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China’s Economic Blackmail

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Massive amounts of Chinese imports are threatening public health and safety. Many food and consumer products pose risks. Lead in children’s toys and jewelry. Toxins in foods for pets and humans, and in toothpaste. Unsafe automobile tires. Many prescription drugs made with few safeguards. The list is endless. The federal government is not safeguarding American citizens through thorough testing of imports. Why?

Simple: The Chinese have us by our budget-deficit balls. Our government depends on China for loaning us money and for not dumping the vast hoard of over one trillion dollars it has accumulated by financing our huge deficits and selling us virtually everything. Dumping dollars is called the Chinese economic nuclear option. They can wreck the American economy any time they want. America is being held hostage because of our government’s disastrous fiscal and trade policies. And, yes, all this middle-class-killing free trade globalization favors corporate interests.

It is hard to keep track of all the ways the American public is being sold out by the federal government as our Constitution and rule of law are shredded. Our jobs are sent overseas and shifted to lower paid illegal and special-visa-legal immigrants. There is no economic security. Banks and credit card companies rape us financially through criminal interest rates and fees. Mortgage companies took advantage of millions of home buyers that now face foreclosure and financial ruin. We pay outrageous amounts for gasoline and, in many parts of the country, for electricity and natural gas. 15 percent of the population still lacks health insurance, and those with insurance face rising costs. Millions of Americans face hunger and homelessness. And by the way our education system sucks.

Yet, the vast majority of Americans that are not in the Upper Class and living lavishly are not fuming, screaming and ready to revolt. They may feel cheated and screwed, but they have not yet concluded that they are politically oppressed –- that their government is criminally selling them out, with no end in sight –- that their democracy is delusional.

The following facts are typical of so many that should help Americans wake up and prepare for the Second American Revolution:

The top 300,000 income earners in America make more than the bottom 150 million combined.

Ninety percent of the Fortune 1,000 companies have set up deferred pay plans that let their top executives set aside, tax-free, retirement income far above 401(k) limits, and 69 percent have set up “supplemental executive retirement plans” that shield execs from company-wide pension cutbacks. That’s how these fat cats obtain tens or hundreds of millions of dollars. All this continues even though an amazing 77 percent of Americans say corporate executives “earn too much” and 61 percent believe wealthy Americans “should be taxed more.” according to a new Harris Poll.

Billionaire Warren Buffet paid just 17.7 percent of his $46 million in income last year, without trying to avoid taxes, compared to his secretary who paid 30 percent of her $60,000 salary.

The top two execs at America’s largest private equity partnership took home over $600 million last year — and paid taxes on that windfall at the capital gains bargain rate of just 15 percent. And Congress shows no desire to close that tax loophole.

Millions of non-wealthy Americans face home foreclosure and bankruptcy, but right now there are five residential properties in the United States listed at $100 million or more

Like some science fiction fantasy, millions of hard-working Americans are popping anti-depressants with abandon to dull the pain of obscene political and economic realities. American puppets, slaves, and victims obediently obey laws, pay taxes, borrow and consume, and endure stress, fatigue and sleeplessness. Meanwhile, the mainstream media feed them propaganda and entertainment. Worst of all, far too many believe they can elect Democratic or Republican politicians that will make things better. Though millions are suffering, bitching and moaning, they remain stuck in a political stupor. They are unready to rebel politically and take back their country from corrupt politicians and the moneyed interests that control them. They have not become political dissidents – the kind that throughout human history rise up and overturn dreadful ruling classes and governments.

Rather than contagious political activism we have compulsive consumerism. Americans keep borrowing and spending, providing about 75 percent of the economy that mostly benefits the Upper Class. That spending is their potential political power. Yet they do not understand that only by using their spending (and debt) as a political force will they get the government to serve and protect them. That means reducing spending to obtain specific political actions, like cutting spending by 10 percent until President Bush ends the Iraq War.

