U.S. Trade Deficit Worsening

Can't Print Enough

RIGHT UP UNTIL THE COMMODITY bubble burst this summer, there was the ridiculous theory going around that the world was now "decoupled" and that European and emerging markets would somehow avoid being affected by the US slowdown. These decoupling theories disappeared as oil dropped like a rock, only to be replaced by an equally ridiculous idea: that the world's economic pain would be spread evenly. This is wrong. Although the entire world is going into a recession as a result of the credit crisis, some economies are better prepared than others to weather the storm.

Durable and capital goods
The US's manufacturing sector is concentrated in industries most vulnerable to an economic downturn, durable and capital goods. Durable goods are products that last for more than three years like SUVs, motor/sail boats, et cetera. These items are the first areas where consumers cut back spending, which is why the big three are in so much trouble. Capital goods are equipment and machinery used in creating other goods, and the biggest demand for these products has come from emerging markets with their growing manufacturing sectors. With emerging market manufacturing now in contraction, demand for these capital goods is set to disappear, which leaves the US in a disastrous situation:

  • We make mining equipment at a time when commodity prices are crashing and mines are shutting down.
  • We make construction equipment (caterpillars, pickup trucks, etc…) at a time when global construction is grinding to a halt.
  • We make civilian aircrafts at a time when global trade and travel is quickly contracting.

    Cheap consumer goods
    At the other end of the spectrum from durable and capital goods are the cheap consumer goods found in retailers like Wal-mart. Demand for these lower-end consumer products tends to hold through the severest of recessions, because they are absolutely essential to our modern standard of living. While some current shoppers at Wal-Mart might be forced to cut spending on these essential items, new spending from shoppers who are downgrading from higher end stores will pick up a lot of this shortfall. For example, as more American's lose their jobs, there will be a lot of consumers downgrading from designer clothes to Wal-Mart's cheaper clothing. The resiliency of Wal-Mart is bad news for the US, as virtually all the retailer's cheap goods are imports from Asia.

    The trade deficit
    A quick look at where the US's trade deficit is concentrated reveals just how grim the outlook is. We are running huge deficits in consumer goods and industrial supplies (oil), which we desperately need, and the only category with a sizable surplus is capital goods (civilian aircrafts, mining equipment, etc), for which global demand is crashing. This explains why the US trade deficit grew in October.

    Implications for the dollar
    While imports to the US are falling, US exports are falling even faster. Exporting nations still have to finance our massive trade deficit, but are now getting less benefits from it. If this trend continues and the US economy keeps shrinking, Asian nations will begin abandoning their dollar pegs and start focusing on stimulating domestic demand instead. The dollar will quickly lose all its value when this happens.

    by Eric deCarbonnel

  • Obama Talkin' Trash Is Hardly News

    Well now, NR columnist Kathleen Parker has settled back down if only somewhat into her more familiar conservative roots with a few choice words about the new president. We must remember that Ms. Parker was the "good Republican" woman who tore into Governor Sarah Palin as being "out of her league" in this new role as Republican VP nominee. This was an outrageous attack, given the fact that many of us were and are still cringing note for note the same bristling song about the Chicago ACORN-tainted community organizer named Barack Obama.

    Hell, with the long line of political scoundrels cluttering up our persistently revised glorious past and the Blagojovich impreachment guilty verdict just delivered in a unanimous blowout, I wonder if anybody on God's green planet is qualified to cleanly govern a state, much less the whole country anymore.

    But life moves along. Elections are held. Winners take power. New drapes are ordered. Personal styles and wayward policies are thrust upon us. But apparently Ms. Parker doesn't like trash talkin' playground antics, and it doesn't matter whether it's the skins or the shirts shucking the jive. Personal exemption excepted. Let's take a look:

    All The President's Speaker

    TWO IMPRESSIONS EMERGE from President Barack H. Obama's first week in office. Partisanship has reached a tipping point when the new president is circling the fire hydrant with a conservative talk-radio personality. And, the new president is sounding an awful lot like the old one. Let's roll the tape.

    "I won. I will trump you on that."

