Should Uncle Sam Punish Americans For Taking Advantage of Good Deals Made Better by Beijing?

by Don Boudreaux on October 13, 2011

in Current Affairs, Other People's Money, Politics, Seen and Unseen, Trade

At U.S. News & World Report‘s “Debate Club” today, Andy Roth here, and I here, each use our alloted 350 or so words to argue against Uncle Sam’s attempt to protect American producers from imports from China whose prices might be made lower by Beijing’s monetary policy.

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{ 130 comments }

rbd October 13, 2011 at 9:10 am

I don’t fully grasp your argument. You make it seem like exports are to be avoided. Should Boeing stop selling commercial aircraft to other countries in an attempt to reduce costs? Should Intel and AMD cease shipping computer chips to other countries in order to lower their costs? I think this needs some explaining.

dsylexic October 13, 2011 at 10:30 am

the whole confusion arises because of national accounting.while trade is between individuals or corporations,all trade stats are arbitrarily credited to a geopolitcal entity called the nation.
if might be good for boeing to sell to foreigners or locals.it doesnt matter.their aim should always be to sell at the best price they can get.

John Dewey October 13, 2011 at 4:32 pm

rbd: “You make it seem like exports are to be avoided.”

Please explain how you came to that conclusion after reading Professor Boudreaux’s arguments? I didn’t read that at all.

Josh S October 13, 2011 at 6:52 pm

If the prices of goods that employees and shareholders of Boeing buy dropped precipitously, Boeing could in fact sell fewer aircraft, and the aforementioned employees would be just as wealthy as before. And if sales remained steady, then the employees and shareholders would be richer.

Or, from a personal standpoint, you “export” your labor and “import” nearly everything that you use in your daily life. It doesn’t impoverish you when prices drop.

vikingvista October 15, 2011 at 4:26 am

You think he is arguing imports vs exports. Actually, he is arguing matters vs doesn’t matter. It doesn’t matter, because those who think it does are missing an enormous unseen (to them).

What does matter is, simply, trade. More is better.

Nikolai Luzhin, Eastern Promises October 13, 2011 at 9:14 am

You state in your article that it is a fact that China has

“undervalued [the] renminbi”

1) By how much is the renminbi undervalued?

2) How does China maintain this state of affairs and for how long can such continue?

3) Why?

4) What are the benefits to China of this policy?

4.a.) Is an undervalued renminbi some sort of a multiplier for China. Why,how, and by how much?

5) What shouldn’t we “undervalue” the dollar the way China has undervalued the renminbi? (If good for goose, why not gander)

Methinks1776 October 13, 2011 at 9:21 am

‘Coz it’s not good for the goose.

Nikolai Luzhin, Eastern Promises October 13, 2011 at 9:24 am

ipse dixit I see

Why would it not be good for us to devalue?

Methinks1776 October 13, 2011 at 9:50 am

blah blah blah.

Ever heard of inflation?

Nikolai Luzhin, Eastern Promises October 14, 2011 at 12:06 am

so all of China’s prosperity is built on inflation

seems like a good thing

muirgeo October 14, 2011 at 7:13 am

Nikolai,

And notice how our economy is doing yet methinks and Don say things totally detatched from reality like, “its not good for the goose.” and accuse us of being simple.

The whole situation is good mostly for the upper eschalon of these multinational corporations who take in all the extra profits that competing labor pools “earn” them.

Scott October 14, 2011 at 7:40 am

This would assume that all of China’s prosperity is based on devalued currency. It isn’t. Also all their prosperity? Most Chinese don’t have a standard of living anywhere close to ours.

vikingvista October 15, 2011 at 4:34 am

” so all of China’s prosperity is built on inflation”

All? Even the Chinese policy makers, who I am sure are every much the ignoramouses that US policy makers are, likely don’t believe that. It would have been the easiest thing in the world for Mao, with his command economy, to devalue his currency as much as he wanted. Don’t you think maybe something *else* has happened in China to account for increased prosperity, besides just currency manipulation?

dsylexic October 13, 2011 at 10:21 am

if you neighbor laces his child’s food with carcinogens,should you follow?

explain why money printing in china is a good thing.? all the so called models which see the jobs caused by export oriented companies are BLIND to the unseen ie inflation and loss of jobs in the chinese domestic economy.
you should try implementing your views inside your own household to see it if make sense.the laws of economics apply to govts as much as it does to individuals

vidyohs October 13, 2011 at 10:47 am

Good point, sir. Your point has become sort of a stock reply or comment of mine when in conversations with my fellow red necks and intelligensia (are lawyers intelligensia – maybe a stretch).

I advise them just as you did, it you think what government(s) are proposing as policy that will affect you, first try it at the micro level in your own life and see if it works. If it doesn’t work to benefit you in the micro, there is no way it can work to benefit you in the macro.

kyle8 October 13, 2011 at 10:43 am

A curious question for a man who claims to be concerned about the poorest citizens. Devaluing our currency directly takes wealth from the poor, and every one else by making everything we purchase from other nations more expensive. Why do you hate the poor?

