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The United States is going down December 5, 2010

Posted by hslu in China, Economics, Energy, Global Affair, Islam, jobs, Politics.
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If you haven’t read Thomas Friedman’s Op-Ed piece, The Big American Leak, on New York Times, you should.


The sad truth about the two American addictions Friedman talked about in his piece is that they can not be reversed no matter how hard American tries.

What Friedman failed to point out is that there are many other oil producing countries who hate America even more so than Saudi does. Iran and Venezuela are two prime examples while Russian and Iraq are not exactly America’s friends either.

Even worse, some of them tell the United States and the world that they are enemies of America. America may not import oil directly from these countries but the United States depends on them, as much as it does on the Saudis, to maintain their oil flows to avoid interruption of crude oil supply. If they decided to hold back their oil production a mere 10%,  for whatever reason that pleases them, the US will be paying $200+ a barrel to the Saudis now. And these countries also get paid at $200+ per barrel too.

Bill Clinton decided in 1993 to cooperate with China and he reckoned that the best way to deal with China was to convert China from communism to capitalism. He has succeeded more than he ever dreamed of.

The massive amount of FDI from the US and other countries since 1993 has allowed China to become the factories of the world, America included. With plants moving from the US to China, America has changed into a service-based economy and the aging of the 78 million baby boomers will make that even more so. America will continue to buy things from China or some foreign countries for the foreseeable future. In other words, the US will owe even more money to foreign countries as long as plants and jobs continue to leave the United States.

As for the dream mentioned by Friedman in his piece:

“If (the US) were in the process of converting to electric cars powered by nuclear, wind, domestic natural gas and solar power”

It will not happen simply because the United States is broke.


Wake Up, Krugman September 27, 2010

Posted by hslu in China, Economics, Global Affair, jobs, Obama, Politics.
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Krugman’s Op-Ed  piece on NY Times on 9-27-2010 debunked the myth of structural nature of the massive unemployment rate in the United States.


He said that Minneapolis Fed president Narayana Kocherlakota and Bill Clinton’s claim that  “people don’t have the job skills for the jobs that are open” is simply not true and not supported by employment data in the nation.

He argued that the problem is not structural and the real reason is

Well, there you go again, Krugman.

You are right that the structural problem is not the reason for the high unemployment rate. I give you credit for that because I agree with you on this point.

You are wrong to claim that the real problem is a “lack of policy resolve” from the US government. You said that because you are preaching the government solution again to solve the problem as a faithful liberal would do.

Well, what is so shocking to me from reading Krugman’s piece is this:

How come a Noble prize winner on economics doesn’t have any common sense?

The real reason for the high unemployment rate in the US is people are simply running out of money to spend in the first place. It actually happened in the Fall of 2005 when the housing bubble started to burst.

The academia called this “deleveraging.” It was a fancy word to say that Americans are having a debt up to their eyebrows. They didn’t have money in their savings account. They barely have enough to pay the bills on any giving month. They didn’t have any money to speak off in their 401(k) and, worse off, they may even have a loan on their accounts. They did save any money for their retirement. And they didn’t have money saved for their children’s education. What they do have are boats on the drive way. Huge flat panel TV in their living room. Fancy kitchen upgrades and a home theater in the basement or near the den. Plus a huge house that’s under water for the past three or four years.

Adding more salt to the the wound, the Three Stooges of the 21 century: Obama, Pelosi and Reid ran the federal government to the ground with lies and deceits and passed policies against people’s will with more government spending, unfunded liabilities, record-breaking deficits and extremely high national debt.

Of course, massive direct foreign investments to China and other markets in Asia and South America from US so many companies since 1993 have resulted in wholesale export of manufacturing jobs to these countries. And this was the root cause for the “structural” change of the industry and the labor market in the United States.Well, the United States has no other to blame but themselves and the capitalism because money flows to where it is treated the best.

American people who still have a job will save more at the expense of a crawling economy and a stubbornly high unemployment rate for at least two more years.

Now that the US government, like many Americans, is broke, the massive spending has to stop which American people are concisely doing right now. Let the market takes care of itself. Once people saved enough money and feel secure with their future,  they will spend again and the unemployment rate will come down structural or not.

Wake up, Krugman. Forget about arguing with other academia and the likes of Bill Clinton. You need to get out of your office and talk to people on the main street from time to time. It is no more complicated than this.

The Third Depression July 7, 2010

Posted by hslu in Economics, Global Affair, Health Insurance, Obama, Politics, Small Business, Taxes.
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The Third Depression

Paul Krugman on June 27, 2010 in a New York Times Op-Ed page argued that we are in the early stage of a long lasting third depression.

He argues for more spending in time of economic slowdown and warned that austerity programs such as those adopted by Greece, Ireland, England and Germany and now considered in the U.S. Congress will lead to a Japan-style deflationary traps in the US and Europe. And tens of millions of unemployed workers will pay the price and remain unemployed for years.

In a word, he wanted to spend our way out of his look-more-like-the-Long-Depression depression. To be more precise, he wanted the government, not private sector, to spend our way out of what he called the third depression.

He didn’t say anything about incentives to the private business. He didn’t point out the enormous burden the U.S. government has added to the private sector in the form of a national health insurance program. He didn’t mention the TARP money benefited the financial firms on the Wall Street. He didn’t question the failed policy of withholding more than half of the $787 billion stimulus program money until 2011 and beyond. He conveniently avoided citing the example of Japan’s long depression during which the Japanese government initiated spending program after spending program since the early 1990’s but still failed to pop up its sagging economy. As a result, Japan is saddled with a national debt that’s more than 200+% of its GDP which Japanese has no hope of ever paying it off.

Instead, Krugman relied on the experience of Great Depression and urged Obama and Democrats to spend our tax money in inefficient, government-sponsored programs.

He wanted to dig a deeper hole first. It is the same liberal rhetoric all over again.

What this country needs right now are more company-friendly policies such as the repeal of Obama’s national health insurance law which will give the private sector more incentive to expand their businesses. The way it stands now, the private corporations will not hire any people because they still don’t know how this national health program will impact their bottom line. With that dark cloud over their heads, they will wait and hire nobody.

Krugman’s third depression will definitely come to reality if United States continues the liberal and Democrat’s tax and spend policy.

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