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To: The Vet who wrote (57696)	8/30/2000 1:32:22 PM
From: Hawkmoon	Respond to of 116764

It is hardly an example of the normal economic state of the world. And why would you think that? The aftermath of WWII was only a far more graphic scenario of what occurred after the Asian contagion. Effectively nations possessed obligations for their citizens which their economy or governmental programs were unable to meet. It's hardly a difference between debt laden, unprofitable, corporations in Japan and their destroyed industrial base (most of which had be diverted to military production anyway) when both equate to the fact that government will have to alleviate the misery of displaced workers (or providing jobs to those returning soldiers). Both situations require a patron nation to provide not only new technology that makes their economy more efficient, but also provides markets for the goods that their own people really can't afford. This is very role that the remaining major power, the US, provided in the post-WWII world. Additionally, as a point of history, it was the US which was instrumental in preventing a reoccurence of what occurred after WWI, namely forcing such crippling war reparations and political conditions upon their former enemy. It was these draconian conditions which created the loss of national pride and desire for revenge within the German people, that they were willing to permit, and fanatically follow an evil genius like Adolf Hitler. The result was the Marshall Plan, and its essential elements relied upon making US markets available (despite our own problems of re-incorporating 12 million US servicemen into our post-war economy). The bottom line is that Japan and Europe are facing greater governmental and economic obligations to their people as a result of their quasi-socialististic policies than is the United States. The US is running a surplus (and hopefully will continue to do so for the next ten years). Our government is paying off foreign held US debt and placing it in the hands of US debt holders (in the form of converting regulas US debt to treasuries devoted the Social Security Trust fund). That is freeing up money to be invested in other assets like stocks and real estate. The US may have debt.. and we may be the world's greatest consumers.. But we still have a greater ability to pay off those future obligations than do our competitors, Europe and Japan. As for the city/country analogy, I think you're quite mistaken. Working harder and working smarter are too different things entirely. I grew up in a blue collar family (my father is a construction contractor) located in a small rural community where most of my friends worked their family farms (where I worked a couple of summers laying irrigation pipe or weeding beets...etc) They may do more physical work, but they are not necessarily more productive than city workers when it comes to final value of their product. Farmers are not subsidizing city folks with their food. If we didn't buy it from them, we would buy it from someone else. In fact, to be brutally honest and despite my respect for the family farmer, agriculture in the US possesses many inefficiencies that could be met by consolidating small farming operations and retraining these individuals to do other occupations. But due to wide spread sympathy regarding the legacy and independence of small farmers (which I also express, mind you), the govt actually subsidizes agriculture to a large degree. And the French and Japanese do the very same thing. Where I grew up, we saw an influx of dairy farmers moving from California in order to take advantage of the lower wages and land prices. They then set up 1,000 herd operations, the productive capacity of which, far exceeded the ability of the local economy to absorb (milk being a perishable item). But they were encouraged to do this due to governmental price supports that guaranteed a certain price per gallon, as well as a guarantee that the government would buy any surplus rather than letting the product spoil. So these dairy farmers were raking it in hand over fist, driving the nicest vehicles and living in the nicest homes in our entire county. They kids always wore the most trendy clothes and shoe and formed their own elitist groups. All because the government was SUBSIDIZING THEM and not the other way around. Bottom line on this point, food is a commodity which can be provided by any number of people who possess land and transportation to get their goods to market. It is subject to the law of supply and demand, as well as competitive labor from overseas (which is made more attractive given the advances in rapid transportation and food preservation). What we see is that the entire United States is becoming, in essence, an Urban (or more appropriately, a white collar, managerial society) who are working smarter, and not necessarily harder. How many farmers do you know who understand stocks, bonds, mergers and acquisitions, or the heart of the US economy, entrepreneurs who take an idea or concept, and create value where no value previously existed? Thus the amount of capital invested is not what really matters Vet. What matters is the ultimate annualized percentage return on that capital. And that is an area in which "city dwellers" normally exceed their "rural brethen".... <g> But even I do not want to see all of the manufacturing capacity migrating to nations with a lower cost of production/labor. There are certain capabilities that every nation should seek to retain in the interests of their national security and sovereignty. Two of those being the ability to produce food and to provide the energy required to run the economy. Thus, as a "city dweller", I'm content to find a balance where government plays a role in insuring our economic and strategic independence. Regards, Ron