I can’t even read this stuff any more.

And, worse, it ‘forces’ his opposition to take a harder stance as well.

Romney to Take China ‘to the Mat’ on First Day in Office

October 14 (Reuters) — Republican presidential candidate Mitt Romney on Saturday accused President Barack Obama of failing to “stand up to China” after the U.S. Treasury put off releasing a politically sensitive report on the currency policies of major U.S. trading partners.

“Four years after promising to take China ‘to the mat’ for its manipulative currency practices, President Obama has once again failed to live up to his word,” Romney spokeswoman Andrea Saul said in a statement released by the campaign office.

“We can’t afford another four years of President Obama’s failure to stand up to China. Mitt Romney will do it on day one of his presidency,” she said.

31 Responses

  1. Indeed, just as soon as the Illinois Sensata plant is shuttered, Willard is going to insist that the Chinese workers Americans trained to do their jobs are going to be able to fly the American flag in China.
    When it comes to China, Bain and its founder are vulnerable. So, of course, the proper pre-emptive move is to launch an attack on his opponent’s strengths. It’s supposed to throw Obama off his agenda.
    Having to defend one’s strengths is presumably very upsetting to people who have none.

    1. @Monica Smith,

      Romney doesn’t have a lot going for him, although he does have one major positive: He’s not Obama. 4 more years of status quo would be far worse than anything “Willard” could launch on us.
      Maybe you could explain how taking more money out of Warren’s pocket will help the USA.

      1. @WARREN MOSLER,

        “with my loss carry forwards I save more when rates go up…”

        I realize you’re making a joke, but I can’t think of a sense in which this statement would be true.

        Suppose that you were granted a special kind of tax credit to the tune of $10MM which was not transferable in any way, but had no time limit on its use to offset future federal tax liabilities. Would you actually benefit from tax rates going higher? I suppose you can expect to use up your tax credit faster which increases its present value, but maybe the higher tax rates make it harder for you to generate taxable income, and so they actually slow the use of your tax credits.

  2. Why is it a bad thing to pursue this considering our situation?

    In a perfect world, we would raise our deficit to fill the demand leakage China’s under-valued yuan causes here and then get to enjoy their cheap goods as well as even more good and services produced here but the situation is undeniable that “everyone” thinks deficit spending and national debt are bad, so elected officials are not going to do that. So, considering that reality, wouldn’t it better to bring some of the demand home via higher prices for Chinese goods if Chinese yuan rose in value?

  3. Warren,

    Unfortunately I have to disagree. Economics cannot be reduced to meeting just two conditions, that government spending should bring the aggregate demand close to productive capacities of the local economy and that local consumption should be maximised.

    There is no economic explanation to the existence of tribes and nations. The fact that separate states exist may also not make sense from that point of view. Yet this is how the humanity self-organised itself over the thousands of years and hundreds of wars and revolutions. Of course one can dream about a better system – for example the universal libertarian democratic communist global super-state, truly United Nations. (Un)fortunately all the attempts to implement such a Global Nirvana State led to the construction of the Gulag.

    We are left with selfish states and nations. We are left with the capitalist plutocracy in the West and with the post-communist authoritarian regime in China. We, humans, probably deserve that.

    Romney wants to trigger a trade war with China. If this happens the world economy will be de-globalised. Then he will have a good excuse to force rebuilding manufacturing capacities on the American economy. As a consequence productive investment will be necessary and this will result in the increased rate of innovation – in the US, not only in China. Yes, the level of (over)consumption in the West may drop because cheap cargo will stop arriving. This is much better than building pyramids or “bridges to nowhere” or Job Guarantee for the hippies smoking dope. These hippies will be forced to work by the necessity of satisfying their basic needs. This is the inhumane logic of capitalism but I am not aware of anything better. NB the Chinese apply that logic, too.

    I would vote for Romney if I could. If a trade war is triggered by the either side after another period of dithering ensured by Obama, the US may actually lose that war.

      1. @Ben Johannson,

        No it is just a little hangover after reading about “the Zionists taking over the world” in the comments to one of the previous posts. I just wanted to restore some balance in the comments.

        What really disappoints me is not the fact that there are stupid neoconservatives peddling lies about the economy and stupid lefties bent on destroying their own states living in the West. I disagree with the both groups.

        What I have observed is that people who strongly disagree with the neocons often worship political correctness or display left-wing fanaticism and those who don’t like leftist extremists often belong to neocons, fanatic libertarian or fundamentalist religious groups. It is so difficult to escape schematic thinking and group identification leading to total conformity in the name of “freedom”.

        True liberation of the mind requires independence from all the flavours of naive and schematic thinking. Yes, exploitation of the workers or neoliberal austerity-mania is bad but utopian communism is even worse when implemented.

        The trouble is that the current decay of the West may be impossible to reverse.

      1. @WARREN MOSLER,
        So if it is not reduced, we must take into consideration the irrational and stupid political context. We know perfectly well that in the ideal world a completely different set of policies such as pursuing economic growth based on renewable energy, peace and harmony, giving all the people equal chance to accumulate wealth and full employment would be optimal.

