(V): Indeed.

gogul: Why keep repeating myself??? Nope.... not needed.

Hu Jintao, you'll be one of my toys

Have some nice times (time?). Don't neglect your diary :)

gogul: Julien, say how it is. Lame politicians? That should be : the lame prosecutor of a certain Canton.







Heulen und Zähneklappern

It's no venting mood, just a cross over of stupid political minds. Steinbrück made jokes about swiss banking? Jokes? I really hope somebody brings the UBS down. It is in certain critical parts a criminal institution. Nobody raised objection when the Americans called out the UBS, juridicaly not totaly correct. As swiss politicians are lame in this matter, seems that Americans have to prove the accusation.

The german Peer Steinbrück worries about a worse credit crunch for the next months (globaly). Who the heck needs credit? Eat stining nettle.

I hate it like pest if politicians worry the people for things which are problems of their criminal finance sector.

Tuesday: Nirvana = purgatorial fire ? ;)

This Chinese government could get powdered to Nirvana. Nobody would miss the chinese KP.

About time that the Han learn a little something how to treat minorities. Welcome.

A little dash of colour, not ment to interrupt this interesting conversation going on, but..

In China the Uyghurs make troubles. Why? The systematic acts of caprice of the Han Chinese are simply not acceptable.

In response to Czuch's question:

> Whats the solution then???

I think the answer to this question is ideologicaly charged. How we as human beings are going to solve the problems and ineffficiencies in the Capitalist system is complex because it is colored by how we see socialism and the role of the state in regulating the economy and the business environment. Politicians do know that this problem exists and I have seen some opinions about it. I can start perhaps with what I will call the "pessimistic and radical view".

Among the more hawkish neoconservatives in Washington there is this belief that the current economic relations between China and the US will eventually lead to military conflict. There is a perception that the US is in an economically unmanageable situation because its foreign debt has become too great to manage properly without causing hardship for millions of working Americans. If at some point China decides that it is time to collect on the debt, the only response viable will be a war because the US will not be able to pay such a huge debt. To me this is a destructive and pessimistic view because it implies that China is a hostile, unreasonable power with nothing but evil intentions towards the US. Thus the more hawkish right-wingers see war as the only outcome.

More moderate views say that if China is given enough time, its population will move from a "producing" population to a "consuming" population. As the economy in China grows the rate of consumption will increase and that will open avenues for products to be sold to China and bring the trade deficit into balance. Evidence of this is seen in both the expansion of local businesses in China and the increase in demand of certain luxury consumer goods (e.g. cellular telephones, televisions, computers, etc.)

There is another view, and this is the one I subscribe to, which sees the current economic relations between China and the US as part of a much greater, and much older economic process. This process is called "economic integration". It is a concept that was born first from a Marxist view of economic systems and then it developed further in the Soviet Union in the 1950s after WW II. The theory is that as time is passing the entire world economy is in a process of "globalization". Originally economic systems arose locally and in isolation, then as time passed different economies came into contact and as they engaged in trade and exchange a process of adjustment had to take place. If enough time is allowed to pass, these economies merge into one larger economy.

The evidence of this is very strong and we all have heard of globalization and the formation of large economic blocks such as the European Union. The process of economic integration requires for nationalistic or local interest to concede ground to the much greater interests of the whole economic block.

The shifting of labour force from the US, Japan and Western Europe into China and India is driven by the self-interest of large corporations, but its ultimate effect is a process of economic integration in which all the economies involved become so interdependent that it becomes impossible to separate one from the other.

We saw this in the latest crisis in the economic system. As the American economy slid into recession, the demand for Chinese goods dropped suddenly and China also experienced a shrinkage in its economy.

As China and the US exchange more and more capital, eventually it will become impossible to separate one economy from the other and the US and China will end with a fully unified and integrated economy.

Many capitalist economists don't like this idea at all because it implies that western capitalism and communism end in an economically inseparable state, and that means a politically inseparable state.

If the current crisis in the world economy is not resolved, we will see a situation in which the state will have to intervene fully to keep the world economy afloat and that will mean moving from local central banks (like the Federal Reserve or the Bank of England) to a larger central bank regulating the world economy. We will have a "World Reserve" that will regulate banking and interest rates on a worldwide scale. We already saw this with many large cenatral banks lowering interest rates at exactly the same time and central bankers meeting to discuss common strategies to fight the crisis.

Parallel to this there will be regulatory bodies that will have to enforce labour laws on a worldwide scale to ensure that wealth is distributed more evenly and to minimize wage disparities that are further fuelling the current crisis and causing hardship for millions of people around the world. Many people are already complaining that there were massive bailouts for banks, car companies, real estate and mortgage companies, etc. However, the poor of the world get no bailout and they go on being poor. So the only way forward is to ensure that there is more wage equity in other places around the world.