    That's Barack Obama a few days ago, according to The Associated Press, speaking to Senate Minority Whip Jon Kyl of Arizona during a meeting with congressional leaders about the proposed stimulus package. Kyl had the audacity to question giving tax credits to people who do not owe federal income taxes.

    Rewinding to 2004: "I earned capital in this campaign, political capital, and now I intend to spend it. It is my style."

    That's George W. Bush after his re-election, explaining his assumption that the American people approved of his many plans, including Social Security reform and the war on terror.

    Obama and Bush each mistakenly assumed that his election was a national mandate for his policies, rather than a rejection of alternatives.

    Yes, Ms. Parker seems genuinely upset that boys will be boys, particularly if she's a moose-hunting mother of five from the North Country. Personal empowerment? Perhaps the Lady Parker should have supported the judgment of an honor-crippled US Senator from Arizona instead of harping on the genuine freshness which was overworked into a momentary stumble by Sarah Palin.

    If Obama had a mandate at all, it was to heal the divisions that have plagued politics for so long. No more partisan bickering, he promised, though there's only about a smirk's difference between Obama and Bush, stylistically. While one is bring-'em-on confrontational and the other a passive-aggressive Mr. Cool, both reveal a staggering sense of personal empowerment.

    If only Kathleen Parker knew what the PUMAs knew she would not have believed those phony words by the Democratic machine, which this go round in particular, included every man, woman, and child on the payroll of the mainstream media. Did I say mention this woman calls herself a conservative? She continues in this vein:

    Obama was cool even when, at that same GOP meeting, he urged Republicans to stop listening to Rush Limbaugh. No anger, just angst. "You can't just listen to Rush Limbaugh and get things done."

    Excuse me, Mr. President, but you've been baited by none other than the Master Fisherman. Limbaugh tossed you a lure and you chomped.

    Uh, yes. El Rushbo—radio talk-show personality, master of ceremonies extraordinaire—certainly has a tendency to stretch over the top, embellishing the picturesque until it smacks of the grotesque, but that is beside the point in this theater of the obvious, and she further details some of that testimony, blasting both Limbaugh and Bush for their predilection toward colorful phrasing. Okay. Did I mention this woman claims to be a conservative? But while she takes the Republicans to task for past linguistic and oratory failures, she continues to whisper sweet nothings to Mr. Obama with these noble words:

    Trying to assign blame—or amp up rhetoric to satisfy the market's gargantuan appetite for ratings—is counterproductive in the present. If Obama wants to rumble, he's got an eager foe in Limbaugh. But if he really wants to win, he might take a page from his predecessor's playbook: Never dignify your enemies with recognition...

    Is Europe Abandoning Socialism?

    The following article by Joseph Farah will display what is at work here. The utter ruin of American competitiveness. That's the blueprint these Marxist Democratic party apparatchiks are using to shore up power for themselves and render the United States more pliable for the big takeover they have already begun executing. Paranoia or keen insight? You be the judge now, or history will do it for you.

    Stuart Varney

    IOW IRONIC IS IT THAT the U.S. is embracing socialism at the very moment Europe and many other parts of the world are running away from it? Somebody needs to ask Barack Obama and Nancy Pelosi about this.

    In the past five years, 33 countries, including 20 in socialist Europe, always held up as the example for a new American economic model by Democrats, have cut their personal income taxes, according to a study by KPMG, the giant accounting firm. In the past four years, 60 countries have cut their corporate income tax rates. Why have they done it?

    Simple. They want to compete more effectively for capital and human resources. Basically, the world has been turned upside-down—with territories even under Communist control recognizing that low taxes is what drives burgeoning economies.

    Read it all.

    British Cave Again To Muslim Threats


    This is a rather disgusting turn of events. How far will these ungrateful thugs masquerading as religious nuts have to go before the West wakes from its dhimmi slouch? For a once great empire like Great Britain to be brought to its knees as slaves to the barbarians in their midst without even a whimper is preposterous. And yet each day brings outrageous news and presents those watchful example after example of the madness that is mindless multiculturalism, weakening once prosperous nations with fear and acquiescence to these purpose-driven invaders who want nothing less than total domination and annihilation of these host "infidel" countries now under demographic and jihadist siege.

