1 OK.  Where's that Krugman vs Krugman post?

2 Krugman. Jesus. The only Nobel Prize-winning economist who thinks Obama is good for the economy.

3 I can see that Krugman deserved his Nobel about as much as Oblammy.

4 He may have a limited point, but not one that rehabilitates his "DEBT IS GOOD/GOVERNMENT SPENDING IS GOOD.

5

O/T -- Morons live for this stuff.  The Weekly Standard has a caption contest.

http://tinyurl.com/yhmsq9c

 

6 In short, right now America has China over a barrel, not the other way around.

So we have no reason to fear China.

So, if I understand Krugman here, because they can't afford to play hardball with us, we should take more of their money to spend on Obamacare? and with no real plan to ever pay it back.

Therefore, if Krugman is right, isn't he basically advocating the evil imperialist line from any number of bad leftwing movies?

Hah, the natives have no means to stop us from taking their unobtanium...so let's take it for Chicago Jesus and Saint Teddy!

7 In Krugman's mind, Debt = good We have more debt than they do (We even suckered them into buying OUR debt, rather than getting debt of their own), so we are in a better position than them.

8 Krugman is a psycho democrat shill.  He is the Glenn Beck of the left.

And he's Enron.

9 Well, Trump had all his creditors over a barrel, too. And they eventually forked-over additional money. So in a sense, they may have a point. But for the point to be valid you'd have to believe that the Chinese are as stupid as were The Donald's bankers - and that Obambi is as "savvy" as was The Donald. Neither of which is in evidence. The Chinese could walk away from this tomorrow and not take 1/10 the haircut we taxpaying sheeple are going to take on our bad bets over the last 40-50 years.

10 How come the article has a photograph of a child molester attached? Shouldn't there be a photo of Krugman instead?

11

If you owe the bank $100,000, the bank owns you.

If you owe the bank $100,000,000, you own the bank.

If you owe the bank $100,000,000,000, nobody owns nothin'.

12 We made the Chinese our bitches by getting them to buy our debt

13 It was all part of a cunning plan then!

I stopped reading after he talks about a liquidity trap. Tell me something, have the Keynesians ever been right about anything? Why the hell do they still get listened to?

14 Krugman's economic theories change depending on what point he is trying to make and which party he is trying to fellate.

15

Hey Avenger,

Was it you that recently published a book (with Publish America)?  Any chance to go off line and put me some frikken knowledge?

 

Or do I have the wrong guy?

16 In short, right now America has China over a barrel, not the other way around.



Sounds more like two men stranded on a leaky lifeboat at sea with no food or water. They're looking at each other thinking about lunch. China has a knife and the US is the guy holding a hand grenade.

17 The error is in assuming they might dump all their paper, when all they need to do is simply not buy as much fresh paper. 

What Krugman fails to realize is the Chinese are at a pivotal point in their economic and political development and literally can't scale back without risking large scale domestic disturbance.

This is the thing about popular uprising - it is most likely to occur during periods when the public's expectation of speed of economic improvements and political reform is not met.  When you're under the boot of a horrendously repressive regime, disturbance is unthinkable, its when those regimes start to liberalize some that they enter a danger zone where expectation/delivery disparity can cause discontent.  This is ultimately what toppled the Shah of Iran.  This is where China is today.

18 座席 Krugman 是有利的投资

19 Was it you that recently published a book (with Publish America)?

Wasn't me, although if it was any good, I'll take the credit.

20 More Snickers!,  More Coke!

21 Does anyone believe that we wanna piss off the one nation that can buy our burgeoning social security debt?

...Beuller?

22 What Krugman fails to realize is the Chinese are at a pivotal point in their economic and political development and literally can't scale back without risking large scale domestic disturbance.

Yeah, they have their own problems.  Big ones.  Don't they have to create 25 million new jobs a year just to stay even?

23 In short, right now America has China over a barrel, not the other way around.

Do I look like Mrs. Obama?

