Michael Bloomberg chimes in on the latest pander from Clinton and McCain.

Tom Friedman is even tougher on these lame politicians.

It is great to see that we finally have some national unity on energy policy. Unfortunately, the unifying idea is so ridiculous, so unworthy of the people aspiring to lead our nation, it takes your breath away. Hillary Clinton has decided to line up with John McCain in pushing to suspend the federal excise tax on gasoline, 18.4 cents a gallon, for this summer’s travel season. This is not an energy policy. This is money laundering: we borrow money from China and ship it to Saudi Arabia and take a little cut for ourselves as it goes through our gas tanks. What a way to build our country.

When the summer is over, we will have increased our debt to China, increased our transfer of wealth to Saudi Arabia and increased our contribution to global warming for our kids to inherit.

Reality is starting to hit China.

Mort Kondracke explains why this question will haunt John McCain in the fall.

Costs of manuafacturing in China are going up, and that’s taking a big toll on some Chinese companies. The days of cheap labor and little regulation are going away.

Now many of China’s manufacturers—including Shan Hsing—are undergoing the kind of restructuring that tore through America’s heartland a generation ago. The U.S. housing market, which generated demand for everything from Chinese-made bedroom sets to bathroom fixtures, has plummeted. A new Chinese labor law that took effect on Jan. 1 has significantly raised costs in an already tight labor market. Soaring commodity and energy prices, as well as Beijing’s cancellation of preferential policies for exporters, have hammered manufacturers. The appreciation of the Chinese currency has shrunk already razor-thin margins, pushed thousands of manufacturers to the edge of bankruptcy, and threatened China’s role as the preeminent exporter of low-priced goods.

Hsu’s new factory, it turns out, is running at just 60% of capacity, and he predicts that half of China’s lighting factories—almost all based in Guangdong—will have to close their doors this year. “Shoe factories, clothing, toys, furniture, everyone is shutting down,” he says. Hsu’s not alone in his alarm. “We spent 20 years building up our industry from nothing to one of the biggest in the world,” says Philip Cheng, chairman of Strategic Sports, which produces half the global supply of motorcycle, bicycle, and snowboarding helmets out of 17 plants in the Pearl River Delta. “Now we are dying.” Cheng says he once earned 8% margins. His margins now? Almost zero.

Comprehensive statistics on shutdowns are hard to come by. But the Federation of Hong Kong Industries predicts that 10% of an estimated 60,000 to 70,000 Hong Kong-run factories in the Pearl River Delta will close this year. In the past 12 months, 150 factories making shoes or supplying shoemakers have closed in Dongguan, says the Asia Footwear Assn. More plants will disappear as demand slows: UBS (UBS) analyst Jonathan Anderson expects overall export growth of just 5% or less for China this year.

McCain’s lame attempt to offer something about the mortgage mess just two weeks after saying he would do nothing to bail out homeowners shows he will say anything and propose anything to get elected. Conservatives are not happy.

Once the general election starts, McCain’s inability to articulate and defend clear positions on the issues in a consistent manner will be his undoing.

Barack Obama talks about the economy and taxes with Maria Bartiromo. His proposals make sense. Some taxes will go back to the rates during the Clinton years, while many middle class Americans will get a tax cut. When asked about some of the tax increases, Obama has a great response:

Why raise taxes in a slowdown? Isn’t that going to put a further strain on people?

There’s no doubt that anything I do is going to be premised on what the economic situation is when I take office next January. The thing you can be assured of is that I’m not going to make these decisions based on ideology. I’m not a dogmatist. My opponents to the right would like to paint me as this wild-eyed liberal, but I believe in the market. I believe in entrepreneurship. I believe in capitalism, and I want to do what works. One of the problems with the Bush Administration has been its rigidness when it comes to economic policy. It doesn’t matter what the problem is, they’ll say tax cuts. Trade deficit? Tax cuts. Slowdown in manufacturing? Tax cuts. At a certain point, if you’ve only got one arrow in the quiver, you’re going to have problems.

Newsweek has a disturbing story about the millions of Asian working who are working in slave-like servitude.

