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Monday, July 21, 2003

Pointing the Finger Elsewhere Won't Help

Well, just as I get off on holiday, Maynard arrives home. His holidays have been more like a world tour by the look of it, but he seems to be full of ideas and ready to go. His main point, that bashing China won't solve our problems, is one I fully agree with. China is a reality we have to learn to live with.

persistently weak global economy is now moving into a dangerous place - the blame game. Temptations are rising to point the finger elsewhere rather than look in the mirror. Such sentiment is nearly unanimous in singling out a new scapegoat: a rapidly growing Chinese economy. I have picked this up in my recent travels to Japan, Europe, Australia, and around the United States. World opinion is becoming increasingly united in putting pressure on China to defuse this threat by revaluing its currency. In my view, that would be a serious mistake. The world has got the China story dead wrong.

Isn't it nice when you see something you predicted come true? Makes you think you perhaps do have some understanding of the situation. Based on what happened in Japan in the 80's, last year I expected this to happen, but I expected it to be a big part of the 2008 election. I wasn't sure about 2004, and still am not, because on the one hand I
suspect a large number of Bush and Dem funders harbor dreams of getting wealthy through China, or even if they have abandoned those, have enough FDI now committed that they can't afford to anger the country; while on the other hand I don't yet see the steady drum-beat of China blaming that's a necessary prelude to such a political stance - you'll see the usual nutcases like Limbaugh and Coulter floating this line and seeing how it plays way before you see politicians discussing it. So I'm not sure that it will play a large role in 2004. But 2008, absolutely.

The one story I am still looking out for is whether Cheney runs as VP in 2004. My suspicion is that if things continue to go badly for GWB, he will be ditched (at the appropriate time which is still probably 6 months from now) as the fall guy for every single one of GWB's sins, leaving the puppet in a more-electable position and ready to do his masters' biddings for another 4 yrs. At that point the interesting question becomes who his replacement will be, something that will tell us just who controls the Republican party - the war-mad neo-cons, people who are so ideologically blinkered (Grover Norquist et al) they simply cannot see that their tax cut regime is imperiling their future prosperity, or pragmatic adults who realize that heck, the way things worked during the Clinton years weren't that bad for a wealthy person.

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