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a theme thats been runnin' through many posts on the good ship USPO has been a constant lament 'bout china.
moanin' 'bout all the borrowin'...
sadness 'bout all the jobs that american companies be sendin' thar...
hand wringin' 'bout how they value thar currency...
me question be this; what shall we do 'bout this quandary?
what possible response does the fadin' power, the United States, have to stop this ascendin' goliath?
to be honest, i haven't heard much from the left on this topic...them who lean to the right have offered up a few responses;
1) start a trade war with china
2) deregulate industries by removin' agencies like OSHA and the EPA
3) eliminate the minimum wage
4) lower taxes on the wealthiest americans
5) overturn president Obama's health reform
ok, me friends...lemme asks ye, if we manage to achieve all five 'o these points, will the United States 'o America return to its rightful place at the head 'o the fleet?
A is A
9aces, thanks fer respondin'!
okies, let me asks ye this, then;
a) how would ye like to see agencies like OSHA and the EPA scaled back. could ye be a bit more specific?
b) ye stated that our nation would be defeated by china in a trade war, and in this i think yer probably right...ye also stated that eliminatin' the minimum wage would be politically impossible...and yer probably correct here also. that bein' said, do ye think that rescindin' President Obama's health care plan to be politically possible? would drastically slashin' m/care&aid and social security be politically possible?
finally, if the problem be more complicated, how would ye address musterin' our fleet to compete with the mighty chinese?
I think China needs to be pushed politically - internationally - to stop artificially devaluing its own currency. Just as we manipulate our currency to keep its value high, the chinese manipulate their currency to keep its value low. This means it can pay its workers a pittance for a day's work which is why they have become the manufacturing giant for the world.
If China let its currency strengthen, its people would be able to buy more goods, its people would earn more value for a day's wage which would allow other countries to participate in the world's manufacturing needs. China would then have to figure out how to keep a billion people gainfully employed when other countries could actually compete with their labor costs.
People wrongly cry about jobs that have gone overseas, imo. The problem with NOT shipping our jobs overseas is that everything we buy would be more expensive, which is political suicide. People like inexpensive shit and really don't care about the morality that generated the low prices, that's why Wal Mart is loaded with customers. I think most jobs that have already left will never return to our country, however as countries like china become more wealthy, they will begin to buy the types of services that the USA offers which will help the USA.
Boeing sells billions of dollars to China annually. That is one case where china is buying American because their economy can support air travel and the USA (and Europe) make the best jets in the world. If china's economy strengthens, they will begin to buy more American goods, and will see their own jobs get shipped to poorer countries.
Since the US responded to the destruction of the NYC twin towers by Saudis with Afghan Taliban connections by raining down "shock and awe" on Iraq, perhaps the way for the US to address the trade imbalance with China is to increase its trade sanctions against Iran. If it seems that I can't take US economic or foreign policy seriously, you're right.
We could "win" a trade war with China in the sense that China would be impoverished and the US would merely go through a period of stagflation.
However, the world would lose as China returned to its behavior of the 1950s and 1960s. A China that is not part of the world economy is going to engage in adventurism.
By DEE WOO
Many Americans believe that the Chinese government is manipulating its currency, thereby stealing American jobs and entrapping the U.S. in an ever-deepening trade deficit. The People's Bank of China announced in June that it will allow the yuan to appreciate—a statement we should take at face value, since the Chinese government won't risk unnecessary isolation.
But even if the yuan does appreciate, it's unlikely to reduce the U.S. trade deficit or create American jobs. Indeed, the currency war being urged by some American politicians would open up a Pandora's box for the U.S. economy.
Regardless of the yuan's value, the U.S. trade deficit won't be significantly reduced unless the U.S. boosts its chronically low savings rate and defuses the disincentive—caused by the dollar's status as the global currency—for manufacturing. When other nations want imports they must produce goods to send abroad. All the U.S. needs to do is print more greenbacks: Buy dollar-denominated commodities and goods with dollars and debt, and service the dollar-denominated debt with dollars and more debt.
It's little wonder manufacturing is dying in the U.S. while Wall Street is prospering. And it's no coincidence that Germany produces robust machinery, while the U.S. produces dazzling financial derivatives. Many items in Wal-Mart are made in China, but the trade deficit is made in the USA.
