Of Troubles and Myths

Citizens of the World,

Facts and Figures of the World

Item 1: "The Trouble with Subsidies" by Fareed Zakaria

- Since the financial crisis began, countries around the world have proposed or implemented 78 trade measures. Of these, 66 turn out to be new restrictions on trade. For example, China has banned outright various European goods
- Rich countries tend not to raise tariffs, because they do protectionism another way: by subsidizing domestic companies
- Worldwide governments are providing $48 billion in direct subsidies to carmakers
- The Peterson Institute for International Economics estimates that the "buy American" provision will result in an increased domestic production of about 0.5 million metric tons of steel every year - boost in production will translate into 1,000 jobs, which in a labor force of 140 million is insignificant

Item 2: "The Myths of the Recession" by Barrett Sheridan

i. The Credit Crisis Is Over - Globally, banks have already absorbed about $1 trillion in losses on mortgages and other bad debt holdings according to Jan Hatzius, chief U.S. economist of Goldman Sachs - expects another $1.1 trillion in losses
ii. All Industries Are Suffering
iii. The Dollar Will Collapse - climbed 25 percent against the euro and 41 percent against the pound since last year's lows - Gold has fallen back to about $900 an ounce, and investors are pouring money into U.S. Treasuries
iv. Credit Cards Are Killing Us - While aggregate credit-card debt has grown phenomenally in the United States since 1999, as a percentage of income it's stayed nearly level, hovering at about 9%
v. Here Comes Protectionism - Western countries would have to tear up the entire WTO rulebook for protectionism on the scale of the 1930s to take hold