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Thread: Trade Deficit in U.S. Plunges on Record Petroleum Exports

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    Re: Trade Deficit in U.S. Plunges on Record Petroleum Exports

    Quote Originally Posted by AlabamaPaul View Post
    I don't recall using the term or advocating protectionism, but I do believe we, as a nation, should exert some control over the disposition of our energy resources, since it is a major component of our trade imbalance, and those trade imbalances send our currency (a measure of our wealth) to other nations and not re-invested here to reduce that dependance...
    Well, I'm the one that used the term protectionism, saying it was bad. Which you contested in the case of natural resources with trade deficits.

    What measures do you have in mind, specifically, when you say "exert some control"? Private firms do have control over whom they purchase their oil from (and whom they sell it to). Also, keep in mind, when we import oil we're not just shipping boatloads of cash overseas with nothing to show for it. It's a mutual business transaction - our economy benefits from our end of the bargain as well. Some of the oil is used by a engineer filling his car up so he can drive to work, some of it is used to create plastics for the medical industry, etc.

    As someone pointed out earlier, "energy independence" doesn't mean what a lot of people think it means. It's a global energy market, so as long as we allow firms to buy and sell globally, the US will never be sheltered from spikes in global prices in the event of an energy crisis.
    Last edited by the_recruit; 02-11-13 at 11:50 PM.

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    Re: Trade Deficit in U.S. Plunges on Record Petroleum Exports

    Quote Originally Posted by AlabamaPaul View Post
    Screw Japan. We have a nation to support here, first and foremost...
    I would say that letting our oil companies sell to the highest bidder of their choosing, which may happen to be Japan, IS supporting our nation.

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    Re: Trade Deficit in U.S. Plunges on Record Petroleum Exports

    Quote Originally Posted by Fisher View Post
    Makes me wonder why with all the calls for "energy independence" we are exporting oil instead of consuming it and importing less........
    We're exporting oil and importing cash, so it's a net positive.

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    Re: Trade Deficit in U.S. Plunges on Record Petroleum Exports

    Quote Originally Posted by the_recruit View Post
    Well, I'm the one that used the term protectionism, saying it was bad. Which you contested in the case of natural resources with trade deficits.

    What measures do you have in mind, specifically, when you say "exert some control"? Private firms do have control over who they purchase their oil from (and who they sell it to). Also, keep in mind, when we import oil we're not just shipping boatloads of cash overseas with nothing to show for it. It's a mutual business transaction - our economy benefits from our end of the bargain as well. Some of the oil is used by a engineer filling his car up so he can drive to work, some of it is used to create plastics for the medical industry, etc.

    As someone pointed out earlier, "energy independence" doesn't mean what a lot of people think it means. It's a global energy market, so as long as we allow firms to buy and sell globally, the US will never be sheltered from spikes in global prices in the event of an energy crisis.
    Protectionism isn't necessarily a bad thing.

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    Re: Trade Deficit in U.S. Plunges on Record Petroleum Exports

    Quote Originally Posted by Samhain View Post
    Trade Deficit in U.S. Plunges on Record Petroleum Exports - Bloomberg



    Goes to show you, drilling for oil in the US does have a very positive impact, even if it doesn't directly affect the price at the pump.
    Creating value, in this case pumping oil in to the world market, is going to have a positive impact.

    I work in the oil and gas world, however, and I can tell you that we've slowed down drilling considerably - that will be reflected in next year's numbers. The reason is all this drilling has driven prices down to where it's not profitable to drill as much anymore.

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    Re: Trade Deficit in U.S. Plunges on Record Petroleum Exports

    Quote Originally Posted by Peter Grimm View Post
    Protectionism isn't necessarily a bad thing.
    In general, protectionism is bad. Care to expound?

