Well, the job in NJ is created because of fake money created in NYC!! NYC is very productive in producing one thing - credit - and nothing else!!. Many of the jobs that moved to NJ is probably surviving based on the bubble in NYC!! So are the jobs in Bombay and Cochin!! The nirvana you are talking is based on credit bubble!! Cantillon published an article (read december bulletin of Doug Noland) in 1730 talking about your "Nirvana" concept!!
Really, if Bombay/China has to improve, it better adopt capitalism rather than depending on NYC/US bubble!! If the US goes bust, do you think China and India will have those back office jobs? I hope you know what happened to IT jobs in India after 2000 bust in US!! Lot of Indians lost IT jobs and all the computer engineering undergrad programs were running empty without students!!!
China is sacrificing it's environment, creating more credit etc that forces it to depend on US!! Had China allowed its currency to appreciate, then its citizen would have enjoyed the fruits of their labor by consuming at lower cost (if yuan appreciates). This would have spurred domestic investment targetting domestic consumer. Ofcourse, in your mind, such a thing is less effective and it is better to "inflate the credit bubble" in China so that US gets lower price!! If the US bubble bursts, the local Chinese will not be in a poisition to spur the demand locally!!
In Bombay, Indian govt pumps humongous liquidity into that city (like building govt offices, train stations etc) by robbing from the poorer part of India (either through printing money and/or collecting taxes). Ofcourse, such "Statist intervention" makes the people of Bombay rich at the cost of the others. You are gloriously touting this as "economic Nirvana". And the Bombay folks throw the "crumbs" to poor Cochin folks!! Ofcourse, this "nirvana" has gone on for 60 years!! Wait for the bust that is going to happen soon and we will see if the Nirvana will still survive!! If US economy goes bust, there will be noone to support the Bombay economy at that elevated cost!! That is why you dont depend on credit bubble, instead depend on "real wealth" generation which is more stable. |