Cheap Chinese products help keep consumers pacified and distracted, even as Americans lose jobs as industry after industry collapses because of floods of Chinese imports. Our delusional democracy produces delusional prosperity. How much worse must life for ordinary Americans become before the masses rise up in rebellion? Apparently, a lot worse.

By then, communist China will probably become the world’s only superpower, built with the wealth extracted from the USA. The lesson of history is the rise and fall of great (arrogant, self-indulgent) nations. The USA is in free-fall. Soaring economic inequality is just one symptom.

Cheap Chinese products are a powerful and insidious destructive force. Free trade globalism more than violent terrorism or military attack is bringing America to its knees. But no presidential candidate is making this their main campaign theme. Shame on them. And shame on anyone voting for them. Perhaps if voter turnout dropped to, say, 20 percent, then we might stop playing our bipartisan delusional democracy game and take our country back.

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About Joel S. Hirschhorn

Formerly full professor Univ. of Wisconsin, Madison, and senior official Congressional Office of Technology Assessment and National Governors Association. Author of four nonfiction books and hundreds of articles.
  • Clavos

    Whew! Talk about delusional!

    This article is so full of misconceptions, it’s hard to decide what to address.

    First, while it is true that some Chinese manufacturers have been sending us a lot of shoddy product; now that we (and they) are becoming aware of that fact, neither their government nor ours will permit it to continue. Why? because it’s bad business! The fact that they’ve gotten away with it until now has much more to do with the ineptitude of the United States government than it does with budget deficits.

    The Chinese hold a lot of US paper, true. But the US is by far their largest market, and they’re making LOTS of money selling us their products. Why would they risk killing their best market by “dumping the vast hoard of over one trillion dollars” worth of US debt they hold. Do you think they’re stupid?

    You say:

    “Banks and credit card companies rape us financially through criminal interest rates and fees. Mortgage companies took advantage of millions of home buyers that now face foreclosure and financial ruin.”

    The rates charged by credit card issuers are LEGAL. Thank your representatives in Congress for that. No one has to use credit cards, and if no one did, you can be sure the rates would plummet, subito. Americans could also try to pay off their credit cards every month and not charge more than they can afford to pay.

    Mortgage companies did NOT take “advantage of millions of home buyers that now face foreclosure and financial ruin.” On the contrary, they stupidly allowed UNQUALIFIED buyers to take out mortgages in a foolish attempt to cash in on the housing boom. Those mortgage bankers are now paying the price of their foolishness as their companies suffer the consequences of lending money to people who should not have had mortgages. Greed, on the part of both mortgagors and mortgagees, caused that debacle.

    “We pay outrageous amounts for gasoline and, in many parts of the country, for electricity and natural gas.”

    Thank the Arabs and OPEC for that. Also thank our own insatiable demand for oil. Despite higher prices, demand in the US for fuel is actually INCREASING, as we buy ever more vehicles.

    “Billionaire Warren Buffet paid just 17.7 percent of his $46 million in income last year, without trying to avoid taxes, compared to his secretary who paid 30 percent of her $60,000 salary.”

    Funny you should pick on the man who is giving away $37 Billion, 85% of his total net worth, to charity. Do you think that might have had something to do with his low tax rate??

    One point you make I DO agree with; the American people do NOT vote their own interests at election time. They ARE distracted by such stupidities as whether Obama is Black enough or Edward’s Pretty Boy looks.

  • http://pleasestopstampingonmyhead.blogspot.com/ Colin Ricketts

    Indeed. I hope you get your revolution, but I think it unlikely. Start organising now.

  • Doug Hunter

    The american people do vote their interests, it’s just their interests are not always your interests.

  • http://www.republicofdave.com Dave Nalle

    When I edited this last night I was going to have some fun responding, but I was too tired, and now Clavos has beat me to it. This is a classic, Joel – the perfect mix of paranoia, hyperbole and sheer craziness. It’s like you’re channeling Lou Dobbs or something.

    Oh, what the hell, I’ll hit a couple of the highpoints.

    Dumping dollars is called the Chinese economic nuclear option. They can wreck the American economy any time they want.

