Monday, October 31, 2011

America's Other 87 Deficits

As always, Stephen Roach delivers:
China-bashing in the US speaks to a corrosive shift in the American psyche. It deflects attention away from those truly responsible for perpetuating the greatest saving shortfall in history. Washington has been seduced by the political economy of false prosperity. That seduction has encouraged America to squander its savings and live beyond its means for nearly two decades. Now the game is up.
The likes of Chuck Schumer needs to put an end to this China bashing thing. It is definitely more political posturing under the guise of "protecting the jobs of Americans". All this claim about predatory pricing is rubbish. As Roach says, China accounts for ONLY 42% of the 2010 trade deficit. The other 58% comes from 87 other countries that the US has deficits with. I would venture to say that none of them practice "predatory pricing". So what explains that trade gap?

You can read here for more on why this China bashing crap needs to stop. The US-China trade deficit is a howler and exaggerated. The iPhone case proves it.