Such an aggresive and global form of the state scares many people and is seen as a form of "socialism" and an "engineered economy". There is great political opposition to any "socialist" measures to fix the world economy.

(V): Nope. I work with words which I build to sentences. I admit that I'm funnier than most in doing this.

(V): No foreign cheap labour source ... basically no more "99c" stores.

Okay, so everything would cost more, but nothing else would change, would it?

If manufacturing came back here, unemployment would go down, but wages would go up, then it would still be cheaper to manufacture in China, even at minimum wage, so we would be right back where we started, except now, instead of 99 cent stores we would have 5 dollar stores!

(V): Its a waste of time to post a "nope" in my opinion. What?

Czuch: No foreign cheap labour source ... basically no more "99c" stores.

Artful Dodger: Nope.

In 2007 Romano Prodi announced the '09 meeting to happen in La Maddalena, a island in between Sardinia and Corsica. Fabrizio Ciccitto from the party 'Forza Italia' wasn't happy: "Its obvious that Prodi wants to seal off the party to prevent an attac of violent demonstrators and extremists". Too funny not.

Ok, Silvio had an idea... ................ ....... OMG this strange dude is still developing ideas. The party happens in L'Aquilla. A earthquake ruined the town in April (it was I think). Berlusconi visited the place, and said into a camera that the people here should just take it as a camping vacation (over 300 dead). The town would be rebuilded soon. Lately he said into a camera that this is happening, which is a lie. Well, ok, party in L'Aquila... Berlusconi hopes for international help to rebuild the little town (yes he said that, and he loves to show up in front of cameras the ugly guy). Well, it's a mess. L'Aquila seems to have other things to do than get flooded by a massive policeforce. The people from L'Aquila living in tents, people who do not trust the next winter, are not amused. Pictures like Bush showing up with New Orleans, does the world needs to see this kind of awful manipulation 2009 in L'Aquila with Berlisconi? Is that boring

Übergeek 바둑이: Whats the solution then??? Government mandate wages paid? Maybe that US manufacturers should have to pay US minimum wages no matter who does the work? Then where will that leave us? What would the after effects be?

Übergeek 바둑이: excellent post... reminds me of some friends of mine who say " That job(some type of labor) isn't worth X amount of money, A Mexican{ or illegal immigrant) will do it for Y amount,, Americans won't do this type of work anymore"

Übergeek 바둑이: Well said.....

In response to these comments:

> I am sure if I had a billion people working for me who I could steal from
> (their productivity wise) I could assume a bunch of the US debt as well.

> I just have an image of some poor Chinese kid, up to his thighs in rice paddy,
> runny nosed on a cold morning, thinking how wonderful his government is
> because they can afford to buy the debt of the US

I heard this idea of "China buying US debt" being tossed around during the election. Barack Obama used it a lot more that John McCain.

There is a general lack of understanding about how China came to hold billions of dollars of "US Debt".

Back in the 1960s China was a nation in a state of collapse. Having come out of a bad revolution and a "cultural revolution" China found itself with almost no industry, no agricultural production and a lack of a good educational system and technology. Western economicsts knew that China did have one asset which was worth a lot. This was its people. With a high population China was sure to come out of its problems if China could channel all those people into industrial production.

Richard Nixon made that historic trip to China and later Deng Xiaoping (the communist leader educated in France) agreed to allow foreign investment in China. After the fall of the Berlin wall, western companies rushed to open factories in China because with an average salary of 800 USD per year China offered one of the lowest labour costs in the world.

Western companies have made trillions of dollars manufacturing goods in China. Rather than calling this "we are exporting jobs overseas" or "we are exploiting Chinese people", western economists invented a sanitized term: "Outsourcing".

The US has "outsourced" so much of its production to China that now the capital flow to China exceeds anything that they could afford to buy from the US by approximately 45 to 50 billion USD per month. American politicians cry fould saying that China has protectionist policies in place but the reality is that China does not need much along the lines of manufactured goods. China buys billions of dollars of grain and legumes from the US, but agricultural products are valued relatively low. American manufactured goods have become in essence luxury goods. The average Salary of Chinese workers does not allow them to buy cars or computers, so the balance of trade is out of whack.

Since the US debt is now growing at 40-50 billion per month in trade and capital exchange, the Chinese are not stupid and they are heavily hedging their holding of Us dollars by purchasing massive amounts of treasury bills and federal reserve bonds.

American politicians point the finger at China and the Chinese government, but the reality is that the debt is being fuelled by our consumption and the greed of large monopolies that have shifted all of the manufacturing to places like China, India and Vietnam. They do it because people in those countries are poor and when you are poor it is easy to be exploited.

