+
One intertwined, inter-related problem,
consisting of two phenomena:
extremely high unemployment, and extremely high government deficits,
easily solved by one brief statement issued by one or both of the presidential candidates.
The tragedy is that this brief statement is not forthcoming. Therefore tens of millions of unemployed Americans continue to suffer, and the nation continues downhill, its wealth hemorrhaging out to foreign countries.
All this suffering is completely unnecessary. The continuing destruction of the nation is completely unnecessary.
Turn our nation around
Recently, several people each won over $200 million in a lottery. It is a proven fact that a good media campaign can change minds on any subject. With only 2.5% of that prize, $5 million, I could run an informational media campaign that would turn this nation around and get us started on a new beginning for America.
We need one or both of the presidential candidates, and/or one or more well-known and respected public figures in any field of endeavor, to make the following statement:
"America will allow, in a year, free import of manufactured goods from country X, only up to the value of manufactured goods country X purchased from us in the previous year, beginning stepwise in 2012 to full implementation in 2014."
"This principle will apply to every foreign country or entity we deal with. America hereby abrogates and withdraws from any World Trade Organization agreements, and any other trade treaties, that would prevent the above."
Example: We currently purchase four times more manufactured goods from China, in comparison with China's purchases of manufactured goods from us. This situation has to be moved stepwise to purchase of manufactured goods from China only up to a total value approximately equal to the total value of China's purchases from us.
American leadership
America adopting the principle described above would be monumental news around the world. Other western countries, Canada, Australia, UK, EU, suffering the same problems we are suffering, huge unemployment and huge deficits, would take heart and adopt the same principle.
Interesting that "China" contains the same letters as "chain". Western countries would break the chains and get free of slavery to China and other low-wage countries.
Manufactured goods trade deficits
We are in a manufactured goods trade deficit situation with every country or group of countries we deal with: European Union, Mexico, China, ASEAN countries. This state of affairs cannot continue.
Many people say to me that we have to innovate and develop new products, to turn our economy around. I agree! Let's do it! But this approach will take a long time to yield results, and will only solve a small part of our unemployment problem.
So in addition we have to increase/resume domestic manufacturing of thousands of existing consumer, commercial, and industrial items.
I recently needed small "binder clips" to organize and keep together some of my paperwork. I went to my local office supply store. Yes, clips are available. A little clear cylindrical package containing 60 clips. But, "Made-in-China" of course.
America is a huge market of over 312 million people. For this huge market we can make these clips here in America and sell them in stores at the same price as currently charged for Made-in-China clips.
Multiply this situation by the thousands of simple, easily-made items, and you solve the unemployment problem and the deficit problem.
Who is preventing action?
The presidential candidates, thousands of other politicians (with a few exceptions), and thousands of commentators, analysts, and newsletter publishers, are spending their time on trivial issues, rather than dealing with jobs and the economy. Even when these people get to the issue of jobs and the economy, they purposely talk nonsense because they want to obfuscate and confuse the issue.
Why do they do this? Why do they want to allow the wrecking of America to continue?
It is because an American elite is making money in the present situation. These people have allegiance to China and other foreign countries, rather than allegiance to America. These tens of thousands of prosperous people are preventing tens of millions of ordinary Americans from having employment and thereby also enjoying prosperity.
A very tragic situation. Especially tragic because so unnecessary.
Footnote: Many people say we should cut or eliminate corporate tax for companies that manufacture in America. Good idea but would require detailed analysis of each product to determine what is the proportion of American labor and American parts. Then it really gets complicated if and when companies scheme to abuse the system. The limit proposed above, on the total value of imported items from each foreign country, controls these issues in a much simpler way. In a related issue, I have long suspected that published figures for imports from China and other foreign countries understate the actual situation. For example, American companies owning factories in China and other foreign countries may be able to bring their manufactured products into America privately. Any procedures along these lines would have to be brought under the control of the principle I am proposing here.
Comment
Reader @larry_author comments that there could be a problem with the proposal presented herein. The problem would be how to assign priority, within the quota, for import of critical parts or supplies for domestic auto manufacturing, as an example. Reader also comments that the solution to the jobs/deficit problem is to stop destroying the middle class.
Ed Farkas response:
I see a bigger difficulty with my proposal, but within this issue I can offer at least one response to the reader's comment. Taking China as one example, my proposal says to China that our imports of manufactured goods from China will drop to 25% of the current level! (Currently we import four times more than we export to China.) China's fury at this proposal will have no bounds. Who knows what they would do. Maybe they would assassinate any American leaders pushing this proposal. Within this situation, I am sure China would be in no mood to negotiate what critically-needed goods would be included in the quota, with other items deleted from the quota.
Throughout history, many nations have experienced shortages because they could not import, due to wars or other reasons. Usually they have found alternate sources or alternate materials or otherwise used initiative and resourcefulness to solve the problem. America is premier in the world in terms of initiative and resourcefulness. I am sure the problem posed by the reader could be solved in this way.
But in any case we do not want to be dependent on China or other foreign country for critical items. That is why it is so insane that our Defense Department places orders overseas.
In response to the comment from the reader that the solution to the jobs & deficit problem is to stop destroying the middle class: Sending of manufacturing jobs overseas began in the early 1960s, and has continued for 50 years. This process is what is destroying the middle class. To stop the destruction of the middle class, we have to greatly increase the size and output of the U.S. manufacturing sector. My proposal herein is a method of meeting that objective.
I wish we could get a grassroots movement, rather than waiting for government to do something. If every American would stop buying foreign-made goods, the problem would be solved very quickly. The big store chains would be forced to go to the thousands of existing domestic manufacturers. These manufacturers would ramp up, and hire more workers. Thousands of new factories would spring up, also hiring workers. Literally, the nation could be turned around in six months.
+
Tuesday, April 17, 2012
Tuesday, March 27, 2012
More disinformation
+
Introduction
Robert Reich was Secretary of Labor in the Bill Clinton Administration. Robert Reich has over 26,000 followers on Facebook.
Looking recently at comments from a few dozen of his followers, it is evident at least in this small sample that these people really admire him and even want him to run for President in 2016. Many of the comments also mention Hillary Clinton and how much they admire her and how brave she is.
Reich's followers should look a little more carefully before deciding whom to admire!
A comment by Robert Reich
Reich published an article on February 17, 2012, with the title "Manufacturing Illusions".
About one-third of the way through the article, there is a short paragaph. Here is the full text of this paragraph:
"Bringing back American manufacturing isn't the real challenge, anyway. It's creating good jobs for the majority of Americans who lack four-year college degrees."
What Americans understand and believe
Polls show the ordinary people of America understand and believe that we have to greatly increase domestic manufacturing in order to save the economy, and, for that matter, to save America.
Obviously it is difficult to get domestic manufacturing going again, faced with unrestricted imports. A further challenge is refusal of large stores such as Walmart to at least give consumers a choice by displaying Made-in-USA goods, readily available from thousands of existing American manufacturers, next to displays of Made-in-China goods.
Outrageous disinformation
Where is Reich coming from when he says "Bringing back American manufacturing isn't the real challenge, anyway."?
Reich loves these convoluted sentences that are impossible to understand. Is he saying it is easy to bring back American manufacturing? Or is he saying that it is not necesssary and in fact irrelevant to bring back American manufacturing?
Reich's statement is an outrageous example of purposeful disinformation, of purposely injecting confusion into the American debate about jobs and the economy. Reich's statement is absolutely false on numerous levels.
I say "bringing back American manufacturing" is difficult to accomplish but at the same time it is of life and death importance that we in fact bring back American manufacturing.
"Bringing back American manufacturing" IS the real challenge because manufacturing is the only sector of the economy that provides:
+ value-added effect, subtly but strongly enriching the economy
+ multiplier effect, i.e. business firms that supply the manufacturing facility
+ ripple effect creating jobs throughout the economy, requiring a wide variety of skills and levels of education
+ reduction of the hemorrhage of wealth out of our country, currently running at over $500 billion per year, that pays foreign countries to do our manufacturing for us
Reich's next disinformation howler
In this short two-sentence paragraph, Reich hits us with a second piece of outrageous disinformation:
"It's creating good jobs for the majority of Americans who lack four-year college degrees."
