[Manic!]

Saw this on CNN:

http://www.youtube.com/watch?v=OTSQozWP-rM

[Integgyy]

lol it's true

[double0seven]

Can't believe some american company just made an Ad like that..

[Nisota Skypra]

So true.. Last time I was researching this kind of topic, I came across an article which stated that China owned somewhere upwards of $1 trillion of the US debt...

The same article also said something about the possibility of the US treasury ramping up inflation in order to deflate the debt.. Dunno where I read it, sorry.

Makes you think though.

[Manic!]

Can't believe some american company just made an Ad like that..

And with the new Supreme court decision the organization behind the add does not have to reveille who's funding it. Could be Bin Laden for all we know.

[Arash]

America became great after slavery and 250 wars in its lifetime.

I dont see an end to this perfect formula, enslave people to work more hours for peanuts... have more wars for resources... equals win.
oh, and take away any kind of nationalized health care which the ad points out, they dont want useless old people sucking up all the air.

[RabidRat]

LOL that's great.

[StylinRed]

The ad reflects what's going on already at schools in China... i can't remember who exactly (someone in charge of USA's money) was doing a talk at beijing university and he was talking about how America is fine and they aren't headed for a recession every student in the lecture broke out in laughter

So true.. Last time I was researching this kind of topic, I came across an article which stated that China owned somewhere upwards of $1 trillion of the US debt...



even though China is the biggest debt holder it only holds something like 10-15% of USA's debt but it gets sensationalized because China is a commie country that wasn't/isn't always buddies with america

[asian_XL]

The ad reflects what's going on already at schools in China... i can't remember who exactly (someone in charge of USA's money) was doing a talk at beijing university and he was talking about how America is fine and they aren't headed for a recession every student in the lecture broke out in laughter



Wrong, what I heard is when the lecturer in Beijing teaches his students should stop being so materialistic and should stop buying foreign products (Apple Iphone, Sony Hi-FI, Samsung LCD), every student in the lecture broke out in laughter.

I am not joking, 1.3billion people are most working for US.

[will068]

America became great after slavery and 250 wars in its lifetime.

I dont see an end to this perfect formula, enslave people to work more hours for peanuts... have more wars for resources... equals win.
oh, and take away any kind of nationalized health care which the ad points out, they dont want useless old people sucking up all the air.

This.

[m!chael]

Think about it like this, Products are conceptualized and developed in America and along with it the human and technological capital necessary to make that possible, achieving exponential growth in both. It is then shipped off to China where some poor schmucks with no other options are being taken advantage by factory owners in order to make that product cheaply enough so that an American might consider buying it.

Yep, sounds like China has the upper hand all right.

[Arash]

But who pays the factory owners and profits exponentially off the backs of the destitute Chinese labourers?
Who is to blame for all the North American jobs lost because cheap products are imported without tariffs?

Its because of people like Milton Friedman (the person in your sig) and the wealthy few percent that control corporations like Walmart and Zellers.

Welcome to the "global village", soon enough our economy will be as bad as the USA.



Why you are a slave
http://www.youtube.com/watch?v=L5DotonW49o

[Nisota Skypra]

even though China is the biggest debt holder it only holds something like 10-15% of USA's debt but it gets sensationalized because China is a commie country that wasn't/isn't always buddies with america

Absolutely, and if US/China relations take a giant turn for the worse, and China realizes on it's loans to the US, the US economy is fucked. As a whole, the US is essentially a consumer nation, with a lot of it's manufacturing done elsewhere (read: China). There's no way that the US could handle China withdrawing it's money. Which I think the ad points out quite nicely - China pulls money out, US becomes China's bitch.

[m!chael]

But who pays the factory owners and profits exponentially off the backs of the destitute Chinese labourers?
Who is to blame for all the North American jobs lost because cheap products are imported without tariffs?

Its because of people like Milton Friedman (the person in your sig) and the wealthy few percent that control corporations like Walmart and Zellers.

Welcome to the "global village", soon enough our economy will be as bad as the USA.



Why you are a slave
http://www.youtube.com/watch?v=L5DotonW49o

Oh yeah? Go take a look at this graph and then tell me how many jobs were lost after Jan 1, 1994 (when NAFTA went into force.) To me It looks like a decreasing trend in unemployment for the next 6 years or so, only disrupted by a mini recession.
http://www.google.com/publicdata?ds=usunemployment&met=unemployment_rate&tdim=true&dl=en&hl=en&q=unemployment+rate+for+us

[Arash]

Were you expecting the job losses to happen overnight?

