FRONT PAGE CONTRIBUTOR
Obama pledges $1 trillion for Chinese economic, labor stimulus
He might as well be, anyway. After all, that’s where the bulk of the cash put into circulation by the stimulus plan Obama wants ready for his signature on his first day in office will go, after all.
Then again, because most of that cash is coming from China in the first place, I suppose there’s a bit of poetic justice present in the fact that President-elect Obama’s the stimulus here, ostensibly intended to spur growth and employment in the U.S. economy, will largely be used to purchase more imported products from China (that fact is doubly ironic because of China’s penchant for curbing its own recessions — like the halving of GDP growth taking place now — by exporting more goods here).
Will any officials (or “economists”) in the Obamadministration catch on to the fact that this $1T stimulus is actually going to create growth and employment in the Far East, rather than here in the U.S.? And, if they do, will they alter their chosen course, or simply try to cover up the fact that All is Not Well in Denmark, despite the visible results (or non-results) of this supposed economic stimulus package?
As a friend (and brilliant financial mind) emailed earlier today:
At that point, you have to imagine that the Chinese will quietly remind Geithner that they’re lending us the money for the stimulus in the first place. And then the Obamunists will twist themselves in knots to keep the public from figuring out that the New New Deal is intended to put Chinese back to work rather than Americans.
Quite frankly, this “stimulus” package is little more than a massive purchase of Chinese imports (which, as a market-watching friend pointed out today, is why the Asian markets rally every time Obama or his minions let slip more talk about their stimulus plans).
What will happen as a result of the realization that this is true? I think it’s pretty clear that protectionists will seek to stem the outflow of U.S. dollars through relatively radical means (do the words “Smoot” and “Hawley” ring a bell with anybody?).
The problem with that, of course, is that America no longer manufactures the products necessary to be self-sufficient to such a degree that Chinese imports can be forsaken. Remember the massive public works projects Obama wants to initiate? Where do you think the materiél for those — roads, bridges, etc. — comes from? How about computers and other electronics for schools and federal buildings? How about air conditioners?
It comes from the Far East. What President-elect Obama is talking about doing is, in essence, sending $1T of U.S. taxpayer dollars straight to China, and then sending more over to procure the materials for his supposedly-job-creating public works efforts here.
The result? China’s economy rebounds like crazy and its employment expands an awful lot, while our economy limps along and our employment very, very gradually rises within public sector jobs — OR we implement tariffs to stop the former from happening, and find out that the reverse of the latter is even worse than what we were originally dealing with.
Does that sound like it’s worth $1 trillion plus of your money? I sure don’t think so.