Again the convoluted sentence. What is Reich trying to say here? Is he saying that all Americans with four-year degrees have jobs? And the corollary that only people without four-year degrees are having difficulty finding jobs?
The second sentence in this little two-sentence paragraph is another absolutely false statement from Reich, in and of itself, and when coupled with the first sentence. The manufacturing sector is exactly and specifically a very good place to create employment for Americans of all skills and educational levels.
To "create good jobs" we have to increase the size of the American domestic manufacturing sector. Reich and others use the word "good" to mean "good wages". They try to show that pursuing manufacturing is not worthwhile because new manufacturing jobs won't pay very well. I say a moderate wage is better than ZERO wages.
Is Reich making the nonsensical statement that Americans who lack four-year degrees have no place in manufacturing? What about Americans with a two- or three-year technical diploma in design, operation, and maintenance of robotic equipment? What about Americans with technical training in programming and operation of sophisticated machine tools?
On the subject of college degrees, Reich is either completely out of touch with reality or is purposely making false statements. I guess Reich has no grandchildren who recently received college degrees. If he did, he would know that Americans with four-year college degrees, especially recent graduates, are finding it almost impossible to find employment.
Why is Reich pouring out disinformation?
China is very concerned about possible recovery of the American manufacturing sector.
The reason is obvious. China does not want to lose its best customer. Even a 10% reduction in American purchases of Made-in-China goods would create havoc in the Chinese economy.
Therefore China has enlisted prominent Americans to "dis" American manufacturing, i.e., create disrespect for American manufacturing and downplay its importance. In effect, China has hired lobbyists. Two important lobbyists are Robert Reich and Hillary Clinton.
Downplaying the importance of manufacturing in America is clearly evident in Reich's little two-sentence paragraph.
Of course Reich is not the only American who is working against his or her own country in this way. There are others. For an example please see my blog post http://edfarkasjobs.blogspot.com/2012/03/disinformation.html
Reich's disinformation/disrespect event discussed herein is not the first one. A few months ago, Reich supported an obviously false analysis that tried to show that China's involvement in the American economy is only 2.7%. Please see my blog post http://edfarkasjobs.blogspot.com/2011/08/new-venture-into-fantasy-land.html for details.
Reich also made the outrageous statement that "China merely assembles". I say if "assembly" is so "mere", why can't we do the "assembly" here in America?
Bulletin! Stop the presses! The American Economics Association has adopted a new rule stating that economists must disclose who funded their work. I say that this new rule is a clear admission that economists are prostituting themselves.
Is Robert Reich funded by China?
Why do I mention Hillary Clinton?
Hillary Clinton made a speech in January 2011 about China. This speech is full of false and incorrect statements and is essentially a cheerleader speech in favor of China.
In working against her own country in this way, Hillary Clinton puts herself in a conflict of interest in terms of her job as Secretary of State in the United States government. She can't be simultaneously working for the United States and for China. She can't operate with divided loyalties. She must resign from one of her two jobs.
Please see my blog post http://edfarkasjobs.blogspot.com/2011/05/americas-fantasy-relationship-with.html for a complete analysis of Hillary Clinton's speech, childish in many ways but also very dangerous and damaging in terms of the level of disinformation.
What is the bottom line here?
It is only plain common sense that we have to cut imports and increase the size of the domestic manufacturing sector, in order to save America.
Why haven't we moved decisively in this common sense direction? The reason is that too many Americans, especially Americans who have power or influence, have more loyalty to China and their own wealth and position, than they have to the ordinary people of America.
Tragically, for some reason these people of wealth and power don't understand that they could keep their positions in a prosperous America as well as in the present impoverished America with 25 million unemployed.
+
Introduction
Robert Reich was Secretary of Labor in the Bill Clinton Administration. Robert Reich has over 26,000 followers on Facebook.
Looking recently at comments from a few dozen of his followers, it is evident at least in this small sample that these people really admire him and even want him to run for President in 2016. Many of the comments also mention Hillary Clinton and how much they admire her and how brave she is.
Reich's followers should look a little more carefully before deciding whom to admire!
A comment by Robert Reich
Reich published an article on February 17, 2012, with the title "Manufacturing Illusions".
About one-third of the way through the article, there is a short paragaph. Here is the full text of this paragraph:
"Bringing back American manufacturing isn't the real challenge, anyway. It's creating good jobs for the majority of Americans who lack four-year college degrees."
What Americans understand and believe
Polls show the ordinary people of America understand and believe that we have to greatly increase domestic manufacturing in order to save the economy, and, for that matter, to save America.
Obviously it is difficult to get domestic manufacturing going again, faced with unrestricted imports. A further challenge is refusal of large stores such as Walmart to at least give consumers a choice by displaying Made-in-USA goods, readily available from thousands of existing American manufacturers, next to displays of Made-in-China goods.
Outrageous disinformation
Where is Reich coming from when he says "Bringing back American manufacturing isn't the real challenge, anyway."?
Reich loves these convoluted sentences that are impossible to understand. Is he saying it is easy to bring back American manufacturing? Or is he saying that it is not necesssary and in fact irrelevant to bring back American manufacturing?
Reich's statement is an outrageous example of purposeful disinformation, of purposely injecting confusion into the American debate about jobs and the economy. Reich's statement is absolutely false on numerous levels.
I say "bringing back American manufacturing" is difficult to accomplish but at the same time it is of life and death importance that we in fact bring back American manufacturing.
"Bringing back American manufacturing" IS the real challenge because manufacturing is the only sector of the economy that provides:
+ value-added effect, subtly but strongly enriching the economy
+ multiplier effect, i.e. business firms that supply the manufacturing facility
+ ripple effect creating jobs throughout the economy, requiring a wide variety of skills and levels of education
+ reduction of the hemorrhage of wealth out of our country, currently running at over $500 billion per year, that pays foreign countries to do our manufacturing for us
Reich's next disinformation howler
In this short two-sentence paragraph, Reich hits us with a second piece of outrageous disinformation:
"It's creating good jobs for the majority of Americans who lack four-year college degrees."
Again the convoluted sentence. What is Reich trying to say here? Is he saying that all Americans with four-year degrees have jobs? And the corollary that only people without four-year degrees are having difficulty finding jobs?
The second sentence in this little two-sentence paragraph is another absolutely false statement from Reich, in and of itself, and when coupled with the first sentence. The manufacturing sector is exactly and specifically a very good place to create employment for Americans of all skills and educational levels.
To "create good jobs" we have to increase the size of the American domestic manufacturing sector. Reich and others use the word "good" to mean "good wages". They try to show that pursuing manufacturing is not worthwhile because new manufacturing jobs won't pay very well. I say a moderate wage is better than ZERO wages.
Is Reich making the nonsensical statement that Americans who lack four-year degrees have no place in manufacturing? What about Americans with a two- or three-year technical diploma in design, operation, and maintenance of robotic equipment? What about Americans with technical training in programming and operation of sophisticated machine tools?
On the subject of college degrees, Reich is either completely out of touch with reality or is purposely making false statements. I guess Reich has no grandchildren who recently received college degrees. If he did, he would know that Americans with four-year college degrees, especially recent graduates, are finding it almost impossible to find employment.
Why is Reich pouring out disinformation?
China is very concerned about possible recovery of the American manufacturing sector.
The reason is obvious. China does not want to lose its best customer. Even a 10% reduction in American purchases of Made-in-China goods would create havoc in the Chinese economy.
Therefore China has enlisted prominent Americans to "dis" American manufacturing, i.e., create disrespect for American manufacturing and downplay its importance. In effect, China has hired lobbyists. Two important lobbyists are Robert Reich and Hillary Clinton.
Downplaying the importance of manufacturing in America is clearly evident in Reich's little two-sentence paragraph.
Of course Reich is not the only American who is working against his or her own country in this way. There are others. For an example please see my blog post http://edfarkasjobs.blogspot.com/2012/03/disinformation.html
Reich's disinformation/disrespect event discussed herein is not the first one. A few months ago, Reich supported an obviously false analysis that tried to show that China's involvement in the American economy is only 2.7%. Please see my blog post http://edfarkasjobs.blogspot.com/2011/08/new-venture-into-fantasy-land.html for details.
