Economic Friction Coming to a Head......Finally

Is China's Politburo spoiling for a showdown with America? - Telegraph

Eliminating Chinese mercantilism is the only way the US economy will ever really recover. Any economist who says otherwise is either terribly misinformed or is lying. The US can no longer afford to ship its jobs, its wealth and its economic future overseas in exchange for goods from the far east.

As a Management Scientist working on my doctorate in leadership and management, I am always stunned at the academic belief that offshoring jobs is a Good Thing. Good for the rest of the world, maybe, but certainly not for us. After finishing 2 management degrees they still haven't convinced me - who do they think will be buying these products when there is no work left in the U.S.?

"I am always stunned at the academic belief that offshoring jobs is a Good Thing."

Depends on for who. For the CEO of a company that makes widgets, outsourcing is a good thing if it increases the profit margin. (CEO's don't care about the long term viability, only the short term profit margin and stock price).

This is what happens when we allow politicians funded by corporate interests to legislate for short term corporate interests instead of long term national interests. Both parties have been on the side of short term corporate interests for quite some time now.

I think it was an economic and political con-job from the begining which benefitted Wall-Street for a couple of generations and of course first Japan and later China. There is no way to have a vibrant economy without building things.

As that Carlin rant I posted awhile back indicated, we were sold out thirty f***ing years ago

A handful of the uber-wealthy benefited. The rest of us got screwed

Deal with it

Jayman, I think the country is dealing with it slower than I would like, but the US is waking up. I am not a 'turn the other cheek' kind of guy. You and I know the cure will be very painful.

It depends on what kind of manufacturing that you're trying to outsource. Things like rubber vommit, christmas decorations, plastic tubs, trash cans, plastic bottles, cd players, televisions, etc should be made overseas. Those are not valuable jobs. They do not belong here.

Things that require more technology and higher safety standards should be built locally if possible, including jets, cars, heavy drilling equipment, refineries, etc. Over the long term though we need to shift our economy towards innovation, science, technology, and intellectual property. This shift is inevitable, and we need to leverage our advantages (better collegiate system) to accomplish this.

The reason that our trade imbalance is so bad with China, is that they have zero respect for our intellectual property. They should be making things for us in exchange for the rights to use our art, software, movies, music, books, entertainment, pharmaceuticals, etc. Piracy is the official policy of China, since intellectual property is considered "property of the proletariat as a whole". Anytime we patent something new, Chinese companies just read the patent and start producing it with no regards to the development costs associated with the product.

So China is in a position where they get what they need from us for free, while we continue to mortgage our future away to them. Our politicians should be smart enough to see this and do something about it.

Lawmakers Urge Geithner to Cite China on Currency (Update1) - BusinessWeek

Does Treasury have a choice?

There will be no change. We will slowly but surely become a third world nation, and the majority of our population will welcome it

Why?

First, a basic Welfare State will be created

Second, all narcotics will be legalized and available at State managed stores

Third, media will concentrate on only the most basic desires (Porn, televised executions, etc)

We will become like the Roman Empire, once it became decadent

wow Jayman you are sour on the future. When I read your post I spilled coffe all over my desk laughing. I decided to watch some tv last night, (I rarely do unless it is football or hockey) all I could find to watch was ultimate fighting, WWF, reality shows about whores etc. It is amazing what is on. I finally found a movie with errol flynn.
How many years into the future will tv consist only of porn and ultimate fighting to the death?

Sure there is. You don't need to build anything to have a vibrant economy, but you do have to have something for which others will pay. The extractive industries come to mind immediately. Agriculture is another. Intellectual property is a third.

I can hear you forming your reply, so let me head it off: the rest of the world must be willing to pay for what you have. If you manufacture things that no one wants, that won't help. Likewise, if they can steal your intellectual property that won't help either.

It all comes down to supply and demand. If you control the supply, and the world has a demand, then your economy flourishes. If you have a demand, but nothing to supply, then your economy is in the crapper.

Tom

I disagree tom. We have intellectual property and we have raw materials right now. There are people who benefit from that but a nation the size of the US cannot do well economically with that. The intellectual property(sometimes stolen) is combined with the raw materials in factories in Japan and China where the value is added and it is then shipped back to us at a higher price creating the huge wealth deficits in this country.

Jayman...you really think that's where Canada is going? Porn on TV and state run heroin stores?

Regarding Malorn's link...
Why do conservatives bitch (as they should) about China keeping the yuan artificially low , and thereby providing their manufacturers a competitive advantage....YET, they bitch like hell if the value of the dollar goes down and helps OUR manufacturers?

If diminishing the value of the dollar is soooo bad, Then why bitch when China does it? Wouldn't it be bad for China to do so as well? Is it concern for China or for our manufacturers? (just seeking clarification)

Krugman had an article in the Times yesterday saying China has to devalue the RMB, to help the world economy, and that it wouldn't create inflation here.

