As with federal budgets, we hear the same cries about the size of our trade deficits decade after decade. Ignore them. The arguments we hear for balanced trade are all fallacious. There is no need to balance trade. Trade happens because two parties find it advantageous to trade money for products. This is capitalism. It works better than any other economic system.
For an easy to understand analogy, you probably have a trade deficit with your supermarket, your department store, and every other business you buy products or services from because you buy more form them than they buy from you. Did your personal trade deficit with them mean anything? No. Everyone’s happy, so to speak. No one forced anyone else to make a ‘trade’ they weren’t happy about.
Some of the loudest voices about America fixing its trade deficits come from Western Europe. You know, the people who are so ‘economically educated’ that they average long term 10% unemployment or double the long term unemployment rate of the U.S. If they actually got their wish, that would mean America would buy less of their products so that trade could be balanced. If we buy less from them, then they would need to produce fewer products which would cause some of the people who work on those products there to be laid off and their 10% unemployment rate to sky rocket higher.
The U.S. just needs to keep focusing on growing its economy, especially by increasing worker productivity. We’re very good at it. That will keep investors (yes even investors from Europe) investing in the U.S. because our returns on investment are safe and high. Foreign nations and individuals with dollars in their possession that they may no longer want can only buy our products, services, financial instruments, or companies.
Don't fear the buying of American companies fear crowd. We buy their companies too. Those American companies that they buy come with American based assets and people that cannot be transported easily. So normally, they grow those companies right here in America, increasing not decreasing employment. When Japan had high real estate prices about 15-20 years ago, they were buying American companies like crazy. Lots of fear raised then too. However, the jobs stayed here and years later, many of those companies were sold back at a loss to Americans because they overpaid for them in the first place and real estate prices crashed in Japan, causing a cash crisis there.
Getting it Right - Welcome
The goal of this blog is to publish my thoughts on a variety of economic and political topics in the hopes that people who find them educational or beneficial will utilize them and/or forward to others who might find them interesting and/or worthwhile to promote to others, possibly including politicians who can push some of these ideas to fruition. The topics in my blog are meant to be of value on a long term basis, not a daily diary or political issue of the day log. If the information posted is useful to you, by all means utilize it and/or forward it as you see fit. If not useful, then merely ignore it. There are no universally agreed upon truisms and too little tolerance between some of those with opposing viewpoints to successfully convince the people with hardened opinions to move away from them. I am an analytical type person who will try to be as factual as I am able.
I disdain the current popularity of name calling and condemnation of viewpoints with no factual alternatives or logical solutions given that I see so often. If you don't have a solution based on fact and logic, then opt out of the discussion because you have nothing to contribute. My background is a degree in Economics from the University of Michigan and 39 years working in middle management jobs for a major retailer. My opinions are forged on the personal experence of life, family, friends, and work as well as triumphs and mistakes that I have made and hopefully learned from. My hope is that this blog helps you.
My first topic will be about personal finance. I chose that one first because most of us work long and hard just to survive but not all of us realize our dreams of becoming financially independent from the labors of our work. Much of our political votes/thinking also focus on the economy and in particular how well we are personally doing financially.
It is relatively simple, without sacrificing the enjoyment of living for 'today' and even at moderate incomes, to retire as a millionaire or multi-millionaire, if you focus on that goal consistently from a young age. It is also simple to ensure that your child or grandchild retires rich. It merely requires a one time gift of just $2,000 invested wisely and the passage of time. Please read my first post on this blog to learn more.
An index/schedule of past and future posts and their dates will always be updated so that it becomes the first post that you see below. If the date of a post that you wish to read is preceded by the word "Posted", then find it below or click on the title in the Blog archive to review.
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