    You know, I’m still waiting for one of you leftist economic doom and gloomers to explain this theory. I’m hoping that when you try to do it the result will be that you think it through. Let me help you.

    Ok, how does China ‘dump’ US investments? Does it discount the price and then sell them to other people? Ok, that sounds believable. Plenty of people out there to buy them. Now, whose economy does this destroy? Well, the Chinese would take a huge hit if the sold them at a discount, so they’d be damaged economically. Then other countries or banks would buy them and expect them to be redeemed at face value. They make a nice profit. Sounds good for them. But what’s the impact for the US. How does this ‘nuclear’ economic bomb impact us. The debts still have the same face value, the same interest rate and the same term of the maturity. When the new owners redeem them we get exactly the same amount for them the Chinese would have. So how, exactly, does this make the deal any worse for the US? All I see is the Chinese losing money and the buyers making money. At worst it might result in market saturation of US debt instruments making it harder for us to get credit, a temporary and likely very limited problem.

    And, yes, all this middle-class-killing free trade globalization favors corporate interests.

    Middle class killing? I guess you can look at it that way. It’s true that the middle class has shrunk a bit as hundreds of thousands of middle class workers have moved into the ‘wealthy’ category. Tragic that our middle class got so rich they’re not middle class anymore.

    Our jobs are sent overseas and shifted to lower paid illegal and special-visa-legal immigrants.

    Do I need to trot out the actual facts again? Every job sent overseas generates 1.2 higher paying jobs here in the US. When illegals are hired it results in natives being promoted and an increase of pay for natives in the same area and industry.

    There is no economic security. Banks and credit card companies rape us financially through criminal interest rates and fees.

    Did they come to your house and force you to take their credit card? They keep sending me offers for zero interest balance transfers so I don’t exactly see how they’re raping me. Plus I pay of my cards every month, so I don’t pay any interest.

    Mortgage companies took advantage of millions of home buyers that now face foreclosure and financial ruin.

    They did? They came to people who were not qualified to buy houses and offered them houses at no money down. The people lived in those houses for a while and then walked out on their mortgages, leaving the banks holding the bag. The home owners then went back to renting an apartment which they would have been doing had they not been sucked into a bogus mortgage. They ended up no poorer and didn’t end up on the streets because they put down no money up front and their mortgage payment was lower than or comparable to their rent. So no loss for them, only for the banks who created the problem and deserve to suffer the fallout.

    We pay outrageous amounts for gasoline

    Adjusted for inflation the price of gasoline is now within 10% of the lowest prices for the last 30 years and lower than it was through much of the 70s and 80s, plus rather than the usual summer gas price increase we’ve seen a significant decrease in gas prices over the last two months.

    and, in many parts of the country, for electricity and natural gas.

    Again, the prices for both of these, adjusted for inflation are lower than they were in the 1980s. Did we survive?

    Millions of Americans face hunger and homelessness.

    By what definition? If it’s the standard definition where if you miss a meal a week you’re ‘hungry’ and if you have to live in a hotel while moving you’re ‘homeless’, then yes. If it’s by any sensible definition then the numbers are historically low.

    Yet, the vast majority of Americans that are not in the Upper Class and living lavishly are not fuming, screaming and ready to revolt.

    This might be because they see people around them moving up in income and think they can do it too, plus they’re enjoying an extraordinarily high quality of life as a result of things like cheap chinese imports.

    All this continues even though an amazing 77 percent of Americans say corporate executives “earn too much”

    The average CEO earns only $96 thousand a year. By all means let’s tax him into the poor house.

    Billionaire Warren Buffet paid just 17.7 percent of his $46 million in income last year, without trying to avoid taxes, compared to his secretary who paid 30 percent of her $60,000 salary.

    Maybe Buffett should lend her his accountant.

    The top two execs at America’s largest private equity partnership took home over $600 million last year — and paid taxes on that windfall at the capital gains bargain rate of just 15 percent. And Congress shows no desire to close that tax loophole.

