Monday, June 13, 2011

Are our politicians listening?

Information published regularly by Bureau of the Census, Foreign Trade Division, and by Congressional Research Service, concerning our trade situation, should be enough to scare politicians into action.   

Information from these respected professional sources shows a pathological trade situation, threatening to destroy our economy completely.  The trade situation is so devastating that abrogation of trade treaties is fully warranted, with immediate application of tariffs to countries with which we have a substantial negative balance of trade in manufactured goods.

There are some politicians who understand the situation and are trying to drag their colleagues into action.  But many other politicians are not listening.  Why do we operate Bureau of the Census and Congressional Research Service if we are not going to listen to them?

I have recently found an article about work done by another respected professional organization, the United States Chamber of Commerce.  The article concerns China, and was published in July 2010.  

In my view, every American politician and every ordinary American working man and woman should be tremendously frightened by this article.  Yet on January 14, 2011, our Secretary of State, Hillary Clinton, gave a speech concerning China that can only be described as an upbeat, cheerleading speech.  (Scroll down to my post of May 13, 2011, for details of this speech.)

Has our Secretary of State read this article?  Has anyone on her staff read this article and brought it to her attention?   Has anyone on President Obama's staff read  this article and brought it to the President's attention?

Have politicians of other western countries, Australia, Canada, United Kingdom, France, Germany, seen this article or had it brought to their attention?

In the paragraphs below I present the highlights of the July 2010 article.  I invite the reader of this post to review the paragraphs below and see if you agree with me that the article is absolutely frightening.

But first, let me present, in bold, one portion of the article.  This portion goes directly to the issue of whether our politicians, and politicians of other western countries, are listening. 

"...the Obama administration and Congress should understand (that) this is not just another run-of-the-mill China policy dispute that can be addressed through new rounds of....diplomatic discussions and bombastic legislative initiatives"

Article title: "China fuels trade tension with policies, report says".  This title is actually somewhat unclear.  A clearer version would be "China policies fuel trade tension, report says".   The article is by Andrew Batson and Jason Dean, and was published in the Wall Street Journal, U.S. Edition home, July 27, 2010.

Following is the actual text of portions of the article.

The report, which was commissioned by the U.S. Chamber, and written by James McGregor, says China is becoming increasingly aggressive in using its vast market to push foreign companies to transfer leading-edge technologies.  That tactic, it says, is "forcing foreign technology companies to anguish over balancing today's profits with tomorrow's survival".

Another example is China's push to develop a homegrown passenger jet through a state-owned company.  Major U.S. firms have been selected to supply systems for the jet project but are doing so through Chinese partnerships.  Once their key technologies have been  transferred to China, "the foreign aerospace firms may find themselves sidelined and competing globally against the Chinese companies they are now creating", the Chamber report says.

To address the multiple issues arising from China's innovation drive, the U.S. has started a broader dialogue with China....  (But) "the Obama administration and Congress should understand (that) this is not just another run-of-the-mill China policy dispute that can be addressed through new rounds of....diplomatic discussions and bombastic legislative initiatives", the Chamber report says.

The Chamber report says...that aspects of the policy are "increasingly perceived as anti-foreign and regressive".  As a result, the (report) says, the 2006 document that initiated the indigenous-innovation policy is "considered by many international technology companies to be a blueprint for technology theft on a scale the world has never seen before".

Tuesday, June 7, 2011

Where are the economists?

I want to explore further some points made in my previous post.


I am a chemical engineer.  Suppose America were to get into a huge chemical engineering mess.  I would immediately come forward and offer any suggestions and assistance I could to solve the problem.  I am sure there are thousands of other chemical engineers who would do the same. 


Many chemical engineers are members of American Institute of Chemical Engineers.  Whether members or not, I am sure there would be an outpouring of assistance.


In fact there is a good joke about chemical engineers.


A member of clergy, a lawyer, and a chemical engineer are scheduled for execution by guillotine.  In the country where this is happening, there is a custom that if the guillotine fails to work, the sentence of the intended victim is commuted.  He or she can go free and live happily ever after.


First the member of clergy is placed on the guillotine.  The button is pressed but the knife fails to drop.  The member of clergy is freed.  Then the lawyer is placed on the guillotine.  The button is again pressed but the knife again fails to drop.  The lawyer is freed.


Then the chemical engineer is brought forward.  Suddenly he cries out "Wait, I see what the problem is. I can fix it!"


America is in a huge economics mess.  No one can deny this statement.


So where are the economists?  Where are the articles, by economists, in the media, in the newspapers, on the Internet, commenting on the real issues:


Real issue 1:  Over the last 50 years, millions of manufacturing jobs were voluntarily transferred to foreign countries.


Real issue 2:  Over this period, America's balance of trade with foreign countries in manufactured goods went from POSITIVE to a huge NEGATIVE of over 500 billion dollars per year.


The above two "real issues" are real things that actually happened.  The above two "real issues" are facts, absolutely incontrovertible facts. 


Surely in any discussion of America's economic situation, the above two "real issues" have to be dealth with.


I looked at the website of the economics department of each of two major U.S. universities.  In one case there are 37 professors and in the other case 56 professors.  That is nearly 100 economics professors in only two universities.  Look at every university with an economics department and you will undoubtedly come up with a figure in the thousands.


Is there no economics professor, among all those professors, who is brave enough to come forward and comment on the above two "real issues" and tell us the significance of these issues and what should be done to solve our economics problem?


I am planning to write a brief note, similar to the above, to a sample of economics professors at various universities.  it will be interesting to see what happens!


In my chemical engineering work, I came up with one good invention.  To develop this invention, I used basic high school algebra, combined with a couple of basic principles of science and engineering.  In other words, simple stuff.


Similarly, I believe that the content of Economics 101 is more than enough to solve America's economics problem.  Everything needed is set out in Economics 101.  So what are we waiting for?


But I should think about this statement a little more.  It is based on my experience of taking Economics 101 a good few years ago.  Here is the question I have.


What on earth are they teaching today's Economics 101 students?   Surely students know that we are in very serious economic difficulties and are looking for answers.  Surely every student is wondering if he or she will be able to find employment, after graduation.  


Maybe I should attend Economics 101 lectures at a nearby university and see what is going on!