Reich also made the outrageous statement that "China merely assembles". I say if "assembly" is so "mere", why can't we do the "assembly" here in America?
Bulletin! Stop the presses! The American Economics Association has adopted a new rule stating that economists must disclose who funded their work. I say that this new rule is a clear admission that economists are prostituting themselves.
Is Robert Reich funded by China?
Why do I mention Hillary Clinton?
Hillary Clinton made a speech in January 2011 about China. This speech is full of false and incorrect statements and is essentially a cheerleader speech in favor of China.
In working against her own country in this way, Hillary Clinton puts herself in a conflict of interest in terms of her job as Secretary of State in the United States government. She can't be simultaneously working for the United States and for China. She can't operate with divided loyalties. She must resign from one of her two jobs.
Please see my blog post http://edfarkasjobs.blogspot.com/2011/05/americas-fantasy-relationship-with.html for a complete analysis of Hillary Clinton's speech, childish in many ways but also very dangerous and damaging in terms of the level of disinformation.
What is the bottom line here?
It is only plain common sense that we have to cut imports and increase the size of the domestic manufacturing sector, in order to save America.
Why haven't we moved decisively in this common sense direction? The reason is that too many Americans, especially Americans who have power or influence, have more loyalty to China and their own wealth and position, than they have to the ordinary people of America.
Tragically, for some reason these people of wealth and power don't understand that they could keep their positions in a prosperous America as well as in the present impoverished America with 25 million unemployed.
+
Tuesday, March 6, 2012
Disinformation
+
Prologue
Three or four years ago I saw an older gentleman, an economics professor from University of Maryland, interviewed on CNN. They gave the man about 10 seconds. He said we have to increase manufacturing in USA to solve our deficit and unemployment problems.
Since then I have not seen or heard even one constructive statement from any economist. They either keep their heads down, staying out of the most serious economic issue since America was founded, or they come up with disinformation.
Providing disinformation is treason, simple as that. Disinformation delays solving the problem of deficits and unemployment. Disinformation creates confusion in the minds of the American people as to what should be done.
What has to be done to solve the problems is cut imports and increase domestic manufacturing, just as the professor from University of Maryland said three or four years ago. Every day we delay in implementing these ideas damages America in multiple ways.
Here is what happens every day:
+ Another net $1.4 billion hemorrhaging out of our country to foreign countries to pay them to do manufacturing we could be doing here.
+ China and other foreign countries become richer by $1.4 billion every day while we become poorer by $1.4 billion every day.
+ China and other foreign countries buy up another chunk of our economy and gain further control of our economy.
+ China gains further control of "leaders" in American business and government so that the ordinary working men and women of America have less and less say in our political debate about how to save the American economy.
What do the rich and powerful people of America want?
It seems the rich and powerful people, the heads of corporations, etc., want America to fail. Why or how they would benefit from a failed and wrecked America I do not know. I hope they understand that keeping the lid on the true factual situation, and allowing disinformation to run rampant, will cause America to fail.
A new low in disinformation
Or maybe I should refer to it as a new high, because I want to talk about a new case of disinformation which is even more outrageous than previous instances I am aware of.
There was an article in Wall Street Journal (WSJ) on March 3, 2012. (Or maybe the correct date is March 2.) Title of the article:
"Economists assail campaign proposals to help factories"
Here are some passages from the first couple of paragraphs of the article:
"Proposals by...(the President and by Republican candidates)...to promote manufacturing are running into skepticism among economists who doubt modern factories can churn out many new jobs."
"Critics of such proposals say the rise in manufacturing employment of the past two years is more a blip than a trend."
The article quotes Susan Lund of the McKinsey Global Institute: "If job creation is your goal, manufacturing is probably not the sector you'd look to."
One initial comment. The statement "more a blip than a trend" is absolutely outrageous. It is gratuitous negativity, with no factual basis. Only by being a very accurate predictor of the future can anyone tell whether it is a blip or a trend. It demonstrates my point that there are people who want America to fail.
More generally, I have the strong suspicion that the above three statements come from Americans aligned with China. China is very afraid of the increasing level of manufacturing in America.
If America were to throw off the chains of China, it could be that other western countries, UK, EU, Canada, Australia, New Zealand, would also get brave and do the same thing.
In numerous western movies, a man finds a valuable gold deposit. He tries to scare people away from the area by making ghostly noises at night or creating images of fierce animals. Similarly, the three statements quoted above are transparent and flimsy attempts to scare America away from pursuing increased levels of domestic manufacturing.
Let's look at more gems
The statement that new manufacturing will not create significant numbers of jobs is absolutely false.
At another point in the article Ms Lund says "increasingly factories are not assembly lines with lots of people standing around". This demeaning and insulting statement is another way of saying the same thing and is irrelevant if not absolutely false.
It is a known principle of economics, stated and re-stated in every textbook, that manufacturing has a ripple or multiplying effect. Even if it is true that the number of workers in the factory that completes the manufacturing process is smaller, there are still the suppliers. The suppliers manufacture components and ship them to the factory. Other suppliers design, manufacture, install, and service the robotic equipment and the automation equipment.
Then the factory itself requires designers, engineers, and personnel in human relations, purchasing, sales, and other categories.
Surely we would rather have all this activity at home here in America, even at a reduced level per unit of output, rather than a ZERO level due to doing the manufacturing in China.
Manufacturing is probably not the sector you'd look to
Ms Lund's statement that "manufacturing is probably not the sector you'd look to" is absolute nonsense. No other sector in the economy provides the benefits I mention above, and I've hardly begun listing all the benefits!
There is simply no other sector "you'd look to"!
Everyone respects honest work. The truck driver, the forest ranger, the librarian, the bus driver, the fireman/woman, the hotel chambermaid/man, the gardener, the city clerk helping people, the police officer, the teacher, the nurse, the doctor, do work vital to our well-being. But in economic terms, these sectors do not provide the benefits provided by manufacturing.
Even if manufacturing returning to America produces fewer new jobs than we might expect, we still get HUGE benefits.
All these people claiming to be economists are clearly not aware of, or don't want to be aware of, a simple fact of economics:
There is a value-added effect, or it can be termed a wealth-creation effect, inherent in manufacturing. For a given level of output, the value-added effect is the same whether 100 workers or 10,000 workers are required.
The value-added effect subtly but strongly enriches the economy.
In a 50-year fit of insanity, 1962 to 2012, we sent huge amounts of manufacturing activity away to foreign countries. Thereby we lost a huge amount of the value-added effect of manufacturing.
Result? We became impoverished while China and other foreign countries became enriched.
Our trade deficit
Our trade deficit in manufactured goods with all foreign countries is over $500 billion per year.
This number is available in publications coming out of the Congressional Research Service and the Bureau of the Census.
$500 billion divided by 365 days in the year provides the $1.4 billion figure (rounded), that I mention above.
Our huge trade deficit is never mentioned by politicians. Reason: it is too scary to deal with or maybe they don't understand it. Also, many economists produce the disinformation that the trade deficit is a theoretical figure and is not a real cost we are paying.
All we have to do is look at impoverished America, and compare with rolling-in-money China, to see that the economists are way off base, again.
If we bring manufacturing back to America, and/or if we cut imports to encourage new manufacturing to spring up in America, even if we don't have huge job creation we still lessen the amount of money that hemorrhages out to foreign countries.
Isn't it obvious that reducing the hemorrhage is going to help America? It's plain common sense!
But the doom/gloom sayers, the people who enjoy seeing failure, the twisted people who want America to fail, don't see it.
PS: I could write an article longer than the WSJ article, demonstrating the nonsense of a dozen more points made in the article. But maybe the brief discusssion above demonstrates the tone of the article. Does WSJ want American to fail?
+
Prologue
Three or four years ago I saw an older gentleman, an economics professor from University of Maryland, interviewed on CNN. They gave the man about 10 seconds. He said we have to increase manufacturing in USA to solve our deficit and unemployment problems.
Since then I have not seen or heard even one constructive statement from any economist. They either keep their heads down, staying out of the most serious economic issue since America was founded, or they come up with disinformation.
