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Monday, September 26, 2005

Winners and Losers

The latest from Paul Craig Roberts:
The Iraqi war has three beneficiaries: (1) al Qaeda, (2) Iran and (3) US war industries and Bush-Cheney cronies who receive no-bid contracts.

Everyone else is a loser.
When Asia pulls the plug on the dollar, the US government will find that monetary and fiscal policy are powerless to offset the consequences.

Compared to US budget and trade deficits, terrorists are a minor concern. The greatest danger that the US faces is the dollar's loss of reserve currency role. This would be an impoverishing event, one from which the US would not recover.

An intelligent government sincerely concerned with homeland security would find a way to halt the global labor arbitrage that is stripping the American economy of high value-added jobs and manufacturing capability, thereby causing the US trade deficit to explode. The loss of tax base that results when US companies outsource jobs and relocate production abroad makes it ever more difficult to balance a budget strained by war, natural disasters, and demographic impact on Social Security and Medicare.

Global labor arbitrage is rapidly dismantling the ladders of upward mobility and thereby endangering American political stability. This threat is far greater than any Osama bin Laden can mount.