You say here
Yep, sounds like China has the upper hand all right.
Do you want America (which already does) and other countries to have the upper hand thanks to free trade agreements?

How about importing cheap fruits and vegetables so that our local farmers cant compete and are put out of business? Do you think this is a smart idea in your Milton Freeman world?



Unemployment will hit 10% the Fed says
The Federal Reserve Bank of San Francisco has estimated that the economy will need to generate as many as 300,000 net jobs every month to reduce the unemployment rate to 8 percent over the next two years.
http://www.presstv.com/detail/144277.html
Absolutely, and if US/China relations take a giant turn for the worse, and China realizes on it's loans to the US, the US economy is fucked. As a whole, the US is essentially a consumer nation, with a lot of it's manufacturing done elsewhere (read: China). There's no way that the US could handle China withdrawing it's money. Which I think the ad points out quite nicely - China pulls money out, US becomes China's bitch.
China holds like maybe a trillion in dollars, Im not sure... that is lots of money. If it starts trading those dollars to other currencies for cheap, other countries could lose confidence in the dollar and also want to get rid of there holdings (most countries need to hold American dollars to buy oil and keep their own currencies stable, I think), so this could cause a currency collapse, where all the bills and all the money people have in the banks become worthless. But again, that is lots of money for China to sacrifice to and take a chance with... from what I understand.

[Carl Johnson]

Absolutely, and if US/China relations take a giant turn for the worse, and China realizes on it's loans to the US, the US economy is fucked. As a whole, the US is essentially a consumer nation, with a lot of it's manufacturing done elsewhere (read: China). There's no way that the US could handle China withdrawing it's money. Which I think the ad points out quite nicely - China pulls money out, US becomes China's bitch.

China holds about $850 billion worth of U.S. treasuries. So first of all if China would to sell their U.S. holdings, there is no way you would be hearing about it until they have almost liquidated all of their positions. However, even if China somehow would sell all of their U.S. debt holdings, there is a very good chance that other foreign central banks and large financial institutions (banks, insurance companies, hedge funds) would come in as the buyer. Because the European Union, the Saudis in the Middle East, even China's own neighbors like Japan, Korea, Taiwan certainly don't want to have panic in Treasury market.

The real questions is what is China going to do with all the dollar they got from selling the treasuries? Clearly the money has to go somewhere. And China has enough problems to deal with at home like inflation and wealth imbalances. So there is no way the communist party is naive enough to think that their debt holdings of U.S. treasury somehow puts them in a superior position when dealing with the United States Government.

[darkfroggy]

Were you expecting the job losses to happen overnight?

You say here
Yep, sounds like China has the upper hand all right.
Do you want America (which already does) and other countries to have the upper hand thanks to free trade agreements?

How about importing cheap fruits and vegetables so that our local farmers cant compete and are put out of business? Do you think this is a smart idea in your Milton Freeman world?



Unemployment will hit 10% the Fed says
The Federal Reserve Bank of San Francisco has estimated that the economy will need to generate as many as 300,000 net jobs every month to reduce the unemployment rate to 8 percent over the next two years.
http://www.presstv.com/detail/144277.html

China holds like maybe a trillion in dollars, Im not sure... that is lots of money. If it starts trading those dollars to other currencies for cheap, other countries could lose confidence in the dollar and also want to get rid of there holdings (most countries need to hold American dollars to buy oil and keep their own currencies stable, I think), so this could cause a currency collapse, where all the bills and all the money people have in the banks become worthless. But again, that is lots of money for China to sacrifice to and take a chance with... from what I understand.

WTF?

Free trade makes things better off for EVERYONE. You do know that tariffs on goods makes it WORSE for the economy. If the Chinese can make applicanes more efficiently than everyone else, then it makes sense to leave it to THEM. The US can focus its energy on MORE productive ventures (research, oil production, anything).

Farmers lose jobs? Buddy, this is nothing new. The amount of people in the agricultural industry has been decreasing steadily over the last century. This is thanks to improvements in technology, which allows us to get a higher overall yield with less work. Thus, the decline in farmers.

You want consumers to pay much higher prices so a few farmers can keep their jobs? This is grossly inefficient and hurts the economy to help a select minority. Having less people in agriculture frees them up to work in other sectors of the economy which need the labour such as construction or medical sciences.

