[lbo-talk] Stock Markets vs the Real Economy

[Dennis Claxton]

At 01:06 PM 8/10/2011, c b wrote:


>In support of MP's idea, the head of General Motors already in the
>1930's said something like "GM doesn't make cars; it makes money".

Doug just put this up:

http://lbo-news.com/2011/08/09/made-in-china-3/

Here’s something that should revise a lot of 
clichés, though it probably won’t: less than 3% 
of U.S. consumption expenditures are on goods 
made in China. Almost 90% are made in the USA. Of 
course, the domestic total is boosted by 
services­but even durable goods are 12% China, 
67% U.S. And less than half the value of Chinese 
imports go to China­55% of the money spent on 
“Chinese” goods represent processing and other 
services (like distribution and retailing) provided in the U.S.

This info comes from a new paper by Galina Hale 
and Bart Hobijn of the San Francisco Fed. Their 
point was to show that Chinese inflation has 
minimal influence on U.S. price levels, which is 
persuasive. But it’s also an antidote to the 
widespread belief that the U.S. is hollowed out 
and all the action is in China. We’ve got 
problems, yes, but we’ve also got 
resources­resources we can do a lot better with than we are now.

---------------------------------

Still, I can't find clear examples of Harvey and 
Brenner saying what SA says they do.  Everything 
I've seen they go out of their way to correct any 
notion that finance and "real" are not working together.