-in-bid-to-reach-compromise. First of all, you need to understand that this is exactly the kind of thing that politicians do to create the illusion that they’re doing something to fix the problem. It’s exactly what the global corporate benefactors of the politicians pay them to do to avoid what they fear most – a turn away from free trade toward a return to tariffs that are so badly needed to provide real incentive to manufacture products domestically.

It’s nothing but extortion, in essence telling America that we won’t even make a show of fixing the problem we created unless you give us $52 billion. Even then, the problem would persist. Most of that $52 billion would be used to import the products needed to build the facilities. Beginning with the heavy equipment needed to develop the sites – the bulldozers, excavators, cranes, etc. – even many of those would be imported. (Caterpillar would get a small piece of the action.) Most of the steel would be imported. Virtually all of the machinery needed to build the chip-making process would be imported. And, once ready to run, virtually all of the raw materials would be imported. Throughout the building process, much of the labor involved would either be illegal or foreign workers here on work visas.

Then, guess what? Once this new chip manufacturing capacity is ready to start up, foreign-made chips will suddenly be in abundant supply again and the customers will shun the new, American-made chips in favor of the cheaper imports, the price of which will have been suddenly cut. The new plants will sit idle because there are no tariffs in place to protect them. The foreign chip-makers will come in, crate up the equipment, and ship it back to their overseas plants for pennies on the dollar. The global corporations will be $52 billion richer and American taxpayers will be stuck with the bill. We’ve seen this same scenario play out over and over.

Recently, President Biden warned the Chinese not to help Russia avoid the economic sanctions imposed when they invaded Ukraine, or there would be serious consequences. The Chinese must have been rolling in the aisles laughing after that meeting! Serious consequences? Oh, you mean like the ones for completely ignoring the Phase 1 trade deal? The tariffs that China agreed in writing would be fair consequences? The tariffs that not a penny’s worth has yet to be implemented? Don’t be ridiculous! China owns us lock, stock and barrel and they know it. They fear nothing that America says because America never follows through on anything.

America prevailed in World War II thanks to its industrial might. Its military at the beginning of the war was barely up to the task. However, thanks to its ability to convert its industrial capacity to war-time production, by the end of the war the Willow Run bomber plant in Michigan was cranking out a new B24 bomber every hour, while the shipyards on the west coast were building new destroyers at a rate of one every two days. Today, we have no such industrial capability. I doubt that we could sustain a military effort of any size for much more than a month before we ran out of imported supplies.

This morning, it was reported that Ukraine has asked to U.S. to continue to supply them with Javelin missiles at a rate of 1,000 per day. The reporter noted that our own military’s supply has been critically reduced by what we’ve provided to Ukraine already. Seriously, do you think the Pentagon has been paying the builder of the Javelins for spare capacity to make 1,000 per day when we probably haven’t even been using them in training exercises at a rate of ten per week? I doubt that we have the ability to produce even ten per day. They’d quickly run out of chips. GM just announced a 2-week closure of one of its most profitable pickup truck assembly plants for that very reason.

The federal budget deficit and the national debt are tied directly to the trade deficit, which is now contributing $1.25 trillion per year to each of them. (The federal government has to pour that much back into the economy to offset the drain of the trade deficit in order to avoid a deep recession or depression.) It’s a problem that they could ignore as long as interest rates were near zero, since that made the interest on the national debt close to zero too. But now interest rates are rising fast. Suddenly, the current level of federal spending is a major problem as the Federal Reserve finds itself far behind on inflation and is raising interest rates fast. Now, the economy is boxed in from all directions. We can’t spend our way out of the trade deficit to avoid an economic collapse. It’s right around the corner and coming fast.

I wrote Five Short Blasts and began this blog in 2007 in the hope that my warning of the effects of the relationship I had discovered between worsening overpopulation and unemployment could lend some urgency to the need to protect ourselves from badly overpopulated nations who were preying on our market, and the need to avoid their same fate.

Now, it’s too late. The foreign globalists have achieved their goal. America has been brought to its knees without firing a shot. What’s going to happen next is just a matter of time. It was foolish to think I could make a difference. My time and efforts have been wasted. Maybe something will happen yet to change my mind. At this point, it’s hard to see it. I may continue this blog, but the nature of it may change. The economic collision that I hoped my Five Short Blasts could avert has finally happened. Now, all that’s left is to say “I told you so” as the rest of the world begins to scavenge the wreckage.


Tucker Carlson’s Surprising “Take” on Overpopulation

January 5, 2022

https://www.foxnews.com/opinion/tucker-world-we-live-in-cannot-last

While browsing the news on the internet this morning, I came across a couple of very interesting and surprising opinion pieces from two different commentators. They deal with different subjects, but subjects that share the common link that is the focus of this blog. I’ll first address the opinion piece by Tucker Carlson of Fox News (link provided above) because I found it to be the most surprising.

