published Sunday, September 25th, 2011

Chattanooga and world trade

There are often calls to "protect American industry" by imposing high tariffs on goods made in other countries. The idea behind tariffs is that they will encourage -- if not force -- Americans to buy domestically produced goods, and promote job creation in this country.

But when one country raises barriers to trade, other countries respond in kind with their own barriers. The result of such protectionism can be a downward spiral in which economic activity drops. Stiff tariffs were, in fact, among the causes of the Great Depression of the 1930s.

If you doubt the importance of international trade, just consider some figures from a recent article in the Times Free Press about the benefits of world commerce to Chattanooga and Hamilton County:

  • In Tennessee, Hamilton County is second only to Shelby County -- where Memphis is located -- in terms of the number of local businesses that export goods. That is according to a study by the Business and Economic Research Center at Middle Tennessee State University.

  • Nearly 200 businesses in Hamilton County export goods.

  • Almost 11,000 jobs in Hamilton County are linked to exports.

The article noted that one local company, Astec Industries, an asphalt equipment maker, has expanded its international sales staff from seven to 36 in just the past five years. And, the president of the company, Ben Brock, said, "[W]e're adding about one more a month."

Ironically, overseas sales of U.S. goods are benefiting from the current weakness of the dollar, which makes our goods cheaper to buy abroad. With the weak economy here at home, we're certainly glad that thousands of Chattanooga-area jobs are being sustained by sales of the goods local companies export.

International trade is complicated, but we would be in a real economic pickle without it.

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carlB said...

Putting the "citizen workers" back to work doing productive work and manufacturing the goods that are now imported will solve the problems of people living in poverty. Yet, at this time due to the financial conditions and the global economy, poverty has increased above the normal low. The opponents of Obama were ready to start criticizing him for not having this Republic out of the 2007 deep recession, out of the two wars, and the National Debt back to "zero" before he was even President, knowing damn well there were not any "quick fixes." Why did the Republicans and the Tea Party decide put their political and ideology differences "ahead" of the good of this Republic instead of helping with the recovery? We already know there are millions of people wanting to find work while they live off governments' assistance of everything from food to paying their utilities. This is not the peoples' fault when their government and the capitalists have worked together setting up these free trade global conditions over the years with the low monetary value countries with the plans in place to close plants here in the USA and invest to have their goods manufactured in the lower total cost countries. Selling their goods in these countries and sending their designed surplus to other developed countries as the USA, creating the designed trade deficit which is now at $600 Billion Dollars per year. How many jobs could be created here for $600 Billion dollars giving the US consumers a better choice of buying "Made in the USA" goods by our "citizen" workers? Do the voters who vote for the people running on the promises of taking down the strength of our government really understand that what they are "wishing for" will only lead to another "great depression" under our increasing wage gap between the have's and the have not's? This apparently is what these people want to happen for destroying everything associated with FDR's New Deal policies?

September 25, 2011 at 4:59 p.m.
conservative said...

I wished you had explained that tariffs are TAXES! I have noticed that few lieberals and Demoncrats know this. This of course means a tax on THEM as well as the "rich", when they purchase a foreign good. Just imagine their dilemma!

September 25, 2011 at 7:11 p.m.
carlB said...

Reply to conservative: conservative, You are the only one talking about "tariffs."

I am talking about the US consumers decreasing the buying of the "global corporate monopolies" imported goods. When the US workers do not have jobs or money then the corporations will have less money to have the goods manufactured in other total lower cost countries. The US cannot recover unless the balance between the private middle class manufacturing workers tax base to pay for the public workers and we cannot sustain with a $600 Billion dollars per year trade deficit with the global corporations.
By the way, are all of the people with lost jobs,and the families living on Government assistence only the Democrats? I think not. I am curious as to where the trillions of dollars located off shore owned by the global corporations came from? They now want the tax rate reduced so they can bring it back into the US.

September 26, 2011 at 1:52 a.m.
conservative said...

carlb: The article is completly about tariffs. Did you mistakenly think I was responding to something you wrote? You are way too long for me to read.

September 26, 2011 at 10:53 a.m.
carlB said...

conservative said... carlb: The article is completly about tariffs. Did you mistakenly think I was responding to something you wrote? You are way too long for me to read.

conservative, That is your call but it was not strictly about traiffs. I gave you another way to look at not putting traiffs in place.

September 26, 2011 at 2:35 p.m.
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