24 Don't they have to create 25 million new jobs a year just to stay even?

当您医疗 保健法案 通过时，谁您认为 回答所有 那些电话？

25

OK, I admit, I never won the Nobel Prize in economics but… Has Mr Krugman ever thought that, if the Chinese start dumping it’s US treasuries, the government will have to start paying higher interest rates to attract new money otherwise, it will be competing against its own US bonds, held by the Chinese and being dumped on the open market? Of course, it never occurs to Mr Krugman that any interruption in this market would be disrupted because he fails to consider that the US government is borrowing 1.4 TRILLION FUCKING DOLLARS A YEAR!!!! I like Mr Krugman’s concept that “the Fed could offset any interest-rate impact of a Chinese pullback by expanding its own purchases of long-term bonds”. So, we can “invest” Fed fictional money on more US Gov’t fictional money. Of course, every paper bill you have in your wallet says “Federal Reserve Note”. What happens if people start to ask, “hey what’s this thing actually worth?”. Never fear, if this play fails, we can ask Hasbro to fire up the presses for Monopoly money that can in turn be “invested” in the Fed to shore up their position. In the end, the only thing that makes fiat currency worth anything is everyone’s belief that they will one day reap the value that they have invested in it. Once it is exposed as having no value, you can get out your wheelbarrows.

26

Krugman is a Commiecrat douchetool, but remember when it appeared that Latin America had the USA over a barrel with respect to Latin Debt in the 1970's and 1980's?

Even a stopped mind, like Krugman's, is right twice a day, at least in that sense.

27 Debt is freedom.

The freest people on the Earth enjoy long days of funemployment but, could not be reached for comment today as they were too involved in the first day of their Spring Break staycation.

28

except that this "bank" can sell the debt to someone else and take a small hit while we still owe the same amount ... now spread over hundreds of owners ...  then we will have no leverage ...

 

29

In other words, Krugman said "Why I stopped worrying and learn to live happily ever after"?

30

Krugman is a psycho democrat shill.  He is the Glenn Beck of the left.

And he's Enron.

Indeed, that this little fact isn't held against Krugman, every day of the rest of his sleazy life, is telling about the slant of the lamestream media.

31

Posted by: Chinese President Hu Jintao at March 15, 2010 02:26 PM (GF+6V)

 

Substituting Krugman with Obama, then I am with you.

/Remember China could have bought Hillary, but they figured Obama is more controllable

32 I'm sticking with Solomon:

"The rich rule over the poor,
       and the borrower is servant to the lender."

33 "We got the enemy on all four sides, Lt."

"Heh, we've got them gooks right where we want 'em."

34

Krugman, as usual, misses on really vital peice to this equation.  He assumes that the Chinese government gives a rats butt one way or the other what would happen to their own economy.

What he doesn't get is that China, like most corrupt dicatorships, only cares about having enough money to support their ruling class.  As long as the ruling class doesn't suffer, they really don't give a crap one way or the other about anything else.

In the case of the Donald and his bankers, the bankers could be encouraged to play ball because if they didn't their bottom line would suffer, and they would actually be held accountable.

But what if China decided tommorow to sell off all our debt at bargain basement prices?  Does anyone actually believe that the ruling regime over there would be "held accountable" by it's people?

Think again.  And as usual Krugman shows his total ignorance of how such government systems truly operate.  China's government is accountable to it's people and as such they'll do whatever they want whenever they want.  The only thing that will give them pause is if they think they won't be able to buy enough shiny toys for their ruling class.  Other than that they could care less.  What's a few million more peasants on the brink of starvation to them?

35

Krugman is an idiot on so many levels. Starting a trade war with China is a great idea, not only are we their leading importer, they happen to be our leading importer. Who does that war hurt most? Let's see China's economy is growing at 10% and they are trying to rein it in. Ours is growing maybe at 2% and we are trying to expand it. I beleive China wins that war hands down.

Regarding the debt, Krugman acts as if China is a logical trade partner. I think China is an enemy, if they can wreck our economy and our government by losing $500 billion. Shit that's less than we spent in Iraq.

Those worried that China will have some sort of popular uprising guess what, they have had several of those. They also have alot of guns and military to keep the peasants in check.

36

I'm no Krugman fan, but he's not all wrong on this.  I must say that the prospect of the Chinese getting the massive screw-over they deserve quite pleasant to consider.  The Chinese still depend on the US to keep buying their cheap, near-worthless manufactures.  That's how mercantilist systems, like China's, keep things going.  Export, export, export, and be-damned the domestic economy.  That's why the have a 17-24% currency devaluation pegged.  That's why they actively subsidize imports.  How we thought it would be great to get those bastids into the WTO is beyond me... But in any case, their options are limited.  There is little that China produces that we could not easily get elsewhere in fairly short order if trade with them were cut off.  They got where they are today as the result of Western investment - not through their own cleverness. 

