Going South

Article 2 in this volume is titled, “Once burned, twice shy …” but that only applies to people who are in the habit of paying attention. U.S. taxpayers, of course, have yet to cultivate that habit, and that’s why it’s so easy to fleece them … over and over and over again.

That was the U.S. taxpayer gullibility that Will Rogers was chuckling about when he would say, “I only know what I read in the newspapers” … over and over and over again.

Every day the elite use the newspapers to trick taxpayers into thinking that the nation’s economic recovery is imminent and certain, and that billions should be anted-up to prepare for the coming financial windfalls, in spite of evidence to the contrary. Here are some recent examples.

From Jen DeGregorio at the Times-Picayune comes a report of still another senseless junket. She begins this way: “Group seeks to boost ties to Panama … Larger canal may mean more trade”.

“More than a dozen political and business leaders from the New Orleans area will fly to Panama today to woo keepers of the Panama canal which is undergoing an expansion that could mean a commercial boon for Louisiana.

“Construction workers are in the midst of creating a third, wider channel through Central America that will open a new path to the Gulf of Mexico for large, Asian cargo ships that now call only at ports on the West Coast. Scheduled to open in 2014, the new waterway could by some estimates triple the containerized cargo entering the United States.

“The mission represents ‘a united front from the metropolitan area’, said Mayor Ray Nagin, who will lead the team …”

“‘This is another step toward reclaiming this region,’ Nagin said. He added that it was important to bring a ‘confederacy of ports’ that includes ports in St. Bernard and Plaquemines parishes, which together represent a broader system that can be touted for marketing purposes.

“There is stiff competition among ports, particularly those in the Gulf, as they frantically try to capture the influx of commerce predicted to arise from the canal opening. Eleven ports along the Gulf and South Atlantic coasts have planned $ 10 billion worth of development projects for the decade ahead, according to an analysis by the Port of new Orleans …”

“The trip, which ends Wednesday, comes on the heels of other recent missions to Panama …”

You read that correctly, “Eleven ports … $ 10 billion worth of development projects …”. Instead of being concerned with the widespread unemployment and consequent loss of buying power in their communities, these political figures are concerned only with securing their own positions and salaries in the coming years of scarcity.

In a similarly irrational report in the Long Beach Press-Telegram, we saw this misleading headline:
“Analysts expect import traffic to rise ….”, and the following bromide …

“Container volumes through Southern California seaports remain well below levels seen last year, but are expected to pick up by year’s end as the economy marches toward recovery.

“Economists say projected increases are indicative of growing consumer demand, which dropped off sharply in the wake of high gas prices, inflation and rising unemployment in recent months.

“Container volumes – often used as a barometer of the economy’s general health – are forecast to climb this summer and surpass 2007 levels by the fall, said Jonathan Gold of the National Retail Federation.

“‘That’s an important sign because October is when the largest share of the merchandise sold during the holiday season usually comes through the ports,’ Gold said …”

“Usually ” …but not this year, according to reports from China. An Asian Time’s story revealed:

“Jin Zhixun sits alone in a booth stuffed floor to ceiling with plastic Father Christmases climbing walls, playing saxophones and dangling from parachutes. The foreign buyers who used to snap up 50,000 Santas at a time are nowhere to be seen. He cannot remember a worse year, he says …”

“Mr. Jin’s problems are shared by hundreds of booths selling Christmas goods — plastic trees, decorations, tinsel, stockings, inflatable snowmen — that stretch away down labyrinthine corridors in one of the ten vast multi-storied halls of the world’s biggest small commodities markets (the Christmas booths run out where the red lanterns of the Chinese New Year start).

“Each of these booths is a wholesale shopfront for a factory somewhere in the teeming metropolises of eastern China, and in July and August they would normally be packed with Western buyers …”

“Normally” … according to the Times writer. But not this year.

And this doesn’t bode well for us. In our previous article we noted Mike Wackett’s thoughtful question: “What will the Asian shipyards survive on during the shipbuilding drought?” … and we were reminded of an analysis by Bob Gilbert appearing in Baltimore’s Sun & Chronicle, wherein he points out that, “It is estimated that the Chinese alone now hold about one trillion dollars of U.S. debt. It is also estimated that China – because of raging world-wide inflation and the continuing downward pressures on the value of the U.S. dollar caused by U.S. government and Federal Reserve policies … is now earning a negative 18% per annum on their U.S. debt holdings. Yes, that’s negative 18%. The Chinese know this and will act accordingly.”

As everyone knows, that “one trillion dollars of U.S. debt” is in the form of treasury notes, and so we’re inclined to wonder, as Mike did, that when – not if, but when – China redeems those notes because our faltering economy is already threatening her industries … what then?

As taxpayers begin questioning the misinformation issuing from port authorities and other “experts”, occasional Letters to the Editors from taxpayers are beginning to appear. Like this one:

“River deepening bad for the economy,” the writer begins.

“The Georgia Ports Authority would like to convince you to pay to have the Savannah River deepened to 48 feet. Yeah, remember that part, you pay for it, not them. And the deepening will help guarantee jobs in Georgia, theirs, not yours.

“Here’s how it works. You (Georgians) pay $ 235 million in taxes so bigger ships, for which the Panama Canal is being expanded, can come into Savannah. Big container ships coming through the Panama Canal are coming from Asia ( mostly China).

“The river deepening allows larger ships to come into Savannah, and larger ships reduce the cost for Chinese products. The container ships will bring in products like pond raised shrimp and fish, lumber, paper and other products that are also produced here in Georgia.

“In other words, the Port Authority is asking Georgians to pay a tax to subsidize imports from other countries; imports that will help put local businesses out of business; imports that will help put many of Savannah’s taxpayers out of work.

“And what do the folks in Savannah get, besides a $ 235 million dollar bill? An environmental disaster that will negatively affect tourism and property values, not to mention irrevocable destruction of local wetlands and wildlife.

“We sometimes wonder why American businesses can’t compete with foreign businesses. The answer is that your taxes subsidize those foreign businesses.

(Signed) “Jack Simmons”

But average taxpayers like Mr. Simmons aren’t alone in criticizing the fallacy of subsidizing outsiders. Prominent people are now suggesting that we subsidize ourselves for a change. Stephen Leeb, President of New York-based Leeb Capital Management, had it right when he stressed the need for self-reliance. About a month ago he said:

“Right now, I think we’re in one of the most threatening crises in our history, and it’s going to take a Manhattan Project (referring to the World War II program to build the atomic bomb) to figure out what to do, and it will take billions of dollars to implement it. It can’t immediately be cured because we need long-term answers. Washington needs to actively take charge if we want to turn this situation around. People are recognizing that the Fed is now in a total box.”

We agree that the crisis “can’t immediately be cured”, but there’s no question that a Manhattan-type effort to build our patented container ships is what we’d need to pull this country out of its economic death spiral. We also know that granting licenses to foreign yards to use our patented design would sustain overseas economies and provide security for both U.S. citizens and the U.S. dollar.