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The U.S. House of Representatives this week overwhelmingly passed a bill that would enable the Obama administration to impose punitive tariffs on almost all Chinese imports into the United States – a controversial move that's intended to punish China for refusing to revalue its currency.
The House China tariff bill faces opposition in the Senate and from the Obama administration and isn't expected to become law. Let's hope that reluctance continues to hold: This bill is little more than a political con job and is quite possibly the stupidest thing that Washington could do right now.
Not only will this touch off a war the United States literally cannot afford to fight, but it's going to hamstring millions of already cash tight Americans by raising the cost of living dramatically while further eviscerating our already fragile gross domestic product (GDP).
Let me show you why…
A Slippery Slope
One of the bill's key goals is to force China to revalue its currency, the yuan, especially as it relates to the U.S. dollar. By making the yuan more expensive, the lawmakers figure, China's cost advantage will vanish – as will the massive trade surplus that China runs with its trading partners. Once that happens, all of America's troubles would magically disappear.
Trouble is, the legislation wouldn't function as expected.
China will simply shift its focus and press its advantage in different areas, the most obvious and significant of which would be natural resources. Most of these resource- commodities – such as oil, gold, and other precious and industrial metals – are priced in dollars.
By making the yuan more expensive, the bill's backers would practically guarantee China the ability to buy more resources at a lower price. As Money Morning readers well know, China's already scouring the planet for anything that's not nailed down. Were this bill to become law, China would only redouble these efforts – and the fallout could be staggering.
Consider petroleum. At the rate China's oil consumption is accelerating, it could buy up nearly all of the world's excess production capacity. I don't need to explain what effect that will have on oil and gasoline prices.
Were this retaliatory legislation to become law, the cost to U.S. consumers would be horrific. It would grant the Obama administration much broader powers to slap punitive tariffs on almost all of China's U.S. imports -totaling $300 billion this year, reports The New York Times.
And that, in turn, would result in price increases of 30% to 60% for everything from blue jeans to copiers that are made in China and imported into the U.S. market.
In very practical terms, this means that millions of already-cash-strapped American families would suffer when they head to their local Wal-Mart Stores Inc. (NYSE: WMT) outlet and discover they can no longer afford the "everyday-low-price" goods they can right now afford to buy on impulse.
This, too, is problematic because 70% of our economy is tied to consumer spending. And that means t he fallout from this type of retaliatory lawmaking will take one of two forms:
- American consumers will shift their spending to similar products from other emerging-markets.
- Or they will gladly go along on the principle of the matter and pay far higher sticker prices on everything from toys to clothing to electronic goods – itself a new economic reality that will have a whole series of implications of its own for the wheezing U.S. economy.
The bill's backers apparently have no clue that a revalued Chinese yuan won't be a panacea for the struggling U.S. job market. When it comes to our massive, double-digit unemployment rate, it's not a cheap yuan and low wages in China that are the issue: It's the uncertain economy and hostile business environment that are acting as the obstacles to a sustained rebound of the American marketplace.
Regulatory Stranglehold
The truth is that our government has created an onerous regulatory burden that's prohibitively expensive for companies to navigate. We do not need more regulation or even punitive tariffs. We need to more-effectively use the regulations that we already have and to streamline or eliminate those that are excessive or unnecessary.
Throughout the financial crisis, f or example, top officials repeatedly referred to banks and brokerages that were "too big to fail." But what happened to the anti-trust enforcement efforts that kept institutions from reaching the point where a failure could have dire consequences for the entire economy?
This tariffs bill puts us on a dangerous path. For instance, while the Great Crash of 1929 may have delivered us to the precipice of the Great Depression, the ill-conceived Smoot-Hawley Tariff Act (signed into law on June 17, 1930) was one of the key catalysts that shoved us over the edge and kept us in the abyss for the next decade.