        But we live in our current context – for example about 50% people in the US (a slightly lower number in Australia) believe in creationism. How many people understand that investment brings about its own saving and that governments in a fiat monetary system are not revenue constrained? These people are the voters.

        We have a deeply dysfunctional political discourse. In the US it is about “fiscal cliffs” and “unsustainable Social Security model”, in Australia “balancing the budget” and “sexism and misogyny”.

        I know that both candidates in the US have to be careful not to say certain things which would go against the script of the play. It is like not speaking about legalisation of gay marriages in Vatican during a conclave.

        President Obama sounded very convincing during the previous debate. He did not have to lie – he believed in what he was taught at the university, he could recite the whole Econ 101 from his heart. He believes in budget deficit reduction and intergenerational budget constraint. We know that Obama has absolutely no clue about how the economy works at the macro level. He even doesn’t understand without a teleprompter that if the GDP grows the budget deficit will fall – the argument used by Romney. (I obviously know that the budget position is rather irrelevant).

        When Romney wants to go hard after China he at least makes an impression that he will try doing something (good or bad, smart or stupid) not just keep hiding behind the “rational” policies of seeking a compromise for the sake of the compromise with anyone. The greatest success of Obama (except for killing Bin Ladden and saving Holden, sorry, General Motors and a few investment banks) was the introduction of the compulsory health insurance. The quality of the health insurance system is hardly comparable not only with Canada, Australia or Israel but even with much poorer Eastern European countries. So is this “great compromise” a success he should be proud for? What if all he can deliver is of similar quality?

        Is betraying a few of the closest allays a success in American international policy? Is screwing up the Middle Eastern revolutions by allowing for the extremist Islamists to seize power in Egypt and elsewhere a great success? If this kind of “democracy” was the only alternative he should have supported Mubarak. Instead he should not speak about democracy in the region where such a concept goes against the predominant religion. Just think about the scandal related to the “blasphemous” movie. The worst in the Middle East is yet to come.

        What Obama does may make sense in the two-weeks time frame. His policies lack any deeper strategic sense and direction. It is not about a “big government” versus a “small government”. It is about having an efficient government in place, taking responsibility for the state and for the Western hemisphere. It looks that Washington is ruled by the lobbyists and interest groups – this is the “big government”. Obama is simply not there as a true leader or a statesman. Someone who makes decisions, implements them and corrects mistakes if they become apparent. Oh but this is soo 19th century in this politically correct and neoliberal post-modern world.

        It is irrelevant whether Romney (and Ryan) is a liar. Actually when he talks about budget deficit reduction it is good if he is a liar. This feature is not strongly correlated with being a bad and inefficient politician. Nevertheless I don’t like him and the religious organisation he belongs to. But if he is not as naive and incompetent as the current president and sometimes acts in the interest of the whole American state (and the West in general) then he should be given a chance. He may make things better or worse but it is precisely the current rotten compromise and fake stability what leads to decay and stagnation. He may be or pretend to be (what really doesn’t matter) a statesmen, not just a grown-up and “cool” students organiser. If not, there may be no further chance to stop the inevitable fading away of the West.

    1. @Adam (ak), You seem unaware that people like Romney are largely responsible for the flood of imports from China and the loss of manufacturing in the US. It was a good way to make money (for Wall Street). If you think Romney wants to help re-industrialize America, there is no evidence to suggest that and I think you will be very disappointed. The situation at the Sensata plant in Illinois, although engineered by Bain after Romney left, is a good example of how this has worked.

      1. @SteveK9, Yes I am fully aware. As an entrepreneur he was exceptionally good in deindustrialising. As a Mormon bishop he was exceptionally good in doing what Mormon bishops do. When he plays another role – on the other side of the mirror – he has a small chance (I repeat, only a chance) to be good in doing the opposite. But if this is the same side of mirror – well, that’s bad.

      2. @WARREN MOSLER,
        No this is incorrect. Imports are real benefits only if they don’t kill local investment in productive capacities.

        There is a double constraint (aggregate demand and real productive capacities) there not just a single one.

        The goal of economic process in not the maximisation of sum of utility functions of the agents at the current point of time. We are not in a static equilibrium. It is at least to maximise the consumption within a certain time period which is a sliding window spanning several decades. If you consume 100% today and don’t invest anything there is going to be very little to reap in 10 years time. The Chinese invest about 40%.

        The Chinese are not insane, just the interpretation of the reality provided in 7DIF is a grave oversimplification in regards to this point.

        Investment is not only about providing the income which can then be saved (see the Kalecki’s equation profits=investment+capitalist consumption in a simplified system). The long-term benefit of investment is mainly building up the real capital stock and increasing productive capacities. Yes I know that many economists choose to confuse real capital with the financial capital (see Steve Keen’s dynamic models) in order to concentrate on the financial aspect of the economy. But this does not fully describe the reality.

        In the real world China was a very poor country 40 years ago, people were literally starving to death. Currently they are the undisputed number one in the world in terms of the industrial production. Is this a measure of their immense stupidity as one would infer from the lecture of 7DIF page 59 onwards?

        I do not deny the Chinese their right to eradicate poverty. However the West is going to be a collateral damage, a road kill in this process – if nothing changes in the attitude.

