Warning from Warren Buffet

Dear Friend,

Here is another version of the warning that has been emerging from 
many quarters over the past year.

Be prepared.

Tim

Editorial: Trade deficit fouls economy

November 1, 2003
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It is not our intent to alarm anyone, but we do hope that readers are 
aware of the latest pronouncement from Warren Buffett, the 
second-richest man in the world who is frequently referred to as "the 
most successful investor ever."

The corporate free trade agenda, says Buffett, has created a mess so 
serious that he is losing confidence in the stability of the U.S. 
dollar, and the economy it underpins. "I am crying wolf again and 
this time backing it with Berkshire Hathaway money," Buffett says of 
the assets of the investment conglomerate he created and controls. 
"Through the spring of 2002, I had lived nearly 72 years without 
purchasing a foreign currency. Since then Berkshire has made 
significant investments in -- and today holds -- several currencies."

Buffett says he is losing faith in the soundness of U.S. currency as 
an investment vehicle because the United States is running a huge 
trade deficit -- close to $500 billion, and rising rapidly -- that is 
causing income to flow out of the country at such a rapid rate that 
it will soon become unsustainable. In the November edition of Fortune 
magazine, Buffett warns that the rapidly mounting U.S. trade deficit 
could lead to a dramatic plunge in the value of the dollar and a host 
of additional economic consequences that could add up to disaster for 
American families.

In the post-Cold War era, U.S. leaders embraced the corporate free 
trade agenda embodied in pacts such as the North American Free Trade 
Agreement and the granting of permanent most-favored nation trading 
status to China. These deals and others like them encourage U.S. 
businesses to engage in a race-to-the-bottom, relocating on a regular 
basis to countries that permit them to pay the lowest possible wages, 
to despoil the environment and to dismiss human rights concerns. U.S. 
businesses have shuttered factories, laid off unionized workers and 
shifted millions of jobs overseas.

In Wisconsin, more than 50,000 manufacturing jobs have been lost 
since George W. Bush assumed the presidency, as whole sectors of our 
economy shut down here and move overseas, mostly to China.

Now the abandonment of American communities and families has extended 
to the service sector. The shifting of manufacturing and service work 
out of the United States is great for the huge corporations that 
contribute mightily to the campaigns of politicians who back their 
free trade agenda. These corporations can lower their costs by moving 
production to countries where wages are low, and basic safety 
regulations and environmental protections have been eliminated. But 
it is terrible for workers here and abroad, who are pitted against 
each other in a battle to see who will work for the least. And it is 
horrific for the U.S. economy.

By allowing for policies that have transformed the United States, 
which used to export far more than it imported, into a nation that 
imports far more than it exports, President Bush and the bipartisan 
congressional coalition that backs the corporate free trade agenda 
are building up a trade deficit that could ultimately take down the 
U.S. economy. Unwise economic policies, Buffett says, are literally 
"selling the nation out from under us."

Buffett's warning needs to be taken seriously, not just by citizens 
who have already witnessed the devastation caused by the corporate 
free trade agenda, but by elected officials. When U.S. Sen. Herb 
Kohl, D-Wis., and U.S. Reps. Ron Kind, D-La Crosse; Paul Ryan, 
R-Janesville; Tom Petri, R-Fond du Lac; Mark Green, R-Green Bay; and 
Jim Sensenbrenner, R-Menomonee Falls, vote for free trade 
legislation, they are doing serious damage to Wisconsin and to the 
U.S. economy.


Published: 1:54 PM 10/31/03


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