miércoles, 18 de febrero de 2009
Posting hiatus
I will be leaving on Friday for Europe and will almost certainly not be posting during my stay there. I will return late April. Wish me Bon Voyage! =)
miércoles, 11 de febrero de 2009
Cervantes Saavedra volvió!!!
One of the greatest pieces of literature I have ever found in the blogosphere. My professor's satiric piece on U.S. China relations can be found here: http://tradeandtaxes.blogspot.com/2009/02/geithners-upcoming-dialogue-with-chinas.html
Here is the text:
Imagining Geithner's Constructive Dialogue with China
In his testimony to the Finance Committee, Treasury Secretary Timothy Geithner wrote:
More generally, the best approach to ensure that countries do not engage in manipulating their currencies is to demonstrate that the disadvantages of doing so outweigh the benefits. If confirmed, I look forward to a constructive dialogue with our trading partners around the world in which Treasury makes the fact-based case that market exchange rates are a central ingredient to healthy and sustained growth.
I can already hear the constructive dialogue he will have when he arrives in China...
Geithner: Thank you President Hu and Premier Wen for inviting me to dialogue with you about matters of the utmost importance to the future of your economy.
Hu: Welcome esteemed Treasury Secretary. We are looking forward to your kind consideration in our affairs.
Geithner: I understand that you now have $1.7 trillion dollars in your currency reserves. That's more than enough to protect the yuan should it fall in the currency markets. For your own benefit, you should stop buying so many dollars and use your country's savings to help your own people, instead of us.
Wen: Thank you for your kind consideration. But we are always concerned with the welfare of the American people and want to provide them with the financing that they need to buy our products.
Geithner: You realize of course, that the dollar will eventually fall in value by 50% while your yuan will rise in value by 40%. You will lose money if you keep changing your yuan for dollars in order to keep the dollar high and the yuan low.
Hu: You are most considerate. Your president has chosen a treasury secretary of rare intelligence. But we do want to help your people so much, we are willing to sacrifice our own interests. We will indeed continue to finance your stimulus package so that your people can buy more Chinese imports.
Geithner: I am concerned about the future markets for Chinese products. If you don't buy our products, our consumers won't get the sustained growth in income that they would need in order to buy ever increasing amounts of imports from you.
Wen: Your thoughtfulness knows no bounds. You are truly the wisest and most thoughtful treasury secretary that we have yet encountered. But do not trouble yourself. Your people will not need more income. We will provide all of the financing that they will need to buy our products.
Geithner: Thank you for taking my advice into your consideration. Our economists are convinced that market exchange rates are a central ingredient to healthy and sustained growth.
Hu: Most esteemed treasury secretary, how can we ever thank you enough for such sage advice. We will certainly take your advice into consideration as we make our five year plans. And be assured, we will continue to supply the financing that you need so that your stimulus plan can stimulate American imports.
[Exit Geithner]
Wen: Do you have your copies of the Journal of International Money and Finance handy. I'd like to read Heng-Fu Zou's 1997 paper again. It gives me such a laugh to know that a Peking University professor explained our strategy to the Americans and they still haven't figured it out.
Hu: That's nothing. The Japanese used the same strategy for five decades, and the Americans never understood what was happening, even while the Japanese targeted one American industry after another.
Wen: Speaking of that, have you seen the latest reports. We gained market share in our competition with every single remaining American industry during the last quarter! Four more American corporations are filing for bankruptcy. We will be in a very strong position when this recession ends.
Hu: I find this earnest young man to be very amusing. I love the way that he is always looking out for our welfare and never the welfare of his own country. Do be sure to invite him back, and do tell him that we look forward to our next constructive dialogue.
Here is the text:
Imagining Geithner's Constructive Dialogue with China
In his testimony to the Finance Committee, Treasury Secretary Timothy Geithner wrote:
More generally, the best approach to ensure that countries do not engage in manipulating their currencies is to demonstrate that the disadvantages of doing so outweigh the benefits. If confirmed, I look forward to a constructive dialogue with our trading partners around the world in which Treasury makes the fact-based case that market exchange rates are a central ingredient to healthy and sustained growth.
