Question/Comment: Did you ever hear about the two old ladies who made a precarious living taking in each other’s laundry? My question is this: how can a nation with manufacturing employment being replaced by “service” jobs expect to have a trade balance with the rest of the world? Don’t we get goods for nothing but IOU’s until we sell them goods? What’s in it for them?
Paul Solman: I think the two old ladies are a good metaphor for economic growth: as long as they keep doing more and more of each other’s laundry, what’s not to like? (Of course, some other old ladies – or young men, even — better be gathering, growing or hunting food; finding or building shelter…etc.) But what’s wrong with services? It’s what I’m doing for a living at this very moment. Maybe you too.
As to those still making things and “what’s in it for them?” – they’re getting our IOUs, shares of our companies. Claims, that is, on what we own. Don’t YOU own US stocks and bonds? And if you do, why? Apply the same logic to the Chinese.