Panie Janku..niech pan powacha Mr,Josepha redaktora "Huston Chronicle"
Dec. 31, 2001, 6:26PM An Argentina-style collapse in our future? By JOEL D. JOSEPH Argentina collapsed last week and nobody seemed to give a damn. Twenty-seven people were killed in economic riots in the streets of Buenos Aires, triggered by 20 percent unemployment and the frustration and hunger that represents. Is this a glimpse of what may happen to the United States in years to come? Argentina is not a Third World country. Its per-capita income is $11,000 per year, more than three times that of Mexico, about the same as Portugal, and slightly less than Spain. One hundred years ago Argentina was the seventh wealthiest nation in the world, after the United States, Great Britain, Germany, France, Canada and Italy. Argentina remains the wealthiest nation in South America. Like the United States, Argentina is one of the world's largest producers of grains and beef. Argentina is blessed with an abundance of natural resources and, unlike the United States, is self-sufficient in oil. So what went wrong in Argentina? Many things went wrong, but the fundamental problem is that Argentina opened its doors to free trade with its poor neighbors, primarily Brazil. Argentina formed the Mercosur with Brazil, Paraguay and Uruguay, basically a North American Free Trade Agreement of South America. While NAFTA has been draining the United States of industrial jobs, the Mercosur has been causing industries to leave Argentina. De-industrialization of the United States and Argentina is causing both nations to have massive balance-of-payments deficits. The United States leads the world in trade deficits with red ink of $450 billion in 2001. This represents 4.4 percent of the gross domestic product, the highest percentage in more than 200 years of U.S. history. Argentina has been in the midst of a recession for four years and its unemployment has reached 20 percent. Our recession has only just begun. Argentina has also been hit harder because the United States has the luxury of having its currency being the world's currency. If we need more dollars, we can just print them up. Argentina can't do that. Argentina has sold off many of its major industries and has lost control of its future. We are not far behind. Fiat, the Italian automobile manufacturer, owned one of the largest auto factories in Argentina. Fiat announced recently that it will close all of its manufacturing facilities there, driving the country further into recession. Chrysler, now owned by Germany's Mercedes-Benz, could similarly decide to close some or all of Chrysler's plants in the United States. Chrysler already imports half its vehicles from Mexico and Canada, and Mercedes could decide to save more money and close the remaining U.S. plants. We should keep this in mind because not too long ago Chrysler faced bankruptcy but was bailed out by the U.S. government. The U.S. government didn't save Chrysler just to turn it over to the Germans. Both the United States and Argentina have been consuming more than they produce. This causes a trade deficit. When a country runs large and persistent trade deficits, it must either borrow the money or sell off assets. Both the United States and Argentina have been selling their treasured assets and borrowing like there is no tomorrow. It is the foreign debt that brought Argentina to its knees. Argentina is like the canary in the mine-shaft, warning the United States that it is in mortal danger. The United States has lost more than 500,000 jobs to Mexico and 750,000 jobs to China during the last five years. We didn't notice it much during the expansion of the 1990s, but we will really feel it now that the economy is in a recession. A leading Cornell University professor, Dr. Kate Bronfenbrenner, said recently that the United States has moved ahead with expanded trade based on "faulty arguments." Instead of giving the president more trade authority, we should rethink NAFTA and trade with China. What exactly have we gained from expanded trade with Mexico and China? Was it worth more than 1 million jobs? Fast-track legislation is the track that Argentina took. Argentina's economy has derailed. Let's learn from the mistakes that Argentina made and renegotiate our trade agreements. Joseph, based in Washington, D.C., is chairman of the Made in the USA Foundation. _________________________________________________________________ Join the world’s largest e-mail service with MSN Hotmail. http://www.hotmail.com
