In Your Face

I find it utterly fascinating how politicians forever get away with professing allegiance to the consumer at large while doing everything within their might to promote select producers and consumers (operative word; "select")- right in the face of the consumer at large...

A case in point would be The President's comments following last weekend's Asia-Pacific Economic Cooperation summit... According to yesterday's Reuter's article titled Obama to China; Behave like 'Grown Up' Economy the president minced no words in shaming China for not "playing by the rules"... "We don't want them taking advantage of the United States" he told reporters... He demanded that China stop "gaming" the international system and create a level playing field for U.S. and other foreign businesses.

For starters (I can't resist); Obama, presiding over $15 trillion in debt, 1/3rd of which was borrowed in the past 3 years alone, telling Jintao to grow up is like the guy who mortgaged his house six times in 2006 (you know, the guy who had the boat, the his and her jet skis, the Escalade and the Harley) telling Ben Stein how to manage his money...

But of course that's not what the President's carping about... His gripe is the same poll-inspired gripe of virtually every politician from Dennis Kucinich to Michelle Bachman... Operative words; "poll-inspired"...

The strange irony is that without our so-called trade deficit (a myth by the way), Obama would be presiding over an even bigger economic mess here at home... You see one of the many items China is spending all those U.S. dollars on is U.S. Treasury bonds... Now ask yourself, if goods from China suddenly became expensive and you therefore kept all of your purchases domestic, do you suppose the U.S. producer would be apt to use his profits to buy 10 year treasury notes at 1.9%, like China's doing? And if you're right and they wouldn't (you said "no", right?), then I assure you the interest rate on all that U.S. debt the government needs to fund that $trillion.5 budget deficit would be substantially higher - thus exacerbating the problem - big time!!

And besides, if China is indeed guilty of purposely cheapening the Yuan, it is, in no uncertain terms, to our (consumers at large) net benefit... Read On Balance...