"With the unemployment rate in the United States at 9.6 percent and the manufacturing sector severely crippled"... Manufacturing sector? What manufacturing sector? Do you mean the two or three companies left that WalMart hasn't intimidated into doing a NAFTA bunk, or are you talking about one of those facilities that does final assembly (3 workers, 45 seconds each) from parts made (15 people, 10 hours of labor) overseas? Haven't you heard, we're a service economy... sorry that was a decade ago... we're a post service, manufacturing free economy...

Most of our trading partners have a value-added tax which acts as a tariff on imports, and is rebated on exports. Such a tax could help equalize our trade deficit, and would assure that American multi-nationals who ship jobs overseas pay some tax on their products, making off-shoring much less profitable. The tax could be structured with a generous rebate for low and middle-income taxpayers, so it would not add to the tax burden on ordinary Americans.

A trade war? All Krugman offers is a trade war? We're going to end up a third world country if we continue listening to this fool.

I would like to know how you define a more balance world?? You don't understand the situation in China, and you represent American when you wrote this article. Every country are facing their own economics problem now a day. But don't use China as a punching bag during the Mid- Election. Levin Bill will not balance the world economics instead it will make it worse. Export Hi-Technology maybe a way reducing unemployment rate.
Stay neutral when you write Dr.

Production Parity

Here is the best solution:
Require all imported goods to be manufactured under the same US standards and laws. This would include pollution laws, worker safety OSHA laws, labor laws, health insurance, disability insurance, retirement funds. Foreign workers must also be allowed to unionize. Then US manufactures will be able to compete on a level playing field.

This is where the US unions lost the war. If they would have demanded production embargoes instead of agreeing to ineffective trade war tariffs, they would not have had their memberships decimated by the loss of our manufacturing base.

Major outsourcing of industrial and manufacturing jobs started in the 70s in the steel industry, and today the plutocracy is still stealing our jobs, in almost every industry.

The key to reversing our current economic depression is, organized labor MUST go global.

As you know Professor, I have been writing for several years about heavily taxing outsourcing companies. My suggestion was to charge union scale + 15% for every job outsourced and also against independent contractors for each employee. Moreover plastics and wood products from China and Mexico give off highly toxic fumes and outgasses.
I agree with building new factories and bringing to life old abandoned ones. Good article, sir.

My respect for Paul Krugman is diminishing by the day. Although he is a
feisty jovial fellow who is quite like-able, the depth of his analysis is
like a shallow pond after a long, hot summer.
His diatribe against those bad Chinese is just a cover up for the real
crimes being committed by the predominantly American finance industry who
are flooding foreign-exchange markets with effectively free money borrowed
from the fed, forcing foreign currencies to appreciate which, for export
oriented economies like China, can have profoundly negative effects on
their foreign trade, which in turn can have devastating effects on their
society.
Krugman is smoking something I would like to have if he believes, even if
only for a second, that the keynsian-nightmare of "savings" is
responsible for the current trade deficit, as if this factor is all that
it would take to turn America back into a manufacturing power which could
compete on equal footing with China.
The American finance industry has no interest in investing in domestic
manufacturing capacity. They know all to well that they can make far more
money by screwing the smaller export-oriented economies in the nations of
the south, by lending effectively free(for them) money, thus burdening
these societies with ever more debt obligations, further impoverishing
them.
So many of our brilliant economists act as if our economic problems were
simply the result of a lack of investment capital, ie. credit. Give me a
friggin break. The real economy, where value is actually produced has been
utterly dwarfed by the FIRE industry. Never in human history has so much
credit been available, as in the last period of time leading up to our
grand financial crisis-the availability of all that credit did NOTHING for
creating domestic jobs, or improving the quality of life for the majority
of Americans. The exact opposite occurred-millions of people are faced
with foreclosure and/or bankruptcy, while those things which function as
gates to quality of life (like higher education and quality health care)
become unobtainable for an ever growing percentage of Americans and
millions more become damned to eternal debt-slavery.

Maybe it is time for China to quit underwriting our insane military
conquests by providing such cheap access to rare-earth metals.
It angers me to no end to think that so many thousands of Chinese workers
are just as dependent as their American counterparts on our damned
military industrial complex. What an evil juggernaut our global economy
has created.
But what angers me even more is having to listen to supposedly brilliant
(ie. Nobel Prize winning) economists like Krugman who fail time and again
to really call out what is going on (speak to power), and who jump on the
populist bandwagon cheering anti-foreigner sentiment(blame the Chinese!)
while celebrating some kind of pseudo patriotism of those who have
systematically screwed people here in the states and around the world.

Michael Hudson provides far more insight into these things than Krugman
ever could:
america's-china-bashing-a-compendium-of-junk-economics

at michael-hudson.com

lol, looks like Lavrenti Beria pointed to the same article......

Have all of you forgotten that the United States has borrowed hundreds of BILLIONS of dollars from China to wage our ridiculous war in Afghanistan? The trade war is nothing compared to our being in hock to China in terms of dollars wasted in Afghanistan.

Can you do simple math,

Don't think your problems posting had anything to do with the author of the post(Krugman). According to the site admins the comment posting code is old(about to be replaced) and has some bugs(like virtually all software). I had the same problem posting here on this krugman article-in my case my message was blocked as spam due to having a url in my post-once i deleted it, my post went through.....

"Outrageous Currency Manipulation"? - You've got to be kidding, Krug - There is no currency in the world that is more manipulated than our own US Dollar.  We are the country that broke Bretton Woods in '71 with Nixon destroying the gold standard.  We are the ones who took our first large step out of trading honest money (gold) when FDR declared it illegal for US citizens to transact in gold or to own gold bullion - this was done, ILLEGALLY, so as to manipulate the currency - something that is much harder to do when the people have the gold in their hand and they are allowed to choose which currency they will use.  How about re-examining our 'Legal Tender' laws, which force people to use the green toilet paper in their wallets which continually evaporates in value under the direction of idiots who want 'even bigger quantitative easing'.  Take note all - Krug got his 'Nobel Prize' from the Central Bank of Sweden "in honor of Alfred Nobel" - and not from the Alfred Nobel Foundation. Setting workers free and putting a bridle on the banks would entail allowing people to choose and to trade gold and silver or whatever other currencies if they wish, without the Federal government taxing them because they were 'bartering with collectibles' or 'making windfall profits' when people are just protecting themselves from confiscation through inflation at the hands of worthless central bankers - GET OUT OF OUR BUSINESS - GO SELL USED CARS - or maybe make license plates...
 

Naturally, Krugman is in the China-bashing camp. They have the weak currency he is so jealous of. Krugman would like nothing better than to see our currency devalued faster and further in order to prove his stimulus theory - on which he has hung his career - can work.

Only problem is that it punishes savers and creditors - people who behaved prudently - and rewards debtors - people who behaved recklessly. Debasing currency is never a means to building wealth - just of saving the necks of politicians in power, whose key lackey he is.

OK, all you Know-It-All, snooty economics-types: Krugman writes about international finance and ALL you can do is bitch about a spam-filter? If you have nothing cogent to say, I'm GLAD the filter pulls you out and tosses you. If all you can do is bitch, put it on your facebook where people don't have lives anyway and might CARE what you think.