Monday, July 23, 2012

America enslaved to China


When America started sending manufacturing jobs away in the early 1960s, 50 years ago, I predicted the huge unemployment we see today, in manufacturing and in many other employment areas.

What I didn't predict, and what no one predicted, was that China, the most aggressive source of our imported goods, would ultimately be able to control American government policy, that we would be enslaved to China.

Every day we see TV advertisements for new medications, accompanied by long lists of side effects, including death of the patient.   The insane idea of sending manufacturing away to foreign countries also has side effects, including enslavement to China and death of the American economy.

The fact is that today China owns a major portion of the American economy.  Why aren't the two presidential candidates proposing major moves to increase manufacturing in America?  Simple answer: The two candidates and 99% of the other politicians in Washington are operating within constraints set by China, or within constraints set by American lobby groups working with China.

Control of the American economy by China is increasing every day.  The net money we send to China,  over three-quarters of a billion dollars per day, is used by China to come right back and buy up our economy.

Do 312 million Americans really want to be slaves of China?  I doubt it!

I have proposed a simple and practical plan in which America would break the chains of enslavement to China, in which America would regain control of its destiny, by reducing imports of manufactured goods down to approximate balance with our exports.

The concept of total value of our imports each year, approximately equal to the total value of our exports, for each country we deal with, is plain common sense. It is fair and reasonable.  This plan adheres to the true meaning of the word "trade".  This plan highlights our continuing belief in free trade, but balanced free trade.

Many people have have expressed strong support for my ideas.

Other people have strongly criticized me and have told me to "wake up" and see the "real problems":
  • "unions"
  • "big government in our lives and in our pockets"
  • "lack of qualified workers"
  • additional manufacturing would not create a lot of employment
  • inadequate education system
I have to say, with regret, that these people are completely wrong.  The issues these people raise are non-issues or at best very minor issues.  These people are like O. J. Simpson looking for the "real killer".

I agree that there are too many government regulations on manufacturing, too much red tape in setting up new manufacturing facilities, and too high taxes on companies doing manufacturing in America (business tax and corporate income tax).  But fixing up these issues won't have a strong effect unless we have in place a program/policy of greatly reducing imports of manufactured goods.

Robert Reich recently tweeted that President Obama needs "a strong economic plan" in order to win re-election.  The only "strong economic plan" that either presidential candidate could put forward that would be effective is to greatly reduce imports of manufactured goods.  Yet Robert Reich himself is aligned with China, so his tweet is hypocritical.

On the basis of fundamental, unarguable principles of economics, the only way to save America is to reduce imports down to a level of approximate equality with exports.

Reaching this objective would have interrelated positive effects:
  • Eliminate the lethal net cash outflow of nearly $600 billion per year to foreign countries to pay them to do our manufacturing for us
  • End of sending net money to China that they can play with and use to enslave us
  • Create conditions for a large increase in manufacturing, putting millions of Americans back to work in manufacturing and in many other employment areas
  • Great increase in tax revenue from newly employed workers and newly operating factories in America, thus reducing government deficits

Bottom line:  The only way to avoid enslavement to China, and the only way to save America, is to greatly reduce imports of manufactured goods, down to approximate equality with exports.

If anyone has a better idea on how to accomplish the objective of greatly reducing imports, let's hear it and discuss it.

But it is nonsense to say that the "real problem" is something other than a lethally high level of imports in relation to exports.