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China now costly? Currency matters |
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Written by Stumo
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Wednesday, 18 June 2008 |
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Our patriotic U.S. companies are still relocating there, more than anywhere else. But currency makes a difference.
A long list of concerns about China is feeding the trend [of choosing other Asian countries to relocate]:
inflation, shortages of workers and energy, a strengthening currency,
changing government policies, even the possibility of widespread civil
unrest someday. But most important, wages in China are rising close to
25 percent a year in many industries, in dollar terms, and China is no
longer such a bargain.
If Congress passed bills to correct foreign currency misalignment,
we would not have this drain going on so long. These companion bills would
go a long way towards addressing that portion of the trade
problem.
* S. 796, Fair Currency Act of 2007, Stabenow, Bunning, Bayh, Snowe and Levin.
* H.R. 2942, Currency Reform for Fair Trade Act of 2007, (Co-Sponsors Tim Ryan (D-OH) and Duncan Hunter (R-CA)
Many Senators and Representatives have signed on the bills, but these have not. Call them. Get them on board.
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In the news
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The following article appeared on the online site for Manufacturing & Technology News on November 17, 2008 and was written by Paul Craig Roberts, former Assistant Secretary of the Treasury in the Reagan administration.
By most accounts the U.S. economy is in serious trouble. Robert Reich, an adviser to President-elect Obama, calls it a "mini-depression," but that designation might be optimistic. Russian economist Mikhail Khazin says that the "U.S. will soon face a second Great Depression." It is possible that even Khazin is optimistic.
I cannot predict the future. However, I can explain what the problems are, how they differ from past times of troubles and why traditional remedies, such as the public works programs that Reich proposes, are unlikely to succeed in reviving the U.S. economy. |
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