Oh please, if you’re still going on about Hans and non-Hans, that brings things down to the ethnic level, which, as a Singaporean, I object to.That’s the ugliest side of nationalism - where distinction turns into discrimination, positive or negative discrimination , both are just triggers for trouble, and this I object to. Look, the Balkans comment as well as the Basque comment were not meant to romanticize either, God forbid. I’m strictly against such conflicts , whatever their cause. Sensitivity, which entails keeping off potentially explosive issues and generally not stomping on people’s toes for the fun of it , is very different from defensiveness, as perhaps detectable in your comments.

If I were a typical Singaporean or fancied myself a non-typical Singaporean, I might have been offended by your last comment. Problem is, I’m neither. Besides, when did this blog become a contest? Oh dear, kiasuism seems to have gone global ;p

Part of my comments re ironic, and if you have followed the discusion on the CIC, you may have red my comments re mr Lou, who ws in one of his former jobs deputy governor of the province of Guizhou. Now, if you know your Chinese history, you should know that Guizhou, home of the Miao, was historically an area colonized by the Han, but worthless. However, the empire’s benevolence required tht these people would not be returned to barbary. Of course the ferocious Miao tribesmen had their own views on benevolence and they fought for centuries for their “independence”. Hence my pleasant surprise that the CIC has a leader whose final provincial career step, was like President Hu, in an area not traditionally inhabited exclusively by the Han. I hope this satisfies.

Incidentally, I did mention the conflicts in the Balkans, which includes Croatia. I guess the Basques their cause is even less noble than that of the Miao) are not only fighting for their homeland, the Basques that are fighting (actually blowing things up) are in the business of being terrorist. They need the conflict for their private livelihood, so to say. Nothing romantic about those thugs at all. Anyway, I hate arguing with people about these sorts of things, It just occurred to me that on this blog there are quite a few comments by people who are apparently sensitive to China being talked about in less than flattering terms. I am not Chinese nor American, and I have no prejudice against one or the other. All I want is to stay clear of economic train wrecks and sometimes blogs like this one can help important people to see things a little clearer. Anyway, if you re Singaporean, I let you win. Too Kiasu for my taste.. Cheer up!

Huizer

Hmm, the football field huh? Didn’t common belief state that football had it roots in the violent game played by the Inca or Mayan civilisations? Considering how football violence turns into violence in the streets , hard to see the progress!

Actually, aren’t you forgetting the 1990s conflict in Croatia? Or the fact that the Basque people are still fighting for a Basque homeland?

Richman

The equations who support your argument work more as a backflow check. Look, if demand didn’t exist (for those higher imports), the importers on the US side would reduce orders, Would they stockpile excess supplies? Surely not. If you don’t want something, be they cheap or expensive items, collective lack of demand will show up, the importers will find excess stock, they will reduce orders and suppliers will get the message through reduced orders and reduced profits, everyone’s in it for the $. Similarly, if debt levels go down, the Treasury issues less paper, there won’t be the paper to buy, heaven forfend, they might buy something else, more Chrysler buildings perhaps?

By the way, in that article, Warren Buffett announced that he was starting to selling the dollar and it was exactly at the top of the dollar’s exchange rate. Pretty amazing!

Howard

You really ought to read Buffett’s article; it’s very straightforward and a good read: http://money.cnn.com/magazines/fortune/fortune_archive/2003/11/10/352872/index.htm

By the way, we’ve had numerous exchanges on this message board lately and I have found all of your comments to be polite and respectful without sarcasm or twisting of words. I have very much enjoyed these discussions.

Howard

The Import Certificate plan that we advocate and the one that Buffett advocates do not apply to specific products, but to the overall value of imports from a specific country. They auction the right to import a value of goods from the country without specifying which goods. Your objections do not apply to our plan.

RebelEconomist: “If trade is balanced, how are countries that are willing to be net importers to expand their capacity to do so? And how would countries that wish to save for the future do so?”

If trade is balanced countries can’t follow the practice of mercantilism (maximizing exports and minimizing imports) as a development strategy. They can still grow their exports, but the result will be a corresponding increase in their imports. The result will be that both they and their trading partners will grow and both countries will benefit from comparative advantage and specialization.

Howard

If trade is balanced, how are countries that are willing to be net importers to expand their capacity to do so? And how would countries that wish to save for the future do so?

IMO, the post-WWII European system only worked because you had outside policeman the United States which kept order and a common enemy in the Soviet Union. My opinion is that Europeans don’t quite notice this and so draw some lessons which I think are incorrect (namely that you can have a system of law and order without the threat of military force in the background.)

Huizer: These may be noble causes but in the end it is the the innocent laobaixing who suffers.

Or maybe not. One reason that Chinese nationalism is tremendously popular in China is that there is a consensus that it has been highly beneficial to the average person. The notion that nationalism is a evil trick by the ruling classes to enslave the poor is not that popular in China.

To seek what China would have looked like with no nationalism or a “failed nationalism”, just look at the Arab world or for that matter the Soviet Union. Note that regardless of how bad things are in China, no one is crashing planes into skyscrapers.

The trouble is that it is inherently unstable since while it might collectively benefit everyone, people have very strong incentives for very unbalanced trade. There are about a dozen ways of dealing with this problem that have been tried.

The way that Bretton Woods envisoned things, you’d have balanced trade through fixed exchange rates.

Trying to deal with this through bilateral negotiations has tended not to work, because trade limitations are inflexible and because bilateral agreements don’t include third parties.

Richman: Import Certificates to balance trade (originally proposed by Warren Buffett) can force the issue if necessary. (We lay out a plan for achieving balanced trade in our book Trading Away the Future.)

I very much prefer tariffs over import certificates. If you slap an 80% tariff on something, your local industry will still feel some competitive pressure. Also import certificates or any other administrative limits are very inflexible. Suppose that there is sudden surge in demand for Japanese cars. If you have a tariff, the system is self-adjusting whereas if you have import certificates, it won’t.

Also don’t kid yourself about the political realities. You might support balanced trade, but the industries that the tariffs and certificates protect are going to insist that they be kept in place long after trade becomes balanced or highly imbalanced in their favor. Eventually you have more and more certificates and restrictions until the economic just chokes to death, which is what happened in a lot of developing nations.

This is one big problem with using the threat of tariffs and import certificates as negotiating tools. In a negotiation, you say, if you do X, we do Y, if you stop doing X, we stop doing Y. The trouble is that most of the people who want trade restrictions want them in place regardless of what the other side does. So if you impose restrictions on car imports to force the other side to reduce restrictions on grain imports, and the other side says “fine you win, we’ll remove grain import restrictions” then your car manufacturers will still want the trade restrictions in place.