Now, before I start, and so that I don’t lose half of my readers right out of the box, don’t get the impression that, because I read Fox News, I’m a Republican and posting this just to advance the Republican agenda. I scan all the major news outlets, including Fox, in order to get stories that the others often won’t even cover. I’m an independent and have bashed both parties especially hard for doing the bidding of their corporate benefactors when they champion policies designed to keep growing our population when it’s increasingly evident that, while boosting GDP and corporate profits, it’s eroding our quality of life.

That said, I was curious where Carlson was going with this piece titled “The word we live in cannot last, but that’s not necessarily a tragedy.” What is it about our world that he thinks can’t last? Too many liberal politicians? Too much “wokeness?” Too much drift toward socialism?

It’s none of that. Yes, he gets in a couple of digs aimed at Democrats – nothing surprising there. What is surprising is that it’s an overpopulated world that he sees that can’t last. He asks the question, “… how many people is too many?” I was shocked! That’s exactly the question that my proposed amendment to the constitution would force politicians to consider when setting immigration policy. Why can’t politicians see it and do something about it?

He then goes on to answer that question:

In Washington, you will never hear that question. More bodies in a country mean more power for the people who run it. Big nations need big governments. Politicians always want more people to rule, so the incentive for unrestrained population growth is baked right into the system. 

The consequences of that?

The larger a bureaucracy becomes, the more impersonal it gets. Past a certain size, organizations of any kind lose their regard for people. As they get bigger, they get blunter, more soulless and cruel. 

It’s true. If there’s one thing that economists get right, it’s the law of supply and demand. As the supply of anything increases, the cheaper it gets. Humanity is no different. The more our numbers grow, the more devalued and cheaper human life becomes, to the point that an individual is practically worthless. You don’t matter. There’s plenty more eager to replace you.

It’s gratifying and encouraging to see that other people with influence are beginning to see the big picture and ask the right questions. I encourage you to read the whole piece yourselves, and I’ll leave it at that.


Elon Musk’s Take on Falling Birth Rate

December 8, 2021

I really like Elon Musk. He’s an incredible entrepreneur. I love the fact that, already an extremely wealthy man, he was willing to risk building his own car company to compete with the giants in the industry, something everyone said couldn’t be done. I love the fact that he’s dedicated to building the cars he sells in America right here in America, including the development of his own battery technology – batteries that he also builds right here in America. Musk is an extremely smart and ambitious man – an American hero.

So I found his take on falling birth rates – as reported in this USAToday article – very odd and disappointing. For such a smart man, his take is, well, downright dumb. Musk believes that:

  1. There are “not enough people in the world,” and
  2.  “… one of the biggest risks to civilization is the low birth rate and the rapidly declining birthrate,” and
  3. “…  if people don’t have more children, civilization is going to crumble,” and, finally
  4. people shouldn’t “try to live for a super long time.”

First of all, let’s get one thing straight. Yes, birth rates have been declining. But they’re still high enough to drive exponential population growth, doubling the population every forty years. Look at this graph of world population growth. My God, that’s not fast enough growth for him?!?

It’s not surprising that CEO’s of major corporations favor never-ending population growth. They see it as a source of never-ending profit growth. After all, more people mean more customers. However, in this case, it seems contradictory for the CEO of a company like Tesla, dedicated to producing “green” products to combat climate change, an existential threat to human life, to actually be advocating for the very thing that’s driving that threat.

We live in a finite world that can only support a finite population. Any child who has ever had an aquarium with guppies understands this. Item no. 4 above seems to indicate that perhaps Musk has some grasp of this too. After all, if everyone lived forever, the birth rate would have to fall to zero. Otherwise, the world would quickly become very badly overpopulated. But advocating for a shorter life span and a higher death rate? Yikes!!

Economists assert that mankind is clever enough to overcome all obstacles to growth and, when they say this, they are talking not just about economic growth, but population growth as well. We know this because they say it in direct response to Malthus’s fears of the consequences of overpopulation. Such a statement has no basis in fact and is nothing but pure hubris. Just because it’s proven true up to this point doesn’t mean it will always hold true. Mankind is, in fact, very clever, but not that clever.

There are endless limitations that make never-ending population growth impossible. Human beings are made up of compounds whose supply on earth is limited. Take water, for example. We’re mostly made of water. As I pointed out in my book, Five Short Blasts, if population growth continued at today’s rate, in 850 years the world’s land masses would be carpeted in human flesh several feet deep. In only 1,100 years, every drop of water on earth would be locked up in the make-up of human flesh. These scenarios are obviously impossible. If theories don’t hold true when tested at their limits, then those theories are invalid. Mankind is not clever enough to overcome all obstacles to growth.

Other obstacles will prove to be insurmountable long before we reach the above scenarios. We may be witnessing some already. Take climate change, for example. Commitments to reduce carbon emissions are broken as fast as they are made because of a dirty little secret: the goals are unattainable, though we continue to pretend they are. All of the renewable energy can’t make a bit of difference without a backup source of power. And what about methane? Landfills emit tons of methane, and we need more landfills all the time. Cattle emit tons of methane, but we need meat. People emit methane, but no one talks about that. Instead, people like Musk insist we need more people.

