The Golden Era of Profitablity

Ben Bernanke, the current Fed Chariman recently spoke at an economics conference in Jackson Hole, WY. He remarks were made at a time when congress is at least contemplating tariffs on China for its monetary policy of keeping the Yuan artificially low and many of it's predatory trade practices.

“The emergence of China, India and the former communist-bloc countries implies that the greater part of the earth’s population is now engaged, at least potentially, in the global economy. There are no historical antecedents for this development. “

Bernanke said Christopher Columbus’s voyage to the New World ultimately led to enormous economic change, but it took centuries for the New and Old Worlds to economically integrate.
“In contrast, the economic opening of China which began in earnest less than three decades ago, is proceeding rapidly and, if anything, seems to be accelerating,”

The natural reaction of those so affected is to resist change, for example, by seeking the passage of protectionist measures.The challenge for policy-makers is to ensure that the benefits of global economic integration are sufficiently widely shared — for example, by helping displaced workers get the necessary training to take advantage of new opportunities."

President Bush believes that math and science education will help offset the job losses occuring in the US. What he fails to mention is these jobs too can be offshored to cheap labor unless fair and effective policies are put into place.

One would think that Ben, our chief economist, would look at the details in the big picture he outlines.

For addtional commentary look at this blog, http://zane.typepad.com/ccuceo/2006/08/ben_bernanke_on.html