This country is already choking on regulation. Recent Wall Street Journal data shows that the annual cost of federal regulation here in the United States increased to more than $1.75 trillion in 2008. That cost has increased 3% in real terms over the past five years, and now accounts for about 14% of national income.
If you add in the federal tax burden (21% of national income, for a combined total of 35%), slightly more than $1 out of every $3 earned in the United States goes to pay for, or comply with, federal laws and regulations. Unless something changes, that "regulation tax" burden is only going to get worse.
Not surprisingly, the small businesses that are the backbone of the U.S. economy and the engine of job creation are getting creamed by this creeping cost of compliance. This isn't rhetoric nor is it related to the Chinese yuan. According to the U.S. Small Business Administration (SBA), U.S. small businesses employ more than half of the private work force and have created 60% to 80% of all new jobs over the last decade.
Writing in The Journal this week, Lafayette College economists Nicole V. Crain and W. Mark Crain stated that companies with fewer than 20 employees incur regulatory costs 42% greater than firms with between 20 and 499 employees, and costs 36% greater than firms with more than 500 employees. The regulatory cost per employee for small businesses was $10,585, compared to $7,454 for medium firms and $7,755 for large firms.
That's hardly the way to treat the backbone of the economy.
Given the opposition the new legislation faces from the Senate and the Obama administration, and the very clear evidence that challenging China to a global trade duel won't have a happy ending, we have to ask the question: Why on earth did the House overwhelmingly pass this bill?
Target For Tonight
First, it's clear that this idea is polling well, and given that the midterm elections are mere weeks away, I believe House members clearly saw this as a way for them to appear tough at this critical (and political) juncture.
The American public is worried about the U.S. economy's seeming inability to get healthy. And voters are sick and tired of the bickering and political infighting that seems to divert lawmakers' attention from the "real" issues that aren't getting addressed.
The hope is that this bill will create the appearance of doing "something," meaning it will serve as a rallying point for voters who don't understand just how dangerous and damaging this legislation would actually be. In other words, it's a political con job designed to appear as if the entire legislative body is worthy of sitting where they sit (and keeping their jobs).
Now that you do understand just how misguided this bill is, it's time to pressure your representatives to start making the right moves.
Here are four key initiatives that will help us get the U.S. economy moving in the right direction again. Our elected officials should embrace the following platform:
- Cut Leverage: If there's been a common catalyst in virtually everything that's gone wrong during the global financial crisis, that catalyst has been "leverage" – borrowed money. Leverage on Wall Street, leverage in consumer goods, leverage in mortgages and leverage in our own spending. The ratios at times reach a staggering 100 to 1! Congress needs to change the rules and change the tax laws to diminish the allure of leverage and borrowing in the dealmaking market. Once that happens, the regulators need to administer the laws with an iron fist .
- Fewer Regulations = A Fatter Wallet: If lawmakers would reduce regulation – and especially the afore-mentioned cost of compliance – U.S. companies would grow at a much faster pace. And small businesses, which shoulder a disproportionately greater burden, would get back to their role as top job generators.
- Don't Tax Job Creation: It's crucial that Washington eradicate taxes associated with job creation. Lawmakers say they're interested in creating jobs, so why is it that they still tax that process? Nothing makes less sense than culling $800 billion from our payrolls every year.
- Rein in Wall Street: A reasonably small group of self-important, self-aggrandizing individuals played the key role in creating one of the biggest financial crises in history. And they did so by building and protecting an environment of speculation that has little or no economic benefit to the rest of us. Require fiduciary responsibility, outlaw the credit default swaps and quit putting lipstick on the pigs running the barnyard.
[Editor's Note: Commentator and best-selling author Keith Fitz-Gerald has maintained a perfect record with his Geiger Index advisory service. If you missed out on all or part of that run, don't despair: Subscribers to his newest service, TheMicroQuake Alert, will be able to benefit from the insights of one of the shrewdest investors in the marketplace today. To find out more about MicroQuake, please click here.]