If you want an example of how tariffs screw everyone over, just look at the Great Depression.

Sorry if sounded defensive. Ask any economist if free trade is a good thing, almost all will say yes.

[m!chael]

Thanks darkfroggy for explaining that aspect of things, sounds like you have a good understanding of trade economics.

People like Arash are what makes politics very dangerous. A lot of times, politicians say and do things in order to appease the uneducated (in the field in question) masses, even though the unpopular choice is the one which will benefit society the most in the long run. Law should be left to judges and lawyers, medical services to doctors, and economics to economists, you get my drift.

Funny image though, Arash being alive when they introduce the plow screaming how this is gonna take jobs away from people :lol

[darkfroggy]

China holds about $850 billion worth of U.S. treasuries. So first of all if China would to sell their U.S. holdings, there is no way you would be hearing about it until they have almost liquidated all of their positions. However, even if China somehow would sell all of their U.S. debt holdings, there is a very good chance that other foreign central banks and large financial institutions (banks, insurance companies, hedge funds) would come in as the buyer. Because the European Union, the Saudis in the Middle East, even China's own neighbors like Japan, Korea, Taiwan certainly don't want to have panic in Treasury market.

The real questions is what is China going to do with all the dollar they got from selling the treasuries? Clearly the money has to go somewhere. And China has enough problems to deal with at home like inflation and wealth imbalances. So there is no way the communist party is naive enough to think that their debt holdings of U.S. treasury somehow puts them in a superior position when dealing with the United States Government.

China can't/won't take back all the money.

They'll only be cannibalizing themselves, as the US is one of China's biggest trading partners and #1 consumer. If the US does well, China does well.

China relies heavily on its exports to keep its economy going.

[Carl Johnson]

China can't/won't take back all the money.

They'll only be cannibalizing themselves, as the US is one of China's biggest trading partners and #1 consumer. If the US does well, China does well.

China relies heavily on its exports to keep its economy going.

Which is why China will continue to buy U.S. debt. It is in everybody's interest that the U.S. consumers continue to buy the goods that China produces. Therefore, keeping more people in China employed without causing social unrest.

[Arash]

Thanks darkfroggy for explaining that aspect of things, sounds like you have a good understanding of trade economics.

People like Arash are what makes politics very dangerous. A lot of times, politicians say and do things in order to appease the uneducated (in the field in question) masses, even though the unpopular choice is the one which will benefit society the most in the long run. Law should be left to judges and lawyers, medical services to doctors, and economics to economists, you get my drift.

Funny image though, Arash being alive when they introduce the plow screaming how this is gonna take jobs away from people :lol

Have you ever heard of economic hit men?
The US government subsided its farmers in the billions so that it could import cheap rice to Haiti, undervaluing its price there. This caused all the farm workers to lose their jobs and farms to stop production. The citizens ended up working textile factory jobs for very low wages since no other jobs were available. Now rice prices could inflate and deflate to what ever the US asks for.
Once the earth quake hit, there was no food around like before, so their governemnt is basically depended on loans and aid from the IMF which will result in the country to give up mining right or its sovereignty to pay the money back.


Where are we going to import food from if there is a world food shortage or war that increase the price of petrol... we will be desperate and willing to pay high prices for food.


If cheap furniture is made around the world and imported, we lose carpenters and blacksmiths... in a sense. Right now WalMarts sells everything one needs, so the small business will be out of business.
How will we earn money, what kind of jobs will be left if we have no production for our selves as a province?

WTF?

Free trade makes things better off for EVERYONE. You do know that tariffs on goods makes it WORSE for the economy. If the Chinese can make applicanes more efficiently than everyone else, then it makes sense to leave it to THEM. The US can focus its energy on MORE productive ventures (research, oil production, anything).In a true governemnt, tariffs would be put into the economy and not spent on arms. Maybe it can be spent on making education more available to people so that they can research into oil production or new technologies.
But with your reasoning, do you think all of us can stay in an office or be in class to research or pump out oil with our machines? People need real jobs like mining metal, but having free trade where cheap metal is imported from lets say Norway, is going to put money in those workers pockets to flourish, thrive and succeed.

America has been printing money out of thin air to buy goods and is not exporting much back to other countries to sell goods, this kind of game isnt going to last long that's why some economist predict an eminent currency collapse. Its a matter of when not if.


