Say wha? The Chinese will just be more careful about the lead paint for a while until the dust clears. The serious dent is coming from manufacturers deciding to keep more work in the US. It will take years though. A lot of capacity as well as know-how has been lost in the past 30 years. Many of the most industrious recent college grads head for investment banking or law firms. It’s going to take a long while before actually making stuff regains cache with the younger set.
I don’t claim that subprime mortgages, weird Wall Street financial instruments or highly-leveraged hedge funds are part of some grand plan. I would say they are the result of government policies that encouraged an “ownership society” that President Bush has mentioned quite often. Qualifying people who were previously unqualified to own homes requires some financial trickery and having the government back up those mortgages (Fannie and Freddie) involves issues of “moral hazard” for us the taxpayers. There is also a correlation between defaults and areas of high concentration of illegal aliens. Again, not a grand plan to batter China but certainly a result of inaction of the federal government.
The economic mess is only really a mess on Wall Street. I’m not saying high gas prices don’t hurt, but I still see lots and lots of V8 SUVs driving to the mall. It’s a sad fact (for me who as an engineer, who appreciates efficiency) that the average gas mileage for passenger vehicles is lower now than 20 years ago. As a percent of income, gas prices are not as damaging to the family pocketbook as they were in the 80’s. When that happens, we’ll know pain.
Those jobs aren’t coming back. And they certainly won’t be coming back in a weakened economy.
“The economic mess is only really a mess on Wall Street” sounds a lot like the 1930s mantra of “What happens on Wall Street doesn’t reach Main Street.” And we all know that wasn’t true then and probably isn’t true now.