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I can't believe I'm about to say this because it goes against every Libertarian bone in my body. Here it is:
We are way too far down the Keynesian path to fix our economic problems with a different president. Capitalism and free trade aren't going to solve them either. We need a strong middle class and low unemployment. To accomplish that, we need a vibrant manufacturing sector. We can't compete with third world countries in manufacturing because our labor is too expensive. China is keeping their currency artificially low to make exports attractive. Vietnam just devalued their currency for the same reason.
Our best weapon is to continue to debase our currency. China is going to be the big loser in all of this. Inflation is taking over and they have very few weapons to fight it. Raising interest rates won't do it. The only real solution is to let the Yuan float up. If they do that, they will lose all of their manufacturing to Vietnam because they will have lost their price advantage. If they don't, inflation will make food too expensive to buy and they'll have civil unrest, probably a revolution. The average worker in China can barely afford food, let alone buy anything they produce. So in the mean time, we'll keep printing money until they cry uncle. The longer they let it go, the worse off they are going to be. The U.S. is basically exporting inflation. There is no way China can produce enough to outpace our money printing.
Eventually, the game will have to stop. We will have killed our currency, but gotten our manufacturing back. We will have a couple of really painful years, but everyone will be working and we'll start producing our own goods. Wages will return because we won't have enough workers to produce all of the things we use. We'll be begging Mexicans to come to the U.S. and work to keep inflation in check.
When it's all said and done, we will have basically just hit the "reset" button.
We are way too far down the Keynesian path to fix our economic problems with a different president. Capitalism and free trade aren't going to solve them either. We need a strong middle class and low unemployment. To accomplish that, we need a vibrant manufacturing sector. We can't compete with third world countries in manufacturing because our labor is too expensive. China is keeping their currency artificially low to make exports attractive. Vietnam just devalued their currency for the same reason.
Our best weapon is to continue to debase our currency. China is going to be the big loser in all of this. Inflation is taking over and they have very few weapons to fight it. Raising interest rates won't do it. The only real solution is to let the Yuan float up. If they do that, they will lose all of their manufacturing to Vietnam because they will have lost their price advantage. If they don't, inflation will make food too expensive to buy and they'll have civil unrest, probably a revolution. The average worker in China can barely afford food, let alone buy anything they produce. So in the mean time, we'll keep printing money until they cry uncle. The longer they let it go, the worse off they are going to be. The U.S. is basically exporting inflation. There is no way China can produce enough to outpace our money printing.
Eventually, the game will have to stop. We will have killed our currency, but gotten our manufacturing back. We will have a couple of really painful years, but everyone will be working and we'll start producing our own goods. Wages will return because we won't have enough workers to produce all of the things we use. We'll be begging Mexicans to come to the U.S. and work to keep inflation in check.
When it's all said and done, we will have basically just hit the "reset" button.
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