Farmers lose jobs? Buddy, this is nothing new. The amount of people in the agricultural industry has been decreasing steadily over the last century. This is thanks to improvements in technology, which allows us to get a higher overall yield with less work. Thus, the decline in farmers.

You want consumers to pay much higher prices so a few farmers can keep their jobs? This is grossly inefficient and hurts the economy to help a select minority. Having less people in agriculture frees them up to work in other sectors of the economy which need the labour such as construction or medical sciences.With these machines that you speak of, why cant we have them working in our farms so that we can have cheap food too?
Also do you care for what happens to your children and their children's children? I dont know if you have noticed, but fruits and vegetables taste like shit, its genetically modified, drenched in pesticides, and who knows what kind of treatment the soil and water has been through. Our bodies can only stay health only if the building blocks are there, but with this imported large scale mutant food, its all going to go downhill.


If you want an example of how tariffs screw everyone over, just look at the Great Depression.

Sorry if sounded defensive. Ask any economist if free trade is a good thing, almost all will say yes.Google watch a 3 hour documentary called the Money Master, the great depression was scheme to buy land off the Americans for pennies and economist cant predict what a roomful of central bankers decide.

[highfive]

How is the USD going to collapse?

Is there a better asset to use as a country's reserve? The Euro? Their economy is deep in shit as well. Yen? what growth has Japan experienced in the past decade? Reminbi? Yeah until the China government opens up all parts of their economies including the risk of foreign takeovers, China will take a long period of time to open up their Reminbi for the world. Gold? Yeah, how much gold do you need to use to back up an economy of 8 trillion (China) or 14 trillion (US).

As of the next 20-50 years, USD is still the world's currency. They are the biggest buyers and borrowers. Everyone is too tied up to the US. You know, the 800 billion of debt China holds, US can always default on it. There goes the 800 billion you lent plus the millions of jobs lost. China will have too much to handle before they can make US their bitch.

[darkfroggy]

^ Arash

I kind of face-palmed when you suggested that the Great Depression was a conspiracy...

What do you mean "where do we import our food when there's a world shortage." The reason we do NOT have a shortage of specific foods is because we're importing it in the first place. Canada cannot grow bananas and oranges because you say so. That would be grossly inefficient and a waste of resources that could have been put to better use.

What you are suggesting is that Canada should be self-dependent. This is totally impossible and infeasible, humans have used trade for millenia to better themselves. We cannot grow our own cotton nor mangos without some drastic reductions in standards of living. You can try growing peaches in this cold climate, or you can produce autombiles for export, and then import cheap food thanks to the gains. Let me know when food prices were so high, Canada closed down some of its factories and businesses so it could grow some oranges.

Fruits and vegetables taste like shit? According to what, the apples and oranges you grow in your backyard? The apples in the store always tasted superior to anything I grew. Don't ever eat out or buy lunch, the restaurants WILL use those nasty, GMO modified fruits to maximize revenue.

[RollingStone]

Absolutely, and if US/China relations take a giant turn for the worse, and China realizes on it's loans to the US, the US economy is fucked. As a whole, the US is essentially a consumer nation, with a lot of it's manufacturing done elsewhere (read: China). There's no way that the US could handle China withdrawing it's money. Which I think the ad points out quite nicely - China pulls money out, US becomes China's bitch.

This argument is incessantly touted in the media but its only one side of the story and is used to frighten people who don't understand economics and/or to those that are simply anti-Chinese. (obviously the target audience of this video)

Every transaction requires at least 2 participants and if China ever does start to sell off a sizeable amount their American T-Bills, two things must be considered:
1. There simply is no other buyer or group of buyers in the world that can and are willing to buy up that much American debt (only Japan owns anywhere near the amount of American debt China does and they're just as weary about American debt as China ).
2. The minute a sizeable chunk of Chinese owned American debt hits the market, the prices of these T-Bills would plummet instantly; which would drag down the value of their remaining American debt.

The Americans know this and this is whey they've continued printing money (under Bush and Obama).

The Chinese however, have taken a much longer view. They understand that they're in a position in which selling their American debt is not a viable option. Not only would it be impossible to find enough buyers, but it would be impossible politically as well. If China ever tries to sell its American debt, it would bring abouts a domino effect in which the American dollar could conceivably collapse-which would in turn drag the world economy down with it-and the Chinese would be held responsible.