GiT October 13, 2011 at 2:55 pm

Oh please, what a bit of sophistry this is.

Given average US household indebtedness levels, and the heavy distribution of household debt among the poor, inflation would directly help the poor by making debt repayment cheaper.

Second, you’re not even staying true to your ostensible principles for interpreting economics. Using the whole seen/unseen line, the unseen side to a rise in the price of US imports is a decrease in the price of US exports and a decrease in the price of US labor.

That is to say that a weakened dollar increases the opportunities for the poor to be able to get jobs in exports or from FDI in American labor as its cost falls relative to other countries.

Who are you to say whether the poor are better benefitted by cheaper consumer goods or a more attractive position in the international labor market or increasing attractiveness of US exports?

In any case, the beneficial effects for the poor with regards to their household debt are unmistakable.

Methinks1776 October 13, 2011 at 3:42 pm

You’re right, Git. I’m convinced.

Inflation was certainly an immeasurable help to the poor in the Weimar Republic. More recently, it boosted prosperity and employment prospects of Americans in the 1970′s and lest we forget, that economic powerhouse of Zimbabwe.

BTW, How much of that household debt of the poor is variable rate (credit cards) and how much is fixed?

GiT October 13, 2011 at 3:58 pm

I never said inflation wouldn’t have bad effects as well. The point is that it has both bad and good effects and that these effects are ambiguous in nature.

But, like a central planner, you presume to know what policies are best or worst for the poor.

I’m not personally opposed to such claims, but I would have thought it would make your positions internally inconsistent.

Inflation is not inherently bad for the economy and deflation is not inherently good. They both redistribute wealth in multiple ways and the net benefit to any given party is ambiguous. But of course you and kyle know best.

Dan H October 13, 2011 at 3:59 pm

Methinks,

I’m not up to speed as much on the Asian markets, so maybe you can enlighten me.

The way I see it, Chinese currency has been openly traded (giving it a floating rate) for a handful of years now. So why is everyone worried about the Chinese “manipulating their currency”? If this were true, traders would dump their yuan in a second. Is it really possible to “manipulate” a currency with a floating exchange rate? I mean, you can inflate or contract the supply of the currency, but the markets would respond in kind and traders would dump the yuan. That’s not manipulation. That’s what the Fed does all the time (and traders respond by dumping dollars, as they have for awhile now).

Methinks1776 October 13, 2011 at 4:34 pm

Ummm…okay, Git. So, is it variable rate debt or fixed rate?

Dan H,

I am no expert on the specifics of how the Remnimbi trades. My understanding is the range is controlled as is the convertibility.

kyle8 October 13, 2011 at 11:19 pm

Not very strong on logic are you, so someone might POSSIBLY get a job in an industry in which there is no comparative advantage if we raise tariffs and restrictions.

But we know for certain that those tariffs will cost people more money and lower economic growth.

Why do you hate America?

Economic Freedom October 14, 2011 at 12:01 am

@ GiT:

inflation would directly help the poor by making debt repayment cheaper.

Nonsense. Most of the poor are on fixed incomes. During inflation, they would simply be paying more for food, rent, clothing, transportation, etc. Inflation is simply a hidden tax on the poor. That’s why it’s so popular with politicians; they can claim to be helping the poor while shafting them at the same time.

Nikolai Luzhin, Eastern Promises October 14, 2011 at 12:25 am

so let me understand this.

China is devaluing its currency to hurt its poor

we encourage this behavior by buying China’s goods and we profit from the hurt down to China’s poor

So our profits come at the expense of China’s poor.

I hope we can keep this a secret because I would not like the poor people in China to find out that they are poor so that American’s can be rich.

I do not think this is a good policy for the long term, With “friends” like us, who needs enemies

muirgeo October 14, 2011 at 7:19 am

Kyle8 wrote,

” Devaluing our currency directly takes wealth from the poor, and every one else by making everything we purchase from other nations more expensive. Why do you hate the poor?”

Yes and now since there are so many more poor people its more important then ever to keep prices down for them. Kyle loves the poor… lots and lots and lots and lots of them.

GiT October 15, 2011 at 1:11 am

Methinks-

Clearly, some of both.

Kyle – Where did I talk about tariffs? I was talking about the effects of inflation. Devaluing currency takes wealth from everyone who holds the currency, or assets denominated in the currency, as a store of wealth. As it happens to stand, the rich hold much more in the way of dollar denominated assets than the poor, and the poor hold much more in the way of dollar denominated debt than the rich.

EF –

And yet incomes and price levels can change to adjust. What can’t adjust is those who hold dollars as a store of value. Those people get somewhat screwed. And those out there holding dollar denominated financial assets and what not tend to be… rich, not poor.

Who will suffer more from inflation? Apple with 72 billion in cash holdings or a poor family with a 100k fixed rate mortgage?

vikingvista October 15, 2011 at 11:19 am

Git,

Neither inflation nor deflation, whether you are referring to changes in the average price or in the quantity of money, need cause wealth redistribution, if you mean by that the forceful confiscation of wealth. A government monopoly money, with no redistributinist policies, would necessarily result in decreasing prices as the economy grows. And private competitive monies, by definition, are without force, even if their quantities expand or contract.

