Letters: Balanced trade is the key

Balanced trade is the key

In his Tuesday Commentary column, “Economic Reality Check,” Michael Barone cites many trees but misses the forest. He points out that the economy is not suffering from much unemployment (true), nor is there much inflation (true). Nor is the economy shrinking (true). He also points out that the growth rate is mighty slow, but he doesn’t stop to analyze why. His conclusion: Barack Obama’s “protectionism” would not help the United States economy.

What he misses is the reason U.S. growth is so slow despite the lack of unemployment. It is slow because businesses have not been investing in American production. They have not been investing because they know that if they do, the mercantilist countries that control our level of trade deficits through currency and other trade manipulations will simply drive them out of business. The key to fixing the problem is for the United States to insist on balanced trade.

By the way, Mr. Barone is wrong when he calls Sen. Obama a protectionist. Mr. Obama would not likely do anything more to balance trade than Sen. John McCain. The main reason Sen. Hillary Rodham Clinton was solidly defeating Mr. Obama throughout the Midwest is because the manufacturing voters detected a phony.

As things stand, the Democrats will gain a huge victory in Congress of 1932 proportions as a result of delusional Republican economics as exemplified by Mr. Barone’s column. The presidential race, however, is up in the air. Ohio, Michigan and the nation will go to the presidential candidate who persuades voters that he will do the most to balance trade.

HOWARD RICHMAN

Co-author

“Trading Away Our Future”

Kittanning, Pa.

No gain from Arctic drilling

Your Tuesday editorial “Energy angst” missed the mark when it suggested that drilling in the Arctic National Wildlife Refuge would solve our energy problems. Drilling there would provide neither a short-term solution to high energy prices nor the dramatic drop in fuel costs you suggest.

No short-term gain can be made from drilling in the refuge. The government’s own Energy Information Administration (EIA) analysts predict that oil would not begin to flow until 2017, and peak production wouldn’t begin until 2025.

Oil from the refuge would make up just 0.2 percent of world supplies in 2020 and just 0.6 percent at peak production. Because oil prices are set on the global market, the EIA states that drilling in the refuge “is not expected to have a large impact on oil prices” and that the Organization of the Petroleum Exporting Countries easily could reduce exports to “neutralize any potential price impact” of drilling in the refuge.

The EIA’s bottom line: 20 years from now, oil from the refuge might reduce gas prices by, at most, a few pennies per gallon.

U.S. energy prices are high because Americans consume 25 percent of the world’s oil while possessing less than 3 percent of its proven oil reserves. Clearly, we cannot drill our way to lower prices. Instead, we must reduce our demand for oil.

Story Continues →