Stirling Newberry, who writes for truthout and other online pubs, believes that you need to balance the trade deficit (a result of the cost of foreign oil) with the sale of American assets, not just American goods.
But to avoid passing control of US companies to overseas investors, you have to keep rich Americans happy: “bring(ing) investment in (to the US) means that one must also cut taxes on the wealthy, so that companies remain under the control of Americans, rather than being bought up by foreigners, particularly those from nations that do not have internal economies. This creates a budget deficit.”
And all along, I thought the rich get tax breaks as a quid pro for campaign contributions to the Republicans. What a simpleton!
The first time I read Mr. Newberry’s hypothesis, I wrote to him asking for more elucidation, please. Evidently a few dummies like me must have been puzzled by his thought process, because he did include a more cookbook type of explanation in the second column in his series.
I’m still confused, though. Mr. Newberry’s argument assumes, I guess, that a) super rich individual Americans hold the controlling interest in most US companies; b) super rich Americans invest more in US companies than in overseas opportunities and c) the super rich Americans that control these US companies are more likely to make decisions in the national interest than their foreign counterparts.
If I had the time and macroeconomic know-how, I’d research this.
It does rattle me that I don’t understand this better, or M3, or a lot of other public policy issues that involve the Treasury and the Federal Reserve.
I do know that the US stock market has been tanking and that some commodity prices fell last week.
Which could be why Peter had fits yesterday about filling up the “TV van”‘s tank the day before gas prices went down.