Monday, January 25, 2016


Americans gain little from trade with Third World countries. Americans are letting their futures get ripped away for a few trinkets like iPads and iPhones.

This is what happens:

 ✘ Foreigner owners of factories produce goods with lots of labor and little capital — very inefficient.

 ✘ Because foreign production is inefficient — low capital, little output per person — even though total output is high because of the sheer size of the workforce — wages of foreign workers are low.

 ✘ Because the cheaper imports not made with much capital per worker undercut the return to American capital, new capital investment slows in the USA.

→ Capital is the source of wages. If there is no capital and no return to capital, there can be no wages paid. Higher wages comes from higher capital spending per worker.

 ✘ Less capital per American means lower wages.

✘ Lower wages means lowering living standard masked by being able to buy cheaper foreign products.

✘ US-based financiers transfer their investments from ever falling returns on USA based capital to foreign countries.

✘ Eventually, all high-paying jobs in the USA disappear.

✘ Income inequality continues to widen as USA-based rich financers get richer on a growing world economy.

✘ Americans get substantially poorer.

✘ Foreign workers go from abject poverty to working-class poor.

  1. Reciprocal free trade only works with foreigners whose capital spending per citizen is about the same as ours. This is authentic free trade. 
  2. Under a system of Free enterprise with true free markets competition with authentic free trade, it becomes harder for some Americans to become obscenely rich. Almost all Americans are better off. Far fewer Americans are extremely better off.
  3. Without Third World tariff-free imports, Americans living standards forever rise under capitalism.
  4. Without Third World tariff-free imports, Americans would gain much higher incomes to afford to buy iPads and iPhones built right in factories right in the USA.
  5. With Third World tariff-free imports, Americans living standards forever fall because capitalism falls in the USA but rises elsewhere.

Look at it this way with easy-to-get math. Let's make big assumptions like capital is uniformly spread over each worker and yields a uniform output.

  • USA: $1,000 @ 10 workers = $10,000 output
  • CHINA: $100 @ 1000 workers = $100,000 output

In the USA, workers get $100 worth of capital to use. While in China, workers each get $10 worth of capital to use.

American workers are 10 times as efficient as Chinese workers are. Yet, Chinese workers can produce ten times as much. As costs are much lower for Chinese (wages and capital outlays), the Chinese can accept lower winning bids (prices) for the same products.

There is no way Americans can compete. It's because of labor and not capital that Americans can't compete with the Chinese. The net result is simply a destruction of American industry until Americans get reduced to Third World status.


✓ Americans become much more like Third World workers while Third World workers rise up a bit.

✓ Wage rates get equalized the world over but at much lower levels.

✓ Ownership of capital gets concentrated in ever fewer hands — there are more super-rich but fewer relative to total population.

And when unrestricted immigration happens — immigration where the foreign-born population exceeds 5% of the USA-born population — this only accelerates the fall in wages. For more on that, read my works. If you read these works, you will understand fully what has been happening to Americans and our economy:

And here are a few works on politicians running for the presidency and what they say about all of this:

The most recent proposed trade deals — the Trans-pacific Partnership and the Transatlantic Trade and Investment Partnership are not even free trade deals.

TPP and TTIP are treason by other means. TTIP would turn over control of the USA commercial regulatory mechanism to the EU bureaucrats in Brussels, essentially. It would erect huge barriers to entry that protect U.S. mega corporations from upstarts at home who would best them with new technology and thus render the extant capital structures of these mega corporations obsolete — the creative-destruction that makes authentic free-markets capitalism thrive.

If these supposed reciprocal trade deals were good for all Americans and not merely for the shareholders of a handful of mega corporations, 100 senators would vote aye. There would be no need to vote in a rule that lowers the passing vote to 51 votes and kill the procedure for amendments. That is what trade promotion authority (TPA) is all about.

Think about it.

The bogus rules changes arise strictly because bad senators who want these deals need camouflage for their re-election. With these deals, they can say the didn't vote for deals like the Trans-pacific Partnership but still be for such deals merely by abstaining or voting nay.

All of these senators want these deals, all 100. All 100 work for the internationalists and not their states' legislators. That is why the 17th Amendment needs repealing.

If you think the economy is bad today, if TPP and TTIP pass, never again will Americans have high-paying jobs. There will be generation of all races and not merely blackies, including tens of thousands of healthy males every year, who will never work. They will live cradle-to-grave on welfare. 

Life will become as it is in France right now.

Americans have been digging their own financial graves since the 1990s by trading with China, the Mexico part of NAFTA, CAFTA-DR and the like. It's great for internationalists and mega-capitalists but not so great for working-class Americans.


Look, I like fruits from the Caribbean like the next guy. We would have gotten those cheap all the same.

Anything not grown in the USA should come duty-free into the USA, stuff like coffee.

We should have free trade with countries that are comparable in terms of economic development as measured by capital per capita. That makes sense.

If the Norwegians are better at making digital sensors, then Americans should stop and use capital elsewhere to make something more efficient.

But Americans can never compete with Third World countries who can throw a mass of labor at the production problem.

Foreigners should be forced compete against Americans through efficiency under capitalism as capitalism is the only way to get a high living standard. What is killing the USA and our economy and capitalism itself is importing goods taxes-free from third world countries whose means of competition is a mass of workers with little capital.

That is why import taxes (tariffs) should exist.  Import taxes ought to be levied at the rate of the inverse of the ratio of foreign per capita GDP to USA per capita GDP. So for example, because Canadian GDP per capita is $50,271 while American GDP per capita is $54,629, a tax of 7.98% should be levied on imports coming from Canada

Here is the math:

(1 - ($50,271 ÷ $54,629)) × 100 = 7.98%

Likewise, Mexican GDP per capita is $10,361. So a tax of 81% should be levied on imports coming from Mexico!

I wrote about how trade should be done in this one:


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