[Letter to the editor]Unwarranted pessimism on AmericaI’m writing in response to Joseph Schouweiler’s July 20 column, titled “America’s Best Days Are Behind It.” His column made a shallow argument based on a lazily skeptical view of America’s economy without offering any possible solutions.
Schouweiler makes his argument about America’s impending decline based on its loss of manufacturing jobs and its growing trade deficit, but he makes significant omissions regarding these trends. What he fails to mention regarding America’s loss of manufacturing jobs is that giving America’s companies the freedom to move jobs overseas allows those companies to grow at a greater rate and compete in the global economy.
The cheap overseas labor used to manufacture goods sold in America keeps prices low, which keeps inflation low and makes America more attractive for investors. With greater investment comes greater potential for innovation, making the United States a more welcoming place for bright young minds.
Regarding the growing trade deficit, Schouweiler overlooks the self-correcting mechanism built into the trade deficit. As the deficit grows, more American currency gets put on the market, thereby increasing inflation and lowering the value of the currency. A cheaper currency lowers purchasing power and leads to decreased imports. It also makes exports cheaper and more competitive overseas, making America’s trade account more balanced.
Instead of mourning the loss of America’s manufacturing jobs or its trade deficit, economically responsible politicians should be encouraging governments to make their central banks truly independent and stop rigging their currency markets to serve short-term political goals. Undervalued currencies like those of China and Japan throw global markets out of balance and make it harder for the aforementioned self-correcting mechanism to take effect. They are not in the best long-term interests of any country.
It worries me that someone like Schouweiler is a professor who has the power to shape young minds. Hopefully he presents more complete arguments in the classroom than he did in your newspaper.
Mike Mackenna, Yongin, Gyeonggi