    A MEMBER OF Congress announces she is inviting Dutch Parliamentarian Geert Wilders to come to Washington to meet with members of Congress and discuss his documentary film Fitna. When Congressman Abdullah hears about this, he threatens the Member and the entire Congress that, unless Mr. Wilders' visit is cancelled, he will mobilize 10,000 Muslims to prevent the visit from taking place. As a result, the visit is cancelled and Congressman Abdullah praises Allah for delivering a victory to the Muslim community.

    Of course, this couldn't possibly happen in the United States, right? Read the commentary below, roll the clock back thirty years, and ask yourself how many Brits do you think would have believed it could happen in Great Britain today? What was unthinkable in Great Britain thirty years ago is reality today. This is "cultural jihad" at work.

    Twenty years ago who would have believed that today Harvard would create "women only" gym hours to meet the demands of Muslims. Or a state legislature would allow an imam to open its session with a prayer that calls on "victory over those who disbelieve."

    Or the Fairfax County (Virginia) police department dropping an anti-terrorism training program after complaints from Muslim police officers—one of whom was engaging in the various types of subversion the training program was intended to prevent.

    For the British Parliament to abandon its right to free speech by knuckling under to the intimidation tactics by Lord Ahmed will only invite more—and bolder—tactics. To think that we in America can follow the path Great Britain has trod and not end up dealing with the same intimidation tactics is the worst form of wishful thinking.

    Iccording to Archbishop Cramner of Great Britain this Lord Ahmed is a repugnant individual. Not only in appearance, but in association, character and morality. And to hear that he has threatened jihad on the House of Lords if their lordships should fail to meet his demands only serves to intensify Cranmer's loathing of the man.

    It appears that a member of the House of Lords had invited the Dutch politician, Geert Wilders, to a private meeting in the Palace of Westminster. She had intended to invite her colleagues in the Lords to a private viewing of his 'documentary' Fitna, followed by discussion and debate in true parliamentary fashion. This is, after all, a liberal democracy, and their lordships enjoy the rights of freedom of expression and freedom of association, not to mention certain parliamentary privileges for the protection of their function in the legislature.

    But no sooner had the unsuspecting baroness sent out her invitations, Lord Ahmed raised hell. It is reported that he 'threatened to mobilise 10,000 Muslims to prevent Mr. Wilders from entering the House and threatened to take the colleague who was organising the event to court'.

    And so Fitna has been cancelled: it shall not now be screened in the House of Lords on 29th January. The Pakistani Press is jubliant, and Lord Ahmed is praising Allah for delivering 'a victory for the Muslim community'.

    It is a sorry state of affairs indeed that a parliament whose liberties have been forged through centuries of religious intolerance should succumb to the threats of one intolerant Muslim. Lord Ahmed is manifesting a notion of Divine Right, and one suspects it is precisely the sort of defence of Islam that Prince Charles shall make when he is sworn 'Defender of Faith'. The blasphemy laws are being re-forged to protect one god, one faith and one prophet; they no longer defend YHWH, Christianity, Jesus Christ or the Church of England. Lord Ahmed is not functioning as a Labour peer; he is the self-appointed khalifa of all things Islamic. He is not concerned to protect freedom of expression or freedom of speech, but to stifle debate and ensure that Parliament submits to the Dar Al-Islam.

    It is for moments such as these that one might hope the Lords Spiritual might enter the fray and defend the right of the noble baroness to extend an invitation to a democratically-elected Dutch MP. Their silence is deafening. They no longer believe anything strongly for fear of causing offence; they no longer defend anything for fear of being abolished.

    If Lord Ahmed had threatened Cranmer with '10,000 Muslims to prevent Mr Wilders from entering the House', His Grace would have assured his Lordship of 100,000 people of all faiths and none to prevent the Muslims from preventing Mr Wilders from entering the House.

    There are occasions when turning the other cheek is sheer folly.

    ACT for America is an issues advocacy organization dedicated to effectively organizing and mobilizing the most powerful grassroots citizen action network in America, a grassroots network committed to informed and coordinated civic action that will lead to public policies that promote America's national security and the defense of American democratic values against the assault of radical Islam.