Should the Chinese government raise their minimum salary? That would cause massive inflation in the US because the manufacturing cost would go up, and companies like Walmart oppose anything like that. Should the Chinese government take measures against foreign companies that exploit Chinese workers? The American government has already taken China to arbitration to the WTO when they tried to impose restrictions on foreign companies. Walmart fought tooth and nail to stop the Chinese government from passing a law requiring that Walmart employees in China join local unions.

Pointing the finger at China is unfair, because our side is as much to blame as theirs. I will believe in pointing the finger on the day when the American government (and other western governments) requires American companies to honor minimum salaries on a worldwide scale. On that day unfair labour advantage will end and American companies will pack up their bags and bring manufacturing back to the US, and the US will stop "selling its debt" to countries like China, India or Korea.

(V): "And AD's example is not relevant, it was not caused by a depression but a change in competition rules. If you cannot understand the difference then study economics"

The CAUSE is not relevant but the effect is. Therefore my example is more than relevant. We are talking about the effects of policy change. And in the same way ATT was split due to policy, so are the big car companies being bailed out due to policy. You can argue that the bailout policy is due to depression and you can also argue that the ATT split is due to a depression of sorts: smaller companies were economically depressed (or suppressed) by the big monopoly.

It's a relevant argument.

(V): "a service being split is not the same as a company busting through worldwide economic depression. Such a comparison is not relevant."

It's relevant because thousands of jobs were eliminated because of government intrusion. You are right that new jobs were created as a result and this point supports my position. The car companies are allowed to fail and new companies would spring up. There's always someone waiting to jump in.

But bailout a failing company? No. How will that help in the long run? It won't. History will show this bailout of car companies to be a huge blunder.

(V): and that collapse of one segment can lead to the whole being severely weakened to the point of collapse.


That is your quote.... the collapse of on part can lead to the collapse of the whole.... explain then what that means?

To me it means that if you let part of the auto industry collapse, then it is possible the whole auto industry will collapse as a result... what else could your statement mean then?

(V): How about dinosaurs? They existed once, in great supply... you cannot blame humans for their demise nor any government could have saved them....

Its just the way of the world.... there might come a day when humans dont exist on this planet, talk about ghost towns!

You can have your governments keep putting their finger in thew dike holes, but just like that wont keep the dike from failing, your governments cant stop the world from changing as it is going to do

Czuch: I didn't say that. I never said that.

Please.. as you say keep to the debate.

(V): So, you really believe that there is a chance that the whole worldwide auto industry will collapse????

I can bet you any amount of money that there is absolutely a ZERO percent chance that will or can ever happen, at least until we all stop driving cars

Czuch: In your first reply you missed the point, and in your second. I gave you examples.

It's called history of how some collapses have affected a town... another such example would be the dust bowl problem that happened in the USA in the 20th C.

And I am sticking to the debate, and what I'm saying is relevant and part of the debate as I learnt from economic classes at school and from observing economists talking on depressions and collapses of the past.

And you have no proof that the auto industry will not collapse... and are you willing to let all those jobs be put at risk with no evidence you are right? I've not seen you bring anything to the debate to support your opinion.

(V): ghost towns from the collapse of the local supporting industry when such towns population have been reliant on one industry.

You said it will lead to the collapse of the whole industry, not of a town... thats where you have no proof... there is no evidence to prove that if you let a few car giants die that the whole auto industry will collapse because of it, try to stick with one debate at a time

(V): others have been caught up in all the mess and failed of no fault of their own.

You seem to believe we all have a God given right to be successful???

Thats where we dont agree... Success is a condition of many factors, some of it in our control, some of it not, like timing and luck.

Try to start a computer company during the great depression and you would fail... not because of the depression, but because the internet had not yet been invented, not a bad business idea really, but just not the right time in history.

Try to start one now, and you will likely fail as well... too late, bad timing, not the fault of a depression, should the government support you?

There are plenty of car companies thriving right now, and banks as well, the smart ones.....

Point is, we do not have any right, nor is it the responsibility of the government to make sure we are all successful

Czuch: No proof or history... ghost towns from the collapse of the local supporting industry when such towns population have been reliant on one industry. Never heard of this Czuch?

And AD's example is not relevant, it was not caused by a depression but a change in competition rules. If you cannot understand the difference then study economics

If the auto industries go under it's not just them that will suffer, but again you'd need to know economics to understand this... look under supporting and related industry and services.

"Its a I cant keep up with the times or run a business correctly related collapse"

Which has led to a depression. The causes I agree can apply to certain companies, but others have been caught up in all the mess and failed of no fault of their own.

Imsoaddicted: Sah - Keh

Thats how we pronounce it here....

(V): not the same as a depression related collapse.




Its NOT a depression created collapse!!!! Its a I cant keep up with the times or run a business correctly related collapse You put out too many loans to too many people who cannot afford to pay them back, thats just a poor business decision.... not anything to do with a depression!

Again, AD already told you examples where many banks are doing just fine.... why do you ignore these facts?

