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Buffett Warns Of Trade
Deficit Disaster

The Capital Times
11-3-3

It is not our intent to alarm anyone, but we do hope that readers are aware of the latest pronouncement from Warren Buffett, the second-richest man in the world who is frequently referred to as "the most successful investor ever."
 
The corporate free trade agenda, says Buffett, has created a mess so serious that he is losing confidence in the stability of the U.S. dollar, and the economy it underpins. "I am crying wolf again and this time backing it with Berkshire Hathaway money," Buffett says of the assets of the investment conglomerate he created and controls. "Through the spring of 2002, I had lived nearly 72 years without purchasing a foreign currency. Since then Berkshire has made significant investments in -- and today holds -- several currencies."
 
Buffett says he is losing faith in the soundness of U.S. currency as an investment vehicle because the United States is running a huge trade deficit -- close to $500 billion, and rising rapidly -- that is causing income to flow out of the country at such a rapid rate that it will soon become unsustainable. In the November edition of Fortune magazine, Buffett warns that the rapidly mounting U.S. trade deficit could lead to a dramatic plunge in the value of the dollar and a host of additional economic consequences that could add up to disaster for American families.
 
In the post-Cold War era, U.S. leaders embraced the corporate free trade agenda embodied in pacts such as the North American Free Trade Agreement and the granting of permanent most-favored nation trading status to China. These deals and others like them encourage U.S. businesses to engage in a race-to-the-bottom, relocating on a regular basis to countries that permit them to pay the lowest possible wages, to despoil the environment and to dismiss human rights concerns. U.S. businesses have shuttered factories, laid off unionized workers and shifted millions of jobs overseas.
 
In Wisconsin, more than 50,000 manufacturing jobs have been lost since George W. Bush assumed the presidency, as whole sectors of our economy shut down here and move overseas, mostly to China.
 
Now the abandonment of American communities and families has extended to the service sector. The shifting of manufacturing and service work out of the United States is great for the huge corporations that contribute mightily to the campaigns of politicians who back their free trade agenda. These corporations can lower their costs by moving production to countries where wages are low, and basic safety regulations and environmental protections have been eliminated. But it is terrible for workers here and abroad, who are pitted against each other in a battle to see who will work for the least. And it is horrific for the U.S. economy.
 
By allowing for policies that have transformed the United States, which used to export far more than it imported, into a nation that imports far more than it exports, President Bush and the bipartisan congressional coalition that backs the corporate free trade agenda are building up a trade deficit that could ultimately take down the U.S. economy. Unwise economic policies, Buffett says, are literally "selling the nation out from under us."
 
Buffett's warning needs to be taken seriously, not just by citizens who have already witnessed the devastation caused by the corporate free trade agenda, but by elected officials. When U.S. Sen. Herb Kohl, D-Wis., and U.S. Reps. Ron Kind, D-La Crosse; Paul Ryan, R-Janesville; Tom Petri, R-Fond du Lac; Mark Green, R-Green Bay; and Jim Sensenbrenner, R-Menomonee Falls, vote for free trade legislation, they are doing serious damage to Wisconsin and to the U.S. economy.
 
Copyright 2003 The Capital Times
 
http://www.madison.com/captimes/opinion/editorial/60257.php


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