Maria Antoinette.
We are at war. The war started for us in 1970 with Nixon. He was in a bind because the country was bankrupted by the war in Vietnam.
At the time it was pure genius to cut European imports and encourage Chinese imports at one tenth the price. He took us off the gold standard and paid the debts back at 10 cents on the dollar.
Then we had Watergate and he had to resign or be impeached. No one turned off the imports from China when the situation was fixed 10 years later by Reagan with his 18 to 20 percent interest on money. Reagan attracted money with those interest rates from all over the world.
China has become an economic monster. So has India. Cheap labor. China could have gone to war with us over something like Taiwan. Instead they embraced economic war with the world. It was very successful . . for China.
History 101. Unfortunately, no one followed through to turn it down when the bankrupt USA was able to.
Now we need another genius in office to turn off the imports without going to war with China. This is where the unemployment came from. Cheap labor and government artificially low currencies have won the war for China.
The nightmare here is all these retail goods have to double in price if the currency war is adjusted so China’s currency becomes more valuable. Check any retail store. A lot of the goods come from China.
In the 70s we had check and balances in the form of negotiation with Unions to bring the wages up as retail goods expanded in price. Well, with unemployment, wages do not improve. But the retail goods will go up double in price when the currencies adjust the dollar lower.
The key here is spendable income from the middle class. Spendable income only comes after you pay your bills, buy food, and what is left over is what you can afford to pay for retail goods. The nightmare for retailers is if they put the price up, no one can afford to buy what they sell. They go bankrupt.
The devil in the mix is China. Someone has to pay to ship those goods from China to the rest of the world. That is happening here and everywhere else including Europe.
The answer for China is to produce the goods locally with their labor. That is what is happening here in the USA right now. China is looking to build entire cities based on their economics. They have the money to do it.
The only real answer here is to rebuild our local industry and find a way to make it economically competive with the goods coming from overseas. We didn’t arrive with this nasty nightmare overnight. It took 30-40 years. We cannot move back quickly without disasterous results.
Ironically, Romney made his money taking bankrupt companies and buying them cheap, laying off everyone, then selling the company assets at a profit. I just wonder if that is his “real solution” when he makes it into power.
The real answer is to make our industry competitive. How to bell this cat is going to take someone a lot smarter than me.