News and Related Story Links:
- The New York Times:
Eye on China, House Votes for Greater Tariff Powers. - RTT News:
House Approves Bill Authorizing New China Tariffs. - Money Morning Investment Research:
What Companies Are Profiting From China's Commodities Crusade? - Wikipedia:
Smoot-Hawley Tariff Act. - The Wall Street Journal:
The Regulation Tax Keeps Growing. - Slate.com:
Where Does the Expression "Put Lipstick on the Pigs" Come From?
About the Author
Keith Fitz-Gerald has been the Chief Investment Strategist for the Money Morning team since 2007. He's a seasoned market analyst with decades of experience, and a highly accurate track record. Keith regularly travels the world in search of investment opportunities others don't yet see or understand. In addition to heading The Money Map Report, Keith runs High Velocity Profits, which aims to get in, target gains, and get out clean, and he's also the founding editor of Straight Line Profits, a service devoted to revealing the "dark side" of Wall Street... In his weekly Total Wealth, Keith has broken down his 30-plus years of success into three parts: Trends, Risk Assessment, and Tactics – meaning the exact techniques for making money. Sign up is free at totalwealthresearch.com.
Although not an American citizen (British and living in Europe), this is one of the finest pieces of dissuasion I have seen for a long time. It is not only the American government that should take note of its contents but the messages it imparts should be almost mandatory reading by the 'faceless mandarins' of the European Union (whose only raison d'etre seems to be to embroil as many people and companies as possible in a dervish dance to destruction).
Congratulations on an excellent piece – and thank you for 'blue-sky' thinking!
Ray Fletcher
You are right in everything you say; America is shooting itself in the foot and it does look as if congress is deliberately dismembering it self into a third world country without development.This marks the beginning of an end to a great civilization. It is sad for the Western world and for the American people. The real problem with the US is that they have ceased to be a democracy; it is an elite plutocracy run by run by international bankers who are solely concerned with gathering wealth and political power. All past empires have shared a similar fate.
Nothing that the House of Representatives or the Senate does or whatever Mr. Fitz-Gerald has to say on anything under the sun will help the US economy easily.
There is only one problem that the US economy faces and that is its mistake of transferring one billion jobs to China over the years. naturally today Americans have no jobs. Even if you import cheap from China most poor people don't have money to buy anything. Importing from China knocked the marginal hourly worker out of his job.
How long will it take Walmart's suppliers to open their own outlets outside Walmart depots? And Walmart will shut down. A burger costs less than 1$, a pizza 1$, a cup of coffee 50 cents, coke and pepsi 5 cents. How long before Chiina shuts down McDonald, Coke, Pepsi, Pizza Hut etc. And the joblessness will rise to 20%.
Forget the value of the chinese currency. All US has to do is to stop buying Chinese goods. Obviously the US govt dare not do this for fear of Chinese repurcussion in the financial markets, but each individual American can decide not to buy any Chinese goods. This willl hurt for a few years but the American glory will be regained. Else by the end of this century Americans will be cueing up outside Chinese factories and mines to work for 1$ per day.
The choice is yours. Continue looking short term and throw the rest of your fellow countrymen out of jobs too or give your next generation a bright future.
Someone coined the phrase "coonsumer is king" when in reality the consumer is merely an objected to be raped, looted and thrown out of her house.
And by the way. America has got the "War against terror" all wrong. Afghanistan is just the pawn. To win the game you have to checkmate the king. Every American below the age of 12 knows this but no American above the age of 12 seems to know this. The address of the King is ISI, Islamabad, Pakistan. America's closest ally in this war against terror.
anish poojara
Well siad Anish Poojara. Hopefully American people understands their power and stop for at last 6 months buying chinese products & stop visiting Wallmart & K-mart so small private stores can have a chance to re- open by American local owners selling home made where the profit could stay in the city. Hopefuly trade schools will start teaching productions of basic goods like food, confectionery, shoes….., only small business is able to creat quality that we are lucking now- to much of chemicals in food, cosmetics, disposable products… If import stops from China who will do productions if no one is learing it ?