Providing disinformation is treason, simple as that. Disinformation delays solving the problem of deficits and unemployment. Disinformation creates confusion in the minds of the American people as to what should be done.
What has to be done to solve the problems is cut imports and increase domestic manufacturing, just as the professor from University of Maryland said three or four years ago. Every day we delay in implementing these ideas damages America in multiple ways.
Here is what happens every day:
+ Another net $1.4 billion hemorrhaging out of our country to foreign countries to pay them to do manufacturing we could be doing here.
+ China and other foreign countries become richer by $1.4 billion every day while we become poorer by $1.4 billion every day.
+ China and other foreign countries buy up another chunk of our economy and gain further control of our economy.
+ China gains further control of "leaders" in American business and government so that the ordinary working men and women of America have less and less say in our political debate about how to save the American economy.
What do the rich and powerful people of America want?
It seems the rich and powerful people, the heads of corporations, etc., want America to fail. Why or how they would benefit from a failed and wrecked America I do not know. I hope they understand that keeping the lid on the true factual situation, and allowing disinformation to run rampant, will cause America to fail.
A new low in disinformation
Or maybe I should refer to it as a new high, because I want to talk about a new case of disinformation which is even more outrageous than previous instances I am aware of.
There was an article in Wall Street Journal (WSJ) on March 3, 2012. (Or maybe the correct date is March 2.) Title of the article:
"Economists assail campaign proposals to help factories"
Here are some passages from the first couple of paragraphs of the article:
"Proposals by...(the President and by Republican candidates)...to promote manufacturing are running into skepticism among economists who doubt modern factories can churn out many new jobs."
"Critics of such proposals say the rise in manufacturing employment of the past two years is more a blip than a trend."
The article quotes Susan Lund of the McKinsey Global Institute: "If job creation is your goal, manufacturing is probably not the sector you'd look to."
One initial comment. The statement "more a blip than a trend" is absolutely outrageous. It is gratuitous negativity, with no factual basis. Only by being a very accurate predictor of the future can anyone tell whether it is a blip or a trend. It demonstrates my point that there are people who want America to fail.
More generally, I have the strong suspicion that the above three statements come from Americans aligned with China. China is very afraid of the increasing level of manufacturing in America.
If America were to throw off the chains of China, it could be that other western countries, UK, EU, Canada, Australia, New Zealand, would also get brave and do the same thing.
In numerous western movies, a man finds a valuable gold deposit. He tries to scare people away from the area by making ghostly noises at night or creating images of fierce animals. Similarly, the three statements quoted above are transparent and flimsy attempts to scare America away from pursuing increased levels of domestic manufacturing.
Let's look at more gems
The statement that new manufacturing will not create significant numbers of jobs is absolutely false.
At another point in the article Ms Lund says "increasingly factories are not assembly lines with lots of people standing around". This demeaning and insulting statement is another way of saying the same thing and is irrelevant if not absolutely false.
It is a known principle of economics, stated and re-stated in every textbook, that manufacturing has a ripple or multiplying effect. Even if it is true that the number of workers in the factory that completes the manufacturing process is smaller, there are still the suppliers. The suppliers manufacture components and ship them to the factory. Other suppliers design, manufacture, install, and service the robotic equipment and the automation equipment.
Then the factory itself requires designers, engineers, and personnel in human relations, purchasing, sales, and other categories.
Surely we would rather have all this activity at home here in America, even at a reduced level per unit of output, rather than a ZERO level due to doing the manufacturing in China.
Manufacturing is probably not the sector you'd look to
Ms Lund's statement that "manufacturing is probably not the sector you'd look to" is absolute nonsense. No other sector in the economy provides the benefits I mention above, and I've hardly begun listing all the benefits!
There is simply no other sector "you'd look to"!
Everyone respects honest work. The truck driver, the forest ranger, the librarian, the bus driver, the fireman/woman, the hotel chambermaid/man, the gardener, the city clerk helping people, the police officer, the teacher, the nurse, the doctor, do work vital to our well-being. But in economic terms, these sectors do not provide the benefits provided by manufacturing.
Even if manufacturing returning to America produces fewer new jobs than we might expect, we still get HUGE benefits.
All these people claiming to be economists are clearly not aware of, or don't want to be aware of, a simple fact of economics:
There is a value-added effect, or it can be termed a wealth-creation effect, inherent in manufacturing. For a given level of output, the value-added effect is the same whether 100 workers or 10,000 workers are required.
The value-added effect subtly but strongly enriches the economy.
In a 50-year fit of insanity, 1962 to 2012, we sent huge amounts of manufacturing activity away to foreign countries. Thereby we lost a huge amount of the value-added effect of manufacturing.
Result? We became impoverished while China and other foreign countries became enriched.
Our trade deficit
Our trade deficit in manufactured goods with all foreign countries is over $500 billion per year.
This number is available in publications coming out of the Congressional Research Service and the Bureau of the Census.
$500 billion divided by 365 days in the year provides the $1.4 billion figure (rounded), that I mention above.
Our huge trade deficit is never mentioned by politicians. Reason: it is too scary to deal with or maybe they don't understand it. Also, many economists produce the disinformation that the trade deficit is a theoretical figure and is not a real cost we are paying.
All we have to do is look at impoverished America, and compare with rolling-in-money China, to see that the economists are way off base, again.
If we bring manufacturing back to America, and/or if we cut imports to encourage new manufacturing to spring up in America, even if we don't have huge job creation we still lessen the amount of money that hemorrhages out to foreign countries.
Isn't it obvious that reducing the hemorrhage is going to help America? It's plain common sense!
But the doom/gloom sayers, the people who enjoy seeing failure, the twisted people who want America to fail, don't see it.
PS: I could write an article longer than the WSJ article, demonstrating the nonsense of a dozen more points made in the article. But maybe the brief discusssion above demonstrates the tone of the article. Does WSJ want American to fail?
+
Monday, February 13, 2012
Laugh or cry
-
In previous posts I have discussed what I call fantasy explanations of the very bad economic and jobs situation in good old USA. Fantasy explanations are presented to hide the real cause of the problem, namely that we shot ourselves in the foot by sending, or allowing the sending, of manufacturing jobs overseas.
Now there is a new crop of fantasies along the following lines. America has had its great days on the upswing, and now is going down, similar to "The Rise and Fall of the Roman Empire".
When I see these new fantasies, I don't know whether to laugh or cry, whether to become physically ill, or simply give up the fight against the corrupt authors of these fantasies, and their corrupt employers.
The fall of the Roman empire was due to myriad, complex internal and external developments. The problem in America is due to one simple thing that we did to ourselves, namely sending our manufacturing jobs overseas.
Since the cause of our problem is very simple and identifiable, it is only logical that the SOLUTION to the problem is also simple and identifiable.
All we have to do is cut imports and thereby encourage increased domestic manufacturing.
I presented a very simple, fair, balanced, and do-able proposal in previous posts:
Country by country, allow imports of manufactured goods from each country only to the extent that that country buys manufactured goods from us.
Right now we have a trade deficit in manufactured goods with every foreign country. The trade deficit with China is the largest. Then there is the European Union, Mexico, Japan, the "ASEAN" countries, and others. This is a ridiculous and impossible situation.
We can easily get into a balanced situation with each of these countries or entities, so there would be a ZERO trade deficit with that country or entity. In this way we would eliminate our trade deficit in manufactured goods with all foreign countries of over $500 billion per year. This outflow is a devastating hemorrhage of wealth, a direct cause of the impoverishment of our country.
Our politicians over the last 50 years have been criminally negligent in allowing this impoverishment to come into existence. Today our politicians are hysterically arguing over every irrelevant/trivial issue they can think of, rather than getting down to the business of cutting imports to encourage increased domestic manufacturing.
Polls show that the ordinary working men and women of America understand very well the importance of domestic manufacturing. Polls show that the American people are prepared to pay a bit more for "Made-in-USA" goods but all we see in the stores is "Made-in-China".
Why is it so difficult for a simple and obvious idea, Made in USA, to gain traction? Basically, the reason is corruption in our national government.
