The Book

Five Short Blasts:  A New Economic Theory Exposes The Fatal Flaw in Globalization and Its Consequences for America

$16.95, Paperback 6″ X 9″
ISBN No. 978-0-9798505-0-9
Available from Open Window Publishing                                        Free Shipping to All 50 States!!

Why are Americans’ incomes and net worths mired in a three-decades-long decline?  Why are jobs with decent pay and benefits becoming so scarce?  Why are affordable health insurance and a financially-secure Front Cover of \retirement fading from the American Dream?  Why, in spite of thousands of economists guiding our nation’s economic policies, is our national debt skyrocketing?  Is it possible that the economists are missing something?  Indeed they are – something extremely subtle but very powerful.  You won’t find another tired rehash of the usual suspects here.  Here is a new economic theory that nails the root cause of our economic malaise and identifies policies that offer real hope for a brighter tomorrow. 

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Five Short Blasts is the book that lays bare the underlying forces making the United States’ approach to globalization a sure-fire loser, one that has been eroding the finances of American households for the last three decades.  Want to learn more before buying?  You can view crystal clear images of the covers, read the preface and view the table of contents by clicking the links below or by visiting Open Window Publishing.  Or you can buy it now safely, using your credit card or your PayPal account, by clicking the “buy now” button, which will take you directly to the check-out page of Open Window Publishing.

Can you afford $16.95 in today’s economic climate?  In light of the economy’s impact on the stock market and your savings, can you really afford not to fully understand what is driving these events?

View crystal-clear images of the front cover  and the back coverRead the Preface!  View the Table of Contents!

58 Responses to The Book

  1. […] Pete for a great interview. Gentle readers, you can visit Pete’s site and learn more about him, the book and his […]

    • Pete Murphy says:

      Wow, you’ve covered a lot of ground in your comment, Justin. I’m going to have to take this paragraph-by-paragraph. In your first paragraph you said, “…tariffs, meaning sales taxes on imported goods that are enforced by people with badges and guns, they always adopt arguments that apply only to America’s side of the border. They refuse to adopt those very same arguments for people on the other side of the border.”

      Tariffs are not sales taxes. Sales taxes are paid by the buyer. Tariffs are paid by the company exporting the product to the U.S. Yes, that results in a higher price for the product which is passed along to the consumer. But the consumer has a choice – pay that higher price or simply opt for the less expensive, domestically-produced version. The tariff becomes an incentive for consumers to choose the domestically-made product. If there is no such alternative, then companies soon figure out that they’re leaving money on the table by not making the product domestically. Tariffs are not enforced by people with badges and guns. Tariffs are either paid in advance by the exporting company or they don’t come into the country. Thankfully, smuggling is enforced by people with badges and guns.

      You then go on to argue that people who favor tariffs favor them only on this side of the border and not on the other side. Not true. Every nation should be free to manage trade in their own best self-interest. I advocate the use of tariffs only to restore a balance of trade. In fact, if a nation like Japan agreed to buy from us as much as we buy from them, then no tariffs should be imposed on Japanese products. The problem is that Japan is utterly incapable of doing that. (This entire blog is devoted to explaining why, so I won’t repeat it all here. Either do more reading on the blog or purchase my book.) Thus, the need for tariffs. If Japan wants to retaliate with their own tariffs, that’s fine. That’s their prerogative. But then we should simply raise our tariffs further in order to assure a balance of trade. If Japan were to play that game, it’s easy to see that it would result in a cessation of trade with Japan. That would be no loss whatsoever for the U.S. We buy nothing from Japan that we can’t make just as efficiently ourselves. What we’d gain is millions of manufacturing jobs.

