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Useless Sanctions on China: Robert Reich Says 'Forget It,' Better to Rebuild American Industry

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Better Believe It Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-04-10 03:20 PM
Original message
Useless Sanctions on China: Robert Reich Says 'Forget It,' Better to Rebuild American Industry



Useless Sanctions on China: Robert Reich Says 'Forget It,' Better to Rebuild American Industry
by Robert Dreyfuss
September 19, 2010

More and more, as the economic crisis continues and unemployment stays high, many politicians, labor officials and economists want to blame China and worse, take it out on China by punishing Beijing with sanctions, tariffs and other measures, even at the risk of trade war. Thats why Robert Reichs piece in the Christian Science Monitor comes as a breath of fresh air.

Reich says that its naive to assume all we have to do to get the Chinese to do what we want is to threaten them with tariffs. He points out that China might well retaliate, undermining the US economy, too, and that China isnt likely to change what they believe is a key political and economic strategy just because the United States makes it more expensive for them to keep it. And, he says, even if China did allow its currency to rise against the dollar, theres no reason to think this would automatically generate lots more American jobs.

He concludes:

What worries me most about all this tough talk about China is it diverts attention from the real problem. American isnt suffering high unemployment because were buying too much from China and not selling them enough. Trade with China is a small portion of the US economy. The central challenge we face isnt to rebalance trade with China. Its to rebalance the American economy so its benefits are more widely shared.

What the United States needs to do, of course, is to create a domestic industrial policy to revive manufacturing, tax the rich, strengthen education and job training, and other measures to revive American decline. One country that has done a lot of that already is Germany, as a Washington Post article this week provided a stunning glimpse into why the Germans dont exhibit the kind of anti-China hysteria that so many Americans do. Unlike the United States, which has a huge and growing deficit with China, Germanys trade is almost in balance, and Germany has managed to export huge amounts of high-tech goods, including BMWs, to China.

Read the full article at:

http://www.thenation.com/blog/154886/useless-sanctions-...
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ProSense Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-04-10 03:25 PM
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1. Here is Krugman
on the subject (also Simon Johnson)

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RandomThoughts Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-04-10 03:31 PM
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2. Here are the questions.
Does china have a democratically elected government and safeguards for rights of citizens.

That was why we claimed we were against Soviet bloc.

So it must have been for some other reason.



So should we set limits on trade with countries with ideals that do not match ours, or should we change our ideals on governance to match them?
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Better Believe It Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-04-10 03:41 PM
Response to Reply #2
5. The closest relationships the U.S. has with other nations are frequently with dictatorships!
Edited on Mon Oct-04-10 03:42 PM by Better Believe It
Including today.

Saudi Arabia.

Columbia.

Afghanistan

and the list goes on.
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whathehell Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-04-10 04:30 PM
Response to Reply #2
7. Very interesting. n/t
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Tierra_y_Libertad Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-04-10 03:33 PM
Response to Original message
3. Erecting a bogeyman to blame is easier than actually doing something for the economy.
Essentially, we are telling the Chinese to wreck their economy to "save" ours. Of course, embargoes, tariffs, etc, would only produce a trade war which we would lose.

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HughMoran Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-04-10 03:34 PM
Response to Original message
4. Yeah, let's just ignore the currency manipulation
After all, people don't buy products based on price, right?

:eyes:
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RaleighNCDUer Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-04-10 04:04 PM
Response to Original message
6. Hell, just give corporations tax breaks for building factories in the US and
DON'T give them tax breaks for building them overseas.

That would be a GOOD start.
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pampango Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-04-10 04:48 PM
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8. Better to go after foreigners than to provide progressive policies for our own people.
It's all China's fault. If we can just stick it to the Chinese (or Mexicans or the Japanese, anybody) everything would be fine.

Don't tell me that Europe trades more with China than the US does (or that Germany has a trade surplus with China) and yet their people have better lives because they have an effective social safety net, progressive taxation, and strong unions. It's all China's fault!

In 2009 our imports from those places was as follows:

China - $296 billion
EU - $282 billion
Canada - $226 billion
Mexico - $177 billion
Australia - $8 billion
New Zealand-$2 billion

http://www.census.gov/foreign-trade/balance/c6021.html

Our trade deficit with the EU ($61 billion) is greater than with (Mexico $48 billion).
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girl gone mad Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-04-10 05:05 PM
Response to Original message
9. Reich is right.
Entering a trade war with China would be foolish on many levels.
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