Wow! Volcker blames recession on trade deficit PDF Print E-mail
Written by Stumo   
Saturday, 21 February 2009

I missed this, but commenter "gregman" said it in the Trade Reform comments.  Volcker told the Senate Banking committee that the recession is due to "massive trade related imbalances."

"Go back to the imbalances in the economy," Mr. Volcker replied. "The United States has been consuming more than it has been producing for many years."

 


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written by Payday Loans , February 23, 2009
The U.S. isn't the only nation in need of payday loans. Other countries, such as the UK and Germany have been hard hit by the slowdown in the worldwide economy. The Japanese economy has been particularly hard hit. Since so much of Japan's economy is tied to consumer spending, their government has made some payday loans to relieve troubled companies. Their GDP has sunk 3 times faster and farther than America's. As with nearly every other country, the forecast is for things to get worse before they get better and to hope for some payday loans.
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trade imbalance
written by Gregman , February 22, 2009
China is like the company store in the old Apalachian coal mining towns: not unlike today's pay day lender. We've become a service economy (and India is fast commoditizing that). Unless we can retool our own manufacturing and services, we're gone.
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President
written by Frank k , February 22, 2009
Yes, Lets bring our jobs home. Then we will be able to pay for our houses again.
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It doesn't Add Up
written by Dr Bob Goldschmidt , February 22, 2009
In order for the economy to be in some semblance of equilibrium, wages must be greater than the value of all the goods and services produced in the US plus the trade deficit. The era of using massive credit growth to make up the difference has come to an abrubt end.

Here are two concepts that will make it better

Reach a grand compromise for card check by using it to organize for wages only. All new employees would be covered and would agree to operating in a meritocracy. Existing employees could participate if they agreed.

Move ASAP to national healthcare paid for by VAT. Low income workers would receive compensatory payments.
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written by Charles Blum , February 22, 2009
I'm quite certain that Volcker has said this before, and it's undeniably true. That's why a true recovery/restructruring strategy must include an early currency realignment. Without a correction in the unrealistic exchange rates of the renminbi and other currencies, imbalances will be maintained and even grow larger. In that scenario, massive "stiumulus" packages and "rescue" plans will amount to throwing good money after bad, merely adding to our unsustainbable debt burden.
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