Then there’s the one that’s the subject of this blog. Growing populations mean more crowding, which drives down per capita consumption and, along with it, employment. Nations, especially the U.S., are getting poorer thanks to social safety net programs meant to deal with the effects of rising unemployment. Maybe we could spend more to fight climate change – like making electric Teslas more affordable – if we weren’t being bankrupted by the costs of overpopulation.

I wish Elon would take a break from his Tesla and Space-X duties and spend some time pondering the subject of population growth a little more carefully. If he did, and came to the conclusion that maybe a lower birth rate and a stabilized population would actually be a good thing, he could have more influence in saving the planet from an existential threat than all of his electric cars ever could.


U.S. Food Deficit Grows Along with Population

November 18, 2021

We were once known as “The World’s Bread Basket.” But no more. My primary interest in trade data is focused on manufactured goods, since a trade deficit in that category of goods supports my theory that, thanks to the inverse relationship between per capita consumption and population density, it’s inescapable that trade with overpopulated nations will yield a trade deficit. However, I’ve also kept an eye on our balance of trade in food, since it could be an indicator of overpopulation in our own country.

As the U.S. population has grown, our trade surplus steadily shrank. By 2015, it was gone. Now, as the population continues to grow (almost all growth in the U.S. population is due to immigration), we now have a growing trade deficit in food. Check this chart of our food trade deficit. The data for 2021 is year-to-date through the month of September. Annualized, the deficit for 2021 will come in at about $21 billion – a record deficit in food for the U.S.

Let’s do some math. In six years, we’ve gone from a balance of trade in food to a deficit of $21 billion. Now, let’s assume that it takes about $10/day to feed a person in the U.S. That’s $3,650 per year. Divide $21 billion by $3,650 and that deficit represents what it takes to feed 5.75 million people. In 2015, our population was 322 million. It’s now 333 million. That’s a growth in the population of about 11 million people.

So, the population has grown by 11 million people in six years, and our food deficit has grown by an amount that it would take to feed half of them. One can conclude that, despite improvements in crop yield, we’re falling further behind in our efforts to feed our own population. We now find ourselves in the position where we have to rely on other “Bread Basket” nations less densely populated than ourselves, like Canada, Australia and South American nations.

It’s a sad state of affairs when America can’t even feed itself any more. Immigrants, pack a lunch and bring a cooler and a basket full of food with you. You’re going to need it.


Biden Tackles Minor Corporate Abuses While Ignoring the Biggest and Most Obvious

July 11, 2021

As reported in this Reuters article, Biden has signed an executive order that tackles many corporate abuses in an effort to help American consumers. Good for him. Many of these actions have been long overdue. But he has completely ignored the one “corporate abuse” that dwarfs all others in terms of its impact on American workers. I’m talking about the trade deficit and the practice of off-shoring millions of manufacturing jobs.

To his credit, while ignoring the abuses that Biden addressed with this executive order, Trump is the only president since World War II who took the trade deficit seriously and took concrete steps to address it.

You may wonder why I focus so much attention on the trade deficit since the purpose of my book, Five Short Blasts, and the purpose of this blog, is to raise awareness of the economic consequences of overpopulation – namely, that falling per capita consumption as over-crowding worsens must inevitably drive up unemployment and poverty. And poverty kills. Ultimately, if nothing else gets us first, it will prove to be mankind’s undoing.

It’s really not that hard to understand once you understand that increasing over-crowding as the population continues to grow inevitably drives down per capita consumption and, along with it, the need for labor. People living in crowded conditions live in ever-smaller dwellings. They own little furniture and appliances because there’s no room for them. They own less clothing because of a lack of closet space. They don’t have yards and gardens, so they don’t need tools to maintain them. They don’t own cars because roads are choked with traffic and there’s no place to park. So they don’t have garages. They don’t participate in sports because there’s nowhere left to play them. They don’t engage in recreational boating because launch and dock space is all taken.

You get the idea. But what does this have to do with trade? Consider a country with a reasonable population density. Let’s say there’s 100 million people in this country. Their lifestyle resembles that of the U.S. Now suppose that they engage in free trade with another nation that is far smaller – say one tenth the size – but also has 100 million people. It’s ten times as crowded and people live in conditions like those described in the previous paragraph. For that reason, their consumption is only half that of the first country.

Through free trade, these two countries, though each is still a sovereign state with borders, behave economically as one country. The work of manufacturing the products that their combined population needs is spread evenly across the work force, but the consumption of those products isn’t. Consumption in the 2nd country remains low because of their over-crowding. The end result is that the first country has lost 25% of their manufacturing jobs and has lost even more in terms of market share. In essence, the first country has been forced to pay the price for the 2nd country’s overpopulation.

