” When free market economists align, as they have done, with foreigners against American citizens, they destroy their credibility and the future of economic freedom.”
By Paul Craig Roberts
At a time when even the Wall Street Journal has disappeared into the maw of a huge media conglomerate, the New York Times remains an independent newspaper. But it doesn’t show any independence in reporting or in thought.
The Times issued a mea culpa for letting its reporter, Judith Miller, misinform readers about Iraq, thus helping the neoconservatives set the stage for their invasion. Now the Times’ reporting on Iran seems to be repeating the mistake. After the US commits another senseless act of naked aggression by bombing Iran, will the Times publish another mea culpa?
The Times editorials also serve as conduits for propaganda. On August 13, a Times editorial jumped on China for “irresponsible threats” that threaten free trade. The Times’ editorialists do not understand that the offshoring of American jobs, which the Times mistakenly thinks is free trade, is a far greater threat to America than a reminder from the Chinese, who are tired of US bullying, that China is America’s banker.
Let’s briefly review the “China threat” and then turn to the real problem.Members of the US government believe, as do many Americans, that the Chinese currency is undervalued relative to the US dollar and that this is the reason for America’s large trade deficit with China. Pressure continues to be applied to China to revalue its currency in order to reduce its trade advantage over goods made in the US.
The pressure put on China is misdirected. The exchange rate is not the main cause of the US trade deficit with China. The costs of labor, regulation and harassment are far lower in China, and US corporations have offshored their production to China in order to benefit from these lower costs. When a company shifts its production from the US to a foreign country, it transforms US GDP into imports. Every time a US company offshores goods and services, it adds to the US trade deficit.
Clearly, it is a mistake for the US government and economists to think of the imbalance as if it were produced by Chinese companies underselling goods produced by US companies in America. The imbalance is the result of US companies producing their goods in China and selling them in America.
http://vdare.com/roberts/070816_china.htm