Hopefully government puts tafirs on imports to put America back to work to creat varity & quality at home & for chance for next genarations to exists.This franchised world is the end of humanity it shuts the ability to think & creat
Mr. Fitz-Gerald:
Your arguments are certainly appealing, but miss a few key facts.
First, China slapped prohibitive tariffs on American poultry, so the tariffs would be going both ways.
Was it "over regulation" that caused the Gulf oil spill or was it a lack of effective regulation?
Was it "over regulation" that caused the recall of over a billion tainted eggs?
Was it "over regulation" that caused the recall of dangerous meats?
Was it "over regulation" that caused the recall of tainted medicines?
Was it "over regulation" that caused the recall of defective automobiles?
Your 4th point about "Rein(ing) in Wall Street" is only more conclusive as you want "regulations" to "require fiduciary responsibility, outlaw the credit default swaps, and quit putting lipstick on the pigs running the barnyard". At the same time your 2nd point calls for less regulation.
Well said db and I am glad you pointed out the authors demands for more regulation.
We all need to keep in mind that articles like this come with a bias from the writers point of view. There is almost always an agenda we need to challenge and I do not agree with much of what Mr Fitz-Gerald has written here today nor the slant applied to the story.
He has not mentioned for example that the house vote was an overwhelming majority decision and that both parties were strong supporters of the bill. Is that not at odds with the fear-pandering he presents here?
Can we conclude that both Democrats and Republicans in majority are just a bunch of idiots that don't understand why they are voting on a subject as important as this? Of course not. You may not like politicians but you cannot argue that these are for the most part intelligent, articulate and educated people who we have put in power to represent the interests of the country.
The bill allowing tariffs to be imposed will be passed by the Senate because that is the will of the people as represented by the majority vote of the house.
I do not see this as partisan politics because almost everyone is onside with the program. Mr Fitz-Gerald has now found himself in the pro-China camp which is in my opinion anti-American at this time. He should stop with the "chicken-little sky is falling" routine and take another look at how the economy here has been negatively impacted by a US Dollar trade subsidy that favors Chinese growth and global expansionism policies. None of that is in our interests at this time and particularly as employment is being negatively impacted.
We all know that protectionism almost destroyed the world and local economies at the time of the 30ies recession, but few realise how much more vulnerable the world economy is today.
Nobody wins, everybody loses, Surely we can learn from that past stupidity and not just repeat it mindlessly with some nationalist or misplaced family homily justification?
With the economy, we must always remember, what goes around comes around, money generates money, no goes around, – Nothing.
I don't think he is saying in this article "not to regulate". He is saying that there is plenty of regulations on the books – some of it is not necessary and what is necessary needs to be enforced. The SEC didn't catch Bernie Madoff because of a lack of regulations but because they didn't enforce the regulations that were there to cover the situation. The BP oil spill could happen (and often has) anywhere. China has had bad spills off its coast and so have certain African countries. If you plan on eliminating ALL offshore drilling then you better have something on your books to replace that missing oil with and if the USA bans it but the rest of the world doesn't, then it is still happening but we are shooting ourselves in the foot by being one of the few places that bans it. What good does it do us to ban offshore drilling if China is going to drill off of Cuba near us? What happens if this causes a spill? We need to decide what alternatives to oil (since drilling and spills are the problem cited) can effectively replace our oil usage at this time? Environmentalists and the administration want to ban oil drilling without offering any viable alternatives that can NOW replace it. What good is that. The rest of the world will keep drilling (and spilling) and only our economy will feel the brunt of replacing cheap oil with WHAT?
why not bring back the EV1, the gov let the oil companies take it,lets take it back
If you are more widely read you know that open borders and free trade is the mantra of the Brahmins of India, who have throughout history bribed the priests and kings to facilitate their trade, which once was spices but now ranges from dead meat carcasses to the planes that carry them.