Thus China has resorted to a different strategy. They've determined that their 'investment' in American debt is unrecoverable and they're going to let its value decline precipitously. Covertly, China has been buying up massive amounts of bullion (actually, not just China but almost every other nation that can afford to do so has been doing this recently) and are hedging that once the American dollar does collapse (w/o Chinese involvement), gold prices will skyrocket and these profits will make up for their lost in American' T-Bills.

[darkfroggy]

Thanks darkfroggy for explaining that aspect of things, sounds like you have a good understanding of trade economics.

People like Arash are what makes politics very dangerous. A lot of times, politicians say and do things in order to appease the uneducated (in the field in question) masses, even though the unpopular choice is the one which will benefit society the most in the long run. Law should be left to judges and lawyers, medical services to doctors, and economics to economists, you get my drift.

Funny image though, Arash being alive when they introduce the plow screaming how this is gonna take jobs away from people :lol

I don't see any Thanks :p

Unfortunately, politicians gotta do what the public wants if they want to stay in power. Sometimes that means using sub-par strategies like rent controls (hurts buyers and sellers, makes markets inefficient... more on this later). That's one of the problems in a democracy; it's not especially efficient.

[darkfroggy]

How is the USD going to collapse?

Is there a better asset to use as a country's reserve? The Euro? Their economy is deep in shit as well. Yen? what growth has Japan experienced in the past decade? Reminbi? Yeah until the China government opens up all parts of their economies including the risk of foreign takeovers, China will take a long period of time to open up their Reminbi for the world. Gold? Yeah, how much gold do you need to use to back up an economy of 8 trillion (China) or 14 trillion (US).

As of the next 20-50 years, USD is still the world's currency. They are the biggest buyers and borrowers. Everyone is too tied up to the US. You know, the 800 billion of debt China holds, US can always default on it. There goes the 800 billion you lent plus the millions of jobs lost. China will have too much to handle before they can make US their bitch.

Pretty sure you don't just walk away from 800 billion, bud.

[RollingStone]

How is the USD going to collapse?

Is there a better asset to use as a country's reserve? The Euro? Their economy is deep in shit as well. Yen? what growth has Japan experienced in the past decade? Reminbi? Yeah until the China government opens up all parts of their economies including the risk of foreign takeovers, China will take a long period of time to open up their Reminbi for the world. Gold? Yeah, how much gold do you need to use to back up an economy of 8 trillion (China) or 14 trillion (US).

As of the next 20-50 years, USD is still the world's currency. They are the biggest buyers and borrowers. Everyone is too tied up to the US. You know, the 800 billion of debt China holds, US can always default on it. There goes the 800 billion you lent plus the millions of jobs lost. China will have too much to handle before they can make US their bitch.

The American dollar has already collapsed in terms of world confidence, which is no small part of what makes up a world currency. The only thing propping up the American Dollar is that the United State government has effectively forced the world to buy/sell oil in Dollars. Saddam wanted to start selling Iraq's oil in Euros and they were almost instantly invaded. (This is obviously not the main reason why the US invaded but I think it had a big influence on the timing of the invasion). A few years ago, Iran also began proposing to start selling their oil in Euros and the Bush Administration immediately stepped into war mode, threatening Iran and provoking incessantly.

America being the world's biggest debtor nation does not bring it any economic respite. Debt holders may not be able to demand repayment but they are receiving interest, hundreds of million$ of dollars in interest. America also has the worlds largest share of private debt. In addition America is waging two global wars that are 100% being financed by borrowed money (this has never happened before).

Anybody with any basic economic/monetary sense knows that you must invest more than you spend if you want a bright future. The United States is PRINTING MONEY JUST TO SERVICE THE INTEREST ON THEIR DEBT LOL! The collapse of the Dollar is no longer a question of whether but when.

And as to the person above who said the collapse of the Dollar to be impossible for the reason that there is no viable alternative: Says who? There has already been high level talks by the worlds major actors seriously considering adopting a world currency in anticipation of the collapse of the dollar, as to avert its catastrophic consequences. If a global currency turns out to be not viable, then the dollar could easily be replaced by a consortium of currencies (the Yen, RMB, Euro, Dollar, Canadian Dollar, Austrian Dollar, etc). International transactions would require a bit more work, but its by no means unworkable. In fact, many countries would welcome it, especially those oil exporting countries. They would no longer be forced to put their money in American banks and be subject to their terms.