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    Netanyahu Defiant Against Appeasers

    Benjamin Netanyahu

    ISRAEL'S SECURITY CHALLENGES ARE daunting. Hamas remains in power and will try to rearm itself with an even more deadly arsenal. This goes without saying, however much the Arab and Western Left wish to spin "context" contrary to the facts on then ground since day one of Israel's declaration of independence as a modern state on May 14, 1948.

    The Israeli papers carried reports on Monday (here, for instance) about an article in the London-based Arabic daily Asharq Al-Awsat claiming Egypt was warning Hamas to strike a deal with Israel before Binyamin Netanyahu forms the next government. Otherwise, the Egyptian officials are supposed to have said, Hamas stands to “lose everything.”

    Rumors were flying about a ceasefire of a year to a year and a half in which Israel would open the crossings to Gaza and free 1,000 Hamas prisoners in return for captured Israeli soldier Gilad Shalit. Israel’s current leaders Ehud Olmert, Ehud Barak, and Tzipi Livni are said to be anxious to conclude a deal for Shalit before the February 10 elections.

    If so, they’re badly miscalculating. Israelis want Shalit freed and are perturbed that Operation Cast Lead didn’t secure that result. The renewed terror puts the government’s claims about restored Israei deterrence in doubt as well.

    Clearly Olmert, Barak, and Livni can’t boast that the war was a resounding success, gravely weakening Hamas, and then agree to abject terms of 1,000 terrorists for one Israeli soldier. Israelis would rejoice to see Shalit back home in any case—then send Livni and Barak (with Olmert finished in any case) deeper into political defeat.

    Bibi to world: I don’t believe Operation Cast Lead came anywhere near defeating or neutralizing Hamas. I am realistic about the danger Hamas continues to pose.

    “Hizbullah has de facto control over Lebanon and has tripled its lethal capacity.”

    Bibi to world: Ditto for the Second Lebanon War. It didn’t achieve much and I am realistic about the danger Hizbullah continues to pose.

    “And advancing peace with moderate Palestinians is possible, but must be done in a way that does not sacrifice Israel’s security interests.”

    Bibi to Obama administration: Again, I don’t dismiss this idea, but I’m going to be real careful about it and will not be pushed into moves I deem harmful to Israel.

    “Above all else, the top priority of the next government of Israel will be to ensure that Iran does not acquire nuclear weapons. Iran is a regime openly pledged to our destruction, and its threats must never be dismissed lightly. Israel must immediately redouble its efforts to work with the United States and other allies to neutralize this threat.”

    Bibi to Obama administration and Europeans: If you’re really intending to do something about it, I will work with you against the Iranian threat. If you’re not, take note: Israel will go it alone.

    To sum up, Netanyahu’s advent evokes rational fears in those who wish Israel ill and irrational enmity in those purporting to wish it well. Netanyahu, aware of the various perceptions, wants it to be known that he is above all an Israeli nationalist concerned about his country’s survival. After three years and more of weak, obsequious leadership, Israelis—with their mixed feelings about his earlier tenure at the helm—are ready to put him there again.

    Read it all.

    We, in the United States, who share this resolve to identify and stop the rising global tide of Islamic jihad in all of its infamy can only hope that Bibi Netanyahu rises once again to the top slot in the Israeli government at this most dangerous time in history. His abiding strength and iron resolve to confront those who would "wipe Israel off the map" not with weakness but with clarity of purpose will be the corrective and timely anecdote to the wobbly Obama policies already in motion.

    Remember people, our Dear Leader has already—in his first week as top policy maker of the most powerful military force on earth—reached out to the Islamic rabble in a pitiful show of "dhimmitudinal" solidarity, just like he telegraphed in one of those two biographies of his (and William Ayers), in stating that "when the political winds change in an ugly direction I will stand with my Muslim brothers."

    As Charles Krauthammer put it, "Every new president flatters himself that he, kinder and gentler, is beginning the world anew. Yet, when Barack Obama in his inaugural address reached out to Muslims with to the Muslim world, we seek a new way forward, based on mutual interest and mutual respect, his formulation was needlessly defensive and apologetic.

