Pushmi-pullyu

Ben Bernanke gave a speech today about how America's trade deficit played a role in creating the financial crisis, and how once trade starts up again, it will probably go back to playing the same old role, unless somebody does something about it. As for America's part, now that the big banks are back to making money hand over iron fist, the Fed Chairman says we should really work on reducing our budget deficit.

None of this is new or surprising, except when he recommended that Asian nations help by getting their own people to buy their crappy products instead of shipping them to us. Bernanke suggested that one way for countries like China to do this was to increase spending on social programs like education and health care, thereby allowing people to save less and spend more. This is essentially the opposite of what the capitalist crowd would like to see happen in Washington, which makes sense given that we are on the opposite end of the cheap money. Except that many of these same people have talked about how important it is to get Americans borrowing and spending again. Maybe now that so many of the jobs are overseas, we have decided that consumption should follow.