There are some politicians who understand, and are speaking out about Made in USA. But the vast majority of politicians PRETEND not to understand. This is where the corruption comes in.
We used to worry about organized crime infiltrating into legitimate business firms. It is possible now that we have a much bigger problem. It may be that China has infiltrated into the US economy in a major way. China may already own or control thousands of U.S. companies. All it takes is own 10% of the shares of a company, and you can get your own man or woman on the board of directors, and thereby influence the policy of that company.
All of these companies have much easier access to government than the ordinary working men and women of America. These companies want to keep the status quo of unlimited import of manufactured goods from China and other countries. This may be the reason why America is not picking up and running with the simple solution of cutting imports to encourage domestic manufacturing.
The situation could be so bad that if we knew the extent of it we would yearn for the good old days of organized crime infiltration!
-
In previous posts I have discussed what I call fantasy explanations of the very bad economic and jobs situation in good old USA. Fantasy explanations are presented to hide the real cause of the problem, namely that we shot ourselves in the foot by sending, or allowing the sending, of manufacturing jobs overseas.
Now there is a new crop of fantasies along the following lines. America has had its great days on the upswing, and now is going down, similar to "The Rise and Fall of the Roman Empire".
When I see these new fantasies, I don't know whether to laugh or cry, whether to become physically ill, or simply give up the fight against the corrupt authors of these fantasies, and their corrupt employers.
The fall of the Roman empire was due to myriad, complex internal and external developments. The problem in America is due to one simple thing that we did to ourselves, namely sending our manufacturing jobs overseas.
Since the cause of our problem is very simple and identifiable, it is only logical that the SOLUTION to the problem is also simple and identifiable.
All we have to do is cut imports and thereby encourage increased domestic manufacturing.
I presented a very simple, fair, balanced, and do-able proposal in previous posts:
Country by country, allow imports of manufactured goods from each country only to the extent that that country buys manufactured goods from us.
Right now we have a trade deficit in manufactured goods with every foreign country. The trade deficit with China is the largest. Then there is the European Union, Mexico, Japan, the "ASEAN" countries, and others. This is a ridiculous and impossible situation.
We can easily get into a balanced situation with each of these countries or entities, so there would be a ZERO trade deficit with that country or entity. In this way we would eliminate our trade deficit in manufactured goods with all foreign countries of over $500 billion per year. This outflow is a devastating hemorrhage of wealth, a direct cause of the impoverishment of our country.
Our politicians over the last 50 years have been criminally negligent in allowing this impoverishment to come into existence. Today our politicians are hysterically arguing over every irrelevant/trivial issue they can think of, rather than getting down to the business of cutting imports to encourage increased domestic manufacturing.
Polls show that the ordinary working men and women of America understand very well the importance of domestic manufacturing. Polls show that the American people are prepared to pay a bit more for "Made-in-USA" goods but all we see in the stores is "Made-in-China".
Why is it so difficult for a simple and obvious idea, Made in USA, to gain traction? Basically, the reason is corruption in our national government.
There are some politicians who understand, and are speaking out about Made in USA. But the vast majority of politicians PRETEND not to understand. This is where the corruption comes in.
We used to worry about organized crime infiltrating into legitimate business firms. It is possible now that we have a much bigger problem. It may be that China has infiltrated into the US economy in a major way. China may already own or control thousands of U.S. companies. All it takes is own 10% of the shares of a company, and you can get your own man or woman on the board of directors, and thereby influence the policy of that company.
All of these companies have much easier access to government than the ordinary working men and women of America. These companies want to keep the status quo of unlimited import of manufactured goods from China and other countries. This may be the reason why America is not picking up and running with the simple solution of cutting imports to encourage domestic manufacturing.
The situation could be so bad that if we knew the extent of it we would yearn for the good old days of organized crime infiltration!
-
Friday, February 3, 2012
Union State
+
Good Ideas
A gentleman I met on twitter (I have unfortunately misplaced my record of his name) has a great idea. He says we should have a new official day: "Manufacturing Day". The object is to emphasize the importance of manufacturing in America. It would not be a holiday where we don't work. It would be a day where the American manufacturing workforce would be in the normal working mode, enriching America through manufacturing.
Another gentleman (@mitch_goldberg) also has a brilliant idea. He observes that investors are running around the world looking for third world economies that are growing. Example: BRIC. Brazil, Russia, India, China.
America's ordinary working men and women know America has been brought to its knees by the insane 50-year policy of sending our manufacturing jobs away. America is now almost a third world country. Mitch's idea is that investors should look right here in America. It is probably the best place to invest, because, despite the bumbling of most of our "leaders", American manufacturing is slowly recovering. I predict that this recovery will feed on itself and the rate of recovery will increase, making America a very good place to invest.
Another good idea
No one can deny that America is in bad shape. 25 million people unemployed. Foreclosures on millions of homes. Neighborhoods of empty homes deteriorating rapidly. Paved roads allowed to return to gravel. Shuttered factories rusting away. Portions of cities abandoned. Schools and bridges falling apart. All levels of government facing impossible deficits.
It is almost an episode of the TV show After People!
There is only one way to solve the problem: cut imports and increase domestic manufacturing. The wealth needed to have a viable economy and a liveable country comes from manufacturing and manufacturing employment. Many reactionary and stupid commentators and analysts don't accept these plain facts. One thing they do in the face of the above comments is start screaming about free trade and how we don`t dare interfere with free trade.
Free trade is great until it becomes EXPLOITATION. Here is an example of EXPLOITATION in trade:
Trade in manufactured goods between America and China, 2010.
U.S. exports to China. $93 billion
U.S. imports from China. $366 billion
Note the ratio of almost 4 to 1.
Trade deficit with China $273 billion
In contrast, here is the situation that would exist in balanced, reasonable and constructive free trade:
Trade in manufactured goods between America and China, 2010.
U.S. exports to China. $93 billion
U.S. imports from China. $93 billion
Note the ratio of 1 to 1.
Trade deficit with China ZERO
Now here is my good idea, if I say so myself!
On a country by country basis we have to control imports following the above pattern. Let's say country XYZ purchased manufactured goods from America in 2011, valued at $35 billion. We then say to country XYZ that we will allow entry of your manufactured goods into America in 2012, absolutely free of tariffs, duty, tax, etc., up to a limit of $35 billion. Once that amount of imports in 2012 has been reached, no further imports will be allowed.
We do this with each and every country we deal with, in this way eliminating our present devastating hemorrhage of wealth to foreign countries of over $500 billion per year. And in addition giving our domestic manufacturing breathing space to survive and grow.
One commentator has said that it is mathematically impossible for every country to achieve the status of net exporter. He is absolutely correct in saying this. My proposal herein is not that we try to achieve net exporter status. All we are trying to do is have balanced trade with other countries.
If my plan requires abrogation of World Trade Organization treaties and regulations so be it. If China gets furious and starts blustering, so be it. No nation can accept a $500 billion trade deficit hemorrhage year in and year out, into the indefinite future, ultimately leading to the complete destruction of that nation!
State of the Union Address
Now let's look at the State of the Union Address of January 24, 2012.
Here are some excerpts from the Address:
"We should start with our tax code. No company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas. From now on, every multinational company should have to pay a basic minimum tax. And every penny (of this new tax revenue) should go toward lowering taxes for companies that choose to stay here and hire here in America."
"If (a manufacturer) wants to relocate to a hard-hit community, (the manufacturer) should get help financing a new plant, equipment, or training for new workers."
"It is time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America. Send me these tax reforms, and I will sign them right away."
"Expand tax relief to small businesses that are raising wages and creating jobs. So put them in a bill, and get it on my desk this year."
What is wrong?
Superficially, these statements from the State of the Union Address sound good. But there is a huge flaw. What is the flaw? The word "should" appears five times in these brief excerpts.
I am an ordinary private citizen. Out of 312 million people in America, only my loyal twitter followers, 100 or so, know about me and pay any attention to what I am saying. So I have no power to get anything done. When I propose some action, I have to use the word "should".
President Obama is THE PRESIDENT OF THE UNITED STATES OF AMERICA. We have all grown up regarding the president as the most powerful man in America. The president should not be saying "should". The president can get things done! He can say "we will do this" or "we will do that", or "I have ordered this" or "I have ordered that", while little no-account Ed Farkas can only say "should"!