Global trade is good, but the effects of it have destroyed the U S the past 20 years and I see nothing wrong when parochials wake up and say what's good for the Brahmins is bad for us.
Five years ago I sat through a Dartmouth parents meeting in which the Dartmouth professor pointed out that America is now much better off due to global trade, which enriches everyone even if the Luddites (I guess he meant the long haired me in the audience) were too dumb to realize it.
Well, just five years after his talk America seems on the verge of economic collapse. So much for his brainwashed hubris. How can any logical person look at the devasted U S economic scene and now say global trade has been great for America??
I now hope that that Dartmouth professor's job is outsourced to India or China, where we can get the same globalist brainwashing at a far lower price. And the Dart prof can learn first hand what happens when his job is outsourced and he has to scramble for a stocker job at Wal-Mart or a reigonal bank that is about to be bought out by a protected money center bank that will abolish more jobs for efficiency to pay for debt service.
The globalism and domestic asset stripping that has idled more than a fifth of the U S population and has destroyed our economic well being has proven that it is only self serving to the traders. Likewise, the roaming economic hit men destroyed the hunting grounds of the indigenous just so that a few elites could enjoy air conditioning.
If globalism keeps wiping out the middle and lower classes to the degree that it is, then the argument for unrestrained unregulated trade will be moot for there will be no more locals with money to buy the foreign products.
I say protectionism is now good. America first. If you don't like that. Then move to China and India and get rich in their unregulated environments and foul dirty air.
Well it all starts with someone giving or spending the money….and seeing how China now has the most …or all of ours….I guess they better start soon…and americas for sale at bargain basement….whats not already sold…or China already owns!!
We need to do 4 things to get the U.S. on a path to long term prosperity.
1)A flat tax of 15% for all incomes with NO deductions.Those wanting to pay more tax to govt could choose any % tax and the amount above 15% would be applied to low income individuals to lower their %.This would allow Americans to actually choose how much they want to help others,either through giving to private charities or govt.Govts stealing from one person and transferring to another is not charity-it's theft.
2)No more borrowing by govts.They have proven irresponsible borrowers and their credit cards should be taken away.
3)No deficits.Govt spends only what it takes in.
4)An honest money system.Not a fiat currency system.
Smoot-Hawley Redux?
It's all part of their game plan. Dumb and naive Americans will be busy blaming China for inflation or the negative impact of higher prices instead of what the Obama team and the Fed have been doing to cause inflation. This is the deception of the socialist agenda. I endured this crap for 6 years after the fall of South Vietnam to communist North which really have been a bunch of manipulative/greedy/corruptive elitists at the top hiding behind the fanciful disguise of the nationalistic movement facade. Real solution? Let the war in all forms between China and the US of A go in full swing to recalibrate the order through some pain and suffering to make left-leaning Americans less naive to appreciate their country's original self and founding principles much much more.
I think that your article is correct in a microcosm – but misses the overrarching general issue of our huge predicament with China. Yes, a trade war with China will cause a temporary rise in cost of living, and yes, it may not result in a huge number of new jobs. It might even result in a recession.. but eventually we will have to significantly change our policy with china (who absolutely refuses to stop cheating in trade), and it will be painful regardless – but much more painful the longer we wait. What you and many others fail to realize is that we are already at war with China and we don't even recognize it. A financial war that the Communist leadership in China has engaged in — the largest, and most destructive mercantilistic war in the history of the world, and free traders like yourself keep excusing it. Since when did the United States put their faith in the hands of a Communist nation… It is so backward. Oh my goodness, let's not upset China… they might retaliate… what do you think has been happening over the past decade. Do you really think that we can create 15 milllion jobs (let alone good jobs) off "retail" and "consumerism". The real art to the creation of wealth is production… it is key to our future, and is key to the strength of our country. We (ourselves and our leaders) have fallen into a deadly trap – based on the art of war. Know your enemy well, and use it to destroy them.