By trading freely with the 2nd country, the first country has immediately taken on the economic traits of a country twice as populated – something it would have taken decades to happen through the course of normal population growth. Worsening unemployment and poverty are the inescapable consequences of free trade with overpopulated nations. This is why my concern for the economic consequences of overpopulation has driven me to put such heavy emphasis on trade.

With all of that as a backdrop, what has Biden done to address our massive trade deficit – now an annual one trillion dollars in trade in manufactured goods? Absolutely nothing. Oh, he’s paid some lip service to wanting to help American workers and has encouraged us to “buy American.” But he’s done nothing about our trade policy and hasn’t spoken a word about our trade deficit.

As reported this past week by the Commerce Department, our trade deficit in May continued to hover at a near-record level of $71.2 billion, the 2nd worst reading ever since setting a record of $75 billion in March. In fact, in his first four full months in office for which trade data is available – February through May of this year – Biden owns the four worst monthly trade deficits ever recorded.

Our largest trade deficit is with China. Thanks to Trump’s enactment of 25% tariffs on half of all Chinese imports, however, that deficit isn’t nearly what it once was. Our annual deficit with China peaked at $418 billion in 2018. Thanks to Trump’s tariffs, that fell to $344 billion in 2019, and fell again in 2020 to $310 billion. So far this year, it’s on track to remain at that level.

Trump left Biden the perfect tool to build on that progress. In January, 2020, he got China to sign the “Phase 1” trade deal which held at bay his threat to extend his tariffs to all Chinese imports in exchange for China’s agreement to dramatically increase their imports of American goods. What’s happened? China is failing miserably in its commitments and, not only has Biden done nothing to enforce the agreement, he hasn’t even acknowledged that the Phase 1 trade deal even exists. So far, through May, China is 39% behind its commitment on manufactured products, 43% short of its goal for agricultural products, and is a whopping 78% short of it goal for energy products. They’re barely exceeding their imports in 2017 which formed the baseline for the agreement.

So far, the Biden administration makes a good show of supporting American workers but, on this most critical issue – the one that would help us the most – all we hear from the White Houe is …….. the sound of crickets.


The Biggest Covid Lesson Not Learned

June 15, 2021

The subject of the environment is a bit off-topic for me, since the focus of this blog is to warn of the economic consequences of overpopulation, leaving others to focus on the environment. But with all of the Biden administration’s renewed focus on climate change, I just can’t let this pass.

Trump called climate change a “hoax.” Is it? I don’t think so. The science is clear that certain gases like carbon dioxide and methane, just to name a couple, have a greenhouse effect, trapping heat below the atmosphere. The concentration of carbon dioxide in the atmosphere has soared over the last decades far above its historical norms. And temperatures seem to be rising. But is there a cause and effect relationship between rising CO2 levels and rising temperatures? I’m not quite so sure.

Never mentioned is the heat-island effect of larger and more densely-populated cities. The temperature in cities is always at least a couple of degrees higher than in the surrounding suburban and rural areas as cool, moist ground is replaced by hot asphalt and concrete. As our population grows, so too does the heat-island effect in big cities. Smaller cities grow into bigger cities. Small towns grow into cities, and new towns appear in once-rural areas. Heat-islands are getting bigger and new ones are appearing everywhere. How do you quantify how much of the higher temperature readings are due to the heat-island effect vs. greenhouse gases? You can’t. Nor does it matter. The effect is the same. The planet is getting hotter thanks to our growing population.

Still, I find it logical to conclude that rising greenhouse gas concentrations in the atmosphere are playing a part in rising temperatures. So what’s the solution? To arrive at a solution, you have to first understand the real cause. Emissions of greenhouse gases like CO2 is the result of human activity. The total volume of these emissions is the product of the number of humans multiplied by the average per capita emissions from their activity. Total greenhouse gas emissions can be reduced by addressing either the average per capita emissions or by reducing the number of humans, or through a combination of both approaches. If climate change caused by greenhouse gases is an existential threat to our planet as environmentalists, political leaders and business leaders claim, then the latter approach – one that addresses both factors in the equation – the number of humans and the average emissions that they produce – is absolutely critical.

At this point, let’s take a step back and digress because it’s essential, especially for younger readers who didn’t live through it, to understand some history of the environmental movement. In the ’60s and ’70s, people were fed up with pollution. Our lakes and rivers and sky were absolutely filthy. The landscape was strewn with litter along the highways and with unregulated dumps and landfills and junkyards. The environmental movement was born.

Soon, however, perhaps because of the extent of the problem and the opposition by industry to do anything about it, environmentalists became quite radical. Much of their focus turned toward overpopulation to the point where environmentalists were perceived as “anti-human,” looking upon all humans with scorn. Industry and politicians alike hated the focus on overpopulation because economic models are based upon and depend upon growth. Industry’s profit growth goals depended on population growth. People, too, hated being told that their very existence was the problem and began to hate the environmentalists. The environmental movement was in peril. At the same time, people also began to hate industry for its opposition to cleaning up the horrible mess they had created.

