Chimerica

Was the Chimerica construct, the pattern of trade/finance in place since 2001, really just a scam?  

In the scheme everyone benefited (the finance sector, China, Multinational corps, the US gov't) except the American citizen.  The benefits of any perceived economic growth didn't flow down -- and as a result didn't become real.

A scam like this is unsustainable.  It has to be unwound.  However, since none of the parties involved want to rebalance to a sustainable solution, it's inevitable that it will end badly.  This puts the recent pronouncements from the church of "free trade" on the recent trade spat between the US and China in perspective.  

Free trade is an ephemeral concept that is so elusive that a sighting of it is akin to witnessing a Catholic miracle.

Comments

[robertg69.wordpress.com]

Wow, you really are some kind of odd sceptic. To quote your post "Free trade is an ephemeral concept" and not even "seems an ephemeral ..."

As the two biggest economies in the world and given the amount of US financial paper that China holds and the quantities of China made the US consumer is addicted to, it seems to me that Chimerica is not a concept but a sad fact of life in the Western world!

[John Robb]

Pretty sure that contending that Chimerica exists proves the existence of the free trade. It does prove that mercantilism works.

[hidflect]

"Free trade is an ephemeral concept"

That's right. For the doubting posters above I ask; Why do you think one of Free Trade's greatest Rah-Rah, pom-pom waving supporters (Paul Krugman) has fallen silent on the issue now for the last 18 months? Coz he finally realised he was a rube. And had been taken on the issue. Free trade was never there to serve capitalism. It was simply a means of off-shoring good jobs to Asian sweatshops like Mumbai and Guangzhou. I know. I've been to these places and seen it myself. Poor bastards sitting there with tin snips in their hands cutting computer component backings out from a giant roll of thin sheet steel, their hands raw from the effort. Paid with room and board and some "pocket money". It was sheer abuse.