I was an Obama supporter. But Mr. Obama has lost my support, due to his inaction and passivity.
Mr. Obama has been president for three full years and he is only now saying we "should" remove tax provisions that reward companies for moving jobs overseas?
UNNNNNN-BELIEVABLE!
He should have issued an executive order on day ONE of his presidency, suspending those tax provisions, as just one example of desperately needed actions that never happened.
What else is wrong?
In his State of the Union Address, Mr. Obama repeated a behavior pattern seen during the debate about budget cuts. He invites Senate/House members to come up with a solution to a problem, write a bill reflecting the solution, and send the bill to his desk for signature. This method is absolute nonsense. How are 535 disparate and squabbling Senate/House members going to suddenly join in concerted action and go through all these steps?
What are we paying Mr. Obama for? He is supposed to be leading, not waiting for other people to do everything.
Mr. Obama has hundreds of advisors, including economists and lawyers. He should order these advisors to write the bill he wants, and then present it to Senate and House for approval. Sure, it won't necessarily get immediate approval, but if it is a good bill in the eyes of the ordinary working men and women of America, Senate/House members will feel tremendous pressure to act, pass the bill, and send it to the president.
Can anyone provide leadership?
Currently we are not getting leadership from President Obama, or, with a few exceptions, from any other politicians in Washington.
Looking past the November 2012 elections, regardless of who becomes president, whether Mr. Obama or one of the Republican candidates, I doubt very much that we will get the leadership we need. All we can hope for is that the immutable principles of economics will solve our problem little by little, encouraging manufacturing in America to increase. Meanwhile our politicians will continue to dither and argue over trivial issues, unwilling to deal with THE key issue, manufacturing in America.
.
.
Good Ideas
A gentleman I met on twitter (I have unfortunately misplaced my record of his name) has a great idea. He says we should have a new official day: "Manufacturing Day". The object is to emphasize the importance of manufacturing in America. It would not be a holiday where we don't work. It would be a day where the American manufacturing workforce would be in the normal working mode, enriching America through manufacturing.
Another gentleman (@mitch_goldberg) also has a brilliant idea. He observes that investors are running around the world looking for third world economies that are growing. Example: BRIC. Brazil, Russia, India, China.
America's ordinary working men and women know America has been brought to its knees by the insane 50-year policy of sending our manufacturing jobs away. America is now almost a third world country. Mitch's idea is that investors should look right here in America. It is probably the best place to invest, because, despite the bumbling of most of our "leaders", American manufacturing is slowly recovering. I predict that this recovery will feed on itself and the rate of recovery will increase, making America a very good place to invest.
Another good idea
No one can deny that America is in bad shape. 25 million people unemployed. Foreclosures on millions of homes. Neighborhoods of empty homes deteriorating rapidly. Paved roads allowed to return to gravel. Shuttered factories rusting away. Portions of cities abandoned. Schools and bridges falling apart. All levels of government facing impossible deficits.
It is almost an episode of the TV show After People!
There is only one way to solve the problem: cut imports and increase domestic manufacturing. The wealth needed to have a viable economy and a liveable country comes from manufacturing and manufacturing employment. Many reactionary and stupid commentators and analysts don't accept these plain facts. One thing they do in the face of the above comments is start screaming about free trade and how we don`t dare interfere with free trade.
Free trade is great until it becomes EXPLOITATION. Here is an example of EXPLOITATION in trade:
Trade in manufactured goods between America and China, 2010.
U.S. exports to China. $93 billion
U.S. imports from China. $366 billion
Note the ratio of almost 4 to 1.
Trade deficit with China $273 billion
In contrast, here is the situation that would exist in balanced, reasonable and constructive free trade:
Trade in manufactured goods between America and China, 2010.
U.S. exports to China. $93 billion
U.S. imports from China. $93 billion
Note the ratio of 1 to 1.
Trade deficit with China ZERO
Now here is my good idea, if I say so myself!
On a country by country basis we have to control imports following the above pattern. Let's say country XYZ purchased manufactured goods from America in 2011, valued at $35 billion. We then say to country XYZ that we will allow entry of your manufactured goods into America in 2012, absolutely free of tariffs, duty, tax, etc., up to a limit of $35 billion. Once that amount of imports in 2012 has been reached, no further imports will be allowed.
We do this with each and every country we deal with, in this way eliminating our present devastating hemorrhage of wealth to foreign countries of over $500 billion per year. And in addition giving our domestic manufacturing breathing space to survive and grow.
One commentator has said that it is mathematically impossible for every country to achieve the status of net exporter. He is absolutely correct in saying this. My proposal herein is not that we try to achieve net exporter status. All we are trying to do is have balanced trade with other countries.
If my plan requires abrogation of World Trade Organization treaties and regulations so be it. If China gets furious and starts blustering, so be it. No nation can accept a $500 billion trade deficit hemorrhage year in and year out, into the indefinite future, ultimately leading to the complete destruction of that nation!
State of the Union Address
Now let's look at the State of the Union Address of January 24, 2012.
Here are some excerpts from the Address:
"We should start with our tax code. No company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas. From now on, every multinational company should have to pay a basic minimum tax. And every penny (of this new tax revenue) should go toward lowering taxes for companies that choose to stay here and hire here in America."
"If (a manufacturer) wants to relocate to a hard-hit community, (the manufacturer) should get help financing a new plant, equipment, or training for new workers."
"It is time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America. Send me these tax reforms, and I will sign them right away."
"Expand tax relief to small businesses that are raising wages and creating jobs. So put them in a bill, and get it on my desk this year."
What is wrong?
Superficially, these statements from the State of the Union Address sound good. But there is a huge flaw. What is the flaw? The word "should" appears five times in these brief excerpts.
I am an ordinary private citizen. Out of 312 million people in America, only my loyal twitter followers, 100 or so, know about me and pay any attention to what I am saying. So I have no power to get anything done. When I propose some action, I have to use the word "should".
President Obama is THE PRESIDENT OF THE UNITED STATES OF AMERICA. We have all grown up regarding the president as the most powerful man in America. The president should not be saying "should". The president can get things done! He can say "we will do this" or "we will do that", or "I have ordered this" or "I have ordered that", while little no-account Ed Farkas can only say "should"!
I was an Obama supporter. But Mr. Obama has lost my support, due to his inaction and passivity.
Mr. Obama has been president for three full years and he is only now saying we "should" remove tax provisions that reward companies for moving jobs overseas?
UNNNNNN-BELIEVABLE!
He should have issued an executive order on day ONE of his presidency, suspending those tax provisions, as just one example of desperately needed actions that never happened.
What else is wrong?
In his State of the Union Address, Mr. Obama repeated a behavior pattern seen during the debate about budget cuts. He invites Senate/House members to come up with a solution to a problem, write a bill reflecting the solution, and send the bill to his desk for signature. This method is absolute nonsense. How are 535 disparate and squabbling Senate/House members going to suddenly join in concerted action and go through all these steps?
What are we paying Mr. Obama for? He is supposed to be leading, not waiting for other people to do everything.
Mr. Obama has hundreds of advisors, including economists and lawyers. He should order these advisors to write the bill he wants, and then present it to Senate and House for approval. Sure, it won't necessarily get immediate approval, but if it is a good bill in the eyes of the ordinary working men and women of America, Senate/House members will feel tremendous pressure to act, pass the bill, and send it to the president.
Can anyone provide leadership?
Currently we are not getting leadership from President Obama, or, with a few exceptions, from any other politicians in Washington.
Looking past the November 2012 elections, regardless of who becomes president, whether Mr. Obama or one of the Republican candidates, I doubt very much that we will get the leadership we need. All we can hope for is that the immutable principles of economics will solve our problem little by little, encouraging manufacturing in America to increase. Meanwhile our politicians will continue to dither and argue over trivial issues, unwilling to deal with THE key issue, manufacturing in America.
.
.
Friday, January 6, 2012
A short post
+
The situation we are in with China is by far the worst threat America has ever faced.
