Comments for Competent Economists Were Not Kept Awake Worrying About "a collapse in the value of the dollar and of U.S. government securities" at http://www.cepr.net , comment 1 to 6 out of 6 comments http://www.cepr.net Wed, 19 Jun 2013 08:33:39 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/competent-economists-were-not-kept-awake-worrying-about-qa-collapse-in-the-value-of-the-dollar-and-of-us-government-securitiesq#comment-1475 People get confused about the meaning of strong dollar. Strong is normally a good thing: strong back, strong military, strong performance. But in the context of economic growth for the United States, is should be more like "strong smelling. " - FGS Mon, 12 Jul 2010 10:02:00 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/competent-economists-were-not-kept-awake-worrying-about-qa-collapse-in-the-value-of-the-dollar-and-of-us-government-securitiesq#comment-1435 It should be kept in mind that both currency adjustment and higher tariffs would enforce a kind of austerity, more or less across classes. Rich people would have to pay more for their vacations in Europe (though not so much if the euro also declined in relation to the yuan - not so many of them vacation in China or buy prestigious Chinese products) but low-income people would pay more for things at Walmart. Hopefully jobs in the US would be created and wages would increase but this would take time - price increases would have to come first. Adjustment would be painful at first, and the public should be prepared for this. - skeptonomist Sat, 10 Jul 2010 03:41:05 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/competent-economists-were-not-kept-awake-worrying-about-qa-collapse-in-the-value-of-the-dollar-and-of-us-government-securitiesq#comment-1427 The people who believe that someday the Chinese (used to be the Japanese) are going to cause a collapse of the dollar by selling off their bonds (or refusing to buy more) are like the townsfolk in "Blazing Saddles" who quaked in fear as Cleavon Little held his revolver to his head and took himself hostage. But as Mencken said, nobody ever went broke underestimating the intelligence of the American public. - jm Fri, 09 Jul 2010 21:51:28 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/competent-economists-were-not-kept-awake-worrying-about-qa-collapse-in-the-value-of-the-dollar-and-of-us-government-securitiesq#comment-1417 Presumably, Baker's using the FFA methodology and not NIPA, but it would be helpful if he'd state which one he is employing. - Ellen1910 Fri, 09 Jul 2010 06:24:39 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/competent-economists-were-not-kept-awake-worrying-about-qa-collapse-in-the-value-of-the-dollar-and-of-us-government-securitiesq#comment-1415 I don't think that currency adjustment is the only possible way to change trade imbalances, though maybe it is somewhat more plausible politically than others. U.S. products could be made more competitive by reducing either profits and executive compensation, or wages, or both. Obviously U.S. capitalists want to reduce U.S. wages and they continue to be successful, though U.S. wages are still much higher than China's. The stock market and its supporters in the media are with executives in wanting to maintain high profits and low wages, and they are more powerful politically than wage-earners. Of course imports can be reduced with tariffs etc. On the whole, the effect is similar to currency adjustment, but tariffs can be adjusted to favor those industries with most political clout. - skeptonomist Fri, 09 Jul 2010 04:01:48 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/competent-economists-were-not-kept-awake-worrying-about-qa-collapse-in-the-value-of-the-dollar-and-of-us-government-securitiesq#comment-1414 Don't you have the stuff about capital gains backwards? In periods of high capital gains income, the savings rate is understated because personal income in the NIPA accounts does not include capital gains. But the taxes paid on capital gains income are included in the calculation that gets to disposable personal income. And DPI less personal outlays is savings. - HC10 Fri, 09 Jul 2010 03:05:52 +0100