Forget Political Rhetoric: There's Work to Be Done

At the beginning of George W. Bush’s presidency, political rhetoric regarding China took the form of old-school Cold War mantras. At the time, US consumption and Chinese production were as dependent on one another as heroin addicts on Afghan poppies. Thus, the “threats” were nonsensical political scapegoats.

As President Obama makes his way through China, we are witnessing more silly talk. Part of the President’s agenda is to convince the Chinese that importing US goods will “create even more jobs on both sides of the Pacific.” Um, no.

If China steps up US imports, they will cannibalize their own production (i.e., jobs). While this would be partially offset by their need to have the US make money to pay off our insane debts to them, as each moment passes China’s economy is growing less dependent on US consumption.

With one of the largest populations on Earth, China’s internal consumption will ultimately offset historic dependence on foreign consumption of their goods. Like the mafia, eventually China will not care how we pay them their interest, so long as we pay. Global politics is a fierce Machiavellian game. As Warren Buffett eloquently explained in I.O.U.S.A.: One Nation. Under Stress. In Debt,Thriftville owns Squanderville in the endgame:

Aren’t we tired of this BS? The cold hard truth for US citizens is we must work to create a sustainable economy. We must set our sights on explosive industries such as alternative energy and health technology. The longer we sit home and imagine the Chinese buying our shitty cars or exotic financial securities, the shorter the road to serfdom for more generations of US citizens who will be stuck paying off the reckless debts of our elders.

As with the previous administration, our government is wasting time giving empty speeches for the US media to pump at home. If you believe in the coming wave of jobs based on Chinese consumption of current US goods, I have some strongly defended US Dollars to sell you …

Comments

[piercy17]

Thousands of workers needed in medical transcription so find your local school to get a degree at bit.ly/5V4v8

2009 Nov 17 05:30 AM

[hock]

Wish the Congressmen and Senators think and act like you. Probably wishful thinking as a money printer is the FED Chairman, who is delaying the truth and making the future reckoning even more painful, while he distributes more wealth to bankers and traders at the expense of the global general public especially Americans with higher commodities inflation and a weaker US$ with his helicopters.

2009 Nov 17 06:03 AM

[Ginny]

NAFTA destroyed the industrial base of the US and with its demise, the middle class. There has been no spending binge, except in overpriced homes. People had been using credit cards and home equity to maintain their lifestyles as their incomes dropped. As unemployment rises and wages continue to fall, the economy will sink further into a depression. Health care 'reform' will result in massive layoffs in the sector as medical practices and hospitals struggle to stay afloat as reimbursement rates are slashed and payment modalities cause chaos.

2009 Nov 17 08:45 AM

[John Galt]

Tim Ianco had a good article about domestic inflation vs international goods that runs along this topic.

The costs of housing has skyrocketed over the last 30 years
The cost of a college degree has skyrocketed over the last 30 yrs
The cost of health care has skyrocketed over the last 30 years

Yeah food and other stuff went up, wages went up some, but those 3 domestic things have sky rocketed. Of course our government is trying to prop housing prices up high... they are ignoring the high cost of college, and are trying to take over health care.

Look at the price of international goods. Computers, TV's, stuff at Walmart. You get much more for your dollar now. 800 bucks on a TV back then vs 800 bucks buying you the latest and greatest flat panel TV from Asia now.

2009 Nov 17 09:36 AM