Now, let's say the Chinese stop buying our debt and decide to put their cash elsewhere.  The US government suddenly has to make up a big loss.  Hopefully it will be incapable of doing so.  At long last, our dream of a smaller government will have to come true.  They'll tax us more, but they can never tax us enough.  It would send the economy back to the stone age.  They can print more money, but then the dollar gets destroyed and that further cripples the Chinese with all their near-worthless paper.  The US dollar, once in the toilet, will make us a manufacturing powerhouse again, because it would suddenly be so cheap to buy things here in the US.  Especially labor.  This would have begun to happen naturally years ago if the dollar had not been kept artificially high for so long.  Thus things would have rebalanced, and as a side benefit employment would be much higher. 

Personally, I'm moving my money out of dollars and into a nice side currency in a stable 3rd world country and all my earnings going forward for the next few years will go the same way.  I fear it's going to be a wild ride.

37

He assumes that the Chinese government gives a rats butt one way or the other what would happen to their own economy.

Actually, Red China has been using high economic growth to keep a lid on internal unrest, post Tienamen Square.

As much as I loathe Krugman, he is probably right about this.

But if we were not in such a position of debt to China, we could probably bring about another regime change, and topple that pudgy pygmy Kim-Jong Il.

38

Actually, Red China has been using high economic growth to keep a lid on internal unrest, post Tienamen Square.

And having said that, while Red China is still nominally "communist", if you look at their model of private enterprise subject to tight state control, I think they have rediscovered / reinvented fascism. Just as Mussolini and Hitler used rapid economic growth to keep it quiet at home while they consolidated power.

Perhaps Brownshirt China is a better term now.

39 Krugman's right.  Their economy is a huge bubble waiting to pop.  Bad economic policy has distorted incentives so badly that Chinese speculators have built entire cities which are sitting unoccupied.

They gave us products, we gave them paper.

40 They gave us products, we gave them paper.

Posted by: Bill C at March 15, 2010 03:03 PM (r7sQy)

BS, they only hold around $800 Billion of our debt, about the size of the stimulus package. They have a $450 Billion surplus per year. That's like saying you had two years salary in your IRA and the stock market wiped it out. It hurts alittle but you get over it.

41 China put themselves over the barrel and are about to fire grapeshot into their groin. China is a house of cards waiting to burn up. A few obvious things...a wild mis-allocation of resources via centralized planning; horrific social policies of that result in the would-be mothers aborted/murdered and then discarded into a little pails (and those pails are now made in Vietnam because of cheaper labor costs). Cashing in T-Bills will be like putting a band-aid on brain cancer. But I don't see how this gives the US any leverage. It will be bad for everyone.

42 I've got Bank of America right where I want it.  The day I gave them the promissory note for my mortgage loan was the day I took control, baby.

43 Tie this in with the Federales grabbing land in the West. We will pay them off with real estate.

44 Oh yeah, there are two solutions to the problem of China keeping its currency to low.  They can allow it to float higher which will drain liquidity from there economy and increase liquidity to the rest of the world or we can put trade restrictions on their goods and keep dollars from flowing into China.

Either way, something has to give.

45 Either way, something has to give.

Posted by: Bill C at March 15, 2010 03:11 PM (r7sQy)

You act like trade restrictions are a one way street. What do we do about the loss of our exports to China?

46 I pay about as much attention to Krugman as I do to Andrew Sullivan, which is to say, none, except for when they show up as topics here.

47

More than a few posters miss the big pic ....

When it breaks bad, China will have spent the last few years buying commodities - oil, uranium, copper, and have developed its' infrastructure. We haven't. In fact, our Elite Asshole Groups, many of them NGOs, have struggled mightily against energy independence and infrastructure growth here in Kwanzania. They forge steel. We do American Idol ... They and Comrade Bear sit astride the worlds enegy resources or its' lines of shipping.  We sit in front of 42" plasma TVs. They double the worlds' uranium ore prices in a year by their purchases, we double our debt.

Does that help some of you ?

AND ... the Chinese will have no compunction about dealing wuith their "human resources"  Go back and read Stuck on Stupid / 35 above .... reality based.