Of course any kind of trade, free or not, results in dynamic wealth concentrations, but it wouldn’t make sense to be referring to redistribution in that broad a sense.

Nikolai Luzhin, Eastern Promises October 13, 2011 at 9:22 am

The Instability of Inequality

Nouriel Roubini

http://www.project-syndicate.org/commentary/roubini43/English

Some of the lessons about the need for prudential regulation of the financial system were lost in the Reagan-Thatcher era, when the appetite for massive deregulation was created in part by the flaws in Europe’s social-welfare model. Those flaws were reflected in yawning fiscal deficits, regulatory overkill, and a lack of economic dynamism that led to sclerotic growth then and the eurozone’s sovereign-debt crisis now.

But the laissez-faire Anglo-Saxon model has also now failed miserably. To stabilize market-oriented economies requires a return to the right balance between markets and provision of public goods. That means moving away from both the Anglo-Saxon model of unregulated markets and the continental European model of deficit-driven welfare states. Even an alternative “Asian” growth model – if there really is one – has not prevented a rise in inequality in China, India, and elsewhere.

Any economic model that does not properly address inequality will eventually face a crisis of legitimacy. Unless the relative economic roles of the market and the state are rebalanced, the protests of 2011 will become more severe, with social and political instability eventually harming long-term economic growth and welfare.

Chris O'Leary October 13, 2011 at 9:38 am

“Any economic model that does not properly address inequality will eventually face a crisis of legitimacy.”

Inequality is the natural state of things.

Ever heard of the bell curve?

Ever known someone who was smart but who would rather play video games than work on a product or invention that people would buy?

muirgeo October 14, 2011 at 7:32 am

“Inequality is the natural state of things.”
Chris O’Leary

Yes, but there are degrees Chris and revolution is the natural state of things when inequality is too great. Best to heed the lessons of history.

dsylexic October 13, 2011 at 10:15 am

unregulated? are bailouts part of capitalism? how about a central bank? one especially owned by banksters?

the central bank was central to marxism.so a marxist institution is the cause of turbulence in capitalism.who wudda thunk

dsylexic October 13, 2011 at 10:18 am

there is no chinese or asian model.there is either MORE economic freedom or LESS economic freedom.
what a load of nonsense that we are in a world of deregulation.roubini didnt forecast the housing downturn using any keynesian model or theory btw,so we dont need his advice to follow more keynesian dogma

kyle8 October 13, 2011 at 10:40 am

Utter trash and nonsense. There has never ever in the history of the planet been a nation or system in which there was any real wealth equality.

And if any did exist it would be mind numbingly poor.

The only people whom this matters to are those eaten up on the inside with envy, jealousy and hate.

How wealthy the wealthy are only matters if they are kept from using their wealth to purchase things, invest, and create more business, jobs, and opportunities.

muirgeo October 14, 2011 at 7:36 am

Here again Kyle no one is suggesting absolutr equality but talking of excessive degrees of inequality. At some level inequality beomes economically ineffecient and socially disruptive. We reached that point some time ago. Why do you guys always think in such absolutes?

kyle8 October 14, 2011 at 8:05 am

where is your proof of that idiot? There is none. All sorts of human societies have existed and there seems to be no correlation at all between stability and the size of any sort of inequality gap.

That is just a fever dream from leftists like you who are all eaten up with envy.

muirgeo October 14, 2011 at 8:41 am

Here’s some pretty good evidence. Doesn’t prove it but it does support my claim.

http://www.infiniteunknown.net/wp-content/uploads/2009/08/income-inequality.gif

Do you have any evidence to support your claim? Any? I’m serious! Any such similiar data that fits your claim? I don’t think you can provide anything near as convincing as what I just gave you. If that graph was inverted then I’d say you were right and I’d be in support of even more inequality. But the graph is not inverted…. it is reality. One with which you are unable to confront and deal with.

Fred October 14, 2011 at 8:43 am

Repeat after me:
wealth is not money
wealth is not money
wealth is not money

vikingvista October 15, 2011 at 4:38 am

“wealth is not money”

If the goal is wealth, money is only the 50 yard line. You don’t get points for crossing the 50.

txslr October 13, 2011 at 1:51 pm

“But the laissez-faire Anglo-Saxon model has also now failed miserably.”

Wrong.

muirgeo October 14, 2011 at 7:37 am

And your evidence is what?

I_am_a_lead_pencil October 13, 2011 at 3:46 pm

“Unless the relative economic roles of the market and the state are rebalanced, the protests of 2011 will become more severe,”

Any balance that is required leans in the direction of a reduced state – and a reduction in the pages of the Federal Register….and any protests that might “become more severe” should come from tea party types attempting to drive home this point.

muirgeo October 14, 2011 at 7:29 am

“Any economic model that does not properly address inequality will eventually face a crisis of legitimacy. Unless the relative economic roles of the market and the state are rebalanced, the protests of 2011 will become more severe, with social and political instability eventually harming long-term economic growth and welfare.”