    It’s not a loophole. It’s an incentive to invest and make yourself wealthier, and it’s just as available to you as it is to a CEO.

    Millions of non-wealthy Americans face home foreclosure and bankruptcy, but right now there are five residential properties in the United States listed at $100 million or more

    Can you explain how the value of those five properties causes other people to go bankrupt and lose their homes? I’m not following this one.

    (bizarre revolutionary harangue deleted)

    Rather than contagious political activism we have compulsive consumerism. Americans keep borrowing and spending, providing about 75 percent of the economy that mostly benefits the Upper Class.

    So the consumer goods which people purchase are of no value to them? What are they buying, gold-plated toilets? And we’ve always been a consumption based society. You do realize, do you not – well, obviously you don’t – that our strong consumer base is what protects us from things like the Chinese ‘nuclear option’?

    How much worse must life for ordinary Americans become before the masses rise up in rebellion? Apparently, a lot worse.

    According to the OECD Quality of Life Index which you can find compiled at International Living, the US still ranks 6th among all the countries in the world, a drop from last years #1 rankind caused almost exclusively by a questionably high ranking of civil rights infringements related to the war on terror.

    Cheap Chinese products are a powerful and insidious destructive force.

    True from your perspective I guess. Anything which makes consumers less angry by putting more money in their pockets must drive you nuts.

    Perhaps if voter turnout dropped to, say, 20 percent, then we might stop playing our bipartisan delusional democracy game and take our country back.

    Yeah, that’s the solution. Stop voting so that fewer voters will pick who gets elected and it will be easier to buy elections. Sounds like a guaranteed formula for making the government worse, not better.

    Dave

  • Dr Dreadful

    Clavos, you missed one of Joel’s misconceptions. The price Americans pay for gas isn’t actually all that outrageous. In my area right now you can except to fork out just under $3 a gallon. Joel should try living in England and paying upwards of $7…

    It’s true that contemporary American government/politics is geared towards maintaining the status quo no matter who’s in power, but equally that does seem to be what most people want: life, liberty and the pursuit of happiness. As long as those of us who do want to think critically and express dissent aren’t prevented from doing so, then there’s really no justification for any kind of revolution.

  • http://www.republicofdave.com Dave Nalle

    Good points, Dr.D., but you can sure smell the frustration from Joel in this article. He has all this outrage to express, and he’s clearly driven nuts by the fact that no one is paying attention.

    Dave

  • Zedd

    Clavos,

    Bad info sources again I see. To quote something that was recently written, “it’s hard to decide what to address” so I shan’t. Investigate a little more my little Latino friend.

  • Me

    The biggest effect the Chinese will have on our economy in the near future (aside from flooding our markets with cheap merchandise) is their insatiable demand for oil! Their economy is becoming more industrialized, and more of their people are becoming successful business owners. As a sign of their new affluence, they are buying and driving more cars than at any other time in China’s history. Think about the sheer numbers… if only 50% of households in China begin driving automobiles… given the number of people living in China, the oil producers will not be able to keep up. This WILL drive up fuel prices… with or without OPEC!

    Clipped from the Time article “China’s Quest for Oil” CNOOC, for example, signed a deal two years ago to extract a million barrels of oil a day in Indonesia, and a year ago it signed a major contract to produce gas in Australia. In February, President Hu traveled to Gabon hoping to secure agreements in Africa. In June, he led a delegation from China’s natural gas industry to Uzbekistan to build the mainland’s presence in oil-and-gas-rich Central Asia. Chinese oil executives have even begun courting Ecuador and Colombia in hopes of buying oil in the U.S.’s backyard. “Latin Americans feel frustrated that the U.S. has virtually ignored the region, so turning to China is prudent and will pay financial dividends down the line,” says Cynthia Watson, a professor of strategy at the National War College in Washington, D.C.
    China’s stepped-up oil diplomacy and its increasingly competitive stance in world oil markets are already creating friction with countries such as India, which like China has a bustling economy and a growing oil habit to satisfy. Earlier this year, ONGC Videsh, the overseas investment arm of India’s largest oil-and-gas producer, was on the verge of completing a deal that would have given it an 11% stake in a proven oil field in Sudan. While the company waited for the necessary approval from India’s Cabinet, CNPC swooped in with an offer that was reportedly 17% higher, and snatched the oil deal for China.”