If we do not create a coherent trade policy to stop China now, it will only get worse and be more painful later. This is no different than other wars – early intervention is much less painful than waiting until we 'hit the wall'. The time to force China to play by the rules is now – Make them allow their currency to be realistic and fair, make them quit requiring our companies to partner with theirs for access to their country, make them quit requiring that we give them technology and know-home to have access to their country, and quit allowing them to beat us at our own game. If they won't, then treat them the same way they treat us.
Fair trade – not free trade…. and this has been anything but fair!! End China's free ride on the gravy train.
We all know that the biggest, most vibrant economies in the world were built under the umbrella of protective tariffs and organized labor. The US economy is on the verge of total collapse since we no longer have a well paid workforce to provide the demand that allows business to thrive by supplying that demand. When the US government returns to doing the job for which it was instituted, protecting its people and borders, then and only then will the economy heal itself.
As you implied, basically this bill is an attempt to convince voters that Congress is trying to fix a major problem in order to get votes. Unfortunately, as usual, they have not considered either what caused the problem or what the effects of their actions will be. It becomes urgent because they have neglected to act when the problem began.
The underlying problem that the trade imbalances created is the false boost in liquidity generated by the currency pegging process via primarily the asian 5 countries. In order to peg their currency to the $US, money was printed and placed on the FX market to depress their respective currencies. Tarriffs are a bad way to try to correct this market manipulation, and unfortunately probably won't work but there needs to be found a way to balance these FX market imbalances for normal productivity growth to occur.
I spent time putting together an argument of why I feel free trade with China is a farse, and that a trade war is in the best interests of the United States. If not now then later was basically my argument since China cheats and is a Communist nation that is essentially already in the mindset of waging economic war against America.
This site chose to remove it and to not post it. No reason.. it just disappeared.
I am discontinuing my reading of this site and your mailings by opting out – there is no reason to read your continuous "sales tactic" drummings if you won't even allow me to post my opinion. Now that this has happened I question every single thing that you have ever sent or posted .
Goodbye.
k disregard.. apparently there is a lag in your moderation process…
apologies
They won't pass it, Congress have no intention of passing it. But the discussion helps some get re-elected, and it (the jawboning and discussion) MIGHT move the currency.
It's good to hear Anish's comments come to the light of day. Anish is 100% correct. America's extistence was sold down the river the day our congressional whores and president clinton sign NAFTA & GATT into law. The yearly trade deficits exploded. Unlike the Budgetary charades financed by monoply money we are currently playing, these trade deficits are REAL dollars and REAL jobs leaving this country. There is no way to compete with countries that have no over regulating and taxing governments, low wages and packs of lawyers drumming up business to punish the few businesses that remain and actually turn a profit.
The only way to reverse this disaster would be political reform which I doubt you could find 535 honest and competent politicians in this country. Thus the real solution would be to stop buying from the hand that is destroying us as Anish mentions. Unfortunately it is a catch 22 position. We can't afford to pay full price because all the real jobs have been shipped overseas.
Doesn't anyone find it odd that we are correctly called a "Consumer Economy" ? Our main product/service is shopping……..
Ronald
Yuo are right ,this will be disaster for wealthy people, but for people who lost a job will be benefits. Europe ,wright now are doing buch better without all this Chines product ,because high tax on Cinines product. Thing about poor people who do not have job. We export all labor to Chine (one hour cost about 38 cents) instaed keep these jobs in US.
JP
Consumers are expected to continue spending and going into debt to lift the economy. But consumer income is inadequate because their jobs have been outsourced to foreign countries. So, without jobs or with poor paying jobs they are expected to borrow money to purchase products produced overseas. You can't expect the economy to grow with just consumers and no producers. Any high school kid knows that this is unsustainable and will not work.
