Geopolitical issues and the US Economy

Added: (Sat Jan 28 2006)

Pressbox (Press Release) - Geopolitical issues and the US Economy
Kamala Sarup

If Iran oil is traded only in Euros, then everyone else in the world will do so. That's an proved conclusion. US economic will collapse as a result. That's another proved conclusion.

Not a bad idea, IMO, for the world to get off the dollar. That will bring the gross imbalance of world trade into better balance and, after a worldwide depression, the world will continue with a healthier balance of consumption and production in all the countries.

Currently, the US is the great consumer, which provides each of the less developed countries with the market to grow by saving, investing and building production facilities. (It does not have a big enough market to sell to itself.) As the biggest consumer, US has a chronic unfavorable trade balance and the undeveloped countries have a chronic favorable trade balance. Remove the dollar, dump them, and prices for imports and exports in dollars fall, US consumes less, exports to US fall, production in US and around the world falls and depression results. World trade falls to levels where each country, including US, has to live with trade balances instead of imbalances.

After the storm is over, developing countries will grow less rapidly with balanced trade, since they can no longer use US as the insatiable market to support their production. Developed countries, including US, will resume growth patterns, but by unknown amounts. US economic power does not necessarily diminish. In fact, with a better balance between production and consumption, it might resume its economic.

Even on the other side today, A few companies, like Eastman-Kodak, IMB, and Corning Glass Works, paid and treated their employees well enough that no strikes ever occurred and no labor unions were established.

An US economy provide the money and take the risks. It is true, Us has buy equipment, goods and labor services to create products for sale. Even today, some capitalists with insufficient capital, ability, motivation, and luck will "go broke" and lose their investments and maybe everything else, while others will make "a living". A favored few will make enormous profits. Inevitably, a continuum of incomes among persons and families ranging from the poorest to the richest, however defined, will be the result. Thus, in a decentralization economy, money creates greater amounts of money and greater average living standards, which are distributed unequally among its people. It is true, socialist economy all are unsuccessful to raise general living standards, although some communist governments , like those of the Soviet Union (Russia) and mainland China, eliminated abject poverty and occasional famines that plagued their former societies. However, socialist and communist communities and nations all failed to produce sustained income and wealth for most of their citizens, compared with capitalist nations, and the causes of their failures can be summarized as follows: said Stanly Norm "Acquisitive people with ability and motivation resent sharing equally with those with less ability and motivation, so the former either stopped making much effort or moved elsewhere. However, in a capitalist economy, those who have must deal somehow with those who have not. This function is administered increasingly by governments rather than private citizens and charitable organizations.

It is the government that reduces the productive efficiency of capitalism to produce more equality in income and wealth among its citizens. Examples of how US governments deal with poverty follow.

In Sep., 1929, national income statistics showed about 60% of U.S. citizens had annual incomes of less than $2,000, which was considered a bare minimum to supply a family with the basic necessities of life.

In the current paradigm, "economy" is all the rage. A veritable lodestone to wealth, success and stability, culled from the combined experience base of the good economic set, the multiple cross-marketing efforts and the sequencing and managing world crises. Co-option as a strategy is timeless and true.

(A Nepali Journalist Kamala Sarup is an editor of peacejournalism.com)

Source:Scoop Media.