    China will cost us money at the pumps if we do not find an alternative to Oil… period. So let us get on the ball and quit screwing around with this! We can become less dependent on foreign oil, and maybe produce a renewable commodity that we can sell to other countries.

  • Cid

    Dave:

    “The average CEO earns only $96 thousand a year”…?

    If you really believe that, you’re a repubtards wet dream. I passed that amount years ago, and I’m no where near the CEO’s chair. You think he makes less than me?! Hahahaha!!

    And as far as people walking away from their mortgages goes, with “…no loss for them”… again, BS. If a home is foreclosed on, the people who purchased it are responsible for taxes on the difference between what they owed on the property, and what the bank ends up selling the property for. Been there. Done that. Couldn’t afford the T-shirt at the time ;)

    You might want to consider looking up the facts, rather than just making them up as you go along. You’ve obviously got a computer, why not use it to inform yourself, instead of misinforming others?

    We’re all entitled to our own opinions, but not to our own facts.

    Sincerely,
    A 3rd Generation US veteran.

  • http://www.republicofdave.com Dave Nalle

    If you really believe that, you’re a repubtards wet dream. I passed that amount years ago, and I’m no where near the CEO’s chair. You think he makes less than me?! Hahahaha!!

    The fact that some CEOs make lots of money doesn’t change the fact that the overwhelming majority run small businesses with only a few employees and make proportional salaries. That drags the average down.

    And as far as people walking away from their mortgages goes, with “…no loss for them”… again, BS. If a home is foreclosed on, the people who purchased it are responsible for taxes on the difference between what they owed on the property, and what the bank ends up selling the property for. Been there. Done that. Couldn’t afford the T-shirt at the time ;)

    So you had a mortgage without an escrow account? Plus the purchasers of homes under these questionable mortgages all have PMI, so there is no liability.

    You might want to consider looking up the facts, rather than just making them up as you go along. You’ve obviously got a computer, why not use it to inform yourself, instead of misinforming others?

    You might want to consider that your personal experiences don’t represent those of the entire rest of the world.

    Dave

  • REMF

    “You’ve obviously got a computer…”

    Um, yes, he does, hence the 18,000-plus comments on Blog Critics…
    (MCH)

  • Cid

    “The fact that some CEOs make lots of money doesn’t change the fact that the overwhelming majority run small businesses with only a few employees and make proportional salaries”

    But that’s not who we we’re talking about, and it’s not what you claimed, is it? The fact is that the difference between the top and the bottom pay in this country has only ever been greater once before. That’s a fact. Google it.

    “So you had a mortgage without an escrow account? Plus the purchasers of homes under these questionable mortgages all have PMI, so there is no liability.

    PMI only covers the mortgage company, not the borrower. The IRS considers the difference a ‘gift’, and as such, it’s taxable. This is also a fact.

    You do know what a fact is? Maybe you should google that too.

  • http://www.republicofdave.com Dave Nalle

    Cid, I actually was able to find the tax situation you’re talking about and it really doesn’t apply in most cases and certainly not in the typical case we’re talking about here.

    First off, the IRS rule is NOT that you pay tax on the difference between the foreclosure sale value and the amount you owe, but that you pay tax on the difference between the amount you owe and the fair market value.

    Since real estate prices have not generally been declining this means that owing more than the fair market value of a new home would require you to have not paid anything off on the home (possible with an interest-only loan) and it would require you to have a high enough income that you could not declare insolvency on the basis of the foreclosure.

    So yes, someone with a high income who took out a crappy loan and then had a home foreclosed on because they just decided not to pay on it anymore despite having the wherewithal to keep paying the mortgage MIGHT owe the IRS something, but that’s not what we’re generally talking about here.