Our booboisie couldn't manage to live green if their lives depended on it .. oh wait ... they will !  No more Mao-Mart = bigger problems for Us v Them

Nimen hao gwai-low

 

48

When your Lady Gaga Doctrine of Foreign Policy requires a village of she-males to satisfy your lust for flaccid c*ckslobbering, Krugman is certainly in the running to be the right spokesperson.

 

49

I've got Bank of America right where I want it.  The day I gave them the promissory note for my mortgage loan was the day I took control, baby.

News flash: B of A has sherrifs with guns on its side to enforce contracts and evict you. Red China, for now, does not have that magnitude of military power, although the Obamunists are working on it, to be sure.

50

BS, they only hold around $800 Billion of our debt, about the size of the stimulus package. They have a $450 Billion surplus per year. That's like saying you had two years salary in your IRA and the stock market wiped it out. It hurts alittle but you get over it.

Posted by: robtr at March 15, 2010 03:06 PM (fwSHf)

The $800 billion is just treasuries, they have $2.4 trillion in reserves. 

You act like trade restrictions are a one way street. What do we do about the loss of our exports to China?

Posted by: robtr at March 15, 2010 03:13 PM (fwSHf)

We can restrict enough imports to make the trade deficit disappear.  If they retaliate we completely cut off all their imports. 

51

When it breaks bad, China will have spent the last few years buying commodities - oil, uranium, copper, and have developed its' infrastructure. We haven't.

Posted by: OhioDude at March 15, 2010 03:15 PM (wdv0T)

I think their bubble will collapse and it will be deflationary.  All those commodities will be on sale.  They paid too much for all of that just like the Japanese in the late 80s.

52 So Krugmann basically is laying out the theory of Mutually Assured Destruction Econ version.

Doesn't that theory assume the leaders of china give a crap what happens to their people.

53

The Chinese still depend on the US to keep buying their cheap, near-worthless manufactures.  That's how mercantilist systems, like China's, keep things going.  Export, export, export, and be-damned the domestic economy. 

True, but a couple of other factors have to be considered.  First the folks in charge over there really don't care that much about their own economy as long as it's sufficient to support the ruling class.  They don't give a crap about anything else, and it doesn't take much of an economy to support them in the most extravagent lifestyle imaginable.

Second, if they manage to wreck the US economy guess what?  No more world policeman.  Yup, instead of making cheap novelty crap they can switch over and start pumping out AK's, grenades, everything up to and including nuclear weapons and selling them en-mass to all sorts of customers.

Most african warlords, who have spent money hand over fist on small arms, would suddenly be rolling around in tanks.  Got a nation like Iran?  Hell why spend all that cash on developing a nuke program when the Chinese will come in and do it for you, for a fee we'll get your nuke program up and running no problem.

No US to do anything about it?  Well you can pretty much expect the EU to stay out of things.  They might make a bit of noise now and again but they'd never really do anything substantial to halt a world wide arms build up.  Their wouldn't be anyone to stop them.  The UN?  Please.  What a joke. 

Personally, I'm moving my money out of dollars and into a nice side currency in a stable 3rd world country

Sounds like a great idea in theory.  Just not sure which 3rd world nation is going to be stable once this all hits the fan.

54 54

The Chinese still depend on the US to keep buying their cheap, near-worthless manufactures.  That's how mercantilist systems, like China's, keep things going.  Export, export, export, and be-damned the domestic economy. 

True, but a couple of other factors have to be considered.  First the folks in charge over there really don't care that much about their own economy as long as it's sufficient to support the ruling class.  They don't give a crap about anything else, and it doesn't take much of an economy to support them in the most extravagent lifestyle imaginable.

Second, if they manage to wreck the US economy guess what?  No more world policeman.  Yup, instead of making cheap novelty crap they can switch over and start pumping out AK's, grenades, everything up to and including nuclear weapons and selling them en-mass to all sorts of customers.

Most african warlords, who have spent money hand over fist on small arms, would suddenly be rolling around in tanks.  Got a nation like Iran?  Hell why spend all that cash on developing a nuke program when the Chinese will come in and do it for you, for a fee we'll get your nuke program up and running no problem.

No US to do anything about it?  Well you can pretty much expect the EU to stay out of things.  They might make a bit of noise now and again but they'd never really do anything substantial to halt a world wide arms build up.  Their wouldn't be anyone to stop them.  The UN?  Please.  What a joke. 