      You speak of “the logic of free trade.” “Free trade” is rooted in an early 19th century theory known as the “principle of comparative advantage.” This theory holds that when each nation trades what it makes best for what other nations make best, that all nations benefit. A nice theory but the author, British economist David Ricardo, couldn’t envision the role that large differences in population density would play in driving global trade imbalances. Free trade works well when it’s between two nations of similar population density. It’s an abject failure when applied to two nations grossly disparate in population density (as in the case between the U.S. and Japan) – tantamount to economic suicide for the less densely populated nation.

      You wrote the following: “If the government of the United States restricts trade with somebody across the border, the foreign exporter cannot get his hands on American dollars. He would otherwise have been able to get his hands on American dollars, because he would have been able to sell goods to an American. He could then have taken those dollars and deposited them in an American bank. This is what exporters do all the time. They have bank accounts in the countries they export to. The foreign exporter could then have spent those dollars on American goods and services. Or he could have invested in American businesses. (Sad to say, he could also have bought US Treasury bills, thereby funding the federal government.)”

      That’s actually fairly accurate. The problem is that the foreign exporters don’t spend those dollars on American goods and services in equal measure. And investing in American businesses? That flow of capital is actually a large net loss for America. Americans invest far more in foreign businesses than foreigners invest in American businesses – which makes the problem of attracting dollars back to the U.S. that much greater. You’re right about the last point, they use their dollars to purchase U.S. debt. What you don’t seem to understand is that the money that is drained from the U.S. economy by the trade deficit must somehow be injected back into the economy. Otherwise, the economy would spiral into a permanent and deep recession. (It would be like you trying to run a trade deficit with your bank. You can do it for a while, but not forever.) The only mechanism left to do that is for the federal government to put back into the economy more than it takes out in revenue – in other words, run a budget deficit, and then sell the debt to foreign investors. I cover this flow of capita in detail in my book.

      It’s no mere coincidence that the growth in the U.S. national debt since our last trade surplus in 1975 closely matches the cumulative trade deficit over the same period. The federal deficit is a direct result of the trade deficit. It’s spent on programs (like unemployment, medicaid, etc.) designed to offset the negative consequences of the trade deficit.

      You said, “In the case of an export tax, he is kept from buying American products by a man with a badge and a gun who sticks the barrel of the gun into the belly of an American exporter and tells him, “you cannot legally sell to that foreigner until you pay the tax.” In the case of a tariff, the government sticks a gun in the belly of an American importer, and tells him “you are not allowed to import goods from that foreigner until you pay the tax.” In both cases, the foreigner is not given the right to spend his money on American products.”

      Come on, Justin, that’s just ridiculous. There are no guns involved. At this point, I should point out that the world enjoyed robust trade before the signing of the Global Agreement on Tariffs and Trade in 1947. Tariffs were used by all nations as they saw fit to manage their economies. The U.S. maintained a balance of trade, and we bought plenty of stuff from other nations, just as they bought American goods. Everyone was free to buy whatever they wanted. And, by the way, prior to 1913 (when the 16th amendment was ratified, allowing the government to impose an income tax), the federal government derived virtually all of its revenue from tariffs and no one paid federal income taxes.

      You said, “Once you see it this way, I hope you will see that the losers in this arrangement are on both sides of the border.” When there is a large imbalance, there is a winner and a loser, whether you want to admit it or not. The loser is the nation with the deficit. The winner is the nation with the surplus. Thus, the U.S. has been a big loser in trade. Badly overpopulated nations either exist in abject poverty, or they enrich themselves by manufacturing for export, at their trading partners’ expense. They come to the trading table with bloated labor forces, hungry for work, but with nothing but emaciated markets (emaciated by overcrowding and low per capita consumption) to offer in return. The end result is that American workers are paying the price for other nations’ overpopulation. How fair is that?

      Justin, I strongly encourage you to learn more about how extreme population densities destroy per capita consumption, and how that plays a role in driving global trade imbalances. My book would be a good place to start but there’s lots of good information on this blog. Don’t be a willing participant in perpetuating the stupidity of the field of economics, a field that refuses to even consider the most dominant parameter in economics today – population growth.

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