I can already hear the constructive dialogue he will have when he arrives in China...
Geithner: Thank you President Hu and Premier Wen for inviting me to dialogue with you about matters of the utmost importance to the future of your economy.
Hu: Welcome esteemed Treasury Secretary. We are looking forward to your kind consideration in our affairs.
Geithner: I understand that you now have $1.7 trillion dollars in your currency reserves. That's more than enough to protect the yuan should it fall in the currency markets. For your own benefit, you should stop buying so many dollars and use your country's savings to help your own people, instead of us.
Wen: Thank you for your kind consideration. But we are always concerned with the welfare of the American people and want to provide them with the financing that they need to buy our products.
Geithner: You realize of course, that the dollar will eventually fall in value by 50% while your yuan will rise in value by 40%. You will lose money if you keep changing your yuan for dollars in order to keep the dollar high and the yuan low.
Hu: You are most considerate. Your president has chosen a treasury secretary of rare intelligence. But we do want to help your people so much, we are willing to sacrifice our own interests. We will indeed continue to finance your stimulus package so that your people can buy more Chinese imports.
Geithner: I am concerned about the future markets for Chinese products. If you don't buy our products, our consumers won't get the sustained growth in income that they would need in order to buy ever increasing amounts of imports from you.
Wen: Your thoughtfulness knows no bounds. You are truly the wisest and most thoughtful treasury secretary that we have yet encountered. But do not trouble yourself. Your people will not need more income. We will provide all of the financing that they will need to buy our products.
Geithner: Thank you for taking my advice into your consideration. Our economists are convinced that market exchange rates are a central ingredient to healthy and sustained growth.
Hu: Most esteemed treasury secretary, how can we ever thank you enough for such sage advice. We will certainly take your advice into consideration as we make our five year plans. And be assured, we will continue to supply the financing that you need so that your stimulus plan can stimulate American imports.
[Exit Geithner]
Wen: Do you have your copies of the Journal of International Money and Finance handy. I'd like to read Heng-Fu Zou's 1997 paper again. It gives me such a laugh to know that a Peking University professor explained our strategy to the Americans and they still haven't figured it out.
Hu: That's nothing. The Japanese used the same strategy for five decades, and the Americans never understood what was happening, even while the Japanese targeted one American industry after another.
Wen: Speaking of that, have you seen the latest reports. We gained market share in our competition with every single remaining American industry during the last quarter! Four more American corporations are filing for bankruptcy. We will be in a very strong position when this recession ends.
Hu: I find this earnest young man to be very amusing. I love the way that he is always looking out for our welfare and never the welfare of his own country. Do be sure to invite him back, and do tell him that we look forward to our next constructive dialogue.
miércoles, 4 de febrero de 2009
Perdón Sr. Presidente, pero me toca a mí
1. Free trade with coutries who want to free trade (Latin America!). Selective import certificates for countries praticing mercantilism (China & Japan). Perhaps we could have the entire NAFTA system use import certificates on China.
2. refurbish the tax system. Now I must admit I lean Fairtax/value added tax, but I think we should also include something along the lines of a Georgian land tax and perhaps a capital gains rollover tax, but the fairtax sort of doubles for both of those I *think*.
3. Set a constant money supply growth Federal reserve policy
4. stop corporate welfare and discretionary fiscal policies.
5. ideally move to low levels of taxation/gov spending, but not so much that we don't have a government
6. make all highways tolled so as to stop subsidizing big box retail.
2. refurbish the tax system. Now I must admit I lean Fairtax/value added tax, but I think we should also include something along the lines of a Georgian land tax and perhaps a capital gains rollover tax, but the fairtax sort of doubles for both of those I *think*.
3. Set a constant money supply growth Federal reserve policy
4. stop corporate welfare and discretionary fiscal policies.
5. ideally move to low levels of taxation/gov spending, but not so much that we don't have a government
6. make all highways tolled so as to stop subsidizing big box retail.
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