June 1, 2009

Rope Made in China

Responding to accusations against China for the financial crisis in 2009, Economist Nicholas Lardy stated “The Chinese gave us the rope, but we didn't have to hang ourselves.”

On that point, I could not agree mORE Profoundly. It is almost impossible to believe, but here is the argument of some:

Production-crazy China sold goods to the US (who chose to buy them). China saved the money it earned (like we choose not to do). Then, China invested that money in what it considered a wise investment - the US (which we choose to sell to them). Consequently, we had more money than we knew what to do with. So, we were influenced to spend it on bad investments (bad mortgages). Thus, it is all China's fault. They are ResPOnsiblE for our problems.

Economist Lardy and I see irony here. Are we the only ones who see it? Where is the sense of US being ResPOnsiblE? Did China force US to sell that as well?

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