So true Nikolai,

The argument is lost for these supporters of market fundamentalism but it has given massive power to global finance and global corporations that unfortunately rebellion will likely be the end result. I saw it here in the streets of Boston today. The kettle is starting to boil over and the elites are simply belittling the “peasantry”. As Dickens wrote, “reality will take a wolfish turn.” History repeating itself….

anthonyl October 14, 2011 at 9:02 am

Markets always addresses inequality, by eliminating it. Government needs inequality among it’s constituency to survive. Government always trys to achieve and highlight inequality. We see this today all over the world. If governments were eliminated inequality would vanish. Not just in terms of its visibility but in real terms as well. People would not have the protective elements of government that tend to support one group over another.

Nikolai Luzhin, Eastern Promises October 13, 2011 at 9:26 am

What we ought to be talking about: Marx was right (perhaps he was a broken clock, but he was right)

The Instability of Inequality

Nouriel Roubini

http://www.project-syndicate.org/commentary/roubini43/English

The problem is not new. Karl Marx oversold socialism, but he was right in claiming that globalization, unfettered financial capitalism, and redistribution of income and wealth from labor to capital could lead capitalism to self-destruct. As he argued, unregulated capitalism can lead to regular bouts of over-capacity, under-consumption, and the recurrence of destructive financial crises, fueled by credit bubbles and asset-price booms and busts.

Gnome DeGuerre October 13, 2011 at 9:42 am

Question:

Is central planning of money supply and interest rates congruous with Marx’s boogieman of “unregulated capitalism”?

dsylexic October 13, 2011 at 10:24 am

good q.the central bank is actually a core component of marxism.the free market has no need of it

Methinks1776 October 13, 2011 at 10:41 am

Is it? My understanding of Marxian Communism is that it does away with money entirely.

dsylexic October 13, 2011 at 1:35 pm

http://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch02.htm

the marxists want complete state control of everything including money
5. Centralisation of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly

contrast this to libertarians like jefferson who hated the idea of a central bank in explicit terms.

Methinks1776 October 13, 2011 at 3:33 pm

dsylexic,

My understanding is that this is only the first stage (we are to arrive at communism in stages). Eventually there would be no more money. I don’t have my reference material with me, though.

Ron H October 13, 2011 at 6:14 pm

Methinks 1776

My understanding is that this is only the first stage (we are to arrive at communism in stages). Eventually there would be no more money. I don’t have my reference material with me, though.

Quite understandable that you would leave your “Roadmap to Nirvana” reference material behind when you were deciding what to take with you and what to leave, when you left the former Soviet Union. Who could have anticipated a need for it all these years later? :-)

vikingvista October 15, 2011 at 11:21 am

And what would you know of Marxian communism? :-)

Methinks1776 October 15, 2011 at 11:23 am

Only what I’ve read, Viking :)

vikingvista October 15, 2011 at 11:23 am

It is congruous with any statist agenda.

The Other Tim October 13, 2011 at 1:23 pm

“Redistribution of wealth from labor to capital” is a kind of nonsense that could only be formulated before the marginal revolution. It doesn’t work as a concept when consumer surplus and producer surplus are separated by the market equilibrium price – capital can’t just take money from labor without some force (say, government) raising a price ceiling on wages. Which isn’t likely to happen under modern governments, and certainly isn’t able to happen under “unregulated capitalism.”

muirgeo October 14, 2011 at 7:40 am

Nikolai,

You said the M- word! Must not say the M-word or that makes you an M- wordist.

Gnome DeGuerre October 13, 2011 at 9:26 am

If China stops running an export surplus with us, who will have sufficient reserves to import our government debt?

John Dewey October 13, 2011 at 4:39 pm

Gnome,

I don’t have more recent figures, but at the end of Jul-2011, China held 12% of all U.S. publicly traded debt. If China chose to stop buying U.S. government debt, the debt would still be purchased. To sell that 12% would likely require slightly higher interest rates. But the debt would be sold.

gnome deguerre October 13, 2011 at 6:18 pm

Dewey

in order to import something to China, don’t we need to export something? China may be mercantilist but that doesn’t mean they give us something for nothing, even if we give them just green pieces of paper. no?

gnome deguerre October 13, 2011 at 6:21 pm

And if they are giving is something for nothing then that is a trade that we should ENCOURAGE! No?

John Dewey October 13, 2011 at 6:47 pm

Gnome, I don’t really understand what you’re asking.

My reply was to your question about who wil buy U.S. Treasury debt if China stops running an export surplus with us. Not sure if you understand my answer to that first question.

Now you seem to be asking a much more general question.

As Professor Boudreaux has explained a number of times, China can do several things with dollars gained from its exports to the U.S.:

1. purchase U.S. goods and services
2. invest directly in the U.S. (build factories in Oklahoma, for example)
3. invest indirectly in the U.S. (purchase debt from corporations or from the U.S. governmenrt)
4. use the U.S. dollars to buy goods and services from some other nation.