In the interest of survival, environmentalists, industry and politicians came together and, in an unholy alliance, came to a mutual understanding. Industry agreed to embrace the environmental movement and pursue technologies that would clean up the environment and, in return, environmentalists agreed to never again focus on the role of overpopulation. The concept of “sustainable development” was born. All sides agreed that we can be clever enough to continue growth and development while, at the same time, protecting the environment from harm. All sides embraced this new concept of “sustainable development.” Never mind that little voice inside your head telling you that “sustainable development” in a finite world is an oxymoron and is nothing more than BS. If and when it proved to be exactly that – a bunch of BS – it would be far enough down the road that it would be some later generation’s problem to deal with. Today, you are that generation.

OK, back to climate change and how to approach it. If climate change is, in fact, an existential threat to our planet, then any approach that doesn’t include some focus on stabilizing our population – worse yet, leads us to believe that, through changes in technology we can eliminate the problem while still growing our population – is clearly doomed to failure. It is, in fact, a hoax, just as Trump proclaimed.

Take the Paris Climate Accord, for instance. If you read it’s mission, you’ll find that it’s goal is not to stop climate change but to reduce it to a manageable level – a level at which “sustainable development” can continue. There you have it. “Sustainable development” has been practiced now for at least fifty years and all of our environmental problems – especially climate change – are the end results. Does the Paris Climate Accord want to end it? No. It’s main goal is to keep “sustainable development” going. And what is required of the U.S. as a member of this accord? The U.S. is required to contribute hundreds of billions of dollars to the effort. And what is that money ear-marked for? Green energy projects? No. In fact, it’s earmarked for exactly the opposite. It would be spent to develop underdeveloped countries like India using fossil fuel technology, with the rationalization that they must first be developed cheaply so that they can then afford to make the switch-over to green energy technology. Don’t believe me? I don’t blame you, but it’s true. Read the Paris Climate Accord for yourself.

Along comes the recent G7 meeting where Biden agreed to donate another $100 billion to the cause. To advance green technology? No, it’s earmarked to help poor countries cope with the effect of climate change.

Then there’s the promise that green energy will create jobs right here in the U.S. But, at every opportunity to demonstrate that that’s true, what happens? Wind turbines are imported from Denmark. Solar panels are imported from China. The new electric Ford Mustang is built in Mexico. The Chevy Bolt EV is primarily made in South Korea.

Frankly, the entire environmental movement has devolved into a hoax, one that is designed to create the illusion that our problems are under control so that unbridled population growth – fueling sales and profit and tax base growth – can continue without opposition.

Back to the title of this post. Despite all the death and hardship it has caused, the Covid pandemic has provided us with one benefit. It gave us an opportunity to see what would happen if human activity was dramatically curtailed. Some amazing things happened. The air quickly cleared. The people of Beijing, China actually saw blue sky – probably many for the first time in their lives. The sky turned bluer everywhere and plants and trees thrived in a way that hadn’t been seen in at least half a century. Greenhouse gas emissions were slashed far more than any scientists thought could possibly be achieved through green energy projects. The roads were cleared of traffic. People took to the outdoors once again – walking and biking. And people began leaving their high-rise apartments in big cities in droves, realizing for the first time just how stifling and risky living in densely-populated conditions can be. The work force was pared down to essential workers and, with federal assistance, we all got along fine. We didn’t really need to eat out so much, or need many of the trappings of modern living that make life such a rat race.

Those of us who have been around a while – long enough to remember a time when our population was half of what it is today – have seen it all before. It brought back a lot of fond memories of what life was like in those more simple, uncrowded times. Frankly – and I’ve heard others make the same observation – it was a breath of fresh air. It was a glimpse of what is possible in a less crowded world.

That lesson is clearly lost, however. No one – not environmentalists, economists, politicians or industrial leaders have dared to utter a peep to suggest a new approach – one guaranteed to resolve climate change with far less effort and expense – an approach that includes steps to stabilize our population. In fact, Biden has thrown the immigration doors wide open in an effort to grow our population even faster. China, in an effort to avoid any decline in its enormously bloated population, is encouraging families to have more children. So is Japan. None of them really care about climate change or any of the other overpopulation-induced maladies that threaten the planet. All they care about is putting on a show to fool you into thinking that there’s actually a plan.

I have warned for a long time that unbridled population growth, through declining per capita consumption and worsening unemployment, will push us into poverty and be our undoing. If we don’t learn to moderate our population, mother nature will do it for us and it won’t be pretty. We’ve seen Covid hit poorer, overpopuated countries the hardest and there take the biggest toll. As grim as the Covid toll has been, something else will come along and it’ll be much worse. What will it take before we finally learn this lesson? I dread to find out.


