Deficit trade, massive deindustrialization and the overvalued dollar exported our jobs overseas. Monopoly American manufacturers moved overseas, returning foreign production and unemployment here.
A record trade deficit facilitated by the overvalued dollar more than doubled between 2001 and 2006 to $838 billion or 6.5 percent of GDP. Increased imports shifted spending away from domestic production so that this was not included in the weak economic expansion. Domestic corporations moved production afar.
This corporate globalization labeled free trade — not fair trade — was endorsed by the Fed’s Greenspan and Bernanke, whose policies of low interest rates induced the housing price bubble.
Often unaccountable ownership subprime mortgages also accompanied the housing price bubble and many fraudulent home foreclosures ensued.
Meanwhile, stifling loans to small manufacturers put many out of business and were replaced with imports.
Conversely to deficit trade, deficit spending for health, wind, solar energy, police, education, is investment per economist Keynes in recession, yet conservatives decry deficit spending and promote deficit trade’s recession.
Taxing the billionaires and millionaires and closing corporate tax loopholes would add revenue and investment income.
Bernice Russell
Crystal Lake