If China chooses to do 4, then the nation which receives dollars from China will have the four options above for themselves.

Do you understand my reply?

Gnome DeGuerre October 14, 2011 at 3:51 pm

We are in total agreement. My question was meant to be rhetorical and to emphasise that we should encourage China to give us stuff for free.

gnome deguerre October 13, 2011 at 6:26 pm

Unless the “buyer” keystrokes the cash

Invisible Backhand October 13, 2011 at 10:58 am

Boudreaux: “The U.S. government should not respond to China’s allegedly undervalued renminbi by raising taxes on Americans who buy imports.”

Roth: “It seems nonsensical to punish a foreign country by raising taxes on your own citizens, but that’s exactly what this bill does.”

So ‘Debate Club’ is actually two flavors of conservatives agreeing with each other.

Invisible Backhand October 13, 2011 at 11:01 am

Wait, there are actually 5 debaters, Boudreaux only linked to one of the guys who agreed with him.

Here’s ALL of them:

http://www.usnews.com/debate-club/should-congress-interfere-with-chinas-currency-policies

Methinks1776 October 13, 2011 at 11:05 am

Where would be without your dull insight?

House of Cards October 13, 2011 at 11:25 am

I wish you would grow your company more rather than lurk in the bushes waiting to pouch on your intended victim. You must be in the top 1% of wage earners that the Occupy Wall St. folks are complaining about.

Methinks1776 October 13, 2011 at 11:35 am

I am so awesome that I can do both, pouch victims and grow my company. I am the evil rich, after all. Mwaaahahaha!!

House of Cards October 13, 2011 at 11:54 am

Just think, you could be in the top 0.01% if you just worked a littler harder (or smarter). What would you do with all that extra wealth? I actually think that you might do some good with it, and not just for yourself. I think there is a hidden Mother Teresa under all that grumbling. I know that you have a soft side; it does shine through occasionally.

Methinks1776 October 13, 2011 at 12:02 pm

Who says I’m not in the top 0.01% already? I do think I do some good with it. Life isn’t all about making money, my dear HOC. BTW, what’s with the periodic name changes? Do you just get bored using the same nome de plume or is there another reason?

muirgeo October 14, 2011 at 7:51 am

Well when you get that wealthy YOU get to be the arbiter of who receives your charity. Its probably as big a power trip as any to be on high decreeing the worth of people and the non-worth of others. Such wealth works when routing charity towards politicians as well decreeing which is worthy… its almost like a modern day slave auction. Did i say almost?

Methinks1776 October 14, 2011 at 8:27 am

Yes, Muirdiot. People still have the right to dispose of the wealth they created as they see fit. That this fact really chaps the hide of a sniveling little thieves like you is just a added benefit. You’ll never get your hands on it.

muirgeo October 14, 2011 at 8:58 am

Doesn’t chap my hide one bit assuming you’ve produced in proportion to what you’ve taken. I have no way to judge this since you have not enough pride to disclose what it is you do. But hedge fund managers are of questionable benefit to society in proportion to the gains they take. They simply position themselves in a market of complexity specifically designed to avoid the overt price mechanism. Its simply rules that make them rich.

Either way I don’t envy the extremely wealthy because their whole time is spent gaining and securing their fortunes while I hike across Gods green Earth happiest with the bareness of my needs and the scarcity of my cares and obligations. I’m pretty sure I would be very sad if I were you…. shudder the thought.

Anyway…. no time to talk… I’m off to hike the Freedom Trail today and maybe meet up with some of the modern day Patriots from Occupy Boston…have fun?

Fred October 14, 2011 at 9:05 am

“modern day Patriots from Occupy Boston”

Sad thing is, I bet these wannabe communist revolutionaries actually believe they are patriots.

brotio October 16, 2011 at 11:29 pm

I have no way to judge this since you have not enough pride to disclose what it is you do. – Yasafi Muirduck

Methinks has discussed what she does countless times. The fact that you’re too stupid to comprehend is an issue you should take up with your proctologist.

Invisible Backhand October 13, 2011 at 12:21 pm

It’s been noted that titan, er, siren of wall street methinks1776 has an awful lot of spare time away from her business. But disciplining her servants takes up a lot of time too.

Methinks1776 October 13, 2011 at 12:39 pm

You wish you were good enough to be my servant, Irritable Bowel.

Invisible Backhand October 13, 2011 at 1:01 pm

The quality of your insults is slipping. Tired?

Methinks1776 October 13, 2011 at 1:12 pm

What can I say? You bore me.

Invisible Backhand October 13, 2011 at 1:19 pm

I’m not letting you up until I cum.

vidyohs October 13, 2011 at 2:46 pm

@IB,
Thank you for that last comment, it certainly cements what all intelligent people know about the looney left, its adherents will tell any lie, stoop to any denigration, commit any foul and obnoxious behavior in their attempts to advance regressivism.

Your lack of intelligence and rational thought is exceeded only by your total lack of character.

Scum.

Patriotic American October 13, 2011 at 4:00 pm

She was being a cunt. She could stop acting like one all over CafeHayek and avoid getting back the insults she dishes out.