United States the “World’s Breadbasket” No More

March 11, 2021

There was a time when the United States was known as the “World’s Breadbasket.” It’s “amber waves of grain” and “fruited plains” – noted in the first verse of “America the Beautiful” – supplied food wherever it was needed anywhere in the world. Even the Soviet Union turned to the U.S. for grain when its own harvests fell short of its needs.

Now, it seems that the “… pilgrim feet, whose stern, impassioned stress a thoroughfare for freedom beat across the wilderness” – from the 2nd verse of the same song, written originally in 1893 when the U.S. population was 65 million people – have grown the “alabaster cities” of the fourth verse to the point where we are the “World’s Breadbasket” no more. With a population of five times larger than when that song was written, we can’t even feed our own people any more.

At least that’s what our trade data tells us. Look at this chart. The category of foods, feeds and beverages – agricultural products – was once a bright spot in America’s ever-darkening trade picture. We always had a surplus for export to feed the world’s hungry, but no more. Our balance of trade in agriculture products has steadily eroded to the point where we’ve now run a deficit for the fourth year in a row. It improved a little in 2020 but, as you can see, it’s on a downward trajectory.

I have always steered clear of the subject of overpopulation in terms of resource shortages. Thomas Malthus hypothesized in 1798 that the world’s population would outstrip its ability to produce food. As decades wore on and the food supply grew even faster than the population, the other sciences mocked economists and proclaimed that mankind is clever enough to overcome all obstacles to further population growth. That has certainly proven true so far and may be true to a point, but any thinking person knows that there will eventually come a tipping point. In fact, it was only by ignoring the possibility of resource shortages and by pondering what else might happen as the population continues to grow that I was able to discover the inverse relationship between population density and per capita consumption – and its ramifications for worsening unemployment and poverty.

Nevertheless, I can’t help taking note of this trade data for agricultural products. Mind you, I’m no expert in the subject. One could argue that there are many other factors involved. Federal agriculture policy such as price supports, policies that encourage farmers to allow fields to lie fallow, etc. may all be playing a part here. Whether or not that explains the deficit in agriculture, I can’t say.

However, the data doesn’t lie. For the past four years, America is growing increasingly dependent on imports to feed its ever-growing population. That should be cause for concern for everyone. It’s bad enough that America is dependent on imports for virtually all things manufactured. That makes us weak and vulnerable. Being dependent on others for our food supply is far worse. Having enough to eat is a matter of total food production divided by the total population. Both factors need to be considered if we’re going to rectify this situation. It isn’t enough to simply consider how to boost production. (Do we really want more genetically-modified crops, more pesticides in our produce and more hormones in our meat?) It’s time to consider whether the number of “pilgrim feet” and whether the size of our “alabaster cities” has begun to overwhelm our “fruited plains.”

Immigrants, take note. Bring some grain and fruit with you, because we’re all out.


Time to Leave the World Trade Organization

September 16, 2020

https://www.reuters.com/article/us-usa-trade-china-wto/wto-finds-washington-broke-trade-rules-by-putting-tariffs-on-china-ruling-angers-u-s-idUSKBN2662FG

As reported in the above-linked article, the World Trade Organization has announced its finding that the U.S. broke its rules when it imposed tariffs on Chinese imports two years ago.

The timing of this announcement is curious.  Of course the U.S. broke the rules.  Everyone knew it at the time.  Trump didn’t care.  It was the only way to make any progress on halting the explosion in the trade deficit with China.  So why wait until now?  Is it because Trump faces re-election in less than two months, running against a candidate who played a big role in the advancement of the globalism that the WTO enforces?

The WTO is the enforcer of the ill-conceived trade scheme hatched in the wake of World War II to bring the world together by employing the unproven concept of “free” trade.  Decades later, the results are in and “free” trade is now a proven failure.  Instead of lifting all economies of the world and bringing the world together through an inter-dependency, the WTO has destabilized the world by establishing a host-parasite relationship between reasonably-populated nations, like the U.S., and the others – like China, so badly overpopulated that they are totally dependent on manufacturing for export and feeding off of America’s market.  The WTO is directly responsible for building up a totalitarian communist regime bent on dominating the rest of the world.

It’s time to put an end to this.  Trump can do it by simply withdrawing from the WTO, a move that would quickly lead to its collapse.  Let’s return to truly free trade, where every nation is free to set its own rules in its own best self-interest.


Trump’s Efforts on Trade a Spectacular Failure

September 9, 2020

I can’t tell you how disheartening it was to sift through the latest trade data, for the month of July, released by the Commerce Department late last week.  There’s just no getting around the fact that the administration’s efforts to cut the trade deficit and bring manufacturing back to the U.S. have failed.  “Failure” would be the word to describe results that haven’t shown any improvement.  But America’s trade picture has deteriorated so badly that the scope of the failure can only be described as “spectacular.”

