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View Diary: Stiglitz: 'We let banks' political pressure, fear-mongering win' (44 comments)

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  •  Let Them (0+ / 0-)

    How is this a problem?

    China decides it wants to spend its money propping up money-losing export industries.  That is to say, Chinese wealth is being spent giving True Independent a cheaper television as opposed to, say, building roads in Sichuan.

    Every renminbi they spend on this is a renminbi they cannot spend on health, education, infrastructure, or defense.  From a competitive standpoint, I hope they do it.

    •  From a competitive standpoint it only helps furth (0+ / 0-)

      er destroy the industrial base of other countries, who lay off workers, due to the inherent dropoff in demand.  In China on the other hand, those workers remain employed, the industrial base remains unaffected and when the global recession ends, guess who is left standing to make any product -- tvs, planes, cars, etc.,.  The country that subsidized its export factories.  Perhaps Taunter does not care if Chinese export policy only causes MORE American workers to lose their jobs ON TOP of what they would have already lost by the global recession.  It is this protectionism on China's part that will fuel other countries to do the same in retaliation (indeed it is demanded as a matter of politics) and then guess what Taunter --- the global economic situtation only gets that much worse.  No country anymore can confine the impact of its policies to its own borders.  China acts as if this is still the 19th century and expects (or believes) no other country will call them out on what they are doing.  That may have been when the global economy was humming along; those days, however, are long gone.

      •  That's why savings are helpful (1+ / 0-)
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        yellow dog in NJ

        China has been saving its money for years - the same years we built an economy out of building each other houses and invading dusty dictatorships.

        This is the rainy day.  And China is going to spend its money somewhere.  Of the places it could spend its money, this is one of the less scary.  Obviously they could just randomly decide to repave their streets in gold, or build anti-ICBM systems that don't work (wait, that's our idea), but it's their call.

        Their behavior does not dictate our response.  We remain, even after the debacle of the last administration, a far richer nation.  If we poured our money into education and reforming our health care system and breaking our addiction to oil we could emerge from this crisis in dramatically better shape.  Or we can just prop up banking and coastal real estate and keep bleeding. The decisions are entirely within our control.

        In the meantime, if the CCP thinks a good use of its savings is giving me a discount on manufactured goods, well, that's good for me and lousy for the Chinese citizens who are suffering and could use their government's savings.

        •  It DOES dictate a response, because they (0+ / 0-)

          are propping up an artificial trade surplus and they can only do so by continuing to make it more cost-effective for Chinese companies to undercut foreign competitors --- that is the classic definition of a trade war.  Perhaps you are okay with that, but I seriously doubt that the firing of MORE US workers above and beyond what would have happened on account of the global recession in order to satisfy Chinese desires to keep its workers from being laid off is going to past the political smell test.  As a matter of politics a response is due.  Plus your short term narrow focus on how much it will cost YOU to get a good manufactured in China is the very thought process that help contribute to the desolation of the US industrial base.  Would it not be better if those goods you were buying were made by US workers?  Less unemployment benefits your tax dollars would be spent on displaced workers.  Focuse on the forest instead on the trees.

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