(other than our terrible wars, Civil War, World War II, Korean War, Vietnam War, Iraq War, Afghanistan War, and others)
And, we are giving China the trillions of dollars and our latest technology they need to destroy us.
Further, there is the definite possibility that it will go from an economic war to a shooting war.
Mr. Greg Autry is one of the authors of the book "Death by China". My comments above are based on some of Mr. Autry's material. Here are some further comments from Mr. Autry:
He has made the following point to the Wall Street Journal:
“…on its front pages (WSJ) carries good articles about the military threat posed by China. However on the inside pages the Journal fails to recognize the economic threat”.
Mr. Autry goes on to state:
“What enables China to build high-tech asymmetric weapons like the DF-21D anti-carrier missile is the continued naïve behavior of the American government and multinational corporations that transfer technology and vast amounts of American capital to a very dangerous state…
In any case, outsourcing our entire manufacturing supply chain to a hostile nation has to be about the stupidest strategic move that any world power has ever made.”
Two sides of the issue
An old saying is that there are two sides (at least) to every issue. In discussing the relationship between America and China, there are two sides. One side includes people such as Greg Autry and Ed Farkas who believe the relationship is an absolute disaster. The other side includes people who think the relationship is constructive and should be built upon for the future.
I say it is impossible for a sane person to sincerely believe that there is good in the relationship with China. I further say that the pro-China people all have an ulterior motive. In other words, the pro-China people are 100% corrupt.
Here are some of the ways that people are corrupt:
+ Writers, analysts, newsletter publishers, who believe that their material will be more readily accepted if they adopt a pro-China stance. And, they are correct in their belief!
+ Writers, analysts, commentators, newsletter publishers, who believe they will get many invitations to be on TV talk shows, if they adopt a pro-China stance. Again, they are correct in their belief!
+ Analysts and commentators who create what I call fantasy explanations (see previous posts August 18, April 23, April 21, 2011, November 26, 2010) to explain our current disastrous economic situation, without admitting that we did it to ourselves by sending our manufacturing jobs away and importing trillions of dollars worth of foreign-made goods.
+ People who simply want to be comfortably on the "winning" side where the money is and where the influence is.
+ Politicians who receive money from China lobbyists or from American companies who hope to do more business with China, and want to avoid any action that might annoy China.
+ People who believe, or pretend to believe, that any action that annoys China, such as commenting on the currency valuation issue, would lead to a "trade war". Are these people really so stupid that they cannot see that we are ALREADY in a trade war (economic war) and we are LOSING HEAVILY? These people have one of the ulterior motives mentioned above.
Here is an example. R. B. Reich was a brilliant man who rose meteorically and was the Secretary of Labor in the first Bill Clinton presidential term. Now Reich is on a TV talk show or similar event almost every day of the week. How did he achieve this success? By dumbing himself down. Recently he said that China has only a very small effect on the American economy and that China "merely assembles" goods.
What does he mean by "merely assembles"? If the assembly is so "mere", why don't we have it done here in America by some of the 25 million unemployed?
How can a formerly brilliant man, presumably devoted to America in the 1980s, now change his tune and make the outrageous and untrue statements quoted above? How can he look himself in the mirror every morning when he is shaving? Oh, right, he doesn't shave!
The San Francisco Federal Reserve Bank did a "study" of the involvement of China in the American economy. The result of the "study" is that China's involvement is only 2.7%, and the good news is that many thousands of jobs are created for truck drivers, ferrying Chinese-made goods around America.
A ten-year-old child could see the nonsense in this "study" result. Who told the Bank to make this study, and who told them what the result should be?
So here is another case of corruption. It is exactly the same as the joke about the dictator of a third-world country sitting in his office. His henchman comes in with an armload of documents. The henchman says "Here are the results of next month's election."
Another category
There is another category of people who probably have no ulterior motives but base themselves on simplistic statements and labels, as a substitute for opening the mind, looking at what is REALLY happening TODAY, and doing some thinking and understanding.
Examples:
+ People who say that restrictions on international trade caused the Great Depression and other depressions. These people use the empty scare word "protectionism". This word means nothing and is a substitute for thinking and understanding.
+ People who say that manufacturing cost is too high in America and unions caused our present problems. If there was any truth in these statements 50 years ago, there is no truth in them now. Again these statements are a substitute for thinking and understanding.
+ People who say that Americans don't want to work. Comment: No one has data to support this statement. There are 25 million people unemployed. No one can say that all these people don't want to work.
A special category
There are people who cannot believe that our business and government "leaders" have messed up our country so completely. I don't want to be too hard on these people. The realization that effectively there is no leadership is very frightening and de-stabilizing.
As stated in an earlier post (November 28, 2011), I am afraid that no man or woman who becomes president will be brave enough to stand up and break the chains of China and other low-wage countries. In a way I can understand the dilemma. Any president of the United States clearly gets his or her orders from powerful people behind the scenes who really run things. Maybe the president is even threatened with an "accident" or assassination if he or she stands up and breaks the chains.
At the same time I can't understand why the very wealthy and powerful people behind the scenes want to wreck America. How will they benefit from a wrecked America? I think the obvious explanation is that these extremely wealthy and powerful people are not sane.
Another category of illogical statements
People ask "How can we compete with China in manufacturing?"
American Institute of Chemical Engineers (of which I am a member) recently plaintively asked "How can we compete with China in R & D?".
The answer is that we should not even THINK about competing with China. There is no need to compete with China. We have a huge market in America of over 312 million people. Let us do R & D, design, engineering, and manufacturing, to serve this market. If we engage in trade, let us trade in manufactured goods only, with western countries with similar values, pollution and safety standards, and wage levels.
Speaking of western countries, if America rises up and breaks the chains of China and other low-wage countries, we will also do a great service to other western countries.
Why are the EU countries in such bad shape with huge unpayable debts? Answer: They have also lost their manufacturing, lost the employment, lost the wealth-creation, of manufacturing. If they see us breaking the chains, they will be encouraged to also break the chains.
What about Australia, Canada, United Kingdom? All in the same boat. All have lost major portions of their manufacturing. All have huge unemployment problems. In March 2011, the Prime Minister of Australia visited Washington and was given the royal treatment, including speaking to the combined Senate and House. She said, to rousing cheers, that Australia is doing great and the unemployment is only 5%. That statement is an absolute lie. The actual unemployment is at least 15%, probably more like 20%.
The behavior of Australia and Canada is analogous to that of people who sold scrap metal to Japan just before World War II. Australia and Canada are selling raw materials to China and also allowing China to purchase, for example, coal mines in their countries. So in addition to sending money to China, Australia and Canada are sending the resources that China needs to carry on the economic war.
The situation we are in with China is by far the worst threat America has ever faced.
(other than our terrible wars, Civil War, World War II, Korean War, Vietnam War, Iraq War, Afghanistan War, and others)
And, we are giving China the trillions of dollars and our latest technology they need to destroy us.
Further, there is the definite possibility that it will go from an economic war to a shooting war.
Mr. Greg Autry is one of the authors of the book "Death by China". My comments above are based on some of Mr. Autry's material. Here are some further comments from Mr. Autry:
He has made the following point to the Wall Street Journal:
“…on its front pages (WSJ) carries good articles about the military threat posed by China. However on the inside pages the Journal fails to recognize the economic threat”.
Mr. Autry goes on to state:
“What enables China to build high-tech asymmetric weapons like the DF-21D anti-carrier missile is the continued naïve behavior of the American government and multinational corporations that transfer technology and vast amounts of American capital to a very dangerous state…
In any case, outsourcing our entire manufacturing supply chain to a hostile nation has to be about the stupidest strategic move that any world power has ever made.”
Two sides of the issue
An old saying is that there are two sides (at least) to every issue. In discussing the relationship between America and China, there are two sides. One side includes people such as Greg Autry and Ed Farkas who believe the relationship is an absolute disaster. The other side includes people who think the relationship is constructive and should be built upon for the future.
I say it is impossible for a sane person to sincerely believe that there is good in the relationship with China. I further say that the pro-China people all have an ulterior motive. In other words, the pro-China people are 100% corrupt.
