I don’t want to make too fine a point of it–because the China issue is very complex–but I anticipate that what we are headed to in terms of a world economy is the need to stabilize wages across the globe, for instance, China will have difficulties increasing internal comsumption as well as stabilizing their overall economy until they make more money! And we can’t buy their products without stabilized jobs here.

Just to respond to one of the guest speakers–China US relations and discussions about wages and worker conditions is more complex now–China has an interest in increasing wages to stimulate their internal economy–there are difficulties in this because if they increase wages they may lose some market share–so this can now be seen as a point of long-term negotiation–over time China will destabilize without increasing quality of life–hence increasing wages.

Tom: Please please please do try to listen more actively. The caller at about 10:52 had not completed his point, question when you cut him off.

As a country we are finished. The caller who wanted to use tariffs to keep out the imports forgot one thing, Walmart.
Walmart owns this part of the world. They are so big that the Chinese factories have to low bid to get contracts.
Walmart will argue over pennies, yes pennies.

They and everything they stand for is what is wrong with this country, not the Chinese.

We are going down, and we are not coming back.
I think we will have 10% unemployment for years to come and it could go higher.

I think there will a huge rise in homeless families and the violence, alcohol and drug abuse.

How can we pull ourselves out of this whole when we have been digging it for the past 25 years? How?

I heard on the news this morning that our congress is thinking of giving themselves a pay hike. What?
Are they kidding? They give away our tax dollars, billions of them to the banks and the banks just sit on it and pay out dividends and bonuses.

We Americans just sit on our butts and do nothing.
we have always been this way. Industry use to pollute at will and they fouled our rivers, soil, and air at will.
All in the name of profit. Now they outsource jobs to the lowest bidder, all in the name of profit and the bottom line.

The question I have is what kind of society do we want?
What kind of communities do we want to live in?

If it’s going to ruled by the bottom line then we are done for, that’s my opinion. We have tried a market based retirement system, 401k’s. They have failed, look around, we now have a huge segment of the population nearing retirement age and are now in it who have lost on average 50 to 70% of their funds. Some have lost health insurance when they need it the most.

My father is in his 80’s and he has paid into the health insurance ponzi scheme all his working life. He SS but this is not enough. If you add up what he has paid over the 50+ years it amounts to about 150K or more. This money was invested and compounded on by the insurance companies so they made out like bandits. Now when he needs it they wont pay out. We the people are rubes, and the corporate entities always win, like the house in Las Vegas.

That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed

That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government

talkin’ about revolution

I am currently living in Shanghai, China and can tell you that as of right now, the economic impact is fairly unnoticable in this part of China. However, after reading all of your posts, I believe that you are forgetting one thing. The fact that China is where it is right now because Western companies have moved factories over here due to the large labor pool and cheap labor costs. Yet with the passing of the Olympics and the upcoming 2010 World Expo Chinese people are looking for more economic prosperity and economic Freedom. If China were ever to devalue its currency, China would be faced with a huge economic disparity that would rival even the poorest of countries of hundreds of millions in poverty and the wealthy elites running the show.

Japan reached a point of saturation in the outsourcing of manufacturing jobs from the US. With regards to human power, China is a bottomless pit that will not be saturated for 30 years until their population starts to decline. The only stop for them from outsourcing all jobs in the US will be environmental constraints… they may only be able to pollute so much.
We need to move to a balanced trade policy. I recommend that we limit currency transfers to the amount of US exports to that country. Surplus capital will remain in the US for 30 yrs (T-bills term) unconditionally.
Under this scenario, the US gets access to low interest rate capital to hopefully invest in economic growth opportunities. China (and other net exporters to the US) will maintain their job creation programs or cut back on exports to the US to balance the trade.
The trade balance has not improved in 40 years, and as with Wall Street, it will not without some regulation/control. Even if the China trade deficit (= job export) is resolved somehow, India, Brazil, Russia, etc are all next in line. I do not think there is that much innovation in the US to keep most of the population employed in that environment.
With most critical economic and social/cultural barriers having been removed, the world per capita GDP will normalize thus dragging down most American earnings, but we need to manage that drop or fall into a serious deflation spiral globally.