Some of the world’s leading computer makers don’t want you to know about Local Technic Industry. It’s a typical Malaysian company, one of many small makers of the cast-aluminum bodies for hard-disk drives used in just about every name-brand machine on the market. But that’s precisely the problem: it’s a typical Malaysian company. About 60 percent of Local Technic’s 160 employees are from outside Malaysia—and a company executive says he pities those guest workers. “They have been fooled hook, line and sinker,” he says, asking not to be named because others in the business wouldn’t like his talking to the press. “They have been taken for a ride.” It’s not Local Technic’s fault, he insists: sleazy labor brokers outside the country tricked the workers into paying huge placement fees for jobs that yield a net income close to zero. “They say they were promised 3,000 ringgits [$950] a month,” the manager says. “How can we pay that? If we did, we would be bankrupt in no time.”

So why don’t those foreign employees just quit? Because they can’t, even if they find out they’ve been cheated by the very brokers who brought them there. Malaysian law requires guest workers to sign multiple-year contracts and surrender their passports to their employers. Those who run away but stay in Malaysia are automatically classed as illegal aliens, subject to arrest, imprisonment and caning before being expelled from the country. “Passport, company take,” says a Bangladeshi who has worked at Local Technic. (Like other workers in this story, he fears possible reprisals if he is named.) “They say, ‘You come to this company, must work for this company and cannot work other place.’ They say, ‘If you work [for] someone else, the police will catch you’.” He paid a broker in Bangladesh $3,600 to get him a job at Local Technic. When he arrived, he says, he learned he was making $114 a month after deductions for room, board and taxes. The math is simple: minus the broker’s fee, his net monthly pay is $14. If he never spends a penny on himself, three years of labor will earn him a grand total of $504.

Free trade is absolutely necessary to the global economy, but we need to start getting serious about labor and environmental standards. Putting an end to this type of forced labor would be an obvious place to start.

Bill Gates explains why the H1-B visa program needs to be reformed and how it results in more tech jobs going overseas.

The Bush economy continues, and they still want to keep spending billions in Iraq.

BusinessWeek has a great article about the desperate need for more technicians in the wind power industry. These are excellent jobs and more students are flocking to this field as more colleges and community colleges add programs.

It’s another small example of how we will benefit economically by adding more green power instead of sending dollars overseas for oil.

The effects of the mortage crisis are becoming more dire. A suburb of Cleveland is practically turning into a ghost town.

This is what happens when the government refuses to consider common-sense regulation of business. Everyone knew that mortgage bankers were getting out of control, but the federal government did nothing. It’s similar to the situation in the 1980’s when we had the savings and loan crisis.

You know things are getting bad when a $3 billion casino project on the Las Vegas strip faces forclosure.

Steve Forbes has been saying this for years. The Bush administration’s failure to aggressively support the dollar has created serious economic problems.

The dumbest, most destructive economic policy of the Bush Administration has been its weak-dollar position–letting the dollar slide in value against the euro, the yen, the pound and gold. The repeatedly disproved theory in operation here is that cheapening your currency will improve your trade balance and that an improved trade balance makes your economy stronger and wealthier. Put aside the meaninglessness of the trade balance as a measure of economic health or sickness–the U.S., after all, has had a trade deficit with the rest of the world for 350 years out of the last 400. A weak-currency policy has disastrous economic and political consequences–most immediately, our tumultuous equity markets.

The entire article is worth reading. He even acknowledges that Clinton deserves credit for his strong-dollar policy.

Add George Will to the growing list of commentators who are ridiculing the new law passed by the Republican Congress to limit online gambling. Will calls it “Prohibition II” and argues that we need to fight excessive paternalism by the government.

Granted, some people gamble too much. And some people eat too many cheeseburgers. But who wants to live in a society that protects the weak-willed by criminalizing cheeseburgers? Besides, the problems—frequently exaggerated—of criminal involvement in gambling, and of underage and addictive gamblers, can be best dealt with by legalization and regulation utilizing new software solutions. Furthermore, taxation of online poker and other gambling could generate billions for governments.

We need a new movement to keep the government out of our lives. Following the Terry Schiavo fiasco, many liberals have rediscovered the notion that too much intervention by the government can be a very bad thing. Libertarian conservatives like George Will are taking on the cultural conservatives on these issues. Unfortunately, many of our politicians on the right and the left still don’t seem to get it. Perhaps this stupid law can help. By pissing off the legions of poker players and other normal Americans who like to bet online, the politicians who want to control our lives might have finally gone too far.

I’m hoping more politicians on the left and the right pick up on this trend.