Second, Washington can't afford a weak-dollar policy—because the only thing standing between the U.S. and a Greek-style sovereign debt crisis is the dollar's status as the global currency. A weaker dollar would threaten that status. Within 20 years, according to the Congressional Budget Office, U.S. debt is projected to equal 140% of gross domestic product (GDP), and this doesn't even include the budget troubles of state governments. In Greece, debt is a mere 115% of GDP.
For now the Fed can absorb difficulties because, unlike Greece, the U.S.'s public debt is denominated in its own currency. But that might not always be the case. Many countries have already begun seeking refuge in reserves of currencies other than the dollar, and since December 2006 there has been more value circulating in euros than in dollars. The collapse of the dollar as the global currency is not an impossibility.
Third, a strong Chinese yuan would reduce Americans' real income, further weakening U.S. demand and perhaps ruining the fragile U.S. recovery. Before a strong yuan created any U.S. jobs in manufacturing, it would kill jobs (at Wal-Mart and elsewhere) that depend on Chinese imports.
A stronger yuan would also mean that less Chinese trade surplus is recycled in the dollar assets and securities that finance U.S. growth and subsidize low U.S. interest rates. Without low interest rates and accessible capital, many U.S. companies will go bust—especially the small businesses that drive job creation.
Fourth, a strong yuan would disrupt China's rapid growth, which is facilitating the country's gradual transition from an export-oriented model to a consumption-oriented one. That, in turn, would severely dampen Chinese demand for U.S. exports. "In the second half of 2009," according to Treasury Secretary Tim Geithner in his July report to Congress, "U.S. exports to China increased by 15 percent on a year-over-year basis, while U.S. exports to the rest of the world fell by 13 percent. In the first quarter of 2010, U.S. goods exports to China rose by more than 40 percent compared to the same period the year before, while U.S. exports to the rest of the world rose by less than 20 percent."
Fifth, drastic appreciation of the yuan would threaten the Chinese government's sacred goal of building a harmonious society. A strong yuan would force out of business many export-focused companies that account for Chinese GDP and job creation. Yes, a strong yuan would help the Chinese economy be less labor intensive and more capital intensive, which would move China up the international economic food chain. But China hasn't found a model better able to absorb its abundance of employment seekers than labor-intensive production.
Building a harmonious society is the Chinese government's most important imperative. Once a Chinese person can make a living, he rarely challenges authority. No one should ever underestimate the Chinese government's determination to defend the bottom line.
All this means that the U.S. should adopt a collaborative approach toward China. Now is a bad time for confrontation. The U.S. currently needs China more than China needs the U.S. China's cheap labor and capital are good for American corporations. All China gets in return is more greenbacks. If the Chinese start to believe that it's just useless paper, that will be very bad news for America.
Mr. Woo teaches in the economics department at the Beijing Huijia Private School.
Dee Woo: The U.S. Will Lose a China Trade War - WSJ.com
avast ye Chass!
in this, you and i be in full agreement. this saber rattlin' about tariffs and a trade war have always worried me. we're not in much of a position to take a hostile economic stance to the chinese, who in many ways, indeed be our masters.
but what can be done about it, aye?
1) Get government spending of all levels, particularly entitlements, back down to a sane level
2) Adopt a Right to Work amendment
3) Pay off our debt to China
4) Invest in robotic technology that will allow the worlds cheap plastic crap to be built right here
5) Become energy independent
6) Enact an international tariff regime on states based on human rights and liberties
1) start a trade war with china. They game international trade agreements and so can we.
2) Structure agencies like OSHA and the EPA to have the goal of aiding non-destructive productivity.
3) Promote a living wage. The minimum wage is a joke and it simply drags down everyone.
4) Reshape health reform to be about improving health and not about who pays for health insurance.
Carefully... then deliberately.
The Chinese think differently than we do. They do not hold the same values we do. They don't see time and effort and expense the same as we do.
Carefully... then deliberately.
Chinese Cultural Values and Their Implications in BusinessChinese business networks are sustained by Chinese cultural values and tradition. When these values disappear, the networks will collapse. Trust, reciprocity, face, time, harmony, hierarchy, power distance, long-term orientation have been identified as the key Chinese cultural values.
These Chinese cultural values are the main representations of the seven core rituals of Confucianism: Benevolence, Harmony, Midway,Forbearance, Filial Piety, Trust and Cautious Words.
*savors this moment 'o agreement*
aye, Tsquare, aye indeed.
well said mate.