The financial crisis and the Asian connection, ctd

Johnathan Pearce (London) · Asian affairs · Economics, Business & Globalization

Following from my previous article about the alleged size of the role played by China/Asia in the current financial troubles, an eagle-eyed commenter by the name of Marc Sheffner pointed this excellent article out which clarifies a lot. My thanks to Mr Sheffner.

God but I love the internet.

March 9th, 2009 |

5 comments to The financial crisis and the Asian connection, ctd

• Marc Sheffner

  March 9, 2009 at 4:36 pm

  You’re welcome. The Market Ticker(Link) is great entertainment. Here’s one (not his rudest) where he mentions China:

  Is not a big part of the current mess a direct consequence of the mercantilism of China, India and many other “low-cost” producers in the world?
  Let’s define “low-cost” a bit, shall we?
  “Low cost” is achieved by paying people the equivalent of 25 cents per hour, while their daily food costs the local equivalent of $3. This has the effect of forcing these workers into company-run barracks because otherwise they can’t afford toilet paper to wipe their butt with. They sew us a pair of jeans which we buy for an hour’s wages in the United States, but that same pair, sold there, costs them a month’s wages. And after luring these employees to the factories they take over their former farmland and destroy it with pollution and industrialization, effectively creating a slave labor class exactly as we did in America during the 1700 and 1800s on the Plantations.
  Global free trade eh? Uh, not quite. These same nations have a hodge-podge of subsidies for local producers for their economy, thereby making import from us either uneconomic or, when they can’t manage it that way, they put procedural, capital control and other hurdles up that make “free trade” a joke going the other direction.
  “Buy American” is perfectly legitimate for government spending in an economic stimulus bill. After all, is not the essential purpose of such a bill to stimulate OUR economy? It is not to stimulate the economy of CHINA, is it?

  But, but, but… didn’t Thomas Friedman write that outsourcing was the wave of the future?

• Paul Marks

  March 10, 2009 at 9:28 pm

  In China the government (not companies) may steal farmers land – but not it is a different story in India.

  Even in West Bengal (a Communist Party government since the mid 1970’s) efforts to steal farmers land and give it to the Tata company recently collapsed.

  As for wages – wages in China are low, but they are vastly higher than they ever have been before (the same is true in India).

  People from the villages are not “lured” with lies – they make a rational judgment.

  In India because they are younger sons (and therefore are not going to get the farm anyway) – in pre factory days they would have starved to death.

  Is that better than working in a factory?

  In China farming is in trouble (partly for uncertain land ownership reasons) – but city incomes have never been higher.

  People look but they do not see.

  “Wages are low” – but under Mao tens of millions starved to death.

  They are not “low wages” or “poor conditions” by the standards of China.

  Look at the cars (oh no – pollution) and televisions, and clothing in a Chinese city.

  None of these things were there only a few years ago.

  Then the elite (and they were the elite – the rest were starving out of sight of Westerners) rode around on bycycles wearing Mau suites – before going home for their one bowl of rice a day.

  The “iron rice bowl” (boasted of by the Communists) in fact only applied to the elite.

  Westerners in the early 1970’s thought they were seeing the poor – in fact they were seeing the richest people in China.

  As I say above – the real “masses” were hundreds of miles away (where Westerners could not see them) and they had no iron rice bowl.

  Today in China the standard of living is vastly better it was.

  As for the United States.

  Stop your insane government spending, and your insane regulations (especially in the “deregulated” banking industry that was pushed into the housing madness), do not blame India and China for your self inflicted wounds.

  Or they may stop buying your Treasury Bills. Which they should anyway.

  For the poor to lend money to the rich – who spend it on wild govenrment spending, makes no sense.

• Marc Sheffner

  March 12, 2009 at 1:27 am

  Tim Swanson who lives in China has posted this brief entry (on Mises.org) on Alan Greenspan who is claiming it wasn’t his decision to lower interest rates that caused the crisis, but the naughty Chinese. Includes links to other articles on the “let’s blame the Asians” theme: It Wasn’t Me!

• Paul Marks

  March 12, 2009 at 9:19 pm

  Alan Greenspan is a turd.

  Ayn Rand was right to shove that plate in his face all those years ago.

  But what is tragic is that the media get to pretend he is a “free market” person.

  The Financial Times creatures do this a lot – as do Newsweek, Time, and so on.

• Paul Marks

  March 12, 2009 at 9:19 pm

  Alan Greenspan is a turd.

  Ayn Rand was right to shove that plate in his face all those years ago.

  But what is tragic is that the media get to pretend he is a “free market” person.

  The Financial Times creatures do this a lot – as do Newsweek, Time, and so on.

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