    The person with a $35,000 income who buys a $120,000 house is going to be in a position to claim insolvency on his tax return on the basis of whatever he may have outstanding on a home that’s foreclosed on exceeding his ability to pay.

    Dave

  • http://www.republicofdave.com Dave Nalle

    But that’s not who we we’re talking about, and it’s not what you claimed, is it?

    All I said was that the average CEO salary is $96,000. Sorry you don’t like the reasons for that fact, but it’s still a fact.

    The fact is that the difference between the top and the bottom pay in this country has only ever been greater once before. That’s a fact. Google it.

    Utterl meaningless. The top earners in this country work for multinational corporations and their incomes have little or nothing to do with the US economy. What’s more, there is no correlation whatsoever between worker salaries and CEO salaries. That’s a common economic misconception. If the CEO of a large company chose not to take a salary at all, not one cent of that money would go to the workers. Wages are set not by what the company’s profits are, but by what the market determines is a fair wage for that job.

    Dave

  • http://LesPaulisanexcellentguitarplayerwithanadmirablegraspofgoodjazz. bliffle

    Fact? Dave doesn’t deal in facts. What he deals in is contrived alibis for his cultural heroes: Bush, Cheney, etc. He does it for sport, and if his sport deters you from pursuing your own ideas he has succeeded.

  • Lumpy

    I just have a question for the original author who seems to be ignoring the comments.

    Joel. Is there anything that doesn’t terrify you and send u running for big momma government?

  • Zedd

    Clavos,

    While it is often convenient to blame OPEC for our gas prices we have to look at the current situation closer.

    Our demand for gas has driven up oil prices not to mention the changes in Chinese society, their daunting consumption’s affect on oil reserves. It would also be irresponsible to overlook our current situation in Iraq with the uncertain status of one of the world’s greatest suppliers of crude oil not to omit the Nigerian issues.

    Simply attributing the changes in oil prices to OPEC displays a lazy and perhaps underlying racist world view (sort of “it’s simply that the native are restless”). Since we have access to better information, it is serving for us to be better consumers of it instead of touting the standard “just blame all of the different people” line.

    We shouldn’t omit the fact that the American refiners are experiencing record profits while the independent retailers are closing their doors.

  • Zedd

    Clavos,

    On the issue of credit cards…

    You seem to have missed the latest reports of how banks and their games with interest rates have assaulted the public. One of the contentions is the bate of low interests which sky rocket the moment ONE payment is late. Another major complaint is how undecipherable the jargon is on these credit card applications. A Harvard law professor was challanged to explain the terms that were written out (in ultra fine print) by one of the major credit card companies and failed. He declared that they were undiscernable.

    I agree with you that people should use them but perhaps it is my perspective that brought me to that conclusion. Most Americans of my generation were brought up to believe that possessing credit cards is one of the milestones to full adult life. Banks know this. College students are given these elixirs and they view them as a right of passage. You are nailed from the start. I got caught up and learned my lesson early, paid it off and bailed. However I have been told on too many occasions that I don’t have enough activity going on when making major purchases such as houses, etc…. I eventually get the loan but my clean slate is frowned upon, regardless of my assets.

    People should not eat fat or watch too much tv. Men should come home on time for supper….. However big business also has responsibility and your constant defense of their abusive actions is disappointing because it makes you appear to be irrationally loyal to interests which cripple society knowingly. Why you continue to do so is perplexing knowing that you will never get a thank you. I suppose its loyalty to an idea, perhaps capitalism or a distorted notion of it.

  • Zedd

    Correction:

    I agree that people shouldn’t use them…..

  • http://www.republicofdave.com Dave Nalle

    You seem to have missed the latest reports of how banks and their games with interest rates have assaulted the public.

    Then pay off your cards.

    One of the contentions is the bate of low interests which sky rocket the moment ONE payment is late.

    Then read your bills and cancel any card which does that to you. If everyone follows that protocol they will get the message.

    It’s not like there aren’t a zillion other cards out there who’d like to have you.

