The Truth About Trade

The U.S. trade deficit has hit the $50 billion mark, the highest in almost three years. Although a surge in oil imports  is blamed, the overriding cause is the fact that Americans are buying more foreign goods and selling less to the rest of the world. That has a simple explanation: shoddy workmanship. Of course, it's easier to blame China, for example, for its monetary or fiscal policies, but, taking the cost of goods into account, the truth is that people don't necessarily buy what is cheaper; they want reasonable quality for their money. There are entire lines of goods that are no longer manufactured in the U.S., or their quality is so poor that no one wants them. So, even if the rate of exchange with certain other currencies were to be favorable to the U.S., it would still have an unfavorable trade imbalance with those countries.

The Americans just don't get it.

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