The Manchurian Administration

Comments on excerpts from:
The United States and China, Cooperating for Recovery and Growth
Treasury Secretary Timothy F. Geithner
Speech at Peking University - Beijing, China
June 1st, 2009

"The financial system is starting to heal. The clarity and disclosure provided by our capital assessment of major U.S. banks has helped improve market confidence in them, making it possible for banks that needed capital to raise it from private investors and to borrow without guarantees. The securities markets, including the asset backed securities markets that essentially stopped functioning late last year, have started to come back. The cost of credit has fallen substantially for businesses and for families as spreads and risk premia have narrowed."

This is a side note about credit. I find it interesting that many people I know (with great credit and pay on time) have recently seen increases in their credit card interest rates.
Then you read in the LA Times: Senate passes credit card reform bill in a 90-5 vote
The measure would rein in interest rate increases and take other steps to protect consumers. The House, which has passed a similar bill, is expected to approve the Senate version today. By James Oliphant-May 20, 2009.

Just maybe these two things are related. When they say "protect consumers" they really mean dead-beat consumers, those who don't read the fine print. So I can't blame the credit card companies for raising the rates on those who can pay, if they're going to be stuck with those who end up not paying as well. Another government gaffe in economics...and the good people pay for it. Back to the main story.

"A successful transition to a more balanced and stable global economy will require very substantial changes to economic policy and financial regulation around the world. But some of the most important of those changes will have to come in the United States and China. How successful we are in Washington and Beijing will be critically important to the economic fortunes of the rest of the world. The effectiveness of U.S. policies will depend in part on China's, and the effectiveness of yours on ours."

There, he said it. A global economy. And it will require substantial changes to economic policy and financial regulation. He isn't saying that we need a stable global economy. No, we need to transition, "change" our economy into a world-wide one, one currency and more oligarchical control.

"Although the United States and China start from very different positions, many of our domestic challenges are similar. In the United States, we are working to reform our health care system, to improve the quality of education, to rebuild our infrastructure, and to improve energy efficiency. These reforms are essential to boosting the productive capacity of our economy. These challenges are at the center of your reform priorities, too."

So, Geithner is admitting that we start from very different positions (democratic republic and capitalist vs. communist nation with capitalist leanings). The key word here is start. Does this mean we end with...socialism? Or China Lite? His Administration sees universal health care as a crisis. This is a challenge similar to China's reform priorities? Let me restate this: Health care is a crisis in the US, His Administration sees China's health care policies similar to His.

"In China, as your leadership has recognized, growth that is sustainable growth will require a very substantial shift from external to domestic demand, from an investment and export intensive driven growth, to growth led by consumption. Strengthening domestic demand will also strengthen China's ability to weather fluctuations in global supply and demand."

This is scary. He is concurring with the Chinese that they need to stop or slow exporting and focus on domestic consumption (sounds like a Seinfeld episode, where's Art Van de Lay). Let's see, we are the top importer of Chinese goods, and they're cheap. China cuts off our supply of cheap goods, our inflation hits new highs (thank you drunken spending and His Federal Reserve Bank)...not a good mix; can you say hyperinflation and the Weimar Republic? It's great for China, especially because they are scared of the value of the dollar. Click here for Glenn Beck's take on this