Comments on: Seven reasons to be skeptical of Obama’s economic plans http://www.creditwritedowns.com/2009/01/seven-reasons-to-be-skeptical-of-obamas-economic-plans.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 By: John Creighton http://www.creditwritedowns.com/2009/01/seven-reasons-to-be-skeptical-of-obamas-economic-plans.html#comment-2798 John Creighton Wed, 28 Jan 2009 00:42:33 +0000 http://www.creditwritedowns.com/?p=5269#comment-2798 I’m not sure the US has enough money for more stimulus. See the documentary: I.O.U.S.A. <a href="http://<a>www.cbc.ca/documentaries/passionateeyeshowcase/20...</a>target="_blank">http://<a href="http://www.cbc.ca/documentaries/p...</a>" target="_blank">www.cbc.ca/documentaries/passionateeyeshowcase/20...</a></a> As for the U.S. government buying up mortgages. I agree that it can keep prices artificially high but they can do so in a way to help keep american’s in their homes. <a href="http://<a>www.thepeacearch.com/forum/showthread.php?t=12797...</a>target="_blank">http://<a href="http://www.thepeacearch.com/forum...</a>" target="_blank">www.thepeacearch.com/forum/showthread.php?t=12797</a></a> These points you mention concern me a lot: •Obama is silent on prosecuting financial industry villains •Obama must re-regulate, but not go overboard •Obama must beat back the protectionists But I do think China does do currency manipulation and without some appreciation of the Chinese dollar it is going to be harder for things to get into balance. I’m not sure the US has enough money for more stimulus. See the documentary:
I.O.U.S.A.
<a href=”http://http://www.cbc.ca/documentaries/passionateeyeshowcase/20...target=”_blank”>http://<a href=”http://www.cbc.ca/documentaries/p…” target=”_blank”>www.cbc.ca/documentaries/passionateeyeshowcase/20…
As for the U.S. government buying up mortgages. I agree that it can keep prices artificially high but they can do so in a way to help keep american’s in their homes.
<a href=”http://http://www.thepeacearch.com/forum/showthread.php?t=12797...target=”_blank”>http://<a href=”http://www.thepeacearch.com/forum…” target=”_blank”>www.thepeacearch.com/forum/showthread.php?t=12797
These points you mention concern me a lot:
•Obama is silent on prosecuting financial industry villains
•Obama must re-regulate, but not go overboard
•Obama must beat back the protectionists

But I do think China does do currency manipulation and without some appreciation of the Chinese dollar it is going to be harder for things to get into balance.

]]> By: mL http://www.creditwritedowns.com/2009/01/seven-reasons-to-be-skeptical-of-obamas-economic-plans.html#comment-2804 mL Wed, 28 Jan 2009 00:18:52 +0000 http://www.creditwritedowns.com/?p=5269#comment-2804 s243a, I am a Chinese and would like to say something about this topic. China is the alpha manufacturer. However, china does not earn as much as most people think as in the trade balance sheet. Most of the factories in China are OEM for foreign companies. For example, Apple finds a manufacturer in China to make iphones each cost about 500USD in retails. China only earns less than 30 cents each of profit while most of the profit goes to Apple, U.S. retailers, shipping (most owed by US companies). At the same time, Chinese factories need to bear the material price fluctuation, retooling... The problem of Omnibus Trade and Competitiveness Act of 1988 is that it only count for import prices (FOB) of the products not counting who make most of the profits. Another very important point is: even if China appreciate Yuan, it WILL NOT help U.S.'s trade deficit. The labour cost in Mexico is about 1/3 of U.S. The labour cost in China is also about 1/3 of Mexico. If China appreciates yuan, will the manufacturing moves back to the U.S? The answer is no. They will move to somewhere else, to Mexico, India, Vietnam, Cambodia, Indonesia, Argentina ... anywhere you can name it, but NOT U.S. So why you think if Yuan appreciate will help U.S. trade deficit? China is not as a threat as most U.S. people reckoned. The China's reserve is about two trillions dollars. Sounds a large number? But if you compare how much money the US government has poured into the financial system without blinking eyes, these numbers are tiny. mL s243a,
I am a Chinese and would like to say something about this topic.

China is the alpha manufacturer. However, china does not earn as much as most people think as in the trade balance sheet. Most of the factories in China are OEM for foreign companies. For example, Apple finds a manufacturer in China to make iphones each cost about 500USD in retails. China only earns less than 30 cents each of profit while most of the profit goes to Apple, U.S. retailers, shipping (most owed by US companies). At the same time, Chinese factories need to bear the material price fluctuation, retooling… The problem of Omnibus Trade and Competitiveness Act of 1988 is that it only count for import prices (FOB) of the products not counting who make most of the profits.

Another very important point is: even if China appreciate Yuan, it WILL NOT help U.S.'s trade deficit. The labour cost in Mexico is about 1/3 of U.S. The labour cost in China is also about 1/3 of Mexico. If China appreciates yuan, will the manufacturing moves back to the U.S? The answer is no. They will move to somewhere else, to Mexico, India, Vietnam, Cambodia, Indonesia, Argentina … anywhere you can name it, but NOT U.S. So why you think if Yuan appreciate will help U.S. trade deficit?

China is not as a threat as most U.S. people reckoned. The China's reserve is about two trillions dollars. Sounds a large number? But if you compare how much money the US government has poured into the financial system without blinking eyes, these numbers are tiny.

mL

]]> By: Terry http://www.creditwritedowns.com/2009/01/seven-reasons-to-be-skeptical-of-obamas-economic-plans.html#comment-2797 Terry Tue, 27 Jan 2009 18:07:27 +0000 http://www.creditwritedowns.com/?p=5269#comment-2797 Excellent critique of where the new administration is at this moment. Indeed, what I've seen so far smacks of the same ad hoc-ery that so undermine the markets and economy last year. I would disagree mildly on the last point: I don't think the USG has enough resources to stimulate (more like "defibrillate") the economy back into growth without undercutting whatever is left in the way of future American economic soundness. We either have to stand aside (classic libertarianism) and let the market and economy takes its course (with lots of big bank bankruptcies, huge unemployment, etc) or nationalize to protect the interests of the American taxpayer. As for me, I say nationalize a la the Swedish model. Keep up the good work. Excellent critique of where the new administration is at this moment. Indeed, what I've seen so far smacks of the same ad hoc-ery that so undermine the markets and economy last year.

I would disagree mildly on the last point: I don't think the USG has enough resources to stimulate (more like "defibrillate") the economy back into growth without undercutting whatever is left in the way of future American economic soundness. We either have to stand aside (classic libertarianism) and let the market and economy takes its course (with lots of big bank bankruptcies, huge unemployment, etc) or nationalize to protect the interests of the American taxpayer. As for me, I say nationalize a la the Swedish model.

Keep up the good work.

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