The China Syndrome

And How To Cure It Before 2012.

Today at the New America Foundation Steve Clemons, that Washington Blog guy announced finally "I am not a Democrat" to slay any doubts. Notwithstanding, he is a rather jovial hospitable moderator and his Forum today on the 'New American Contract' held a few innovative ideas and more of the same refrain on China beating our pants off competitively, ripping us off raw and manipulating their currency. One solution-artificially suppress the dollar, suggested one panelist. I don't like that because it means a weaker dollar is going to make it more expensive for Americans like me to travel in Europe.
Read Stiglitz again I am reminded. I don't get all how suppressing the dollar artificially is going to save us- and require explanation from George Soros.
Many thanks to Senator Dornan for clarifying the issues boldly regarding what a serious crisis we are really in.

The chant of "we can't beat cheaters" resonated, which had me wondering- why is it that the WIPO- World Intellectual Property Org. is so toothless that China keeps on dumping cloned and pirated goods on our markets and we are powerless to stop it. Currency manipulation solutions only skim the surface of the real issues- and ignore the fact that their prices are just dirt cheap because they don't have to pay the designer to invent the stuff originally, they can just knock it off and pass it off and they pay their workers in rice (nearly).
Why is there no OMBUDSMAN BRIDGE or Liason Office between WIPO and WTO by treaty or convention? Why can't there be tariff impositions imposed as penalties for WIPO infringement judgments? Why can't these august bodies of aristocratic civil servants sitting in Geneva walk down the Lake walk there and have regular meetings wherein the trade policies of WTO are mutually enforced by enforcement of judgments of WIPO? There ought to be some coordination I surmised- and how would that start to happen? You get a WIPO judgment, your country gets hit with a ten percent tariff increase- you cause your whole country to have to pay.

If we are getting walloped by trade deficits, and raped raw by piracy and intellectual property theft why are we not imposing tariffs that assist the trade deficits for violations of the intellectual property laws? Seems pretty simple to me but what do I know?

Here is what I propose happen in short order. Perhaps we need another Committee. OH NO, not another Committee. At the Executive level, appoint, (please don't call it a Czar or people will start calling it communist) - a group of trade policy, fiscal policy, and monetary policy experts WITH Intellectual Property powerhouse brainpower to link these issues and strategize our best interests to protect our economy- translation- protect our JOBS, people. When you protect JOBS, you protect the livelihoods of people aspiring to be in the middle class, you preserve their buying power and cyclically it all moves like a well oiled economy as opposed to the gum in the gears bail-out bonanza we can't keep having without bankrupting the country.

Another idea I liked; any executive whose company got TARP funding has to pay half their bonus back to the US Treasury. Where do you think it came from in the first place? Why subsidize companies that are not 'free market' viable and get no return on it.

The Committee should be comprised of former and/or current ITC commissioners, WIPO high level people, WTO Commissioners, leading economists, etc.

In lay terms, if you cheat and steal my designs and sell them well below market because you avoided all the labor costs by manufacturing without living standard wages with cheap raw materials and avoided design costs, and we catch you and get a judgment against you at WIPO, this will translate into sanctions at the WTO in the form of increased Tariffs for your country's goods to compensate for you artificially reducing prices and flooding our markets. Your whole country will suffer, which should put significant peer pressure on you by your fellow countrymen who will be really mad at you that you were caught.

That's just one idea, hairbrained or not. What we need is a visible Administration level expert policy group that addresses the deep recession (worse since the Depression of the 30s with real unemployment approaching 30 Million) to address issues of exporting jobs overseas for cheap labor, currency manipulation, piracy, loss of the manufacturing base, etc.

Senator Dornan made the salient well taken point that there is no Divine Right for America to
be a leading economic power in the world, and we won't be if we don't start making smart decisions in our interest. We owe our parents and grandparents and the forefathers who built the country better than we are doing by selling ourselves out.

And No, the discretionary Non-Defense funding freeze is Not a smart idea. Dumb idea.