In his inauguration address, Trump observed:

…  rusted-out factories scattered like tombstones across the landscape of our nation …

Earlier in the address, regarding situations like that noted above, he proclaimed:

… That all changes – starting right here, and right now …

The July trade data comes 3-1/2 years into his administration – plenty of time to implement changes and to see the effects.  It’s hard to find any silver lining.  Consider:

  1. The trade deficit in manufactured goods in July soared to $80.4 billion, a new record that completely blows away the record set under the Obama administration ($63.3 billion in March, 2015).  Check out this chart:  Manf’d Goods Balance of Trade.
  2. During the 2016 campaign, Trump vowed to quickly tear up the NAFTA deal and replace it with a much better deal.  Most of his term has been wasted negotiating the new “USMCA” trade deal that replaces it.  It finally went into effect on July 1st of this year, but the terms have been known for a long time, so you’d expect that manufacturers would have been busy implementing plans to get in compliance.  The results?  In July, the trade deficit with Mexico soared to $10. 6 billion.  When Trump took office in January, 2017 it was $3.8 billion.  Since then it has nearly tripled.
  3. When Trump took office, the deficit with China was $31.4 billion.  In July of this year it was $31.6 billion.  After Trump took office, the deficit with China continued to grow until, finally fed up with China’s promises to buy more American products, Trump imposed 25% tariffs on half of all Chinese products.  Almost immediately, the deficit with China began to shrink dramatically.  However, all momentum was lost with the signing of the “Phase 1” deal with China, when the U.S. agreed to halt plans to impose tariffs on the remainder of China’s products in exchange for Chinese promises to dramatically increase their purchases of American goods.  The results were predictable; China reneged on the deal.  They haven’t even measured up to the 2017 baseline that was used as a starting point.  Here’s the data, updated through July:  Phase 1 China Trade Deal 2020 YTD.  What has Trump done in response?  Nothing.  He continues to insist it’s a good deal, in much the same way that Obama stuck by his trade deal with South Korea while our deficit with them exploded.
  4. What progress was made in at least stagnating the deficit with China didn’t translate into any benefit to American workers.  Instead, it contributed to the tripling of the debt with Mexico and also ballooned the debt with Vietnam.  When Trump took office, the trade deficit with Vietnam, an economic back-water, was $3.3 billion per month.  In July of this year it was more than doubled to $6.8 billion per month.  Why?  Because no tariffs were applied to anyone other than China.  The tariffs motivated manufacturers to begin moving out of China, but there was no disincentive to simply move to secondary suppliers in Mexico, Vietnam and other places.

Some might say that such conclusions are unfair in the midst of the pandemic.  Not so.  The effect of the pandemic has been to cut economic activity to a depression-like level, and the effect of an economic slow-down has always been to shrink the trade deficit, not grow it.  That makes the enormous deficit in manufactured goods in July even more troubling.

Speaking of the pandemic, at least people are beginning to realize that being dependent on foreign suppliers for critical goods like ventilators and face masks is a threat to national security.  It’d be nice if that realization extended to other products that would just as easily be cut off during war time.  Better yet, wouldn’t it be nice if people realized that an economy that needs to stand on agriculture, construction, manufacturing and services is hollowed out and unstable if one of those legs is gone?

I don’t doubt Trump’s desire to truly “make America great again” by bringing back our manufacturing sector.  But he sees himself as a “deal-maker” and believes he can deal his way out of the trade deficit.  That’s where the problem lies.  For America, at least, there’s no such thing as a good trade deal.  I defy anyone to identify a single trade deal that has ever left America with anything but a growing trade deficit.

And forget about “free trade.”  That centuries-old concept is about as relevant to today’s trade environment as theories about a flat earth and how the sun rotates around it.  Today, trade is war – a war for increasingly scarce jobs in an ever more over-populated world.  Unlike America, the rest of the world understand this.  They know that what they really need is access to America’s market so that they can keep their bloated populations employed manufacturing goods for export.  Americans don’t have a clue.  They think it’s about lower price and more choice.

Had Trump simply applied tariffs everywhere where America was suffering a big trade deficit in manufactured goods, manufacturers would have come running back like refugees fleeing a war.  Instead of improving incrementally, our economy would have exploded.  Manufacturers would have eagerly snapped up any workers who lost their jobs to closures of restaurants, bars, gyms, movie theaters, etc. during the pandemic.  Trump’s re-election would be a foregone conclusion.  Instead, he’s going to be lucky to win.  Forget about the pandemic.  It’s his failure to make progress on truly making America great again that has left him vulnerable.

Don’t interpret this post as an endorsement of Biden.  It’s reported in the news today that Trump has criticized Biden as a “globalist.”  He’s not wrong.  But it’s not just Biden.  Until Trump came along, every politician, Democrat and Republican alike, were and still are globalists.  I’d vote for Biden in a heartbeat if he vowed to use tariffs to restore a balance of trade, but he won’t.  Though the results under Trump have been disappointing, things could and would be much worse under virtually anyone else, at least until more American politicians are willing to engage in the trade war that they don’t even acknowledge today.