I would never call her a cunt. She doesn’t have the depth and warmth.

txslr October 13, 2011 at 4:10 pm

Pretty strong evidence for revisiting the banning issue. BTW, I generally find MeThinks’ comments to be informative, insightful and delightfully snarky.

Methinks1776 October 13, 2011 at 4:58 pm

Oh, I dunno, txlr.

These are just the wretched, misogynistic screeches of feeble intellects equipped with equally flaccid units that have obviously suffered a lifetime of endless rejection. We must show forbearance.

(thank you for the compliment, btw, sir. right back at you.)

txslr October 13, 2011 at 5:19 pm

Methinks,

Are you implying that ideological rigidity is compensation for flaccidity in other arenas? Science marches on!

Dan H October 13, 2011 at 11:12 pm

“I would never call her a cunt. She doesn’t have the depth and warmth.”

… says the man who probably doesn’t have first hand knowledge of such things.

Hank Mencken October 13, 2011 at 5:38 pm

Maybe you should decloak your backhand a little, our Klingon translators are offline.

I think it’s all a cosmic test and you should not stress so much that you’re going to fail.

I don’t think you’re against a unanimously voluntary division of labor are you? That’s really all you need to be a chum in the Hayek club.

There don’t need to be any sides, let me have my “flowers” (mass produced goods) as long as they’re peaceful, and I’ll let you have your “flowers.”

http://www.youtube.com/watch?v=hMM_T_PJ0Rs&feature=player_detailpage

Thor Westgaard October 13, 2011 at 5:52 pm

Cool vid. I think I’ll edit out the last part to make it just about a flower, add some theoretical subtitles, and show it in class. It presents economics in a very accessible way.

Economic Freedom October 14, 2011 at 2:24 am

Got shill?

“There’s NO business, like SHILL business, there’s NO business you know . . .

House of Cards October 13, 2011 at 11:48 am

Don B. is an economist, clearly not a sociologist or moral philosopher, though he may fancy himself as such.

Why should all Chinese, or foreign imports in general, be treated equally?
You claim that you oppose slavery, so what if the goods in question were produced with slave labor. The problem is that you think you are off the hook as soon as a worker is paid even 1 cent an hour under appalling conditions. That doesn’t pass the slavery smell test, sorry.

One should be concerned about environmental pollution as well. If a company in China is emitting pollutants that are destroying the local environment or polluting the atmosphere with greenhouse gases, or other more perceptible pollutants that cross the Pacific and land in L.A., that clearly is a cost not included in the low price of Chinese goods.

There is also the issue of supporting fascist regimes such as the one party that rules with an iron fist in China today. They derive part of their power from the money they extract from the burgeoning economy. The Chinese military doesn’t buy their lethal missiles, and tanks from bake sale funds, either.

So, it may be prudent to switch production to Thailand, or India, or ???; those may be countries that are more benign overall.

These thoughts of mine were prompted by a BBC broadcast interview (last night) with a famous artist that is being persecuted for speaking his mind about the totalitarian regime that he lives under.

http://dominicavibes.dm/news/ai-weiwei-is-named-artreviews-most-powerful-artist

As an aside, the white racist apartheid regime in South Africa was finally toppled. I do not know if the international efforts to boycott the regime played a part in ending the white minority rule.

Invisible Backhand October 13, 2011 at 12:26 pm

Speaking of China’s pollution, here’s a story about a chinese man who did 3 years in jail for trying to save a lake.

http://news.asiaone.com/News/Latest+News/Asia/Story/A1Story20111002-302743.html

But I don’t think you’ll get far with appealing to the moral senses of the people around here, HoC. Libertarianis attracts mostly aspies and autistic spectrum types.

Economic Freedom October 14, 2011 at 2:28 am

Got shill?

Gil October 13, 2011 at 12:26 pm

It’s okay if you’re aren’t the one doing the enslaving, you’re just buying goods at a knockout price.

dsylexic October 13, 2011 at 12:50 pm

stop blaming china.you have some nerve,coming from the US -which has the biggest prison population in the whole damn world.spare us your homilies

The Other Tim October 13, 2011 at 1:14 pm

Slavery is compulsory labor. Voluntary labor in exchange for a wage which the laborer considers sufficient to motivate him to freely take the job is not slavery.

You have not learned the lesson every other would-be wage manipulator has to eventually learn. If you screw with supply and demand, it screws you back, and the consequences become worse than the social ill you wanted to fix.

txslr October 13, 2011 at 1:42 pm

The discussion was directed pretty specifically to the question of taking government action because of China’s (alleged) manipulation of it currency. The exact same arguments were made years ago with respect to Japan which was not employing slave labor or any of the other large scale sins you reference. If you have thoughts on how we might improve human rights in China I’m sure many people of this board would be happy to engage you on that topic. That is not, however what Don’s brief article was about.

Andrew_M_Garland October 13, 2011 at 4:55 pm

To House of Cards,
Assuming China produces goods with slave labor, which is better for the slaves: to buy or not buy their production?

