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Gordon.
Thank you. I enjoyed your insightful post.
In agreeing with other commenters here, I too would like to point out the US' inability to channel the interests of a powerful few into benefits for the masses will drive impotent public policy in the future.
Yes, private lending should be ramped up, but not put in the hands of investment firms (or banks) involved in hedging or securitization. Goldman Sachs' lining of their own pockets by creating artificial value for their stock holders is NOT a path to prosperity. The restructuring of the global banking system...requires a bit more restructuring.
unfoxworthy: Gordon. Thank you. I enjoyed your insightful post. In agreeing
It is goo to see that at lest some of our leaders, or former leaders as it were, appreciate the emerging realities of the 21st century economic picture. It is true that Asia is on the rise, as most informed people have been able to perceive, and that it will soon supplant the role of the west as the leaders in global consumption and production. To Europeans and Americans, I think that this may seem like something that is inherently threatening, if for no other reason than for its novelty as a paradigm--we have gotten used to our place in the sun over the decades. Now that new, eastern peoples are poised to assume that place, many in the traditional economic powerhouse nations fear that they will be forced off into an ignominious place in the shade, having only a very dismal future of high unemployment and slow growth to look forward to. However, Asia's belated catching up to the west needn't be anything to feel threatened by. Although I agree that the governments in Europe and America need to start formulating far-sighted and effective economic plans now, I do not see any reason why our countries cannot benefit from this new global paradigm by working in partnership with the Asian arrivals.
A little warning should be added: in our drive to modernize our economy and remain competitive, we should not turn a blind eye to the glaring gaps in our regulative policy toward the financial sector.
Aarontastic: It is goo to see that at lest some of
That's actually an interesting point; I don't think either of them will make achieving that sort of global hegemony a goal of their foreign policies.
China, by its traditions, is more immediately concerned with ancient territorial claims--I believe that they would be quite satisfied with keeping Tibet, Inner-Mongolia, and the Uighur regions under their control, than trying to act as global cops. Their only expansionist desires would lay in the direction of Taiwan, and possibly Korea.
India I don't know as much about. What I do know is that it is a very structurally challenged nation--they have hundreds of different dialects, and dozens upon dozens of different cultures within their borders. They already constitute an empire, of sorts, and I don't think it's likely that they will harbor any superpower ambitions beyond developing what they already have. Pakistan and Bangladesh, and possibly Sri Lanka would be the only candidates for expansion I would see, but since the Pakistanis have nukes and India is on good terms with those other countries, that doesn't seem very likely either.
To further make the case against India and China trying to claim the vacant mantle of 'superpower', I really think that the ability to amass the sort of relative advantages necessary in economic and military terms to achieve that sort of dominance in the world has disappeared, and probably for good. The United States was the first, and probably the last superpower.
Aarontastic: That's actually an interesting point; I don't think either of
How can the socialist West compete with the capitalist East? This is not being facetious. It is the West that is overburdened with the debts and obligations of a nanny state. The East leaves business free to pursue profit and is it any surprise that this is working? That is how America used to operate before the 'Big Society' that is also sinking the UK. Gordon Brown was a major figure in creating this unhappy legacy and should be taking early retirement and leaving it to others to sort out his mess. The UK is the most indebted country in the world after Spain thanks to him, see: http://www.arabianmoney.net/banking-finance/2010/12/10/uk-more-indebted-than-portugal-ireland-or-greece/
ArabianMoney: How can the socialist West compete with the capitalist East?
You assume one can survive with out the other? Fact is East needs us more then we need them! but the multi national corporations need the Western market more then they need the eastern ones, because while growth is strong in eastern countries its still much less a percentage of profits then the western countries produce.
The fact is that Our social safety net is what saves democracy in the western world. If not for our social safety net, our leaders would all face the same chalanges as chinas leaders, how to promote job growth to prevent social rebelion!
Johnathan_Plate: You assume one can survive with out the other? Fact
"So why, despite this new reality, am I convinced that the twenty-first century can be one in which the United States, by reinventing the >> American dream<< for a new generation, remains a magnet for the greatest companies, and in which Europe can be home to a high-employment economy?" ------------------------------------------------------ Let's talk about 'American dream', for a minute. Ok, so, what is it? It's an ideal. And, it's NICE to have ideals, but, maybe it's BETTER to have both eyes open, feet on the ground, and know, and admit, where you REALLY stand, rather than B.S.ing yourself(and others) and working to keep up a facade. That's right. Let's cut the 'stuff'. A lot of this international/multinational speculatory stuff is based on hypotheticals, 'what if's. Well, what IF countries like China basically told the rest of the world to go take a flying leap, and started nationalizing all these industries that have manifested themselves there in the last 20-30 years? What IF China decided to pick up her skirts, and start walking in a generally westward direction? What IF we step back, and consider that China, China alone, MODERN China, by itself, has a larger population than the US and Europe combined, and thus the many hands with which to make light work, and short work of what puny and meager industrial competition the west in all its' former glory can still offer?
Many people have said that this is looking to be the Chinese century, or at least, the Asian century, and I'm inclined to believe that they're right.
realitytrumpsbull: "So why, despite this new reality, am I convinced that
Very sound advice. It will not be popular here in US, apparently also not in UK. People do not like being told they are spoiled and live too well, but that's the message.
ThatsTheTheWayItIs: Very sound advice. It will not be popular here in
The economy crashed because people borrowed money they could not pay back. And remember 2006: economy was fine, unemployment 5%, but then housing prices fell. Speculators and those with home equity loans who had put no money down "walked away". That caused the CDOs to be revealed as bad; if people paid their mortgages the CDOs would have been fine. That caused the global meltdown and our current unemployment.