Most certainly, the cost of most things would go up since, since so much is Made in China--except for food. Cost increases always get passed to the consumer.

If you combine those cost increases with the double digit cost increases in most services we routinely see in this country every year, it could tip the balance towards inflation and result in interest rate hikes. I'm not sure that isn't bad at this point--it will increase interest income on CDs. etc. Most banks these days are getting away with high lending rates and low CD rates, and I would like to see more return on my money they are using.

China has obvious IP problems, and I do believe a lot of infringement is deliberately overlooked, but piracy is not the "official policy", since China has signed major IP treaties. IP is not considered property of the people.

Intellectual property in the People's Republic of China - Wikipedia, the free encyclopedia

Music copyright infringement in the People's Republic of China - Wikipedia, the free encyclopedia

Your thinking is too narrow, and is being clouded by the current example of the U.S. I am talking in general, I believe you are thinking of the current U.S.

We don't have intellectual property that will support our country. What we have is not enough, and it isn't well protected. Quiet frankly, I don't see how it could ever be well enough protected given the international nature of trade.

My point is general: you don't have to manufacture anything, you just have to supply something for which others will pay. Norway is a great example, with all of their North Sea oil.

The problem is having something to sell, be it physical or intellectual. You can't create extractive products from nothing, and intellectual property is hard to defend. Still, it is not correct to claim that only manufacturing can lead to and support a flourishing economy.

If you remove the absolute qualifiers I agree with your statement. For example, I would say: "At this point, it's hard to see how the U.S. can maintain a flourishing economy without a basis in manufacturing."

Tom

I will guess that within a decade, we'll see porn and death sports on Prime Time

I forgot to mention that our "edumacashun" system is also badly broken. A scary proportion of kids cannot perform at expected grade levels

Are these losers going to be our future scientists and engineers? Or, will they be destined to be the neighborhood crack dealer?

I do believe that is where both countries are headed. It's a logical outcome, when you face the harsh realities:

We were sold out over 30 years ago, our many economic bubbles (Tech, housing, etc) have all burst, the Boomers are set to retire in droves, we will be unable to even PRETEND to keep infrastructure and welfare funding - let alone defense and foreign aid funding - anywhere near current levels, and hungry homeless people are likely to be ANGRY hungry homeless people

We will soon face a Perfect Storm, a convergence of all the many issues discussed in the paragraph above. I rather doubt we'll have a sudden collapse into social anarchy

What we will have instead is generation after generation, for the foreseeable future, facing and *expecting* lower and lower standards of living. We'll see entire tracts of foreclosed and empty homes left empty, probably bulldozed to prevent squatting

How do you think the reign of terror known as The Former USSR was able to keep such a tight grip on power for so long? True there wasn't much porn or narcotics, but the mostly empty State grocery stores still had plenty of alcohol and cigarettes

It actually makes economic, political, and social sense to appeal to very basic needs. Keep the population stoned, and make sure they're entertained while watching porn and violence on TV

At least, if I were in charge, that is how I would slowly implement social programs. I would realize it is financially impossible to provide the same standard of living for growing hordes of semi-illiterate bumpkins, and instead would have to ensure their little minds are kept amused and entertained

Just as cigarette companies used to hand out smokes to kids, to get them hooked at a young age, I would ensure that an easy-to-cultivate crop, eg Green, became a crucial agricultural crop. That the cultivated and processed results of that crop were freely available.

That way, logically, I would keep the vast hordes of semi-illiterate bumpkins safely happy and content. With very minimal social and economic cost on my part

That probably sounds callous and dystopian, but I really do see this as the only logical course that our increasingly irrelevant Western Industrialized nations can follow

Oh isn't THAT the truth? If you expect to have a hope in hell of not losing your principle, you invest in "safe" CD's/GIC's that are lucky to return 2-3%

Wow, you really have a twisted view of mankind. You do realize there have ALWAYS been uneducated "bumpkins" right? Actually MORE of them. Society was just better able to ignore them when media was limited and narrow in scope.
Our media cacophony now brings it all into daylight and in fact, searches for that stuff now. It sells! Back in the days of Beaver Cleaver media did not like to focus on the dirt, the ghettos, and the depravity of humans that has always existed (and always will).

And Russia did have drugs back then. And our homes are not going to be worthless. In a world with overpopulation and food shortages, NA will be golden with it's low population densities, fresh water, and arable land. Our problem will be refuge floods, not from within.

Back to the actual TOPIC now...It should be noted that the congressional appeal to Geithner to label China a currency manipulator is a bipartisan position. Wow...actual bipartisan thinking!

Seems to me though, all currencies are manipulated.

I'm in the process of readinghttp://www.amazon.com/dp/product/1568584377?tag=priuschatcom-20 by Chris
Hedges...
.
_H*