After the crah of 2008, consumers have wised up; they're saving money rather than speding more than they have and they're are reducing their debt. I'd say that the U.S. government should take a lesson from the consumers and do the same. We're living on borrowed money and this is not a recipe for a strong economy.
What's the cure? Find a way to bring jobs back to the U.S. so that people can inprove their earning power and buy products they themselves produce. This wil expand the middle class, reduce unemployment, increase tax revenue, possibly eliminate deficit financing and improve homeland security.
I pasted my artcile but it has not been published
Do Americans really think that all their financial problems are caused by the value of the RMB, and that revaluation will solve al the economic problems that the USA has gotten into thus far.
This does not sound like Economics 411—but deserves an "A" for Political snowballing.
We are all learning the hard way. The U.S. Congress has been woefully inept at oversight controls for Trade which should be fair and reciprocal. U.S. Dollars made in the United States should stay in the United States for re-investment and creative productivity. The Cotton Industry was sold out to European Investors in the 1920's; the U.S. Citizens and Workers have been over-taxed and the increased U.S. Dollar Growth Under-regulated allowing Billions to go out of the Country; thereby enslaving productivity and economic growth. Oar # 19 with Ben Hur.
By Joseph Foster. Author, ‘’Destruction of America’’
Release date November 2010
The US entered into a trade treaty with China based on attaining Geo political influence, At the time it remained focused on Containing Communism as its prime objective, the second being trade.
We now found out the fall of the Berlin wall has contributed to the De Industrialization of the US, it has caused more damage than the threat of Communism.
One flaw of the WTO agreement it is detriment to western labor, moreover it does not give American business incentive to hire Americans since their wages are too high in comparison to emerging market labor.
How on earth could a US worker compete with low paid Labor countries,
China is also, to some extent threatened with low labor cost countries, since there are other countries where labor is cheaper than China.
For CEO seeking cheaper labor than China, my research has revealed a country
Where Labor may be obtained for $35,00 per month with no fringe benefits,
Now you may say they do not have the skills as the Chinese or Indian workers, , No problem all you need is to recruit the Labor and train them for one year, Thereafter you would need to increase their wages to $100,00 per month, still Cheaper than Chinese or Indian workers, such hiring will further elevate the Corporate bottom line.
Is Washington now making noise about trade, why for the last 15 years it kept silent and saw its Industrial base being destroyed in favor of cheap labor?
Both political parties have abandoned the American worker.
The Global trade in time is going to develop into a labor war.
On my recent business trip to China, I was impressed to witness
The new development of hundreds of high rise office complex in the business section of Beijing, moreover hundreds of up scale high-rise condominium buildings,
During my eight-day visit to China while I was at the Beijing Hilton, I met many business persons from several countries, on a shopping mission for their business in Africa and other countries.
China to day is focused on business, growth, and making money, while Washington is focused on NATO and future Wars, perhaps Iran, Somalia or Pakistan chasing a bunch of terrorist hiding in caves.
Folks it is very strange that Washington did not discover the Quan is undervalued 20 years ago, also very strange that the issue became a heated
Topic in congress two months before election.
After the election, I predict the Senate will finally kill the bill.
You may ask why, American CEO of multi Nationals Companies take
1.3 Billion Chinese customers very serious. As I traveled in China, I could see
Construction cranes all over the place.
Now you may ask what about millions and millions of American workers
That may become permanently unemployed, no problem eventually our
Present Administration will employ all of them with stimulus money.
The next question, where will we get the additional funding, again no problem We may either borrow more or print more money.
The Federal Government, State Government, and Cities
Have all grown in size beyond the means of the American Taxpayers to support.
One issue that outrages me is property Tax, in the UK it is referred to as
Council Tax, it bleeds homeowners to death, in some instance the home
Owner reaches a point of despair, since he can no longer afford to feed
The demand for more money by some low-grade human vultures whose appetite keeps increasing by property price appreciation.
These Vultures have now began to learn that there will no longer be an increase in revenue, due decrease in property values.
