China Gets It Right, But Hurts America

[bjorn_skurj]

Thats the small picture. Of course we need credit, but we have to take the signs. If companies have come back and back for more money, maybe they arent good business and need to die. Maybe if people cant afford to go to college or live in houses, maybe the price of houses and college needs to come down to a level people can afford. I'm just saying let it happen. Credit is needed, but you cant just look at it that simply. You have to look at what got us here and what the market is saying. We cant keep minipulating the market so we keep prospering.

That's what the down part of the business cycle is about - retrenching and reloading for the next up cycle. Prices are already falling - look at what's happening to oil.

[ZenLunatic]

Sure, but you are all over the place. You are advocating for a US policy that would ensure that this country crumbles. And will force China to sell its treasuries.

 

And I think you vastly overstate the amount of crumbling that we need to suffer through while China continues growing for it even to get close. And it ignores the fact that China's growth has slowed as our economy has slowed. So, it begs the question -- can an emerging market like China even grow without the US? China makes crap that they sell to the US. If the US can't buy it, who will?

 

The US bailout is as much an investment in "infrastructure" as China's bailout. I am as worried about the future of this country as anyone, but come on, ZenL. Take a deep breath.

 

 

I am not advocating any kind of policy. I just think alot of the decisions we made and are making are horrible. Right now, we should not bailout the auto industry but it will probably happen.

 

The question about if the rest of the world can survive without America is the main question. They have to and China is trying and that was the point of the article. The other countries will suffer from our losses but they will forge on only if they disconnect from our dollar. If they cant figure out that they can survive without us, then we will bring them down with us. First off, they can save alot of money by just not lending it to us. Secondly, if we dont buy, there's more for the rest of the worldand even themselves to buy. But of course business will change.

 

It's really not easy to make argue all these points on a forum because it takes to much time to type, but whatever.

[ZenLunatic]

I can only say this. Let's see how this whole bailout thing works out. Let's see where are in a few years, maybe at the end of Obama's term. Let the history books mark this horrific event and how it was handled. Just like the Iraq war.

[LouieB]

At this point whatever the USA 700 billion bail out is, is still not clear. Hopefully the Chinese have a clearer idea of what they want to spend their bailout money on.

 

LouieB

[ZenLunatic]

Anyways, thanks for letting me vent here.

[MattZ]

I am not advocating any kind of policy. I just think alot of the decisions we made and are making are horrible. Right now, we should not bailout the auto industry but it will probably happen.

 

Ok, but a lot of the decisions China made and is making are horrible. They have 4x the population (credit: cryptique) and 1/5 the economy that we have. Come on, man. I am not saying we don't have to be smart and change a lot of broken things over here, but let's at least be sure the conversation proceeds along lines with reasonable perspective. The sky is certainly falling, and China may well step into holes we leave behind, but the country is not broke, we are the world's biggest economy by far, the rest of the world is dependent upon us, no one in the world wants to invest in a currency other than dollars, we consume much of what the world makes, and we are innovators in technology, finance (be careful what you wish for), etc. China isn't invading tomorrow.

[JUDE]

I think the one thing the Chinese bailout has over our version is that I don't think the Chinese governtment will sit still while bailout money is spent on corporate parties/retreats or paying year end bonuses to executives.

[MattZ]

I think the one thing the Chinese bailout has over our version is that I don't think the Chinese governtment will sit still while bailout money is spent on corporate parties/retreats or paying year end bonuses to executives.

 

Keep in mind that many banks didn't have a choice to accept bailout money because Paulson was afraid that the market would panic and run from any banks that accepted money if some did and some didn't. So many banks were forced to accept $$. Certainly doesnt excuse the AIG situation, but it is a relevant fact in any discussion about executive comp at banks that accepted $$ in the bailout.

[ZenLunatic]

Ok, but a lot of the decisions China made and is making are horrible. They have 4x the population (credit: cryptique) and 1/5 the economy that we have. Come on, man. I am not saying we don't have to be smart and change a lot of broken things over here, but let's at least be sure the conversation proceeds along lines with reasonable perspective. The sky is certainly falling, and China may well step into holes we leave behind, but the country is not broke, we are the world's biggest economy by far, the rest of the world is dependent upon us, no one in the world wants to invest in a currency other than dollars, we consume much of what the world makes, and we are innovators in technology, finance (be careful what you wish for), etc. China isn't invading tomorrow.

 

Well I think there is a misunderstanding with a part of our talkings. I am not saying anything about China taking over us or even want that. I an American born and raised. I am just noting how their situation compares with ours. At this point we are still the world power, I know. But thats gonna change. You have to have money to be powerful.

