First of all, there is a need for trade balance between the United States and Europe. For if not the United States would put itself into an economic ivory tower, which is no good and against the principles of the U.S. foreign policy; and unwise in general for any other country (North Korea, only, does that…). We need to export, and it just happens that we export quite well and import quite little, today.

Why?

Because the shrinking Dollar just crossed the threshold of $1.5 for one Euro, this week!

Europeans are worried with that, quite a bit; and not since this week only. For everything is imported on the U.S. soil from the E.U. is getting increasingly costly. At a smaller, but more easily visible scale, take a look one minute at what is happening in New York City, now. Tourists are crowding in New York stores to buy as much U.S. good of consumption as they can, as if it was their last day to live on earth! That’s foreign money that comes on our cases, sure; and it’s good. But things are not as easy as they seem.

A few years ago, we complained that our steel was hard to sell abroad, owing to the high wages of U.S. steel workers sheltered by labor unions. Massive layoffs were to be expected in our steel industry. It was so concerning that President George Bush was urged by U.S. steel companies and their workers to do something quickly. Massive expected layoff in the U.S. steel industry was at stake. The same problem happened with our automobile industry. Many automotive plants closed around Detroit during the last three years, and GM is still experiencing sore losses.

Well, all right! Our economy doesn’t rely anymore largely on manufacturing “things that fall on the toe.” This aspect of our economy represents much less than 15% of the whole today, but we need this industry, anyway; because we cannot afford, strategically speaking, to rely for that exclusively on foreign countries that might possibly become our foes tomorrow. You get it?

Alexander Hamilton thought seriously about this problem and he wrote something about it on the Federalist Papers; something that happened to relate more especially to defense industry, by sheer coincidence. And what said Hamilton became a cornerstone of our defense for the ensuing centuries. Some abroad call that the “Military Industrial Consortium,” which prevent our defense from dangerously slipping into foreign hands.

But we had to do something to repair the growing U.S. – E.U. trade imbalance.

And, the expected miracle happened.

The green buck went down, and it got increasingly interesting for foreigners to buy U.S. steel. But Europeans began to complain and repeatedly asked to the U.S. Government to do something to stop that. We had ourselves the same problem with the Yen and with Chinese low wages; and a quick look at whence come goods in any Wal-Mart store may understand what I mean (Wal-Mart, alone, represents by and large 1% of everything China exports abroad worldwide!).
Unfortunately, the shrinking Dollar was not entirely a pure creation of Ben Bernanke and Alan Greenspan, his mythic mentor. For, the “subprime” crisis and the subsequent housing prices downfall everyone knows about today added to the phenomenon, which made the fall of the Dollar uncontrollable. The recent significant cuts on interest rates testify eloquently about this.

So, our problem, now, is that we must buy abroad as much as we did before (or a bit less, Ha, ha, ha), in order to compensate for the weakening Dollar. But, U.S. private companies and consumers don’t care about trade balance, and they do not intend to buy their stuff for 1.5 times the price they can buy it at home for the sake of helping the Europeans! So they buy U.S. products more than before (I’m glad with it, personally! It’s good for employment and for certain branches of our industry that are in bad need of it).

So, if U.S. consumers don’t want to buy European goods anymore, then Europeans might take prophylactic measures against U.S. imports too, because their money are getting away in China, and now in U.S. too…
That is the problem for them, and so it might be a problem for us too, soon. Last but not the least, we are consistently giving them a trash in selling Boeing airplanes nearly everywhere they try to sale their Airbus (He, he, he. Yeah, that’s funny, somehow.)
So, the only one who can do something to prevent us from experiencing that problem is the U.S. Government, which is in power to take the initiative, in buying anything costly enough to tip the trade balance between us and the Europeans.

It fell on refueling tankers, seemingly…

You see the picture?

I guess Abu missed to see that, seemingly; and he is rejoicing himself on what suggest appearances, only. Yes, Abu, poor shmuck, they happen to be deceptive sometimes, isn’t it?