It also then discusses US issues: So it's becoming apparent a little sooner than I believe the Politburo would have wanted. The American standard of living will soon be much more dependent on simple Chinese political moves the US' reactionary voting base will essentially mean China controls elections. Such a folly of the US system.
Interesting. Too bad for America then. Nobody wants to do hard math or hard labor here. Everybody just wants to sit back, watch American Idol, live paycheck to paycheck, etc.
What you suggest was, believe it or not, the underlying assumption Americans made about the future of the country after we were the triumphant winners of World War II. We were going to be the Masters of the World and everybody else would do what we wanted them to do. Cut to the chase: if we would support our currency instead of letting the Federal Reserve System crush it into the dirt, we could still "rule the roost". Quick example: we buy spoons from China (they make them, we dont, and we don't want to). If the dollar is weak we get fewer spoons per dollar spent. If the dollar is maintained at a strong level, we get more spoons per dollar spent. Extrapolate this simple logic to everything else and magically we Americans HAVE more because our money BUYS more. But will we do that? Oh, hell no! The central bankers of the world are too busy creating a one-world economy, to be followed by a one-world government, which THEY will control completely....
What is Obama or the next president going to do about this? Is American economic independence really all that possible? The government had to ask China how to craft the stimulus a few years back, will they have to approve of each major policy move?
Pollycy understands the basics of the importance of world acceptance of the U.S. dollar, but he doesn't seem to realize that the United States has been abusing its unique position for decades. His solution has not only been thought of: it has already been implemented (a long time ago). The world is awash in dollars and dollar instruments and the Federal Reserve has been running around trying to maintain the high mark the U.S. Dollar has obtained and allow it to go down in value very slowly by battling the twin pressures of irresponsible government fiscal policy and disillusionment in the long-term value of the U.S. Dollar (why hold dollars if their value is going to decrease?). It would take massive political will by both Republicans and Democrats to make the changes necessary to achieve such a long term result and there is nowhere near that level of will in evidence. Change isn't going to happen until things get so bad that the public can't ignore the results and Congress can't ignore the public's reaction. Do remember that for virtually every other nation on earth, the relative value of their currency is based on actual economic performance and its level of foreign indebtedness. What will happen to the United States if a sufficiently shocking economic event occurs that makes the rest of the world look at the United States using ONLY those criteria?
If American exports are growing as fast as the article states, that's a good thing. While the thought of us growing more dependent on China is somewhat unsettling, a decline in the value of our currency could actually help us in the long run. Our exports could become more competitive, and our debt becomes less staggering in value. Of course, this does mean our standard of living will fall, and traveling abroad could become absurdly expensive.
What the next president needs to do is engage in some protectionism. We don't have to depend on exports to drive our economy if we just stop the flood of Dollars going to China because we buy too much from them. America needs to build more stuff in this country and buy less from China.
And thus US jobs and profit rely on Chinese policy. Chinese will control elections because of the poor system. The WTO would put even more billions in fines on the US it's lose-lose.
The US does not have to remain in the WTO. Nor do we have to pay any fines that the WTO imposes. Not that I think Obama or Romney or Pawlenty would defy the WTO, but if we want our country back that may have to be done someday.
"We don't have the comparative advantage yet." I have no idea what that means. Protectionism is meant to allow products to be manufactured in the US instead of importing them from China.
Well, I would argue the only real flaw in the system is how we view political donations as free speech. With or without a falling dollar, it's possible for China or any other foreign country to buy our elections. To me, this is a separate issue altogether.
In other words, we're not cheap enough labor to produce these goods effectively. Protectionism is a quick fix at best. It almost always fails in the long run.
Better educating our workers is the solution. You can't expect First World citizens to be able to hold onto low skill jobs when competing with countries like Indonesia.
It more or less does; US trade would drop like a lead balloon. US jobs would go with it. Then why discuss it like you do know? Not quite. The two party reactionary voting means that if one party 'does poorly' the other is elected regardless of stance or policies. China knows this well. US politicians know this as well; if they want to keep their seat, they need to make sure China's got their back.
"In other words, we're not cheap enough labor to produce these goods effectively." I half agree with that. Our labor costs are higher than China which is actually a good thing for American workers and bad for the Chinese workers. So we can't produce many products as cheap as China but with tariffs on imported Chinese products we don't have to have the same labor costs to compete in the US market.
Good point. I don't know. I think it's kind of inevitable. It doesn't really disturb me that much though. The only part that does kind of disturb me is if this results in restricting media coverage of China. We've already seen evidence of this in Canada and Australia.
Well that has been a 40 year failed effort. Maybe not everyone can be a white collar worker and sit behind a desk. Making goods in a factory is not such a bad thing for semi-educated Americans to do.
Here's the problem with that approach though. You'd have to put tariffs on cheap goods from all countries. China is actually slowly moving away from a lot of cheap manufacturing as it rises in standard of living. Countries like India, Vietnam, Indonesia, and Honduras produce a lot of the cheapest goods now. So, to be effective, you'd have to put tariffs on the same goods from those countries as well.
That's almost a definite to happen. Sure both parties say they want to "be tough on China", and the Politburo knows that those congressman need to say that to appear strong; but when it comes down to sitting at the table, things change. Rudd and Harper are the first of the "Chinese Presidents", Huntsman would make America's first if he ever gets it. France and the UK have already bowed, Germany as well. Trade pacts with China are so lucrative!
