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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: gpowell who wrote (16751)	2/5/2004 3:44:59 PM
From: Lizzie Tudor	Read Replies (2) \| Respond to of 306849

I know that. I believed these theories myself for a time. At this point I think the problem is that most theories are created in a vacuum, and perhaps these theories would work according to plan if a pristine economic environment existed. For example, outside of the case for free trade, we have a system in the US that has allowed what is (imo) excess taxation of labor for about 20 years. Fica especially, is a tax that shouldn't be borne by workers, it is not an insurance program to the people paying for it now, thats for sure. Anyway when you allow free trade to displace these workers, which are essentially your economy's meal ticket- deficits arise, dollar crashes and inflation follows. We haven't seen inflation yet due in large part to the undervalued Yuan but we will see it- starting in 07 if chinese imports continue. We certainly have seen deficits, someone posted here that the current deficits are lack of receipts in large part (I agree)- the reason this is not discussed openly is that the Bush admin doesn't want to draw attention to the jobs crisis. Nowhere in the free trade manual was stagflation mentioned, that I am aware of. Just another unintended consequence. Same thing with Juarez, based on the free trade theory, Juarez which is a Nafta stronghold should be a booming prosperous town with a middle class. Instead we get unspeakable poverty and corrupt police who refuse to investigate a murder spree resulting in over 300 deaths. Things just don't go according to textbook all the time and this free trade experiment is one of those.