    Dave

  • Clavos

    Bottom line is:

    NO ONE IS FORCING ANYBODY TO USE CREDIT CARDS

    You say people are being “baited” into acquiring and using credit cards. first of all,your implication is that people are stupid and can be tricked into things that are inimical to their interests.

    Secondly, even if you have credit cards (and I have many) you DON”T HAVE TO USE THEM.

    And if you do use them, use them wisely; don’t charge more in a month than you can pay in a month and you’ll NEVER PAY USURIOUS INTEREST RATES OR LATE CHARGES. If you can’t exercise that kind of self-discipline, you’re not behaving as an adult, but it’s NOT the responsibility of the credit card issuer (or the government) to hold your hand like a nannny and protect you from your own stupidity.

    And though I’ve used the pronoun “you” throughout this comment, I DON’T mean you specifically, Zedd. It’s a generic “you.”

    People need to be held responsible for their own actions, not babied.

  • STM

    One day let me tell you about America’s economic blackmail. Joel. I could start with a free trade agreement with my country that now runs about $18bn in favour of the US, and is $2.5bn more than it was just in the three years since it was signed, largely as a result of the US government subsidising poor farming practices in the US which disadvantages farmers at this end. No such luxury here though, even during six years of drought: our farmers still manage to feed and clothe us and half the rest of the world with world’s best practice and without any help from the govt – but they still still suffer at the hands of US farm subsidies.

    I have noticed a huge rise in the availability of low-priced US goods – virtually non-existent previously apart from some fruit in the off-season – since 2004. That includes US-built cars, which mostly hadn’t been seen in Australia since the 1960s.

    It always works both ways, and suggesting the Chinese are engaged in some form of economic blakcmail is bollocks. Luckily for us, it doesn’t impact our standard of living because of strong domestic consumption and the fact we can compete elsewhere in other markets, but there would other countries who just wouldn’t be able to.

    I reckon the biblical advice about taking the log out of your own eye before you go for the speck in another’s is perfect in this situation.

  • Dr Dreadful

    Clavos #21: My wife and I do the same thing. For most purchases, we use our credit card instead of cash. We have a MasterCard that’s linked to a reward program, so we can rack up beaucoup points which we usually redeem on travel. We record every transaction in our household ledger as if we had paid cash, so we never think we have more available for spending than we actually do.

    That said, it’s often said that credit card companies hate customers like us, because we don’t make them money. They’d much prefer us to run up a huge line of credit and pay enormous amounts of interest, because that’s where their profits come from.

  • Clavos

    Doc,

    That’s exactly what we do as well. I even pay my rent by credit card, because of the mileage. Even large bills like insurance, where I have to shift funds from one account to another are run through the cards, BUT PAID OFF every month. We also book ‘em on Quicken (made easier by everything being on one or two statements) and therefore have a very good picture of what we spend on virtually everything (which can be a real eye opener at times!).

    They (the banks) don’t hate us as much as you might think; we’re virtually hassle free for them, and the merchants ARE paying them from half a point up to two points, depending on the card. They make less on us, but still, they’re making money.

  • Clavos

    Doc,

    Forgot to mention I do virtually all my banking online as well; which further makes it convenient to run everything through the cards.

    I only write one to three checks a month, these days.

    Though I do hit the driveup ATM fairly often for yuppie food stamps, I haven’t physically set foot in my bank in a couple of years.

    I also have an interest-bearing account with a bank that ONLY exists online.

  • Dr Dreadful

    “Yuppie food stamps”… LOL. Haven’t heard that one before!

  • STM

    Clav: “Though I do hit the driveup ATM fairly often for yuppie food stamps,”

    Also known here as drinking vouchers (pick appropriate colour – pink, blue, red, brown or green).

    These days, a fiver (pink) will barely get you one drink in an upmarket bar. A green one ($100) will now barely pay for a cheap Friday night out (cab fares and drunken “it-seemed-like-a-good-idea-at-the-time” late-night pizza/kebab not included).

  • Clavos

    Aaah, Stan!

    The memories you’re evoking!