This crisis was caused by people who borrowed money recklessly. You can either blame the borrower, or blame the lender - but if I lend you money and you don't pay me back, I blame you, sorry. Even if I knew you wouldn't pay me back when I lent you the money, you still owe.
The meltdown was caused by people overreaching, buying homes they couldn't afford, taking out home equity loans on presumed house values and spending the money on SUVs. Greed caused it, greedy bankers and greedy consumers. All in the US BTW, and only a few million borrowers involved, yet it destroyed the world economy. The world doesn't care whether the US people or Wall St caused it, they know the US did it, and know we can't be trusted in the future. Americans got money to buy their houses from abroad, from people who bought the CDOs. The world financed the US housing boom and got burned, they won't make that mistake again, won't ever trust Wall St or the US people. They now know we are deadbeats, don't pay our debts.
ThatsTheTheWayItIs: The economy crashed because people borrowed money they could not
I'll be in favor of more outsourcing once all the big multinational corproations offshore all their CEOS and boards to poor Asians...they'll work for about $.80 per hour...what most Ceos are worth...
Debbie_McPherson: reality<br> <br>I'll be in favor of more outsourcing once all the
The forecasts for a sudden, smooth upsurge in Asian consumers that is also simultaneous with uninterruptedly high growth rates overall, is naive. You cannot expect nations like China to keep growing at 8% while cultivating a surge in consumption, since the 8% growth rate is itself a product of overinvestment. For consumption to reach the levels forecast by experts, in the context of the overall rapid growth context of Asia, it would have to average gains of about 20-30% per year! Even Germany and Japan, which were rebuilt from scratch in the 1950s-1970s, never averaged more than 12%:
Will Asia outstrip the West in investment? Of course. High investment is the main tool keeping many Asian economies (esp. China) at artificially high growth rates. It also kept economies like Spain and Ireland humming along for years. At some point, you have to spend increasingly more investment dollars to get the same return in GDP terms: China now averages about $7 in investment for $1 in GDP. This is when you begin seeing phenomena like ghost towns.
I don't know how you define the "West." It is a problematic term since it often excludes clearly "Western" countries like Mexico. Europe and the Americas have 1/4th of the world's population, which paints a much different picture than your "10%" figure.
AlexABC: The forecasts for a sudden, smooth upsurge in Asian consumers
The Prime Minister believes that the West can tap into this growing middle class of Asians? Is he so blind as to not see that China (cars and electronic products etc.) and India (patent-violating drugs - to sell to "poor people" you see, and toothpaste etc.) will be developing and manufacturing the vast majority of products for these so-called new middle-class persons? China and India are closer and thus have fewer expenses in getting these products there and better understand the target market(s). In addition, neither China nor India offer real copyright or patent protections. Thus, even if we had a successful product such as the IPhone, it would soon be copied and produced far more cheaply by a local manufacturer. Check-mate. The answer is thus NOT their middle-class consumers.
adevarul: The Prime Minister believes that the West can tap into
Heres Gordon Brown " We are in a New World Order" blahblahblah " Calling together a global financial constitution" which would benefit the IMF and all the bankers of course. Blah blah blah Gordon Brown no one is listening, you're almost a total psychopath of your former
GuiltD: Heres Gordon Brown " We are in a New World
The reality is the Asian understanding of FREE TRADE is your markets are open for us but ours are closed to you! The Asians jealously defend their manufactures and will as a national goal control commodities.
Case in Point:
Cotton - historic world market prices for cotton have been stable ranging from $0.55-$0.65/pound of cotton. Today that price is somewhere between $1.20-1.80/pound! Why? The Chinese government was trying to corner the cotton market. India the worlds second largest exporter behind the U.S. figured out what China was up to and froze exports of its cotton and is selling its cotton to its textile industry at subsidized pricing to protect its textile industries.
What has our government done? It's been debating extensions of unemployment benefits and tax breaks for millionaires!!!!! They don't have a clue??????
The sad fact is, that is the example this month! They will be another example next month! The Chinese practice free trade like the British Empire did in the 1800's!
No offense.
Regards,
Malcolm_Hensley: Mr. Brown I understand your point! The reality is the
we were forced to prop up the bankers when their swidling blew up in their faces - 3.3 trillion later they enjoy biggest profits and bonus plans in their history
now, Brown would have us prop up Asia -which we have done by giving incentives and subsidies to American Corporations to go there and take advantage of slave labor and freedom to pollute to their hearts content - it has cost us over 14 million jobs and pushed many Americans into poverty - we need protectionism or Americans will see themselves in third world economy - which is where this headed.
no thanks, Mr. Brown -
Debbie_McPherson: Malcom<br> <br>great post.<br> <br>we were forced to prop up the bankers when
Sorry, Gordo. This isn't 1945 anymore. The US is tapped out from defending Europe from Soviet aggression, so much so that we can't afford to remove our forces from your territory. We can't lead any Marshall Plan II unless our bankers in Beijing are willing to raise our credit limits.
RealistBC: Sorry, Gordo. This isn't 1945 anymore. The US is tapped
Right now the Preident is under attack for the
debt he hd to accept in order to preserve the
value of our currency.
The problems come from thirty years of ecomonic policy and war.
Dumping more money into the mess will only dig a deeper hole.
escobar: Right now the Preident is under attack for the debt