Last week, President Obama declared: “America has its groove back! The recovery is moving ahead!” Oh, really? Will he support balanced trade legislation to cut the huge flow of imports that cause our costly trade deficits and job losses? And will he withdraw his premature backing of another NAFTA-like “free trade” deal, the Trans Pacific Partnership (“TPP”)? If he will, he can reassure the nation that he’ll solve our trade problems and recover millions of lost jobs. He should listen again to his friend, Warren Buffett, “The Oracle of Omaha,” this time on the extreme danger of our ever-growing trade deficits.
Ever since late 2003, Mr. Buffett has warned of severe trouble coming, first in a Fortune Magazine lead article headed “Our trade deficits are selling America out from under us. We’ve got to stop it now, and here’s how to do it!” He presented a strong case for returning to a national policy of earning as much as we spend in world trade. If we don’t, he said, we’ll be forced into ruinous debt and borrowing – exactly what happened when his advice was ignored in Washington
American businessman and investor Warren Buffett was quoted in the Associated Press, Jan.20, 2006: “The U.S trade deficit is a bigger threat to the domestic economy than either the federal budget deficit or consumer debt and could lead to political turmoil.”
And then in 2008, he produced a YouTube video to tell the story of “Thriftville” vs. “Squanderville” as in his landmark Fortune article. Here’s a link to the video.
What Mr. Obama’s advisors haven’t solved is that the huge flow of imports has turned our whole domestic industry into a leaking boat! Whatever new hi-tech companies we create are fair game for intense import competition or foreign takeover. The last thing we need now is another NAFTA-style trade agreement like TPP. Here’s Mr. Buffett’s comment: “Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.” The recovery actions to date are mostly small “patches” except for the big success for the auto industry. One-sided trade agreements like NAFTA and TPP tear huge new holes in America’s trade “boat.”
There’s still a good chance to save the day – for America to have a winning future! A “strike force” is being formed to fix the import problem with balanced trade legislation and to seek changes in new free trade agreements like TPP!
Kenneth N, Davis, Jr. also is a former U.S. Assistant Secretary of Commerce/International and former IBM vice president and chief financial officer.
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Posted March 5, 2012 at 1:08 pm, in Free Speech Zone