 

I think the mentality that we are the world power and we have to survive for the world to survive is what will doom us. Because the fact is that the rest of the world can survive without us. All we do is consume. If we cant consume anymore, the rest of the world will. All that was coming to us will go to the rest of the world for less.

 

If we arent broke, then why do we need to supply banks and companies with hundreds of billions of dollars??? Do you think we can payback any of the money we borrow?

[JUDE]

Keep in mind that many banks didn't have a choice to accept bailout money because Paulson was afraid that the market would panic and run from any banks that accepted money if some did and some didn't. So many banks were forced to accept $$. Certainly doesnt excuse the AIG situation, but it is a relevant fact in any discussion about executive comp at banks that accepted $$ in the bailout.

 

If AIG was based in China and received money from the Chinese government I would imagine the repercussions would be quite severe for their actions.

 

I know what you are saying about being forced to take money, but these people obviously forgot about the key word in

[mfwahl]

I think the one thing the Chinese bailout has over our version is that I don't think the Chinese governtment will sit still while bailout money is spent on corporate parties/retreats or paying year end bonuses to executives.

AIG execs would totally be locked up in these:

[MattZ]

Well I think there is a misunderstanding with a part of our talkings. I am not saying anything about China taking over us or even want that. I an American born and raised. I am just noting how their situation compares with ours. At this point we are still the world power, I know. But thats gonna change. You have to have money to be powerful.

 

Fair point - there may be a misunderstanding. I just get the sense that you keep harping on China as if they are going to take over the world and leave us in the dust. And if it's not going to be them, who is it going to be? Japan? Germany? Come on. Think about it.

 

I think the mentality that we are the world power and we have to survive for the world to survive is what will doom us. Because the fact is that the rest of the world can survive without us. All we do is consume. If we cant consume anymore, the rest of the world will. All that was coming to us will go to the rest of the world for less.

 

I think hubris has been the ruin of many a man. And country too. No argument from me there.

 

If we arent broke, then why do we need to supply banks and companies with hundreds of billions of dollars??? Do you think we can payback any of the money we borrow?

 

We need to supply these companies with money for a lot of reasons. Most importantly, because they ran themselves poorly, and in many cases did so because of cheap credit. But also because there is panic and a domino effect in a very complex and interconnected economy. Markets can and do overreact, and most people think there is some of that here too. There will be pain and suffering as we ride it out, but I am confident that the country is resourceful enough to weather the storm in the long run. We still don't know the full effects of this bailout, but as I said a few days ago, the bailout is an investment in banks. Not a blank check that is flushed down the toilet. That investment could be profitable for the taxpayers. If calm is restored, and we pull ourselves back up, it will be fine. This country has certainly suffered through worse and come out stronger.

 

And yes, I think we can pay back the money we borrow.

 

EDIT: And, just because banks are hoarding cash because of real or preceived credit risk, it neither means that (1) they are broke or (2) that the country is broke.

[EL the Famous]

I think the one thing the Chinese bailout has over our version is that I don't think the Chinese governtment will sit still while bailout money is spent on corporate parties/retreats or paying year end bonuses to executives.

 

i bet some of it gets spent at one of those sushi places you can eat off of a nude asian chick. all work no play, c'mon.

[ZenLunatic]

We need to supply these companies with money for a lot of reasons. Most importantly, because they ran themselves poorly, and in many cases did so because of cheap credit. But also because there is panic and a domino effect in a very complex and interconnected economy. Markets can and do overreact, and most people think there is some of that here too. There will be pain and suffering as we ride it out, but I am confident that the country is resourceful enough to weather the storm in the long run. We still don't know the full effects of this bailout, but as I said a few days ago, the bailout is an investment in banks. Not a blank check that is flushed down the toilet. That investment could be profitable for the taxpayers. If calm is restored, and we pull ourselves back up, it will be fine. This country has certainly suffered through worse and come out stronger.

 

And yes, I think we can pay back the money we borrow.

 

I dont know who will be the strongest nation, maybe not one country like America anymore. China seems to on the right track.

 

I think we are broke and in serious money trouble. We are borrowing tons just to stay alive and there is not end to the borrowing in sight. That constitutes broke to me, others may have differing definitions.

 

For us to start paying back, we need to start making money. For us to start making money, we have to stop spending and save and produce. Right now, we are recklessly spending to keep afloat bad business that dont make money. Putting forth bad policies to try to stabalize artifically high prices and reward the irresponsible to try to keep a fake standard of life. There is a reason why the banks arent lending like the government wants. Cause its learned from its mistakes. Its gonna be a long depression here.