    Krauthammer is being gentle. The truth is that Obama has more up his sleeve than even this well-respected conservative columnist will admit publically.

    Is it "new" to acknowledge Muslim interests and show respect to the Muslim world? Obama doesn't just think so, he said so again to millions in his al-Arabiya interview, insisting on the need to "restore" the "same respect and partnership that America had with the Muslim world as recently as 20 or 30 years ago."

    Astonishing. In these most recent 20 years—the alleged winter of our disrespect of the Islamic world—America did not just respect Muslims, it bled for them. It engaged in five military campaigns, every one of which involved—and resulted in—the liberation of a Muslim people: Bosnia, Kosovo, Kuwait, Afghanistan and Iraq.

    That's right. Stop the misplaced appeasement to these vulgar peoples who are aggressive the world over, thanks to Saudi-financed Wahabbi madrassas now stretching into every corner of the free world. Bottom line, Mr. President. No more dhimmitude. We had enough of that with the last man to sit in the same seat you now occupy. Enough! said this patriot.

    Obama's War On Pakistani Terrorists

    A Kashmiri protester shouts pro-freedom and pro-Pakistan slogans during the joint funeral procession of Bilal Ahmed Dar and two rebels in the village of Narwara, some 40 Kilometers (25 miles) southwest of Srinagar, India, Tuesday, June 19, 2007. Thousands of people marched in Indian-controlled Kashmir Tuesday protesting the killing of 17-year-old Bilal Ahmed Dar by government forces, who locals claim had no ties to militant groups. The teen was killed along with two rebels Monday in a gun battle between police and suspected Kashmiri rebels in the village of Chewdara. (AP Photo/Rafiq Maqbool

    THERE HAVE BEEN REPORTS that the continuing strategy of allowing Predator strikes in the proverbial “lawless, tribal areas” of Pakistan has been paying dividends. Aside from the objective good of eliminating enemy combatants, the regular attacks have apparently been making it more and more difficult for al-Qaeda types to find refuge.

    Oddly enough, it seems to make the locals less eager to indulge in their much vaunted hospitality and to have these people stay overnight in their houses and villages when there’s a decent chance that missiles will come flying out of the clouds and blow the abodes to smithereens.

    We presume this what the new Secretary of State, Hillary Clinton, meant by “smart power”? But what if a civilian or two is killed? What then? Well, it’s the kind of smart power I can advocate without losing a moment to self-doubt. And with progress having been made, it was important to send an immediate signal to the region that President Barack Obama was not going to call a halt to these strikes. Hope is a motivator. To defeat an enemy, you must rob him of hope. That’s nothing new. Predator strikes alone won’t defeat this pernicious and relentless enemy, but it’s part of the solution until we finally wake up and realize that this is a protracted war whose name is Islam, but for the sake of unbelievers I have no problem calling it Obama's War On Pakistani Terrorists

    Good move, Mr. President, and keep it up.

    Ditto those words from Right Wing Bob.

    Standard Network Pandering

    Watch CBS Videos Online

    IS THIS ALL THE LEFT HAS REMAINING in its quiver of intellectual assaults on Israel? After sixty-two years of incessant conflict with these untenable Arabs who only flocked to this formerly barren land to harass, dominate, or exterminate the Jews as per their religion, this report offers nothing new, and yet the comments on this CBS News drip with enthusiastic aplomb for the bravery and courage of this allegedly blacked out story. What dribble!

    Palestine has never existed as a nation. The region known as Palestine was ruled alternately by Rome, by Islamic and Christian crusaders, by the Ottoman Empire and, briefly, by the British after World War I. The British agreed to restore at least part of the land to the Jewish people as their ancestral homeland. It was never ruled by Arabs as a separate nation.

    Meanwhile, this tiny nation has had to fight tooth and nail for its very existence for every single day since its inception in 1948, and with Iran threatening to wipe that name of Israel and its people right off the map, Hamas and Hezbollah in the full throes of a breeched childbirth, and world opinion against the only civilized nation in the midst of an Islamic horde with every attempt of Israelis to defend themselves, this situation is certainly not evaporating on its own accord. This arrow left the bow long ago.