The Obama Administration, the Democratic Congress, and their friends in organized labor are quick to blame unemployment on the trade deficit. Facts don’t support that assessment. The historical record shows a *positive* correlation between aggregate trade deficits and job creation – a trade deficit signifies *more* jobs. That’s because trade …
Today’s papers give the impression of a collective exhale on U.S.-China relations. Chinese President Hu Jintao is coming to Washington for a global nuclear security summit and that means a trade war over exchange rates has been averted. However, a better term than “averted” is “postponed.” It is probably true …
The New York Times, Washington Post, and others today ran front-page stories on economic and political disagreements the U.S. has with China. The headlines mostly distract from the real issue. China is nowhere close to a global military power but it is becoming a global economic power. It is therefore …
The headlines should read: World Didn’t End! Sub-head: We didn’t know what we were talking about. The data for official Chinese purchases of Treasury bonds in 2009 were published yesterday. Verdict: the PRC bought practically nothing. In 2008, official Chinese purchases of US Treasury bonds were equal in size to …
There may be valuable political conclusions to be drawn from the current tiff between Google and the Chinese government, but there certainly isn’t anything new on the economics or business side. Perhaps the main reason the PRC wants foreign technology and know-how is to drive foreign (and some domestic) companies …
Japan’s newly minted finance minister, Naoto Kan, seems an excellent choice to lead Japan on an expedited road to fiscal perdition. For those who argue the best way to deal with the coming financial crisis is to precipitate it quickly, Mr. Kan’s choice should be particularly welcome. The governments of …
Myth: China is America’s banker. Truth: China has bound itself to American economic leadership. The federal government runs a gigantic budget deficit, which will hurt the economy for the next decade. China buys some of the bonds sold to finance that deficit and has about $800 billion in official holdings …
A top story in the Washington Post last Saturday concerned Chinese banks. It was badly misleading, to the point of almost seeming intentional. The article leads with the claim that “new lending by Chinese banks has injected $1.3 trillion into the world economy.” That is the figure injected into the …
