Riverside, Calif.

One reason behind the speculative aspect of the housing bubble was the low interest rates given by banks. If banks had given a fair rate of return on savings, there would have been less pressure on the housing market as an investment.

As for wages, 70 percent of the economy was supported by consumer spending. Low wages caused by "free trade" means workers have no disposable income for spending or savings. No spending means no consumer market, and no saving means banks have less funds for loans.

It was interesting to note that open borders drove down wages for both legal and undocumented/illegal workers. Indeed, jobs for both categories disappeared south of the border. Some California growers moved to Mexico and Central America, where workers are paid $11 a day, instead of the $9 an hour that they received in California. The travel trailer division of Fleetwood, which employed Americans of Mexican ancestry at $20.00 an hour, moved from Rialto, California, to Mexicali, Mexico, where Mexican workers received $3.00 an hour.

Without trade barriers, all workers in the US will face reduced wages and a limited job market. Tariffs must be high enough that it is too expensive for goods not produced within the US market. To be a part of the US market, you must produce in the US for that market. This is how development works for any country.

Pervis J. Casey
03/24/2008 @ 2:26pm