[Arash]

How is the USD going to collapse?

Is there a better asset to use as a country's reserve? The Euro? Their economy is deep in shit as well. Yen? what growth has Japan experienced in the past decade? Reminbi? Yeah until the China government opens up all parts of their economies including the risk of foreign takeovers, China will take a long period of time to open up their Reminbi for the world. Gold? Yeah, how much gold do you need to use to back up an economy of 8 trillion (China) or 14 trillion (US).

As of the next 20-50 years, USD is still the world's currency. They are the biggest buyers and borrowers. Everyone is too tied up to the US. You know, the 800 billion of debt China holds, US can always default on it. There goes the 800 billion you lent plus the millions of jobs lost. China will have too much to handle before they can make US their bitch.I believe the central bankers control the Yen, Euro and the Dollars on one side and major powers like Russia, China, India and Iran are an opposing force on the other.

Do you think a currency that is constantly increasing in debt and now over 13 trillion is a stable one?

^ Arash

I kind of face-palmed when you suggested that the Great Depression was a conspiracy...I cant convince you by typing what a 3 hour documentary points out, so you can decide after watching it.

What do you mean "where do we import our food when there's a world shortage." The reason we do NOT have a shortage of specific foods is because we're importing it in the first place. Canada cannot grow bananas and oranges because you say so. That would be grossly inefficient and a waste of resources that could have been put to better use.What about the strawberries and even blueberries that are imported during the summer. Peaches, grapes and apples are grown here, but we find imported ones for sale which is obviously cheaper to even make it here. Putting farmers out of business and lessening our local food supply so that corporations can profit is stupid in my opinion.

What you are suggesting is that Canada should be self-dependent. This is totally impossible and infeasible, humans have used trade for millenia to better themselves. We cannot grow our own cotton nor mangos without some drastic reductions in standards of living. You can try growing peaches in this cold climate, or you can produce autombiles for export, and then import cheap food thanks to the gains. Let me know when food prices were so high, Canada closed down some of its factories and businesses so it could grow some oranges.Our province has been trading since the fur trade, Im not against trade, Im against large American corporations taking local jobs away by importing cheap products.

Answer me these 3 things
What job does your father have?
What job do you have now if you have one?
What kind of career do you plan to have in the future?

I doubt there will be a future in most jobs today unless its a service job... even then.

Fruits and vegetables taste like shit? According to what, the apples and oranges you grow in your backyard? The apples in the store always tasted superior to anything I grew. Don't ever eat out or buy lunch, the restaurants WILL use those nasty, GMO modified fruits to maximize revenue.Its industrialized, either imported or grown locally without the proper taxation, I would rather reward our citizens to produce our food. Specially the tomatoes!

[RollingStone]

WTF?

Free trade makes things better off for EVERYONE. You do know that tariffs on goods makes it WORSE for the economy. If the Chinese can make applicanes more efficiently than everyone else, then it makes sense to leave it to THEM. The US can focus its energy on MORE productive ventures (research, oil production, anything).

Farmers lose jobs? Buddy, this is nothing new. The amount of people in the agricultural industry has been decreasing steadily over the last century. This is thanks to improvements in technology, which allows us to get a higher overall yield with less work. Thus, the decline in farmers.

You want consumers to pay much higher prices so a few farmers can keep their jobs? This is grossly inefficient and hurts the economy to help a select minority. Having less people in agriculture frees them up to work in other sectors of the economy which need the labour such as construction or medical sciences.

If you want an example of how tariffs screw everyone over, just look at the Great Depression.

Sorry if sounded defensive. Ask any economist if free trade is a good thing, almost all will say yes.

Your explanations work well in the classroom but do not hold up in the real world. Neo-liberals have done great work in brainwashing society into thinking that free-market fundamentalism is the answer to all our economic problems.

Inconveniently however, reality paints a very different picture. EVERY SINGLE developed country (the only possible exception being Hong Kong) has risen on the back of massive government involvement in the economy. Government intervention defined as: high tariffs, very liberal income redistribution policies, huge government investment in key sectors, etc.

