Summers said the rebuilt U.S. economy must be more export-oriented

countryBoy · Jul 17, 2009

Quote from indexer:

I think the real reason business produces in China is to skirt environmental protections and other safety regulations.

Of course this is completely true. And most of the ones who move manufacturing to places like China may survive, and the ones which don't move to China, keep mfg in the U.S. will fail. I know for a fact this is happening to the furniture mfg industry right now in the U.S.

So, what are <b>you gonna do</b>? Boycott furniture made in China (almost all furniture you see in any department store)? Will you choose instead to buy furniture hand-crafted in some Vermont shop, at 3X the price. Let us know which chairs you buy

(BTW, <b>all the furniture</b> in my house is made in U.S., quite a lot of it is handmade, but that is just because I know people in the business)

poyayan · Jul 17, 2009

Summer is just saying one thing.

Earn foreign cash to pay our debt down.

That is what its boil down to and there is nothing wrong with that. In fact, that is just bare bone fact.

countryBoy · Jul 17, 2009

Quote from poyayan:

Summer is just saying one thing.

Earn foreign cash to pay our debt down.

That is what its boil down to and there is nothing wrong with that. In fact, that is just bare bone fact.

Fine, and I'm sure that Summers truly hopes that the economy turn up, and exports boom. Problem is, Summers is not supposed to be in the "hope" business. He is supposed to be in the "economic plan" business. Just doesn't look like he has a workable economic plan right now.

gigsup · Jul 17, 2009

Quote from Scataphagos:

"Export oriented?" Total BULLSHIT! Empty words to appease the masses. We'd love it to be so, but there's not a "snowball's chance in Hell" of EVER developing an overall net exporting economy so long as there is a cheap labor alternative in Asia.

He deserves 20 lashes for blowing smoke up our skirts...

Larry Summers: watch what I do, not what I say.

why would anybody listen to any of these people.

Scataphagos · Jul 17, 2009

Quote from makloda:

You think workers in Germany of Japan earn $5 an hour wages? In fact, hourly wages in Germany (in USD) are higher than in the US, i.e. your supposed wage disadvantage would crush any hopes for Germany (or Japan, or Switzerland etc.) to export anything. Yet the opposite is the truth, at least for the past 50 years.

How the hell are these countries able to export while the US is whining about cheap wages in Asia?

True, not everything has a high labor cost component. America, Japan, Germany and others still produce certain things... but after considering labor, materials, transportation of materials and finished goods, regulations, protection legislation, and everything else... if there is still a significant competitive cost advantage to having it made overseas, it will likely be.

And what about "services"? Low labor cost is the major reason US companies' customer service and tech support are done by someone in India or Philippines.

Even some hospitals are digitizing x-rays and having them read by radiologists in Asia.

Daal · Jul 17, 2009

He also said that exports are very important in recoveries of financial crisis, will it be the Dollar index the next focus for their 'stimulus packages'?

TraderZones · Jul 17, 2009

Quote from Scataphagos:

Yes, they would. The labor-cost differential is not 2:1... more like 20:1. Whether or not China allows its currency to float is a total non-issue... unless the Yuan starts trading at 150 or so... and THAT ain't gonna happen.

in manufacturing, labor is only a minor cost now. Most of the work is highly automated with expensive robots/welders/whatever, in huge buildings cranking out large volume.

Add in the long shipping times, and the huge distance to China is a disadvantage for a number of reasons.

The fact is, a number of American companies now find doing it domestically or in Mexico, where company leaders can also travel to the site is making a lot more sense -depending on the product.

China's more formidable weapon is not cheap labor - Vietnam is cheaper. But China has almost unmatchable beginning-to-end supply chains.

fkbsuhites · Jul 17, 2009

To resuscitate the middle class, simply keep the govt. out of republican clutches for the next 2 decades.

You only have to look at the predominantly republican states to see that these trailer imbeciles are in a quick race to the bottom.

Quote from ASusilovic:

The United States averted a financial catastrophe but sustainable recovery depends on redirecting the economy away from consumption, a top White House economic adviser said Friday.

In excerpts of remarks prepared for delivery on Friday, Lawrence Summers also defended President Barack Obama's "ambitious" policy agenda, saying it would lay the foundation for future prosperity.

Watch Live: White House's Summers on Economy

"We were at the brink of catastrophe at the beginning of the year but we have walked some substantial distance back from the abyss," Summers said in excerpts of a speech released by the White House. "Substantial progress has been made in rescuing the economy from the risk of economic collapse that looked all too real six months ago."

Summers said the rebuilt U.S. economy must be more export-oriented, with less of a focus on consumer spending and the sort of financial engineering that has been blamed for contributing to the current economic crisis.

The economic recovery should be "more middle-class-oriented and less oriented to income growth that disproportionately favors a very small share of the population," he said.

http://www.cnbc.com/id/31964152

Hello currency markets ! Summers gave just the start sign for some nasty currency volatility ! Every currency trader should be excited for the years to come !

thriftybob · Jul 17, 2009

Nothing like waiting 40 or 50 years before noticing that you cant borrow and spend your way to prosperity.

Its hopelessly too little, and decades too late. The US is a dinosaur, dead but still stumbling along. You would need to devalue the dollar or reduce wages by 90% for American companys to be able to compete with China.

We couldnt even bring ourselves to TRY to reduce our oil consumption by 70% last year. We dont have another 20 years.

scriabinop23 · Jul 18, 2009

Quote from ASusilovic:

The United States averted a financial catastrophe but sustainable recovery depends on redirecting the economy away from consumption, a top White House economic adviser said Friday.

In excerpts of remarks prepared for delivery on Friday, Lawrence Summers also defended President Barack Obama's "ambitious" policy agenda, saying it would lay the foundation for future prosperity.

Watch Live: White House's Summers on Economy

"We were at the brink of catastrophe at the beginning of the year but we have walked some substantial distance back from the abyss," Summers said in excerpts of a speech released by the White House. "Substantial progress has been made in rescuing the economy from the risk of economic collapse that looked all too real six months ago."

Summers said the rebuilt U.S. economy must be more export-oriented, with less of a focus on consumer spending and the sort of financial engineering that has been blamed for contributing to the current economic crisis.

The economic recovery should be "more middle-class-oriented and less oriented to income growth that disproportionately favors a very small share of the population," he said.

http://www.cnbc.com/id/31964152

Hello currency markets ! Summers gave just the start sign for some nasty currency volatility ! Every currency trader should be excited for the years to come !

If he really means this, then he should proudly say F-U to China and devalue the currency promptly to 2.00/euro. We'd see price inflation near term, but the long term effects would be very job beneficial.