Buying their production makes them more valuable as slaves and possibly improves their condition. Not buying forces their slave masters to find alternate, less valuable uses for their slave labor.

Has your interest in slavery revealed what the slaves themselves would prefer? There may be other possibilities.

House of Cards October 13, 2011 at 10:54 pm

I don’t think you will be occupying Wall St. anytime soon.

I think I will let Patrick Henry answer your questions for me:

http://en.wikipedia.org/wiki/Give_me_Liberty,_or_give_me_Death!

Economic Freedom October 14, 2011 at 2:28 am

So is it your contention that it is to the self-interest of corporations to taint their products with unsafe ingredients and materials as part of a cost-cutting strategy for the sake of maximizing profits?

Andrew_M_Garland October 14, 2011 at 12:25 am

To House of Cards,

Cute, but what is your answer. Is your proposal that the slaves should revolt against their masters, even if it means their death? Sometimes slaves do that.

In the meantime, is it better for the slaves to buy their production or not?

Gil October 14, 2011 at 12:38 am

HoC is arguing that slaves don’ see any benefit from their production – they get paid the barest minimum and all profits go to the masters hence supporting slave-made products doesn’t enrich slaves. On the other hand, does it benefit the U.S. if it means they can get good cheaper and thus enriches their economy?

dsylexic October 14, 2011 at 4:23 am

i am sick of this slave -master nonsense.shaddup .they are NOT slaves just as much as they people in the beginning stages of the industrial revolution werent .there are tradeoffs in life.first world comforts and choices are not availabe to the chinese worker.so stop judging everyone else by your pampered standards.jeez.

Economic Freedom October 14, 2011 at 2:26 am

So is it your contention that it is to the self-interest of corporations to taint their products with poisons or unsafe ingredients and materials as part of a cost-cutting strategy for the sake of maximizing profits?

juan carlos vera October 13, 2011 at 11:55 am

To Roth…
¿Cooler heads?. You, the great American nation, has become an engine to promote and support worldwide fascism. Since the second world war until today, your democracy has become an effective instrument to legitimize and consolidate fascism successfully. Your successful democratic system chooses fascist rulers and that example is successfully imitated and copied in all democracies around the world. I wonder why today’s fascist rulers should rule out policies that have always given such juicy economic gains for rulers?.

txslr October 13, 2011 at 1:48 pm

Glad we got THAT cleared up.

Bastiat Smith October 13, 2011 at 12:23 pm

From a Classical Liberal standing, we should interfere in other countries’ matters to see the spread of personal freedom.

Good thing I’m not one of those! Then I’d have to care about the Chinese poor!

Funny that my purchasing decisions help the Chinese poor on a greater scale than any well intentioned scheme that I could contrive and enact.

Invisible Backhand October 13, 2011 at 12:29 pm

Help the communist elite, keeps the Chinese poor in misery, and erodes the prosperity of regular Americans, you mean.

txslr October 13, 2011 at 1:49 pm

You must be hell on Cuba!

Economic Freedom October 14, 2011 at 2:30 am

Yo! How’s the shill thang going?

Marty Mazorra October 13, 2011 at 1:38 pm

Can’t we just sum it up with personal freedom?

I demand the right to buy whatever from whomever (from wherever) will deliver me the quality I desire at the price I can afford… If whomever wants to finagle things to make whatever cheaper for me, I say thank you whomever, there’s other whatevers I’d like to buy with my savings… And be sure to spend those U.S. dollars wisely….

sethstorm October 13, 2011 at 3:50 pm

Yes, and do it yesterday. Those cheap goods are doing nothing more than justifying a regime that selectively hands out freedom to few people versus handing it out to all. Such funding has only made China’s ability to do its totalitarian tasks that much more efficiently, whether it is locating, prosecuting, or executing dissidents (whether they are against the company town, government, or multinational that contracted them). Then admonish the person for misrepresenting the situation with that language.

Have we gotten to the age where it is bad if you show any form of respect for the person that ends up doing the job? It seems so whether you’re in the US or China.

Matthew October 13, 2011 at 3:55 pm

Can someone explain the problem here, from Gagnon on the “Yes” side

“First, it is important to understand what China is doing. The currencies of countries that are growing rapidly tend to increase in value, which offsets their declining costs of production and maintains balanced trade. By aggressively buying U.S. and European assets, China short-circuits this currency appreciation in order to boost Chinese exports and damp Chinese imports.”

So China is hurting us by aggressively buying our assets? Like our government debt? They are trying to sell more of their stuff than us by buying our stuff?

Stone Glasgow October 13, 2011 at 4:10 pm

“By keeping the value of its currency low, Beijing enables Americans to stretch our dollars farther.”

This is simply wrong. If one nation uses gold as money and another silver, the value of each metal is irrelevant. A fall in the value of silver does not allow the nation using gold to aquire more goods from the silver-money nation, except to the extent that they hold their assets in gold. Most wealth is held in assets other than currency, and new wealth generated by industry is never pecuniary.

