Re: Tomas Palley on China

[Doug Henwood <dhenwood@xxxxxxxxx>]

michael perelman wrote:

> Am I wrong in thinking said Palley is mistaken by putting too much
> emphasis on currency manipulation? How much manufacturing would return
> to the United States if China would increase its currency by 100%? Would
> we start seeing shoes and textiles manufactured in United States? At
> best, the outsourcers would be inconvenienced by moving to Burma or some
> other low-wage country.

You're right about over-emphasizing the currency angle, but it
wouldn't be that easy to relocate a lot of activities outside China.
They've got an excellent infrastructure and skilled workforce that
couldn't easily be duplicated.

Palley quotes Steve Roach of Morgan Stanley, of course. There ought
to be a moratorium on this. Roach is a smart & thoughtful fellow, but
he's a minority view on Wall Street, and his forecasting record isn't
particularly outstanding. I understand the appeal of citing a Morgan
Stanley guy, but if you think there's a 40% risk of a hard landing,
make the argument yourself. An appeal to authority  of this sort
won't cut it.

Doug