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    Re: Trade Deficit in U.S. Plunges on Record Petroleum Exports

    Quote Originally Posted by the_recruit View Post
    In general, protectionism is bad. Care to expound?
    Sure. I feel bad for new college grads. So many middle class jobs have been shipped overseas, for example to China.

    In America today, you either have a crap job or a great job. The middle class jobs and the decent entry-level jobs are gone.

    That's a direct result of policy.

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    Re: Trade Deficit in U.S. Plunges on Record Petroleum Exports

    Quote Originally Posted by Peter Grimm View Post
    Sure. I feel bad for new college grads. So many middle class jobs have been shipped overseas, for example to China.

    In America today, you either have a crap job or a great job. The middle class jobs and the decent entry-level jobs are gone.

    That's a direct result of policy.
    No. That has to more to do with the massive financial crisis and ensuing recession during which we lost effectively 12 million jobs. A lack of protectionism was not a factor in that.

    And the bit about zero middle class jobs and entry level jobs is pure hyperbole. I happen to have a decent entry level job and I graduated May '09 - at the worst of the Great Recession.

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    Re: Trade Deficit in U.S. Plunges on Record Petroleum Exports

    Quote Originally Posted by the_recruit View Post
    No. That has to more to do with the massive financial crisis and ensuing recession during which we lost effectively 12 million jobs. A lack of protectionism was not a factor in that.

    And the bit about zero middle class jobs and entry level jobs is pure hyperbole. I happen to have a decent entry level job and I graduated May '09 - at the worst of the Great Recession.
    Let's take the company I work for as an example. Our revenues dipped during the recession, so we fired 30% of our workforce. Today, our revenues are at pre-recession levels. However, we have not hired back the 30%, instead we have learned to operate at a lower headcount.

    That experience pretty much sums up why some economic indicators are positive, yet unemployment remains high.

    Here's another one. We recently slashed our entire American-based accounting operation and moved it to India, all so that we could make room in the budget to implement new German accounting software.

    Here's another. We currently have a hiring freeze in place in the United States. Obamacare raised the expense per employee by about 6%, so we need to offset the difference by cutting growth in the workforce by 6%.

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    Re: Trade Deficit in U.S. Plunges on Record Petroleum Exports

    Quote Originally Posted by Peter Grimm View Post
    Let's take the company I work for as an example. Our revenues dipped during the recession, so we fired 30% of our workforce. Today, our revenues are at pre-recession levels. However, we have not hired back the 30%, instead we have learned to operate at a lower headcount.

    That experience pretty much sums up why some economic indicators are positive, yet unemployment remains high.

    Here's another one. We recently slashed our entire American-based accounting operation and moved it to India, all so that we could make room in the budget to implement new German accounting software.

    Here's another. We currently have a hiring freeze in place in the United States. Obamacare raised the expense per employee by about 6%, so we need to offset the difference by cutting growth in the workforce by 6%.
    Again, most of that is the result of the recession - it doesn't have anything to do with protectionist policies or a lackthereof.

    Your anecdotes are typical arguments in favor of protectionism. However, they fail because they don't view the larger picture. When I say protectionism is bad, i don't mean it literally hurts everyone. Protectionism is bad because it hurts the economy overall. In fact, protectionism DOES protect very isolated pockets of people- but only at the expense of the greater overall economy.

    Such arguments are virtually identical to those against automation. Let's use the handweaver example I brought up earlier, whose jobs were eliminated by the invention of the power loom. Legislation that would have protected handweaver's jobs from being "outsourced" to a cheaper labor supply (power looms), would in fact have been beneficial to anybody that was a handweaver. But it would have hurt the overall economy and everyone across the nation who would have benefited from being able to purchase lower priced woven cloth. Ultimately, the handweavers find other jobs and the economy ends up the stronger. Protectionist policies behave the same way - protecting a small minority at the expense of a net loss.

    Virtually all contemporary economists across the board, from Friedman to Krugman are opposed to protectionism as a rule on the grounds that it's damaging to the economy.

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