Case in point, when the United States was in its developmental phase, it was extremely protective of its young economy. It had in place very high tariffs to limit imports from the more advanced European countries. In the 20th century, the government invested billions into obscure technologies like the micro processor and what is now known as the internet. The apex of the American economy was in the 50's and 60's when the American economy virtually rivaled the rest of the worlds' economy combined! This era was characterized by very protectionist measures (i.e. high tariffs), high/progressive income taxes (the top tax rate was 90%!), high investment in social programs (i.e. the GI Bill), etc, etc.

In more recent times, the Four Asian Tigers (namely, Taiwain, Singapore, South Korea, and to a extent Hong Kong), the "Miracles of the East" rose on the backs of very protectionist governmental policies. Taiwan, Singapore, and South Korea took extreme measures to limit imports. In their developmental phase, they limited imports to only things that they absolutely required and forbade almost everything else (South Korea even limited foreign cigarets!). In the ensuing decades, these countries poured every last resource into developing their key industries/companies (cars, ships in South Korea, electronics in Taiwan). It is only very recently that these countries have begun to open up their economies to foreign competition. Their timing is not accidental, these countries opened up only AFTER their industries and economies matured to a level they feel that can compete with the west.

Guess where they got their economic blueprint from? Japan! These countries are now serving as working models to many other developing countries, the most notable being China!

Now turn to countries that adhered to 'Reganomics,' namely countries in South/Central America and Russia. South/Central America has had neo-liberal economic policies forced upon their governments for nearly a century and today they are the economic backwater of the western hemisphere. Not too long ago, many of these countries had very respectable per-capita-GDPs (i.e. Argentina once had one of the highest per-capita-GDPs in the world!). On a similar note, after the collapse of the Soviet Union, the Russian gov't asked the Americans to assist in restructuring their economy. The Americans counselled the Russians to open up their economy and let the free market 'do all the work.' We all know what happened after: all hell broke loose! The standard of living today for many Russians is WORSE TODAY than when they lived under communist rule! The only positive that came out of this fiasco was that the world took note and notably, China, took a very different path to transitioning their economy.

Turning back to the United States, the only reason why it's agricultural sector is 'competitive' is because they receive hundreds of million$ of dollar$ in subsidies every year. These mega-corporations then in turn lobby the US government to force other (mostly destitute countries like India, Mexico, Haiti, etc.) to adhere to "free-market" fundamentals. That is, to allow for unrestricted imports of American produce at artificially low prices (Dumping in economic jargon). The result is the devastation of millions of farmers in these countries. They are then forced to migrate, oftentimes illegally to foreign lands where they hope to find sustenance (i.e. Mexicans crossing into the US looking for jobs). Today, in India hundreds of farmers commit suicide because they can't compete with imported (heavily subsidized) produce from the United States. Disgracefully, Reganomics hasn't worked too well for the majority of Americans either. Today, the United States' middle class is shrinking by the day, its manufacturing sector is in tatters, its imports far more than it exports, and it has become the world's largest debtor despite decades of neo-liberal policies (beginning with Ragan). The only group that has benefited are those belonging to the top 10% of income earners, the standard of living for the remaining 90% has either stagnated or declined.

Contrast this to Germany. The country limits the ability of industry to offshore its manufacturing base and has also put in place some of the worlds toughest regulations which effectively limits much foreign imports. Japan has adhered to a even more isolated stance. Critic all you want about these these "protectionist" (socialist in American terms LOL) countries but its undeniable that they have some of the highest standards of living in the world!

Lastly, your reasoning for the cause of the Great Depression is also fallacious. It was not caused by protectionist policy. Even Milton Friedman, the godfather of neoliberalism in the United States, acknowledges that the prime factor was 'cheap money.' That is artificially low interest rates set by the Federal Reserve which in turn encouraged irresponsible borrowing and speculation in the marketplace. Which btw, is exactly what caused the Sub-Prime Crisis of '08. Greenspan himself testified that the neoliberal paradigm has been proven flawed,and that he, his life's work, proven WRONG!

[Ferra]

China can't/won't take back all the money.

They'll only be cannibalizing themselves, as the US is one of China's biggest trading partners and #1 consumer. If the US does well, China does well.

China relies heavily on its exports to keep its economy going.
short term yes
but at its current rate, it wouldn't be long before China's domestic demand becomes sufficient to take up most of its own production.
We are already seeing this in the industrial and building materials markets, and consumer goods will be next.

[MoBettah]

It's ironic because China uses all the current measures that they point out are mistakes in this video. Using government money for stimulus, health care changes, and government involvement with private industry - are exactly what Chinese government have been doing.

