Thursday, August 23, 2007

Bull on China shops

By Libby

I'm working today so just a quick post on the BuzzFlash Media Putz of the day, Erin Burnett of CNBC, who had this to say in denfense of the Corporatocracy.
"A lot of people like to say, uh, scaremonger about China, right?" Burnett recently commented on "Hardball." "A lot of politicians, and I know you talk about that issue all the time. I think people should be careful what they wish for on China. You know, if China were to revalue its currency or China is to start making say, toys that don't have lead in them or food that isn't poisonous, their costs of production are going to go up and that means prices at Wal-Mart here in the United States are going to go up too. So, I would say China is our greatest friend right now, they're keeping prices low and they're keeping the prices for mortgages low, too."

So she's saying we should quietly allow China to poison our kids and sell us tainted food and slipshod goods because it's good for WalMart's profit margin? How do people like this get paying jobs in the media?

It doesn't take a rocket scientist to figure out China is not our friend and could very easily send us down the tubes simply by calling in our loans. Erin's piece would have made some sense if she had advised us to respect our biggest creditor out of fear, but to suggest we should be grateful that the Bush administration put them in a position to destroy us is just silly.

Although, on second thought I suppose we should be grateful they haven't availed themselves of the opportunity to do so -- yet. However, if we continue to insist that they behave responsibly, one fears that restraint may not last forever. A situation almost too horrible to contemplate since there is no obvious solution as China holds all the cards and could trump in any time it suits them.
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Blogger Capt. Fogg said...

Does the US really have any friends and are the global players really representative of any particular country? What would happen to Toyota if Japan started selling dollars to undermine our economy? They are quite able to do that. Why aren't we afraid of them?

Although China could call our loans, they would cut their own throats by doing it because there is no one to replace us. Holding all the cards does not help much if there is nobody left in the game.

Their domestic stability depends in large part on our consumption and without it at least a billion people kept relatively calm by the prospects of an improving future would be impossible to control. China is facing rural uprisings every day and without a middle class that depends on international trade, they are in very deep trouble.

As to tainted foods and toys, I have yet to see anyone notice that the vast bulk of tainted foods are produced in the US or that people have been yelling about poorly designed and dangerous toys since the days they were made everywhere but China. China would be vastly more responsive to selling us safer things if we made some move to inspect them and that we don't is our fault because the greed is our greed, not theirs. When they are required to do so, they make high quality goods.

So far nobody has got sick from the traces of lead in baby bibs or toy trains while a great number of kids have died from preventable diseases, accidents, poisonings and domestic food born pathogens.

The fact that we're so unwilling to put things in perspective and to jump to conclusions without investigation makes me nervous because it seems someone needs us to be angry at China and if someone wants to fan the fires of nationalism I suspect he needs the smoke to hide behind. Mattel is not an innocent party and the US government is not an innocent party, nor is Wal-Mart. If we're angry at China it's because they're shirking responsibility and we're buying their tainted propaganda.

12:04:00 PM  
Blogger Libby Spencer said...

Good points and well taken Fogg. The trouble with posting on the fly from work is that one can't develop the nuances of the post.

I don't mean to make China the sole villian here but I don't think you can deny they are indeed in a position to wreck us if they so desired and as you point out, we currently have no real friends in the world. I don't think it's so farfetched to imagine a time when China's good graces might feel more beneficial than our own should a time come when the current symbiotic balance changes and China might decide to challenge us. I wouldn't agree that it's solely a two nation card game.

As far as tainted goods, I do blame Walmart and the FDA more than China and that may not have been clear in the post but there are no innocent parties in this and corporate greed is at the heart of this and is the same, no matter what the nationality.

1:58:00 PM  
Blogger Capt. Fogg said...

The Japanese government could also sabotage our economy and so could Europe. That's not their fault - it's ours.

There's an old adage that may apply: borrow a million and the bank owns you. Borrow a billion and you own the bank. We borrow in the trillions. Nobody can afford to call our loans!

I worry more about OPEC than I do about China.

I listened a little while ago to the Lou Dobbs hysteria hour and people were e-mailing in, talking about punishing China for making shoddy goods. Does anyone realize that China is a country and not a company? It's not up to their government to make sure exports meet the tough requirements of foreign countries, it's up to the importers in those countries.

In the case where products were contaminated, China exacted swift and draconian punishment - far more than we do when it happens here, and it happens here all the time and the offenders go scott free. We just have no business acting like victims.

Is this frenzy of China bashing to distract us from the fact that all our regulatory agencies have either been gutted or turned over to the industries they're supposed to be regulating?

8:54:00 PM  
Blogger Libby Spencer said...

Your impeccable logic comforts me Fogg. There are indeed good reasons for China not to destroy us but you do have to admit that one could hardly call them a friend. We're more like business associates who tolerate each other because we have to.

But really good point on the bashing. It does distract from the point that our regulatory agencies are a bad joke and they wouldn't be sending tainted goods if they couldn't get away it so easily.

7:24:00 AM  
Anonymous Anonymous said...

you guys are way off. reminds me of why there are no liberal economists. the problem in China is not that there is too little regulation, the problem is the factories are run by beaurocrats. Just imagine if you were chinese and you weren't allowed to complain. like you said china isa country not a company. unfortunately. the idea that a communist country is too capitalistic for you is scary

1:23:00 PM  
Blogger Steve said...

I would agree with capt.fogg that we are the problem, not China - however, since China is so US dependent what happens to our economy, (start thinking subprime and consumer debt rising @ 8.7% compared to 1.5% increase in GDP - the capacity to pay that debt), will have very profound effects on their economy. Eventually, they may have no choice but to call in our paper. China's economic realities in the aftermath of the 2008 Olympics will be a watershed event. Even if they were to settle for dimes on the dollar that in turn will cause a total devaluation of the US$. Waiting in the wings is the new world currency, the Euro$, which is already becoming more valuable in world trading circles. Ask any American vacationing in Europe. The US$ is falling in value, and more importantly, prestige. When the US$ is no longer the world's measuring stick by which all other economies are compared, that's it; game, set, and match.
This may be the worst part of the Bush/ Neo-con legacy. Iraq is just a side show compared to the massive debt occurring during this administration.
Nobody wants to pay much less raise taxes anymore, it's a dirty word. Bond initiatives to fund ailing infrastructure, like highways, bridges, schools, etc., are resorted to instead. Just kept piling that debt on your kids and grandkids folks. Show them how much you love them.

1:36:00 PM  
Blogger Libby Spencer said...

Lester, corporations are run by private bureaucrats and the point of the discussion here is that our regulatory agencies are the culprit. As Fogg pointed out, in China they kill the guys when they fuck up.

Steve, a really good but scary point.

3:55:00 PM  

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