        Filling the aggregate demand gap by running budget deficits high enough could help a bit but doesn’t solve the problem entirely because the American economy is based primarily on private enterprises maximising their profits while the Chinese economy includes central planning. For example the Chinese government created incentives for the solar panel industry (apparently they got to the point they have an overproduction problem but I would be very careful with that statement). On the other hand during the “great moderation” (debt loading) phase the free market mis-allocated American real resources towards the real estate industry.

        Where are all the factories in the US? In the “rust belt”? Ah we are in the “post-industrial” phase, services are the king now. But for how long?

        It is still not too late to start rebuilding manufacturing as the skills are not all lost. In that context spending money on military build up is not that stupid. If not… There is no output gap in Zimbabwe, they simply lost their productive capacities because of the moronic (rather socialist) policies of their leader such as land redistribution. Hyperinflation is just a symptom not a root cause of the malaise.

        One day the Chinese will start charging much more for their “free cargo” for example they will demand geopolitical concessions as the only acceptable means of payment. Just as it happened with the rare earth metals – first they dumped them below the costs of production and then when the last mine in the US was closed down – wielded an embargo on Japan.

  4. Yea scary, what does it say about America that a sociopathic lier such as Ryan can get elected into congress?

    Obama stabilized the collapse created by the Bush administration. He has easily proven to be great president already, wipe the floor with GW Bush even given the republican agenda from day one of ignoring the needs of the American people and blocking any progress Obama attempts to make.

    I pray to Jesus that the Democrats take back the congress and so that Obama can fix the country.

    I hope Americans wake up to the nightmare that is the Republican party and end it as they did the WIGS, create a new political party based on financial realism, small Federal Government starting with the military, and an end to both the banking and legal industry cartels running this country.

    1. @Lont,

      Great satire Lont, but I don’t think we should insult Obama supporters gratuitously. There is an honest disagreement about the size and role of the federal government in our lives. Yes, Obama has turned out to be a terrible leader, with no moral compass, no real understanding of capitalism, and no idea how to negotiate with anybody (whether Congressional leaders or foreign leaders), but it is still rational for people who believe in a greater role for the government to support him.

      1. @WARREN MOSLER,

        I disagree with the word “suddenly.” Hillary regularly bested him in debates. McCain held his own even though McCain is uninterested in economic issues, has a foul temper, and is generally a cantankerous old man (although I’ll admit he has a surprising gift for comedy). And Obama has never been a smooth speaker off a teleprompter.

  5. I keep lying down to die and nothing happens but after reading Adams comet it might be easier next time…

  6. @Adam (ak), Nation states did not self-organize. Individuals organize to coerce for themselves what they have no talents to produce. Manipulating people seems to be the only alternative for individuals bereft of the cognitive faculties and manual dexterity to transform the material world.
    Poor Willard can’t even count his wife’s horses. He’s been a front for a long time and his associates keep trying to promote him “up and out.” Unlike Dubya, Willard’s not only clueless, but mean. And stingy.

    1. @Monica Smith,
      Just try eliminating these evil and manipulative individuals. They are an inherent part of any human society.

      Would a group without alpha-males and alpha females, run by fully cooperative beta-females out-compete a group organised around a slightly psychopathic alpha male bent on expanding his influence and wealth?

      This process of competition is a part of self-organisation.

      Obviously the part of the American leftie “ethos” of the 1960-1970s was an organised attempt to intellectually castrate and morally disable any potential “alpha-males”.

      One of the symptoms of this intellectual disease in Europe were laws giving more protection to burglars than to people defending themselves and their property:

      Good luck with this attitude!

      1. @dave,
        Free health care even written to constitution doesn’t solve the problem if the economy is in tatters.

        If America loses its global dominant position as a result of Obama’s dithering and indecisiveness, the superpower’s “dividend” will disappear. I am not entirely sure whether this scenario would be better for the elderly people in the US. Besides that I am not sure whether Romney will completely dismantle “Obama-care”.

        Why the purchasing power of a software engineer or a factory worker in the US is several times higher than in China, India or even Eastern Europe? Of course the classical trade theories would never explain that phenomenon. It is obviously not an “economic equilibrium”. Does the current state exist because workers are more productive in the West or just because a certain global structure of exchange rates, prices and wages exists, leading to redistribution of profits?

        When an iPhone is made, how much of the profits is captured in China and how much is captured in the US?

        When I moved to Australia some time ago I got an immediate 200% salary rise (however purchasing power didn’t change that much because housing was extremely expensive in Australia). Did I start working 200% harder?

        That unique global position of some Western countries (Marxists would call it an element of the post-colonial imperialist exploitation structure, capturing added value) will disappear when America’s political and military strength declines further.

        If this is what Obama wants he should openly declare that this is his goal – how many elderly Americans would vote for him then? Make no mistake, there is no “global justice”. There is no vacuum and someone else will start capturing the “added value”.

    2. @Monica Smith,
      I’m sure you’re right, Monica, but could you quote your sources? And, whom do you suppose is Obama fronting? Valerie Jarrett or Oprah don’t seem like satisfying answers.

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