James deSantis picture taken North of Bejing near the Great Wall

American Trade Deficit and Job Losses:
Econometric correlation to the undervalued Chinese currency 'yuan/renminbi'

Nipawin - Wednesday - October 8, 2003 - by: Mario deSantis

"We have met the enemy and he is us"

Pogo, character invented by cartoonist Walt Kelly

core of

In a world where hard science drives social and economic life, it was thought that the only way to give some respectability to economics, was to neglect history and include the 'hard facts' of statistical correlation techniques, to predict the economic future. So the field of Econometrics was invented and it became the core study of economists.




Unless you know how to statistically correlate the amount of sunshine in a given day and the selling of ice creams you cannot be a respectable economist in today's world.




Never mind if you live in Saskatchewan as I do, where we have lots of sunshine and our winters are long with temperatures reaching -35 degree Celsius. Anyhow, what I want to say is that we have become so dogmatic and specialised in our ways of doing things, that instead of creating a better world, we just settle for a way to predict both

  1. a hegemonic world for the few and privileged
  2. a depraved world for the many and underprivileged.



new way

This is the world of the Free Market and of geopolitics according to the American reductionist new economic order of 'You are either with us or against us.' But there is another way to create a better future for our complex world and it takes a new way of thinking and a new way of doing things.




Rather than wage wars against our manufactured enemies and perpetuate an hegemonic world order, we need to wage peace for all of us and sustain a democratic world order.




In one of my recent articles I made reference to the tool of System Dynamics as a way to help us bridge this divided world and bring some critical thinking for finding solutions to our problems.




The United Nations, the International Monetary Fund, the World Bank and the World Trade Organization, they are all international structures which are supposed to ensure within their policies, a growing global economic prosperity with peace, yet we are experiencing a divided world in a continuous war against supposed enemies, once communism and now terrorism.




The conventional economists and politicians along with the correlated friendly media, continue to identify a myriad of causal problems and yet, only occasionally, this same media reports of root problems, economic structure, and justice. One outstanding economist, Dr. Michel Chossudovsky, who has dedicated his life in understanding the root causes of globalisation of poverty, writes:
"At the heart of the global economic system lies an unequal structure of trade, production and credit which defines the role and position of developing countries in the global economy. What is the nature of this unfolding world economic system; on what structure of global poverty and income inequality is it based?"




Today, as the presidential election is getting nearer, in a disgraceful economic predicament, most American politicians are blaming the Chinese for the American trade deficit and loss of manufacturing jobs as such deficit and job losses are casually and hardly correlated to the undervalued Chinese currency 'yuan/renminbi' against the dollar. The typical ongoing mantra echos what US Congressman Bernie Sanders (right) has stated recently on the CNN Lou Dobbs Tonight show
"We have a $435 billion trade deficit. We have $120 billion trade deficit with China, which is costing us approximately 1 million jobs."




The conventional media doesn't report the global root problem of poverty as described by Chossudovsky:
"Whereas [commodity] prices are unified and brought up to world levels, wages (and labor costs) in the Third World and Eastern Europe are as much as 70 times lower than in the OECD countries. Income disparity between nations are superimposed on extremely wide income disparities between social income groups within nations... These vast disparities in income between and within countries are the consequence of the structure of commodity trade and the unequal international division of labour."




So the Bernie Sanders's and Lou Dobbs's (right) of this world should stop voicing their rhetorical 'hard facts' of American job losses and blame China for this, and instead they should learn to understand that this problem is of their own making as the American free loaders of the Free Market have been rationally maximising their profits by matching the provision of the global variety of goods and services with the global disparity of international wages, and by doing so, determining the unequal international division of labour.




We will go over this hegemonic American blaming game against the rest of us and show that the Bush administration is wrong in blaming China for the economic problems of their own making.



Mario deSantis


  Pertinent articles published in Ensign
  deSantis, Mario Bridging the divide of an upsidedown world: Critical thinking with System Dynamics September 29, 2003 Ensign
  Chossudovsky, Michel The Globalization of Poverty and the New World Order 2nd edition 2003, pagee 21, 23 Global Outlook,
  CNN LOU DOBBS TONIGHT Aired October 6, 2003 http://edition.cnn.com/TRANSCRIPTS/0310/06/ldt.00.html
  Verhovek, Sam Howe China Vague on Any Plan to Boost the Yuan August 1, 2003 Los Angeles Times, http://www-irps.ucsd.edu/about/innews2003/latimes080103.php
  Uchitelle, Louis A Missing Statistic: U.S. Jobs That Went Overseas Published on 10/5/2003 in the New York Times, http://bernie.house.gov/documents/articles/20031006174915.asp


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