    Those were the good old days, mate!

  • Dr Dreadful

    My father-in-law likes to hand out cash at Christmas with the line, “These are really great gift certificates – redeemable at every store in America.”

  • Zedd

    Clavos
    I understood that you weren’t refering to me however thank you for taking the effort to clear that up.

    You missed the point that was being made.

    You see you come from a different culture and you were not socialized here. What I am saying to you is that credit cards have become an institution. Just as there are some stupid things that go on in Mexico that need to halt at a dime but prevail because of the culture, it is the same in this instance. It is naive of you to suggest that an entire nation which is built on consumerism would simply stop being itself (in essence) at a dime. What has happened is that the credit card companies have SWITCHED rules mid game. The recent reckless assult on our society which is fueled by “quick profit no matter the cost” is responsible for this, yet another distortion of truth by industry. The players get introduced into the game as young kids and YES they are dumb. Also most people know very little about money (its our culture again) and don’t know how to stop the rape.

    You would blame the victim off course. Calling them stupid and not making a single commentary on the unscrupulous practices which put people in perilous situations, is an abomination. Your commitment to the obscure ideals of capitalism at the expense of human beings, social welfare, families and stablity in our culture is puzzling.

  • Clavos

    I wasn’t “socialized” anywhere, I’m much too much of a cynic and misanthrope to be classified as socialized, but I’ve been here longer than you’ve been alive, Zedd, so I’m pretty familiar with how things work here. Plus, both my parents were gringos, so I literally grew up bicultural, not first of one culture, then later of another.

    People who buy things they don’t need on their credit cards and then don’t pay the card off are stupid, Zedd; there’s no other word for it. They are as dumb as a box of rocks, period.

    And I’m not saying Americans should stop being consumers; all I’m saying is that those who consume more than they earn are not smart.

    I consume lots of stuff; but if I just “want” something (as opposed to really needing it to survive) and I can’t pay cash for it; I don’t buy it. it’s as simple as that.

    Interest rates on credit cards have always been usurious; there have always been late penalties as well. The only difference is now they hit harder and longer.

    Credit cards are a convenience, not a viable line of credit; those who don’t understand this are doomed to be forever in debt. Too bad, but it’s nobody’s fault but their own.

  • alessandro

    This is ridiculous – like green ketchup. First, that person who mentioned China’s demand for oil is on a better track than this article. If anything, they can cause a global problem once their economy slows down. STM, you can include Canada in your comment. Americans are savvy business people – something this article fails to consider: the other side of the ledger. I’d rather have America’s problems than most garage lots we call countries. Be careful what you wish for, Joel. I keep it simple. You know, stuff like a red, shiny firetruck, a Beowolf mask, a date with Lori Loughlin etc.

    The article takes a purely theoretical stance and utterly fails to calculate the Chinese side of the equation – even if they could the Chinese would never do such a thing.

    Ah, yes the good times that were supposed to wipe us all. In the 1980s the Soviets were going to invade (long live fucking Red Dawn, man) and Reagan was going to start a nuclear war (not the Soviets of course) and in the 1990s I was being told to learn Japanese because they were “creditors” and were poised to take over. Then the Nikkei collapsed and America soared. Thank God. I was just getting used to English.

    Just a quick further comment about the 80s regarding Canada vis-a-vis the Soviets. The only Cold War we cared about was kicking those dirty red commie scoundrels butts on the hockey ice.

    Then there was Paul Elrich busting environmental balls. Speaking of paranoid leftists, now they are buying into Putin’s multilateral/democratic empty talk as if he is some international hero.

    Sooo declassé.

    As for the pills, hey happiness is a warm gun. Maybe we all need ritalin because for over 20 years teachers were always telling (me anyway) how we messed up the world.

    Not that I play a fool’s game of prediction but I’ll make a guess. Here’s what’s going to happen: Nothing.

    Now if you don’t mind, I have to water my rosemary plant.

    Come to think of it, the Chinese do have that wall to protect them. Shit. I take back everything I just said. Americans are screwed.