[lit-ideas] Re: Englehardt, Cold Warrior in a Strange Land

  • From: "Lawrence Helm" <lawrencehelm@xxxxxxxxxxxx>
  • To: <lit-ideas@xxxxxxxxxxxxx>
  • Date: Sat, 25 Mar 2006 17:56:19 -0800

I fail to see foreign investment in our bonds as problem.  The only control
a bond-holder has is to cash in his bond.  If he does it too early he
suffers a penalty.  One can imagine a horror scenario in which all bond
holders cash in their bonds at once.  A nation could put payment on hold but
no one thinks the U.S is likely to do that any more than anyone thinks the
U.S. would get into such difficulty that huge numbers of bondholders would
want to cash them in.  I just can't see a problem here.  The fact that so
many want to invest in our government and economy means that they think we
are the safest place for their money - something I think as well.  

 

As to jobs shifting about and becoming lower or higher paid, that is one of
the downsides of any free economy.  Having competed in a very volatile
industry I am very familiar with this matter.  Toward the end of my
employment at Boeing we were hiring an enormous number of foreign engineers.
There was a period after Cost-Plus-Fixed-Fee contracts went by the board
that there was less and less need for new engineers so students opted for
other majors.  When Boeing needed engineers, they had to hire them where
they could get them.  They were willing to work for less than American
Engineers, but sometimes they cost more as when their instructions to a
vendor esulted in a part we didn't want.  The vendor could produce the
specification written by the engineer from the Middle East and say, "see,
this is what he asked for and this is what I built."  We would then give the
engineer another English lesson and chew out his boss for not reading the
spec more carefully.  This is a problem but I don't think we are ever going
back to the sort of protectionism that protected jobs but overall wasn't as
good for our economy as the present system.

 

Investing in other countries was one of the goals of the Tri-Lateral
Commission which was formed around 1976.  Part of the justification at the
time was that nations who invest in other nations aren't likely to attck
them.  You quote China as having invested 262 billion dollars in our bonds.
Does it seem likely tha China will attack us?  Well no, not even if they
could which they can't, but what about wanting our economy to fail?  What,
and endanger their 262 billion?  Not a chance.

 

-----Original Message-----
From: lit-ideas-bounce@xxxxxxxxxxxxx [mailto:lit-ideas-bounce@xxxxxxxxxxxxx]
On Behalf Of John McCreery
Sent: Saturday, March 25, 2006 3:56 PM
To: lit-ideas@xxxxxxxxxxxxx
Subject: [lit-ideas] Re: Englehardt, Cold Warrior in a Strange Land

 

On 3/26/06, Lawrence Helm <lawrencehelm@xxxxxxxxxxxx> wrote:

> 

> I don't see the U.S. as "limping along" in any respect.  From everything
I've

> read, and I read a lot, we are still the most successful economy as well
as

> military.

> 

> 

 

Hi,Lawrence.

 

Nobody denies that if you look at gross GDP figures the US appears to

be doing all right. But while the investor class, of whom I happen to

be in a modest way a member, are doing very well, indeed, the median

income in dollars adjusted for inflation has fallen. The numbers of

people living below the official poverty line and of people with no

health insurance at all are rising. The strategy of preserving the

American worker's edge through education has proved to be a paper

tiger (plenty of highly educated Indians, Chinese, etc., out there).

Yesterday, Howard Myerson had an interesting piece in the Washington

Post talking about a new study, reported in an article in Foreign

Affairs, by former vice chair of the Federal Reserve Alan Binder, who

suggests that between 42 and 56 million white collar jobs are

exportable to other countries.

 

>>"Janitors and crane operators are probably immune to foreign

competition," Blinder writes, "accountants and computer programmers

are not."

 

 

And the national debt is out of control. Here, for your delectation is

an opinion that just appeared on the NBR-Japan Forum list. The author

is a retired Japanese government official.

 

**************

Here's what I summerized from a U.S. government's source of information

http://www.ustreas.gov/tic/mfh.txt

as the current top 10 foreign holders of U.S. government securities such

as Treasury Bills:

 

Country      2006 Jan (US$billion)

 

Japan          668.3

China          262.6

UK             244.8

Caribbean      97.9

OPEC           77.6

Taiwan          71.6

Korea           68.3

Germany       65.2

Canada         54.9

Hong Kong   48.3

 

From this statistics, one can see that Asian countries, particularly Japan

and China, are supporting the bulk of the national debts of the United
States.

These Asian countries are, in turn, major exporters of goods and services to

U.S.

 

I wonder if U.S. is trying to maintain its hegemony and if the international

economy is designed by U.S. in such a way as we see it today. Does U.S.

think that it can maintain supremacy over other countries as long as it can

maintain the military supremacy?

 

I ate a can of sweetened mandarin orange the other day. I called Microsoft

for help to configure my wireless home LAN and ended up with talking to an

Indian software engineer who helped me and who told me that he lives on

the East coast of India. My wife laments that all merchandises she checks

at local garment stores are made in China. We see enough Japanese cars

here in this suburb of New York City. So, U.S. is buying goods and services

from those supplier countries and sell to them in return paper certificates
of

debts? Does U.S. really want globalization? What is the true aim of that?

So that they can continue to let others work and buy on credits perpetually?

Is that the scheme? Does U.S. think that its military supremacy will never

end? Why U.S. is buying so much from China to help the Chinese economy

if U.S. is afraid of military build up in China? In the meanwhile,

U.S. is holding

Japan, the biggest lender, under an iron claw and it looks very secure.

Could the world can be in a more reciprocal relation?

 

I think that what we see is not a healthy and sustainable situation.

 

***************************

 

 

Cheers,

 

 

John McCreery

The Word Works, Ltd.

55-13-202 Miyagaya, Nishi-ku

Yokohama 220-0006, JAPAN

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