Personally, I'm moving my money out of dollars and into a nice side currency in a stable 3rd world country

Sounds like a great idea in theory.  Just not sure which 3rd world nation is going to be stable once this all hits the fan.

Posted by: StuckOnStupid at March 15, 2010 03:25 PM (e8T35)

New Zealand

55

You act like trade restrictions are a one way street. What do we do about the loss of our exports to China?

Posted by: robtr at March 15, 2010 03:13 PM (fwSHf)

A fair question.  My plant makes stuff that we export to China - but it's stuff that they can't be trusted to make correctly.  The Chinese don't buy anything from us unless they have no other choice.  They can't just cut themselves off from our market without shooting themselves in the foot.  Here's a link to an article with the top 10 exports from the US to China.  http://tinyurl.com/y93lnpy   It's a little dated, but I'm sure it's still relevant.

We can replace them as suppliers of plastic/cast-aluminum crap somewhat more readily than they can replace us.

As for worries about their infrastructure investment and our lack thereof, they didn't do it based on any reasonable market principle.  It was just giving people stuff to do, sorta like it would have been here with our stimulus (if any significant amount of it had actually gone into infrastructure).  Regional rulers had to show positive GDP.  What's easiest?  Build public works, whether anyone needs them or not.  Happily the US already has infrastructure, and while our roads with their potholes annoy us, the fact is our is still better than most of the worlds'.

56

Second, if they manage to wreck the US economy guess what?  No more world policeman.  Yup, instead of making cheap novelty crap they can switch over and start pumping out AK's, grenades, everything up to and including nuclear weapons and selling them en-mass to all sorts of customers.

Posted by: StuckOnStupid at March 15, 2010 03:25 PM (e8T35)

I agree with the facts of your statement.  And the nukes do worry me a little.  But to be honest, aside from the nukes issue, as long as we have enough armed force to protect our own waters, land, and borders, and a couple close (real) allies, I could give a crap about the rest of the America-hating world.  We have lots of nukes still (last I checked) and hopefully Obastard can't dismantle them all before his ass is on the street.  And we can build more, thank heaven.  We also have missle defense tech.  If the rest of the world has to burn, then so be it.  If all of Africa, the ME, South America, Europe, and Asia goes up in smoke, that's sad, but they have no one to blame but themselves.  Their attitude has been marked chiefly by ingratitude for all these years.

57 News flash: B of A has sherrifs with guns on its side to enforce contracts and evict you. Red China, for now, does not have that magnitude of military power
But they do have 32 million womenless horny men they could send our way clutching a picture of Janeane Garofalo.

58

Reactionary,

I didn't see anything on that list that china can't buy somewhere else. On the other hand I saw alot of things on the list that we export to them that we can't sell anywhere else or we would be. It's not like we are running at full capacity here.

59

But they do have 32 million womenless horny men they could send our way clutching a picture of Janeane Garofalo.

Horny Chinese men overpowering and raping dykes like Janeane Garofalo? Now THAT is thinking "win-win". Maybe the offspring will be lovely hapas and not man-hating (this all depends on a purge in the school system, of course).

60

And having said that, while Red China is still nominally "communist", if you look at their model of private enterprise subject to tight state control, I think they have rediscovered / reinvented fascism. Just as Mussolini and Hitler used rapid economic growth to keep it quiet at home while they consolidated power.

I think your assesment here is correct, China could probably be more properly classified as fascist than communist.  In the long run though I don't think it will make much difference.

With no US to interfere, there are not a whole lot of nations in that region that would be able to do much of anything about Chinese expansion.  And while Taiwan and Japan might be at the top of their hit list, a run on North Korea wouldn't surprise me much either.

The thinking of course would be simple, take them out before they have a nuclear program that is sufficient in size, capacity or launch capability to do much harm to China overall.  Sure, we might lose a few cities, but who cares, as long as the leadership survives.  Get them now before they become a real threat.

Pakistan would most likely make this list as well, get them now while their government is in such disarray that having nukes won't do them much good, they can't launch enough in any meaningful way to stop us.

The only real threat to Chinese expansion in that part of the world would be Russia, and I don't think they'd do much as long as the Chinese left them alone.  No, they'd wait and let China go beserk, get the entire EU in an uproar, and then once enough confusion and dissent was sown in Europe they'd do what they've wanted to do for years, ever since the end of WWII.  They'd come rolling across the border and their would be no more Europe.