 

 

 

 


Trump vs. Biden on Immigration

July 22, 2020

https://www.reuters.com/article/us-usa-election-immigration-factbox/factbox-trump-and-biden-take-sharply-different-paths-on-immigration-idUSKCN24L122

The above-linked article is a comparison of Biden’s positions on immigration and Trump’s position and record on the same issue.  The article has a pro-Biden bias, casting his positions as having compassion for immigrants, while casting Trump’s positions as being more heartless and cruel.  Putting aside that bias, however, the comparison is relatively accurate.

Before going further, for the benefit of those new to this web site, my purpose is to bring attention to an economic consequence of population growth that has escaped economists because of their refusal to even consider the subject.  Simply put, beyond some optimum population density, further population growth begins to erode per capita consumption and, with it, employment.  While the macro economy continues to grow, it doesn’t grow at the same pace as the population.  The result is a bigger pie, but smaller slices for everyone.  Incrementally worsening poverty is the inescapable result.

With that said, let’s now talk about immigration.  Many claims are made about the supposed benefits of immigration and why it should continue.  It’s often said that immigrants are the engine of our economy, that they account for 25% of all new business start-ups, for example.  Just in the last few days, I heard it said that 19% of all long-haul truck drivers in America are immigrants.  Immigrants are doctors, engineers, scientists, professors, and so on.  At the other end of the scale, immigrants pick our crops, clean our hotel rooms, and do all of the other jobs that Americans seem loathe to do.

Regarding that last point, there’s some element of truth.  Few Americans work those jobs, but is it because they don’t like to work hard, or is it because the pay is too low?  I’d argue that many American workers would eagerly leave minimum wage jobs to do those other jobs if they paid more.  The wages are low because of the unlimited supply of immigrants who see those wages as a huge step up from what they can aspire to in their own countries.

As for those other workers – the entrepreneurs, the professional people, the long-haul truckers and skilled tradesmen, it’s true that a significant percentage are immigrants, but that’s only because a significant percentage of the population is immigrants.  They’re no more likely to fill those roles than native-born Americans.  Immigrants don’t possess any unique skills or powers to boost the economy.  They’re just people, and they want the same thing that all people want – to make a living and provide for their families.

Another claim often made is that America is enriched by the diversity that immigration provides.  Diversity, it is said, is a source of strength for our economy.  America is enriched by people with different backgrounds and different perspectives.

It can’t be argued that it isn’t interesting to learn about different cultures.  But the claim that diversity is a source of economic strength?  Baloney.  That’s a myth, invented and perpetuated by those who stand to benefit from never-ending population growth.  Who are they?  Corporations.  More people equate to more total sales and a bigger bottom line, while all of the negative consequences of population growth be damned.  Don’t believe me?  Go to the CIA World Fact Book web site and bring up a list of countries ranked by GDP per capita.  You’ll find the top of the list dominated by countries practically devoid of diversity.  Ranking high on the list is Ireland, a nation with virtually no diversity but, in terms of trade balance per capita, kicks America’s ass in trade far worse than any other country.  Diversity has nothing to do with economic prowess.

In the final analysis, the ONLY effect of immigration is to grow the population.  Growing the population makes sense only if you believe that we need more people – bigger and more crowded cities, more traffic, more demand on resources, more carbon emitters,  more trash in the landfills, and so on.  Worst of all, if you believe in the premise of this web site – that a growing population will doom the U.S. to worsening poverty by eroding per capita consumption – further population growth is tantamount to slow-motion economic suicide.

Joe Biden is an advocate for more immigration and, thus, more rapid population growth.  That position isn’t surprising and it’s not something unique to Democrats.  Virtually every Republican takes the same stance, though they tend to pay more lip service to opposing illegal immigration.  Both parties are in agreement on immigration.  Why?  Because that’s the stance that their corporate benefactors pay them to take.

Only very recently have some environmentalists begun to awaken to the fact that they’ve been hoodwinked by the faux-environmentalists who would have you believe that the planet can be saved from the vast array of negative consequences of worsening over-population through technological gimmicks like cutting carbon emissions, paving the way for more “sustainable development,” a corporate euphemism for more population growth.  In light of this awakening, policies that promote population growth may soon seem out-of-step with the reality of the challenges that confront this planet.

Trump is unique in being opposed to both legal and illegal immigration alike.  If we can believe him, his motivation is his belief that immigrants hold down wages and take jobs from American workers.  Is there an element of racism?  He denies it.

I wish Trump were a more likable person – more eloquent, more compassionate, less hot-tempered, a better role model.  Would I vote for Biden over Trump if Biden took a hard line on immigration like Trump?  You bet, especially if he also favored restoring a balance of trade through the use of tariffs, as Trump does.  If there were no differences in their positions on these two critical issues, I’d vote for Biden in a heartbeat.  But that’s not the case.