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Forbes: Americans should worry less about their trade deficit. Asia Times: China becomes more aggressive over its territorial waters. Japan Times: Japanese PM's overconfidence cost his party.
American businesses grow disillusioned with China
Columnist Gideon Rachman writes in the Financial Times that corporate America is becoming increasingly disillusioned with China. He states that this comes after years in which the business community in the United States was one of the biggest supporters of greater US-China relations.
QUOTE: When Google, Goldman Sachs and GE all run into difficulties simultaneously, it seems clear that a bigger trend is at work. Privately, senior US officials have been worrying for some time that Chinese trade and economic policy is taking a more nationalist direction that is penalizing US companies.
US should worry less about its trade deficit
Brian S. Wesbury, chief economist, and Robert Stein, senior economist at First Trust Advisors, write in Forbes that the US trade deficit is not a cause for concern. They argue that the deficit is due to the United States having an attractive investment climate that offers a relatively strong banking system and political stability.
QUOTE: Just look at Thailand's populist upheaval, or the pressure for Greece to abandon the euro and devalue. No wonder central banks and other investors view US investments as preferable, even if investment returns (in dollars) are paltry.
Policymakers must tackle sagging global growth
Ian Bremmer, president of Eurasia Group, and Nouriel Roubini, New York University professor of economics, write in the Financial Times that the global economy will soon see another significant slowdown. America needs to extend unemployment insurance and help to local governments, countries that save too much must take a bigger role in global demand, and the eurozone needs an easing of monetary policy to encourage growth.
QUOTE: These steps will take time. Even if all are undertaken properly, global growth will recover only slowly. But if they are not undertaken at all, the risk of a global double dip, and a new financial crisis, will grow sharply. Policymakers cannot keep kicking the can down the road for much longer.
US Congress must extend unemployment benefits
An editorial in the Washington Post argues that the US Congress should set as a top priority the extension of unemployment benefits to jobless Americans. It argues this is a moral necessity and smart policy as Americans will pump the money back into the economy.
QUOTE: Drawing the deficit line at additional unemployment benefits is shortsighted, because, if anything, the economy could benefit from more stimulus spending, not less.
Obama administration has failed to control North Korea and Iran
John Bolton, American Enterprise Institute senior fellow, writes in the Wall Street Journal that the Obama administration has failed to act tough enough with North Korea and Iran. He argues that the US Congress and opinion leaders should play a bigger role in pushing the nations to give up their nuclear programs.
QUOTE: Opinion leaders should prepare China for Korean reunification after Kim Jong Il. Kim's demise could lead to chaos. But with the right planning, his death could also set the stage for reunifying the Korean Peninsula. With the White House essentially mute on this subject, Congress and others must bring the discussion about post-Kim North Korea to the fore and highlight the opportunity it provides to topple the entire regime.
Japanese leader’s handling of consumption tax cost his party
An editorial in the Japan Times argues that Japanese Prime Minister Naoto Kan’s poor handling of the proposal to raise the nation’s consumption tax cost his party its majority in the Upper House. He acted overconfidently and took the issue too lightly.
QUOTE: If the government wants to discuss raising the consumption tax, it should first make a serious effort to cut waste in the government's total budget, which tops ¥200 trillion. In discussing tax reform, the government needs to give consideration not only to the future level of the consumption tax but also to how to strengthen the income tax's function of redistributing income.
Wall Street rebounds while Main Street suffers
Columnist Bob Herbert writes in the New York Times that while Wall Street banks and brokerage firms see recovery, average Americans still suffer from joblessness and cuts in public service.
QUOTE: What’s needed is the same sense of urgency about helping struggling families and putting people back to work as the Bush and Obama crowds showed when the banks were about to go bust. That sense of urgency is always missing when it’s ordinary people who are in trouble.
China takes more aggressive stance on defending its territorial waters
Jian Junbo, assistant professor of the Institute of International Studies at Shanghai’s Fudan University, writes in the Asia Times that China is taking a tougher stand on defending what it sees as its rights and interests in its territorial waters. As China’s economic might grows, it does not want to take threats from the United States or its neighbors.
QUOTE: Beijing's claim that the South China Sea (and hence other near seas) is part of its core interests is not only in response to perceptions of a US challenge, but also to the realities of geopolitical conflict in the area.
US consumer credit declines while spending rises
Daniel Gross writes in Slate that the decline in US consumer credit while retail sales are up should be viewed as a positive economic indicator. He states that if people can spend less on credit card fees and interest, they can spend more on shopping for consumer goods.
QUOTE: Shoppers may not be cutting up their credit cards, but they're using them less frequently, paying down balances more rapidly, and doing a better job of staying current. Meanwhile, they're increasing spending at a rate far above the rate of inflation.
US recovery leaves out small businesses
Columnist David Brooks writes in the New York Times that the financial recovery in the United States has benefited big companies, while small businesses have not been helped to grow or hire more workers.
QUOTE: We’ve been mired in debates over macroeconomic models recently. But maybe the real issue is how we are going to light a fire under the country’s loners, its contrarians and its narrow, ambitious outsiders.