Some of these oil snake vultures decided to reward them selves with salaries UN heard off, They began to pay police officers $200 K and garbage collectors $50 K the profession of a garbage collector began to be at the same level as a school teacher.
There are some public officials however, that adhere to sound economic practice and by no means deserve to be condemned but they are few in number.
America has long lost the right to be entrusted with the world's reserve currency. Democracy in America today means if you vote for what we want O.K. but if not we shall ignore you. If America stops buying Chinese goods just remember you can be replaced. You, America, are just one country among hundreds and for far too long you have failed to treat your fellow citizens of the world as you would like to be treated. Why should China now be held responsible for America's dissolute behaviour? For too many years America has paid her suppliers with unbacked paper IOU's. Now they want the country they paid for goods they bought with printed credit and expect that country, that lived within its means and saved to suffer. No way…if countries could be jailed for fraud and deceit America should be given a life sentence of 50 years without parole. Donal.
Contrary to your opinion I (and many other Americans) would tradeoff higher consumer goods from China to compensate for the deflating of asset prices that should never had occured starting over 10 years ago in what should have been a deflationary environment that Greenbubbles wouldnt allow.
and effective medicine. the world is full of crooks and scheemers. there will always be companies who will cut corners for the sake of a little extra profit. remove external controls and we all pay for it, eventually. we had enron, valdez,BP's multiple transgressions. maybe you want to trust things to self regulation but I don't. When you discover that your hip replacement his defective and has to be replaced because it wasn't cleaned properly in manufacture, or your miner husband would have been saved by a $20 piece of equipment you appreciate the value of regulations.
DON'T SAIL IN A JUNK
An awful lot of the materials made in China and found in your neighborhood hardware store are JUNK. For example, buy a hose bib at OSH Hardware. The ones "Made in China" don't hold up as long as American made hose bibs. Also recall in the sixties when a few people drove those "little Jap cars", or when a imported product had "Made in Japan" on it? At first they were junk. Eventually, these imports were sought after for first rate quaility and by the mid-seventies, "Made in America" was seen as "JUNK". So remember, roles can change much faster than politicans or public policy. Markets are much faster than whole countries or voters.
the beginning of my post was cut off. I said that I am all in favor of strong regulations with teeth. We are about to experience a tsunami of problems because financial intitutions could not be bothered to preserve chain of title on mortgaged property with proper documentation and recordation. I want safe food, safe transportation, products that are not dangerous to my health, employers who play by rules, pure water to drink and air to breathe, financial products I can trust Regulation is there for a reason.
I'm president of a U.S. electronics manufacturing company and I import from Asia daily. Let me tell you how things really work for me. If we continue on our present course, there will be little money left in our country to purchase my products and my company will eventually fail. If the tarrifs are increased a little, I will continue to import and just raise my prices. My company will fail sooner, because I will collect more money to send to Asia. If the tarrifs are raised such that it cost less to manufacture here than in Asia, I will hire people and stop sending so much money to Asia. Goods will cost more at first, but the country will become stronger. I will still import until I can either purchase goods here or manufacture them myself. However, I think it's too late to change course and I'm afraid I will see the U.S. become a second rate, struggling nation in my lifetime, and I'm already old. The decline will not be smooth. We will see dramatic dips as in 2008. People are quick to blame banks and mortgage companies for our problems, but if you really want to see the enemy that continues to send money to Asia, just look in a mirror.
China is destroying you economically with unfair tactics and it will never be too late to do something about it. The cowardly act of being afraid of them and just allowing them to run over the top of you may not bring you to war this week. Did Europe not deal with pre-WW2 Germany in just the same timid manner and look how that ended up. China needs to be put into its place economically through very strong and large tariffs. Yes, the short term effect will hurt the US consumer. But, if some regulations on your industry can be relaxed factories will pop up in the US to fill that need very quickly and employ people and pay people to go buy those goods. What are you afraid of? I have never seen America so weak and timid. Sad.
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