[RFlush]

WTF?

Free trade makes things better off for EVERYONE. You do know that tariffs on goods makes it WORSE for the economy. If the Chinese can make applicanes more efficiently than everyone else, then it makes sense to leave it to THEM. The US can focus its energy on MORE productive ventures (research, oil production, anything).

Farmers lose jobs? Buddy, this is nothing new. The amount of people in the agricultural industry has been decreasing steadily over the last century. This is thanks to improvements in technology, which allows us to get a higher overall yield with less work. Thus, the decline in farmers.

You want consumers to pay much higher prices so a few farmers can keep their jobs? This is grossly inefficient and hurts the economy to help a select minority. Having less people in agriculture frees them up to work in other sectors of the economy which need the labour such as construction or medical sciences.

If you want an example of how tariffs screw everyone over, just look at the Great Depression.

Sorry if sounded defensive. Ask any economist if free trade is a good thing, almost all will say yes.

^ Arash

I kind of face-palmed when you suggested that the Great Depression was a conspiracy...

What do you mean "where do we import our food when there's a world shortage." The reason we do NOT have a shortage of specific foods is because we're importing it in the first place. Canada cannot grow bananas and oranges because you say so. That would be grossly inefficient and a waste of resources that could have been put to better use.

What you are suggesting is that Canada should be self-dependent. This is totally impossible and infeasible, humans have used trade for millenia to better themselves. We cannot grow our own cotton nor mangos without some drastic reductions in standards of living. You can try growing peaches in this cold climate, or you can produce autombiles for export, and then import cheap food thanks to the gains. Let me know when food prices were so high, Canada closed down some of its factories and businesses so it could grow some oranges.

Fruits and vegetables taste like shit? According to what, the apples and oranges you grow in your backyard? The apples in the store always tasted superior to anything I grew. Don't ever eat out or buy lunch, the restaurants WILL use those nasty, GMO modified fruits to maximize revenue.

I suggest you take an econ class aside from first year macroeconomics :rofl:

[RollingStone]

I suggest you take an econ class aside from first year macroeconomics :rofl:

:rofl:

[cressydrift]

http://i.bnet.com/blogs/its_a_trap.jpg

[Bouncing Bettys]

The most respected leading economists in the 60's said Soviet Russia would surpass the US as the leading world power. In the 80's they said Japan would surpass the US as the leading world power. Neither happened, the economists were wrong. I guess we'll see how this one pans out.


That ad is pretty right leaning/tea party stuff. Blaming tax and spend behaviour for the US's woes when deregulation of various industries, lowering tax rates for the highest income earners, the busting up of labour unions, etc. has done much more damage.

[DOHCVTEC]

For those interested in a short, but insightful, talk on the current state of the world economy, including of course China and the US, I would recommend listening to Jim Rogers (http://en.wikipedia.org/wiki/Jim_Rogers).

Co-founder of the Quantum Fund, he retired from Wall Street aged 40, went on two drives around the world, first on motorbike and then in a custom modified yellow Mercedes (a G-wagon with a SLK-shell), before selling his New York apartment to move to Asia, in anticipation of the shift in global economic power to China.

Here's a recent talk he gave about the world and about his move to Singapore, where both his daughters are learning Mandarin.

http://www.youtube.com/watch?v=uRjUVmMZv-g

And this is the Q&A for that talk: http://www.youtube.com/watch?v=fX1EWYaKOck

[sundance1911]

nice

[Death2Theft]

Right because everything that tastes bad can't be good.
With these machines that you speak of, why cant we have them working in our farms so that we can have cheap food too?
Also do you care for what happens to your children and their children's children? I dont know if you have noticed, but fruits and vegetables taste like shit, its genetically modified, drenched in pesticides, and who knows what kind of treatment the soil and water has been through. Our bodies can only stay health only if the building blocks are there, but with this imported large scale mutant food, its all going to go downhill.


Google watch a 3 hour documentary called the Money Master, the great depression was scheme to buy land off the Americans for pennies and economist cant predict what a roomful of central bankers decide.

[sobranie33]

For once, CNN pull off how China invade human right on Tibet example,now, they are pulling off how US government wasting government fund got owned by China. Where do they stand exactly?

[m4k4v4li]

what I really want to know is... wheres skinnypup in this conversation? no blanket statements about the big bad commies?