(V): and that collapse of one segment can lead to the whole being severely weakened to the point of collapse.


This is your theory, maybe, but you have no proof, or historical record to back that up!

You just dont get that things are always in constant change.... the climate for one, but you just want governments to stop it anyway.

AD, just gave you a real life example of a huge industry change, when ATT split up... we recovered from that, and got stronger even.
You will push to stop burning fossil fuels, but you want to save the industry that makes cars that burn them?

Then, on the other side, you could care less if some oil exec. goes to the poor house, along with all his employees, right?

I just dont get it?

Czuch: Um... you do know that eating snot is comparable to eating a McD's.

Something about the flavour and make up of the fats and sugars!! Or so the scientists say!!!!

Artful Dodger: Btw.. a service being split is not the same as a company busting through worldwide economic depression. Such a comparison is not relevant.

We've had services privatised or put into competition (rail travel, post, etc) and a certain amount of rearranging is normal. People will lose jobs, jobs will be created.... That is a normal event well known to those who've studied economics and not the same as a depression related collapse.

Do you understand this?

Bernice: yep we pronounce it sarkee to

Czuch: and we pronounce it "sarkee"
I also have friends that have a chinese restaurant, I rang them and asked (they are chinese) and they pronounce it the same....
but I guess if you have a plum in your mouth you would pronounce it "saw-kee" kinda like being a snob.

Tuesday: It's that there seems to be no recognition of history and economics that gets me, and that there is no understanding that a country is a big economy built of various segments of industry from various areas and that collapse of one segment can lead to the whole being severely weakened to the point of collapse.

** and I refer everyone else to this answer in reply to their replies **

Saves me time typing

Czuch: Back in 85 I lost my job due to the government's intrusion into AT&T's business. They split up the phone company and I lost my job along with 24,000 other workers. No one bailed me out. Thousands more lost their jobs after the breakup. I was 34 and had two children. Along with my wife's help, I put myself through college, landed a teaching job, and started a new career. I went on to get my master's degree and that put me way up on the pay scale. No government help. No bailouts.

And what of all those workers who also lost their jobs? If they looked, they found new work. As a result of the breakup of the phone company, many more businesses were formed. Some grew at fantastic rates!

So here's the government breaking up a "BIG" company on the one hand, and then helping a "BIG" company on the other.

Let the market take care of it. After the phone company breakup, new business started. More jobs were created than were lost. I don't recommend it because it was government intrusion that caused the problem (and I could have my stats wrong). Either way, the government should do it's job and ONLY its job. Follow the mandates of the Constitution and stay out of our lives. They try to RUN everything but they RUIN it instead.

Big government = less freedom = less quality of life = less potential = weakness.

Tuesday: sorry... I just have an image of some poor Chinese kid, up to his thighs in rice paddy, runny nosed on a cold morning, thinking how wonderful his government is because they can afford to buy the debt of the US......

Tuesday: oh... and I pronounce it like... saahkay

(V): "snot eaters" ........... is that what you call Chinese people??


not really, I just made that up for effect, but I ate some snot before when i was a lad, out on a cold morning... its not very becoming

(V): we are all descendants of conquerors and those who did terrible things in the past.

... ahhh, so you are saying that the Chinese are on the correct path, just going through some growing pains, based on the fact that the US had some of its own???

(V): The current situation is not normal.

Just because something hasnt happened in your lifetime, doesnt make it paranormal...


Yes, some people will always suffer when jobs are lost and certain industries fail, and some jobs will gain when new industries rise....


You dont seem to care about oil jobs being lost, since they are causing global warming, its no different from a car company that isnt keeping up with the times.

(V): the US is not like a big company. And no, it shouldn't be bailed out. California is a good example of this. They are a government. They operated against sound economic principles. They are a very liberal State and they simply gave too much money away. YOu can't offer free this and free that to people that don't contribute and then scratch your head when the money runs out. No bailouts for California. They dug their own hole even while they were being warned. They ignored the warnings. You touch the hot stove, you get burnt. Deal with it.

As for the auto industry: if they fail, they fail. More people have lost their jobs in small businesses than could ever lose their jobs in the auto industry. Big business doesn't make the US. It's the small ones that do. The big ones suck up to the government. When "Ma Bell" was dismantled, competitive businesses sprung up everywhere. Sure, thousands lost their jobs when the telephone company split. Many more thousands found jobs as a result of newly developing businesses.

On Banks: if they are insured, you get your money back. If not, oh well. It's not the job of the government to bail out people who make bad investments.

As to Bernie Madoff: The government was warned over and over about that man and the government ignored it. Seriously, he should be hung in the city square for all to see, along with any others who were participants in the theft.

But bailouts? No. Who is going to give me the thousands I've lost when the market lost money? No one. That's the way the ball bounces.