America’s China Bashing: A Compendium of Junk Economics

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It is traditional for politicians to blame foreigners for problems that their own policies have caused. And in today’s zero-sum economies, it seems that if America is losing leadership position, other nations must be the beneficiaries. Inasmuch as China has avoided the financial overhead that has painted other economies into a corner, nationalistic U.S. politicians and journalists are blaming it for America’s declining economic power. I realize that balance-of-payments accounting and international trade theory are arcane topics, but I promise that by the time you finish this article, you will understand more than 99% of U.S. economists and diplomats striking this self-righteous pose. The dollar’s double standard gives America an international free ride For over a century, central banks have managed ...

China's Policy Checkmate

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Interview with Xulin Dong May 2010 DX: You have strongly advocated the use of taxation as a most effective and desirable way to prevent real-estate bubble. Now in the Chinese media there’s a good deal of discussion about the need to re-design China’s real-estate tax regime. In particular, about the merit of a US type of property tax. So what are the key elements of a good real-estate regime? MH: For starters, there is confusion about just what a “land tax” is. China has a policy of granting long-term leases, for up to 70 years for residential property. The price charged for these leases is NOT a land tax. It gives security of land title – that is, of land tenure. On the ...

Dollar Hegemony and the Rise of China

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Hudson to Premier Wen Jaibao, March 15, 2010 Dear Premier Wen Jiabao, I write this letter to counteract some of the solutions that Western politicians are recommending for China to cope with its buildup of excess foreign-exchange reserves. Raising the renminbi’s exchange rate against the dollar will not cure the China-US payments imbalance. The dollar glut will continue, and so will the currency fluctuation among the dollar, euro and sterling, leaving no stable store of value. The cause of this instability is that each of these three currency areas has grown top-heavy with by debts in excess of the ability to pay. What then should China should it do with its buildup of excess reserves, if not recycle its inflows into their bonds? ...

Banks Profit Going Up and Down

Michael Hudson on Renegade Economists Radio discussing China's looming isolationism, the background on G20 austerity plans plus a few serves on what economics should be looking at. Hudson appears at the 2 minute mark. Audio - 22/06/2010 Subscribe to the Renegade Economists podcast

Trouble in Europe, China

Based on an interview with Eric Janszen of iTulip April 10, 2010 On April 10, 2010 I caught up with Michael Hudson and he was in rare form. Readers know that my personal view is that much of the right wing of the political spectrum doesn’t know what the problem is and all of the left wing, while nailing the problem, doesn’t know how to solve it. No one is too left wing or too right wing to get an interview here. Interviewer (EJ): Thank you for your time this morning. Hudson (MH): Glad to be here. EJ: It’s been a while since I’ve interviewed you so let’s have a wide-ranging discussion today. I want to include your Thursday Financial Times article on ...

Railway Financing and the Shape of China’s Future: Some Lessons from American Economic History

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Report for the Robert Schalkenbach Foundation “Is it British wealth we want when we desire to develop our resources or build railroads? No, we do not need the wealth, for at this moment we are the richest nation on the face of the globe. We need the money.” – John Brown, Parasitic Wealth, or Money Reform (1898:34) These words were written over a century ago by an American who saw that it was money that put the nation’s tangible wealth, its natural resources and labor, in motion. Recognizing that money was essentially a social and legal institution, a creation of the state, the author urged the government to finance the railroads by printing its own money ...