A lot of folks were fooled by this whole detant thing, but the guys in charge over there now were the same ones that were in charge under the old communist system.  Nothing has really changed. 

Nope, if the US economy tanks then the world loses the one real protector it has, regardless of how much bs we have to put up with from the surrender monkies at the EU and all the nonstop bitching from the middle east. 

Just watch what happens if there is no US anymore, at least not one in a position to do anything about much of anything.  Then you'll find out what it's really like dealing with people who will go to war for oil, or gas, or sand, or just because it's thursday.

61 First the folks in charge over there really don't care that much about their own economy as long as it's sufficient to support the ruling class.  They don't give a crap about anything else, and it doesn't take much of an economy to support them in the most extravagant lifestyle imaginable.

Right, because the Chinese people aren't known for having revolutions or anything.

62

I didn't see anything on that list that china can't buy somewhere else. On the other hand I saw alot of things on the list that we export to them that we can't sell anywhere else or we would be. It's not like we are running at full capacity here.

Posted by: robtr at March 15, 2010 03:38 PM (fwSHf)

Maybe.  We do live in an age where virtually every commodity has multiple suppliers.  But what they want from us has fewer suppliers than what we want from them.  The agricultural products are a strong area for us due to our great surpluses in that area - I think they'd have a harder time with that than one might suspect.  As for heavy equipment, semiconductors, and aircraft - they would have to turn to Europe, or maybe Japan for such things.  No bargains there. 

Further, they will be beholden to the Europeans for investment.  That may not work out as well as they hope, given the European attitude of superiority and their much greater penchant for market protectionism.  And if they lose both us AND the Europeans, that is the day that Chinese progress comes to a grinding halt.  They can't invent new things.  All they can do is copy, and (on a good day) refine existing tech.

 

63

And while Taiwan and Japan might be at the top of their hit list, a run on North Korea wouldn't surprise me much either.

I would say that North Korea is already a Red (Brown) China client state, for all practical purposes. To the extent that they have any economy whatsoever, it is dealing with Red (Brown) China.

64 The only thing we have to fear from China is either ecological disaster or a war of attrition. They have more people than we do. Their economy is a fake built on a house of cards and false accounting, their citizens live in hell, their alleged move from communism is a lie, and their military might is like the USSR's.

65

"Their economy is a fake built on a house of cards and false accounting, their citizens live in hell, their alleged move from communism is a lie, and their military might is like the USSR's."

I would only disagree on the alleged move assertion of yours. China has ended Maoist barbarism and has adopted the typical developing Asia model of an export-driven economy. The problem with that is that it only goes so far, as Japan has learned. Japan, we we all thought would own the world back in the 1980's, turned into the macroeconomic equivalent of a Pokemon craze in the 1990's. Ditto for the other little tigers.

China has Japan's problem many fold, without Japan's wealth, internal stability and cohesion. Unhappy minorities in the Western provinces seethe and no one is going back to Mao, not even the ones with the guns who could make that happen.

66

Right, because the Chinese people aren't known for having revolutions or anything.

Having them is one thing.  Having a snowballs chance in hell of one succeeding, that's another story entirely.  Anyone that looks like they might be thinking of starting anything like that is usually jailed, sometimes even executed long before their "revolution" is much more than a few folks sitting around making noises about how unhappy they are with the government.

I get that it's a whole different mindset and it's hard to grasp, but the vast majority of the Chinese live in total terror of their own government.  They have no rights whatsoever.  Their government can come and take anything, indeed everything from them at any time they wish on nothing more than a whim.

If your neighbor makes a joke about the chariman?  He dissapears.  Some high school kid starts complaining about the government?  He does too.  After a while you stop complaining.  You stop because if you don't you won't be around long.

Weed out the vast majority of the dissenters and keep your eye on anyone that might cause trouble, viola.  The day you announce your dumping all the US bonds you go in and arrest anyone on your watch list.  A few firing squads later, problem solved. 

67

Here is how the left defends Krugman's Enron connections

http://www.slate.com/id/2061092/

68

"I get that it's a whole different mindset and it's hard to grasp, but the vast majority of the Chinese live in total terror of their own government.  They have no rights whatsoever.  Their government can come and take anything, indeed everything from them at any time they wish on nothing more than a whim."

