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Retired Gulf VP Charles Campbell nails US economic problems and their solution
Howard Richman, 3/23/2011

Retired Gulf Oil Senior VP Charles Campbell nails our chief problems and their solutions in his brilliant March 23 Baltimore Sun commentary (End America's addiction to Mideast oil: Only hope for U.S. economy is to bring down our trade deficit, become self-sufficient in energy).

He is correct that if we fail to solve these problems, we are headed toward economic disaster. In fact, our government debt problem may be about to get worse as a result of upcoming sales by Japan of dollar reserves and the expense of Obama's military intervention in Libya. As far as energy production is concerned, his area of expertise, he argues that we need to develop domestic energy resources but are moving in the opposite direction. He writes:

We ... will not drill on the shallow continental East and West Coast shelves or in the Arctic National Wildlife Reserve because of the BP accident; increased nuclear power is dead after Japan; coal production has been restricted after the West Virginia mine disaster; and the environmentalists will frustrate natural gas production from shale.

That leaves green wind and solar energy solutions, which are erratic and inefficient and will take decades to replace any appreciable amount of fossil fuels. Diverting corn from food to ethanol fuel does nothing for reducing carbon dioxide and is one of the principle causes of current record-high food prices.

He joins fellow businessmen Ralph Gomory and Dick Alexander in recommending Warren Buffett's Import Certificates, realizing that our foreign debt problem cannot be solved without balancing trade:

In 2003, Warren Buffett proposed a method to eliminate the U.S. trade deficit. Sen. Russ Feingold converted Mr. Buffett's proposal to a bill named the Balanced Trade Restoration Act. It was not enacted.

Passing the Feingold bill would increase U.S. employment, stabilize the dollar and be the first step toward solving our financial problems. Other steps toward reducing our debt and solving our trade deficit include: ending our Middle East wars; drilling for oil and gas; constructing nuclear plants with spent rod reprocessing; and replacing liquid fuel use for auto and air travel with high-speed rail systems and electric cars.

Although my father, son and I have also argued (see our 2008 book Trading Away Our Future) that Buffett's plan would be an effective way to balance trade, we currently advocate a less-bureaucratic scaled tariff which would accomplish the same goals without violating WTO rules.

Charles Campbell is entirely correct that the solutions to our economic problems are not complicated: (1) balance budgets, (2) develop domestic energy, and (3) balance trade.

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    Wikipedia:

  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]