October 20, 2004
From First World to Third World
By Paul Craig Roberts
In the early 1980s when I was
Assistant Secretary of the Treasury, the US trade
deficit was due to oil imports.
Currently, the US deficit in
manufactured goods alone is 3.5 times our oil
imports. Our trade deficit in vehicles is nearly equal
to our deficit in oil, and our deficit in clothing, ADP
equipment, office machines, TV and VCRs is 1.5 times our
oil import bill.
The US is
ceasing to be a manufacturing country. America has a
trade deficit in almost every manufacturing product.
Comparing the first eight months of this year to the
first eight months of last year, our trade deficit in
manufacturing products increased by 16%. In iron and
steel mill production, it increased 146%.
The US has a trade surplus in
corn, cotton, wheat, scrap metal, and animal feeds. The
only manufacturing products in which the US has a
(small) trade surplus is airplanes and scientific
instruments.
Since 1985, the US trade balance
with China has deteriorated from balance to a deficit of
$160 billion. Who has the high-tech economy and who has
the Third World economy? Normally, Third World
countries run trade deficits with high tech countries.
Charles McMillion, president of
MBG Information Services , notes that the
US-China trade relationship is the most unequal in
the world. The US has a trade deficit with China in
almost every industry code. The US deficit in advanced
technology products with China is astounding.
How was it possible for China,
alone in world history, to out-pace the most advanced
country on earth? Was China elevated to the forefront
by US firms who moved their production for the American
market to China in order to take advantage of
essentially free labor?
Americans no longer produce the
“American goods” that they consume. American
incomes are falling, as economist Joseph Stiglitz
recently pointed out. When the dollar gives way, as
Dallas Federal Reserve Bank President Robert McTeer
says it must, Americans will not be able to purchase
the goods and services that American firms produce
abroad with foreign labor.
US firms will have to sell their
offshore-produced wares to the labor that produces
them.
“Cheap foreign goods” will be beyond the reach
of Americans, whose country is in rapid transformation
from a superpower to a Third World economy.
COPYRIGHT CREATORS
SYNDICATE, INC.
Paul Craig Roberts is the author with Lawrence M.
Stratton of
The Tyranny of Good Intentions : How Prosecutors and
Bureaucrats Are Trampling the Constitution in the Name
of Justice
