10.02.10
Head US man squeaks for China
[Geithner]: “We’re not going to have a trade war; we’re not going to have currency wars. I don’t know what that means, but people are saying that.”
I suspect that he was trying to reassure the markets — but if we’ve learned anything lately, I hope it is that actions, not talk, matter.
And look, if China continues on its present course, eventually we will have some serious currency and trade conflict. Furthermore, we should.
All Geithner did here was signal to the Chinese not to worry, U.S. officials will keep making excuses for China’s behavior and doing nothing, regardless of provocation.
Go to your local supermarket, hardware store, or Guitar Center.
As a thought exercise, imagine all the substandard slave labor junk suddenly costing twice as much. Pretend the wine corkscrew now costs twice as much, the $119 Fender Strat (or First Act electric guitar in a cardboard box) costing two and a half times more, with no case or extras.
In many ways it’s a delightful fantasy. A trade war which encompasses such things immediately makes the substandard materials undesirable, even in an economy where the consumers the products are aimed at need stuff to remain cheap because they’be been beggared.
Suddenly the stock in pawn shops — and there’s a lot of it due to the Great Recession — looks more attractive.
And that’s spent money that stays in the US, at least paying a clerk, albeit awkwardly.
Philosophical question: If you can’t buy Chinese stub wrenches that don’t work (or “Hanes” socks that develop holes the second or third time they hit the washing machine), does it matter?
If the Chinese-made LoDuca “Chicago blues” harmonica goes from $10.99 to $20.99, suddenly becoming less desirable in price compared to a good standard German-made harmonica, it is a bad thing?
If the LoDuca company has to shift their product line to one of higher quality, but more expensive, can we afford it?
The recent history of Mattel’s stock price is here, — the quintessentially anti-American US company taking advantage of Chinese monetary policy and labor markets.
Two other huge Made-In-China US firms.
Guitar Center and Fender Musical Instruments are, sadly, privately held.