True, but to even *have* a market economy means that the people have more freedom, even under a totalitarian dictatorship, then they would under communism. Even the Nazis had White Rose movements.

But this does raise an interesting alternative history question: Suppose the Western Powers had deterred and contained the Nazis rather than appeasing their way into war. What would have developed in Germany and its Eastern European satellites? Would the 1960s have seen "Brown Guards" take over the streets of Nazi Germany? Egged on by Old Fighters behind the scenes, would they demand that the aristocrats of the SS get off their high horses and "learn from the Volk"? Would ancient universities get closed down, and elderly scholars sent to country districts to raise pigs?

But one thing would be the same: Gullible Leftist dupe journalists would arrive from the West, and send home admiring articles about "how the Germans must be understood on their own terms".

69 When it comes to "economic experts" like Krugman, always assume the opposite and you'll probably get it right

If Jim Cramer puts a screaming BUY on a stock, dump it like an ugly prom date

70 Krugman has his schlong deep up my squeakhole.  I've got him just where I want him!

71 I've been sort of hoping that China would stop buying our debt.  Since our elected representatives are incapable of making a tough decision to drastically reduce the scope of gov't spending, I've been pulling for the Chicoms to make em do it!  Is that wrong of me?  make me anti-American?

72 As others have noted above, Krugman's airy dismissal of any potential future problems w/ China ("we have them over a barrel, not the other way 'round") is sheer sophistry.  The Chinese leaders can crash the American economy simply by pulling back at the next gov't Treasury auction.  Without enough buyers, the Fed would have to step in to make up the shortfall--something that would be noticed all around the world.

As Ohio Dude and Stuck noted, if the Fed becomes the major buyer of US paper, then for all practical purposes the federal govt would be unshackled from whatever tiny shred of fiscal reality it still has.  In other words, it would be "crank up the presses."

This too would be noted world-wide.

But like much of the military fencing that went on under the radar back in the day, none of this will need to happen.  Because the Chinese only need to *communicate* the *possibility* to Obammie's advisors and the Obienauts will snap-to in short order.

Consider:  We've got an *admitted* 10% unemployment now--and by most accounts really more like 17%.  If you were Obie, would you want to risk starting a trade war w/ China-- which would surely add another 5% or so to these numbers just in time for the 2012 election?  Nah, I didn't think so.

Truth is, our room to maneuver in the world political and military arena has become vastly curtailed, in the sense that if we buck China's leaders, they can make life a lot worse for any U.S. president--and without firing a shot.

Chickens comin' home to roost and all that, eh?

Hope you stupid 52-ers will be happy with the new world order, absent any effective U.S. power--'cause that's exactly what you ignorant bastards will have accomplished.

73

Beware of economists who preach against all common sense - going massively into debt to someone is not a good way to gain power over them.

Krugman's talking like we're Donald Trump and China is the clique of Manhattan banks that lend him money.  It works for Trump because the banks don't have any interest in seeing him fail - it's bad for their balance sheets if they take a bath on the Donald and they have nothing but debt to show for the failure.

Krugman doesn't account for the fact that China competes directly with us - they're #2 in economic and political power and want to be #1.

Would the Donald's banks keep floating him if they were building their own billion-dollar casinos and golf-courses across the street from Trump's ?  Or would they let him fail, eat their losses and rake in his customers ?

Krugman's a broken compass that only points to disaster.  Any politician that follows his advice is doomed to fail.

74 China is still a tyranny, still a dictatorship with Maoist roots. Their "free" economy is not free. I don't know why on earth people believe their freaking propaganda, you think they'd know better after the Soviet Union's fall but maybe some of you are too young to remember.

75 If they retaliate we completely cut off all their imports.

That's a non-starter.  It sounds plausible at first glance, but all it does is make war on the American poor struggling to get by. 

People don't have an extra 10% or so to pay the US government tariffs that would supposedly be used to punish the Chinese.  Tariffs won't punish the Chinese so much as they'll punish struggling Americans who can't afford to buy anything else.

Even with a 10% tariff premium added, Chinese products will still be cheaper than anything else in the market.  American labor is so much more costly than Chinese, even a 50% tariff premium wouldn't make the American shit competitive in most cases.

So a trade war is in reality just a "stealth" mechanism to tax low income Americans without calling it a tax.

76

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77 If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem. John Paul Getty