Marty Mazorra October 13, 2011 at 4:49 pm

OK, so let’s say China uses silver colored pieces of paper and we use gold colored pieces of paper… I want to buy a set of coffee cups… Here at home, they’d cost me say 40 pieces of gold paper… Now let’s say in China the going rate for a set of coffee cups costs 40 pieces of silver paper… and China is willing to exchange 4 pieces of silver paper for every 1 piece of gold paper… So then I can buy my coffee cups from China for 10 pieces of gold paper…. and save myself 30….. to spend elsewhere…

What am I missing?

vikingvista October 15, 2011 at 4:47 am

” What am I missing?”

Nominal price changes.

Stone Glasgow October 15, 2011 at 4:34 am

You’re missing that the money is just a ratio between coffee cups and paper. If the cups are cheaper in China, it has nothing to do with the paper. It means that China is either better able to produce cups with less effort and material, or that China has a comparative advantage and that cups are one of the products it is best suited to produce.

Tim Dufore October 13, 2011 at 5:04 pm

No he should not. He should stop trying to get everyone in the world to cry Uncle.

Why didn’t he stop when the Iron Curtain fell and he “won” the Cold World War III that began in 1946? Millions loved him for that.

Why won’t he take a hiatus from his Drug Prohibition World War IV began in 1972?

Why doesn’t he concentrate on his new Terror World War V he declared in 2001, and strive to lessen his collateral murders?

Why does Uncle Sam even consider starting World War VI (Unfair Mercantile Exporters War)? Won’t this starve and impoverish billions if he goes much further?

If Daddy Yankee would just rebrand his many bases and armaments as World Terror Prevention Forts and Fleets, he might just get a little gratitude and cooperation from everyone else, I think.

kyle8 October 13, 2011 at 11:12 pm

Can you imagine how hypocritical we seem tot he rest of the world screaming about China while we have ourselves devalued the dollar only just this past year, and we give major subsidies to all sorts of domestic industries as well as tariffs and subsidies on agriculture.

Dan H October 13, 2011 at 11:16 pm

^THIS.

100% true… Do you know why many Latin American countries remain relatively poor despite their moving towards free markets and free trade? It’s because we subsidize agriculture to the point where we price them out of the world market. That must make progressives feel really good about themselves.

Methinks1776 October 13, 2011 at 11:20 pm

It’s hard to compete with free. And maybe their dictators’ “shoot first, ask questions later” policies have have a little something to do with it too.

http://news.yahoo.com/chavez-proposes-shooting-down-suspect-drug-planes-030704462.html

Ron H October 14, 2011 at 3:18 am

It seems Mayor Bloomberg can do that also.

Methinks1776 October 14, 2011 at 7:42 am

I knew there was a reason I left New York Shitty.

BostonFlyer October 14, 2011 at 11:23 am

Corporate welfare and stealing for the poor to give to the rich is a favorite pass time of the right, As Gore Vidal properly pointed out we have two right wing parties in this country. Also let us be hones the only difference between republicans and democrats is that the democrats are the honest socialist party. As for china I though this site would be about free market but apparently it is more about being a shill for big business.

Methinks1776 October 14, 2011 at 11:42 am

As Gore Vidal properly pointed out we have two right wing parties in this country.

then

Also let us be hones the only difference between republicans and democrats is that the democrats are the honest socialist party.

So which is it? Two right wing? To left wing? One right, one left?

Corporate welfare and stealing for the poor to give to the rich is a favorite pass time of the right

Hey, there’s nothing Republicans love more than a bit of corporate welfare for their cronies, but I thought Solyndra was Obama’s handiwork.

Fred October 14, 2011 at 11:49 am

Corporate welfare and stealing for the poor to give to the rich

Taking less does not equal giving. For example a tax break is not a gift. It is taking less.

Giving less does not equal taking. For example an entitlement cut is not taking. It is giving less.

kyle8 October 15, 2011 at 9:23 pm

well since you quoted that noted economist and social genius Gore Vidal, then you must be right!

muirgeo October 14, 2011 at 7:04 am

“History shows that governments, including Uncle Sam, routinely demonize foreigners in order to bestow unwarranted privileges on politically influential domestic producers. ” Don B

The professor seems not to realize how this is exactly what is happening. WE now our the foreigners. With so called American manufacturers having their factories in China the Chinese devaluation of its currency and the tariffs China imposes on American exports do exactly what these multinational corporations want. They serve as protectionist policies for their producers now made in China.

It takes a degree of naïvety not to see this but indeed the professor himself IS an unwitting protectionist but just for American factories now producing in China.

ralph October 14, 2011 at 8:41 pm

If China wanted to go to zero or give me a new computer for$2, I would take it.

vikingvista October 15, 2011 at 11:26 am

If you succeeded initially in doing so, many of your fellow Americans would like to see you shackled at gunpoint and thrown into a cage.

Methinks1776 October 15, 2011 at 11:27 am

Right after they get their $2 computer. Americans of all stripes love a good deal.

vikingvista October 15, 2011 at 9:22 pm

Yep. Not too many protectionists asking their retailers if they can pay more.

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