ECONOMICAL SUPPLY CHAINS YANKED

No quick fix on the horizon. Note that even savings by those tight-fisted Asians are blamed for problems in their own region. Simply put, global merchants have overproduced in terms what the people can afford to buy, or desire to own; in other words, they have looked for love in all the wrong places.

But lest we forget, the Chinese and the Arabs still own America, unless we do something to break free (like produce our own energy and rebuild our own gutted industries, and insist on fair trade policies rather than this massive giveaway (trade deficit) that our leadership continues to pile up at national expense.

Washington Post reporter Steven Pearlstein:

FOR THE PAST TWO YEARS, Asians and Europeans have tended to view their own financial and economic problems as largely imported from the United States. The impacts on their own economies, they reasoned smugly, would be modest and short-lived.

Turns out they were wrong.

Over the past two weeks, the bottom has fallen out of Asia's export economy while Europe has come face to face with a financial crisis that is as bad as ours and will probably become even worse without the kind of unified response that individual countries have so far resisted.

And what does that mean for us? Nothing good. It means that our downturn will be longer and deeper than many had hoped and that we can't rely as much on export growth to pull us out of the ditch.

Basically, there are two stories to tell here about the sudden downturn in the global economy.

The easiest to understand is the collapse of industrial production in East Asia, where the supply chain starts in places like Taiwan and Vietnam and moves through places like China and Japan before cars, shoes, computers and flat-panel TVs arrive at stores in the United States, Western Europe and everywhere else.

According to Barry Eichengreen, an economist at the University of California at Berkeley, the 40 percent decline in Taiwan's industrial production at the end of last year was the "canary in the coal mine" of Team Asia's formidable export machine. At about the same time, Japan's exports fell 35 percent, Korea's 17 percent, and China's fourth-quarter gross domestic product was essentially flat—no economic growth at all.

As did a number of other economists, Eichengreen told me he'd never seen declines this fast and this steep, even during the Asian economic crisis when he was working at the International Monetary Fund's war room here in Washington. It all reflects not only the sharp pullback in discretionary consumer spending around the world but also an equally sharp pullback in the flow of foreign investment that was used to build factories and shopping centers and has been an important driver of growth in the region.

Demand for Asian exports will pick up again before too long, but it will be a long time before they reach the levels attained at the height of the bubble economy. And it will be longer still before foreigners will be eager to invest in expanding capacity again.

Ideally, Asians would respond to this challenge by reducing their heavy reliance on exports and foreign investment and reorienting their economy more toward domestic consumption. But as Raghuram Rajan of the University of Chicago points out, that's not as simple as it sounds.

For starters, the things Asians might want to consume aren't necessarily the things they produce to export, so production would need to be reoriented and workers retrained and redeployed. And to replace the foreign investment, these economies would need to develop financial institutions that can raise and invest risk capital, which right now they don't really have. Most significantly, Asian governments would have to create safety-net programs like Social Security so people don't save so much and spend so little.

In short, the Asian downturn is probably manageable, particularly now that the Chinese government has responded with a massive stimulus package. But it will take time for the region to make the necessary adjustments to get the region humming again.

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TAKING PRIDE IN THE PILGRIMS

As yesterday's festivities pass into memory here is a clear thought from the efficacious Right Wing Nuthouse:

I know, I know. We simply can’t let a Thanksgiving go by without being made to feel simply awful as a result of rapacious white Europeans betraying and eventually murdering Rousseau’s “noble savage” in bunches. This line of thinking leads to a rather interesting conclusion; Europeans should have stayed in Europe, allowing only Asians to emigrate to North and South America.

If European naval technology had been just a little less advanced, we very well could be speaking some Asian tongue today—or perhaps even Polynesian given the enormous skill and intrepidness of their sailors. The last great migration from Asia may have occurred as recently as 6,000 BC according to some exhaustive yet controversial linguistic studies. But if European ship building improvements had lagged by just a couple of hundred years, North America would have been a ripe target for settlement by any number of Asian cultures. Then, it would have been rapacious yellow men who would have gotten tagged with killing the native population.

That’s because it didn’t matter who came, the clash of civilizations was inevitable. Failing to understand our early history in the context of the history of migrating peoples from the time that Homo Sapiens first moved out of Africa is shallow, stupid, and these days, politically motivated. It doesn’t absolve white people of murder nor does it lessen the tragedy of the destruction of native American culture. But thinking in these terms should animate our total understanding of the history of our continent and our country—something the modern day left, whose guilt-ridden diatribes against our ancestors always sounds such a discordant note on this, the most unique of American holidays, deliberately ignores in order to prove their solidarity with the oppressed.

All of that was in the future when the Pilgrims held the first Thanksgiving in the fall of 1621 in recognition of the help given to them by the Cape Cod Indian tribe, the Mashpee Wampanoag. By that time, the Pilgrim’s numbers had been dramatically reduced by disease, losing more than half the number that landed at Plymouth Rock. The Indians had no doubt contributed to the survival of the remainder by showing them how and where to fish as well as introducing them to some native American crops like Maize and beans.

But what we tend to forget about the Pilgrims is that they were not explorers or people inured to hardship. They were country folk from the Midlands of England—most of them were not farmers or possessing the skills necessary to begin a colony. They were simple townsfolk whose separatist ideas about the Church of England landed them in trouble with the authorities – so much so that they were driven out of the country. First to Holland, where their religious views were tolerated but where parents were concerned that the children were losing their essential “Englishness” and pined for the homeland. That’s when William Bradford made a deal with the London Company for a land patent and the crossing was planned.

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