China, Paul Krugman And the Coming Great Readjustment

In tomorrow’s piece, Delusional Economics, I will outline the theoretical foundations for a Reality-Based Recovery (the program aspects of which will be described in my pending article, BREAKOUT – The Path to the American Recovery).

But first…

China, Paul Krugman

And the Coming Great Readjustment

In today’s New York Times, the liberal economist, Paul Krugman, neatly hits the nail with en expertly aimed hammer, in “China, Japan, America.” This is Paul Krugman at his clear-headed best: lucidly descriptive, cautiously prescriptive.

Spoiler alert: Krugman is in general agreement with the China-assessment of populist conservative, Lou Dobbs.[1]

Krugman has concluded that China’s currency and trade policies are harmful to US interests. This is an easy assertion to make, a difficult one for the current political elites to address.

Note below: In my three referenced articles I have made the larger point that China’s policies are essentially indistinguishable from those of a predatory, monopoly-seeking corporation. At the conclusion of today’s piece, Krugman writes:

“So here’s the question: Will U.S. policy makers let themselves be spooked by financial phantoms and bullied by business intimidation? Will they continue to do nothing in the face of policies that benefit Chinese special interests at the expense of both Chinese and American workers? Or will they finally, finally act?”

Or put differently: Who will bell the cat?

Yes, that is the question, but what is the answer?

Some recommended reading:


Krugman: China, Japan, America (NYT 9-13-10)


China Inc. and the American future – Paul Krugman Almost Gets It

China 2.0 – Why We Must Prevail

China, Inc. Part Three – America, Inc. at Risk

My pull quote —

“All civilizations are inherently predatory, China and the Western democracies included. Modern, intelligent predators are capable of cooperating. The secret here is to avoid becoming prey or indulging in prey behavior.”

Stay tuned for:

Delusional Economics

& the Catastrophic Failure of Magical Thinking


Jay B Gaskill

Attorney at Law

[1] See Exporting America: Why Corporate Greed Is Shipping American Jobs Overseas

By Lou Dobbs and Joanne J Myers. Note these Dobbs’ quotes from his book interview by Carnegie Counsel “One of the great tests for outsourcing is when is the last time you heard of a CEO’s job being outsourced, or the board of directors, or senior management? It doesn’t happen, does it? It’s strictly on a cost basis. I love to hear people use these code words—productivity, efficiency, global competitiveness. Say what you mean. You mean the cheapest possible labor. That’s exactly what is happening.” …AND… “If people continue to lose jobs and have their purchasing power diminished, they will need to have a lot of those cheap goods. Wal-Mart is now the number three export market for China, for example. That may be the way of the world, but it’s not the way of the world that would be most beneficial to Americans and the middle class, because I live under a view that the middle class is the backbone and the future of this country. I want to see it enlarged. I want those who aspire to be part of it to have every opportunity. I don’t see that occurring if this trend is fully extrapolated.” …AND… “No one believes more in free enterprise democracy than I do. Few people have benefited more from it. I have been a businessman as well as a journalist. Nobody in this room believes more in capitalism, its relationship to freedom, and in being pro-business. But I am not pro-stupidity, nor am I anti-middle class.”

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