What might be the danger to the U.S. Economy of a shift in the valuation of the Chinese currency? Since China is a major supporter of our debt habit, it might not be too pretty.
What is the solution? Well it may well be... Revamping the tax code (or, more to the point, a tax overhaul to support saving and suppress spending) BUT, you suppress spending and you've got yourself a recession.
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Why is global trade not similar to global movement of life forms, like sea lampreys, kudzu, zebra mussels, snake fish, and on and on?
Global trade disrupts closed systems. It's a bit like taking all the skin off of a body. We are not closed systems, we have ports of entry and exit. But we are not totally open, and when we do get too open, we get sick and die.
Global trade works for those segments that are themselves protected or are not effected, or for whom the effect is delayed and the one who benefits has a certain mobility to get out of the way.
Most people cannot get out of the way.
Thus, having opened up our system to the Chinese, there is no way to painlessly correct it.
Global trade does not have to be a problem. Look at the U.S. It was basically started as a co-operative trading bloc. The Europeans see the advantage and want to do the same. The problem with its present global incarnation is that it is only partially global. Barriers to trade are being dismantled but the barriers to other institutions, such as environmental and labor laws, are (deliberately) not being dismantled. So presently "global trade" is just a means to build product cheaper. (Do you have to store and dispose of hazardous waste in the U.S.? Go to China where you can dump it in the stream.)
Personally I think global trade is a good thing (there are positives and negatives). But there needs to be some sort of international effort to break down the national barriers to the counter checks and balances of capitalisms excesses. (This seems far fetched to us in the U.S. where many of those checks and balances are under attack. But look to the stratagem of Karl Rove as inspiration. He attacks at exactly the opposition’s strong point.)
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