Here are some of the ways that people are corrupt:
+ Writers, analysts, newsletter publishers, who believe that their material will be more readily accepted if they adopt a pro-China stance. And, they are correct in their belief!
+ Writers, analysts, commentators, newsletter publishers, who believe they will get many invitations to be on TV talk shows, if they adopt a pro-China stance. Again, they are correct in their belief!
+ Analysts and commentators who create what I call fantasy explanations (see previous posts August 18, April 23, April 21, 2011, November 26, 2010) to explain our current disastrous economic situation, without admitting that we did it to ourselves by sending our manufacturing jobs away and importing trillions of dollars worth of foreign-made goods.
+ People who simply want to be comfortably on the "winning" side where the money is and where the influence is.
+ Politicians who receive money from China lobbyists or from American companies who hope to do more business with China, and want to avoid any action that might annoy China.
+ People who believe, or pretend to believe, that any action that annoys China, such as commenting on the currency valuation issue, would lead to a "trade war". Are these people really so stupid that they cannot see that we are ALREADY in a trade war (economic war) and we are LOSING HEAVILY? These people have one of the ulterior motives mentioned above.
Here is an example. R. B. Reich was a brilliant man who rose meteorically and was the Secretary of Labor in the first Bill Clinton presidential term. Now Reich is on a TV talk show or similar event almost every day of the week. How did he achieve this success? By dumbing himself down. Recently he said that China has only a very small effect on the American economy and that China "merely assembles" goods.
What does he mean by "merely assembles"? If the assembly is so "mere", why don't we have it done here in America by some of the 25 million unemployed?
How can a formerly brilliant man, presumably devoted to America in the 1980s, now change his tune and make the outrageous and untrue statements quoted above? How can he look himself in the mirror every morning when he is shaving? Oh, right, he doesn't shave!
The San Francisco Federal Reserve Bank did a "study" of the involvement of China in the American economy. The result of the "study" is that China's involvement is only 2.7%, and the good news is that many thousands of jobs are created for truck drivers, ferrying Chinese-made goods around America.
A ten-year-old child could see the nonsense in this "study" result. Who told the Bank to make this study, and who told them what the result should be?
So here is another case of corruption. It is exactly the same as the joke about the dictator of a third-world country sitting in his office. His henchman comes in with an armload of documents. The henchman says "Here are the results of next month's election."
Another category
There is another category of people who probably have no ulterior motives but base themselves on simplistic statements and labels, as a substitute for opening the mind, looking at what is REALLY happening TODAY, and doing some thinking and understanding.
Examples:
+ People who say that restrictions on international trade caused the Great Depression and other depressions. These people use the empty scare word "protectionism". This word means nothing and is a substitute for thinking and understanding.
+ People who say that manufacturing cost is too high in America and unions caused our present problems. If there was any truth in these statements 50 years ago, there is no truth in them now. Again these statements are a substitute for thinking and understanding.
+ People who say that Americans don't want to work. Comment: No one has data to support this statement. There are 25 million people unemployed. No one can say that all these people don't want to work.
A special category
There are people who cannot believe that our business and government "leaders" have messed up our country so completely. I don't want to be too hard on these people. The realization that effectively there is no leadership is very frightening and de-stabilizing.
As stated in an earlier post (November 28, 2011), I am afraid that no man or woman who becomes president will be brave enough to stand up and break the chains of China and other low-wage countries. In a way I can understand the dilemma. Any president of the United States clearly gets his or her orders from powerful people behind the scenes who really run things. Maybe the president is even threatened with an "accident" or assassination if he or she stands up and breaks the chains.
At the same time I can't understand why the very wealthy and powerful people behind the scenes want to wreck America. How will they benefit from a wrecked America? I think the obvious explanation is that these extremely wealthy and powerful people are not sane.
Another category of illogical statements
People ask "How can we compete with China in manufacturing?"
American Institute of Chemical Engineers (of which I am a member) recently plaintively asked "How can we compete with China in R & D?".
The answer is that we should not even THINK about competing with China. There is no need to compete with China. We have a huge market in America of over 312 million people. Let us do R & D, design, engineering, and manufacturing, to serve this market. If we engage in trade, let us trade in manufactured goods only, with western countries with similar values, pollution and safety standards, and wage levels.
Speaking of western countries, if America rises up and breaks the chains of China and other low-wage countries, we will also do a great service to other western countries.
Why are the EU countries in such bad shape with huge unpayable debts? Answer: They have also lost their manufacturing, lost the employment, lost the wealth-creation, of manufacturing. If they see us breaking the chains, they will be encouraged to also break the chains.
What about Australia, Canada, United Kingdom? All in the same boat. All have lost major portions of their manufacturing. All have huge unemployment problems. In March 2011, the Prime Minister of Australia visited Washington and was given the royal treatment, including speaking to the combined Senate and House. She said, to rousing cheers, that Australia is doing great and the unemployment is only 5%. That statement is an absolute lie. The actual unemployment is at least 15%, probably more like 20%.
The behavior of Australia and Canada is analogous to that of people who sold scrap metal to Japan just before World War II. Australia and Canada are selling raw materials to China and also allowing China to purchase, for example, coal mines in their countries. So in addition to sending money to China, Australia and Canada are sending the resources that China needs to carry on the economic war.
Thursday, December 15, 2011
Frightening
Question: What is more frightening than a horror movie?
Answer: A short video prepared by www.prosperousamerica.org
I was introduced to this video by Mr. Den Black of American Jobs Alliance.
What are some of the frightening things in the video?
+ Destruction of millions of jobs in manufacturing and in service industries.
+ China recently proved its capability to shoot down satellites, and generally is greatly enlarging and upgrading its armed forces, using our money!
+ Chinese graduate students in U.S. research universities are likely to take our new technology straight back to China.
+ A Chinese company is the biggest operator of ports in the world. U.S. west coast ports are not big enough to bring in goods as fast as China would like. A new port is under construction on the Pacific cost of Mexico. Goods will be brought straight to a distribution center in Kansas, via a new "trade superhighway".
Ed Farkas comment
The video is excellent. Every politician in Washington should be forced to see it. But a further frightening aspect of the video is that no strong solution to the problem is presented. The narrator even assures viewers that the organization behind the video is not "protectionist or isolationist".
Why? What's wrong with a bit of protectionism? The pendulum has swung so far in the other direction that we are about to destroy our economy completely.
I believe the U.S. president, the U.S. government, and many Senate and House members, are completely controlled by China*. Therefore nothing will be done to prevent the continued destruction of the American economy and America itself. Nothing will be done to prevent China from becoming the owner of thousands of American companies, including ownership of coal mines, oil fields, gas fields, etc.
*or by groups of American companies active in China, amounting to the same thing
Some possible solutions
A million man/woman march on Washington asking for jobs and the cutting of all ties with China. Might be enough to scare the people who control the U.S. government.
A million man/woman march on Washington asking for limits to terms of office, with maximum 12 years (or other suitable number) in Washington. To apply retroactively to sitting politicians, and of course to future politicians. I believe this is the only way to obtain something approaching rational and honest government of the USA.
(Our founding fathers made one huge mistake in their otherwise amazing and pioneering work of setting up the constitution and the new government and country of "USA". They forgot to put in limits to terms of office. The issue was discussed and was dealt with in early drafts of the constitution. However, limits to terms of office were not included in the final version. As a result, America has NEVER had rational, common sense, honest, government.)
If we could throw out hundreds of Senate and House members who are controlled by China, and bring in ordinary working men and women to replace them, we could get action to rescue America.
In some ant colonies, it has been observed that all the individual ants will suddenly act together to face an emergency. My new dream (scroll down to see previous dream in previous blog) is that Americans will similarly act together, spontaneously, and stop buying goods made in China or other Far East countries. The whole problem would be solved overnight. The people in Washington who are controlled by China, and China itself, would be thrown into absolute disarray.
If this dream were realized even in part, existing American manufacturers would ramp up, and hire additional workers, within weeks. A whole new spirit would be seen in America. We would tell China they don't have to bother completing their new port in Mexico. Or the trade superhighway to Kansas.
A key economic issue
I took some economics courses in college. That doesn't make me an economist. However I have made more sensible comments about causes and solutions of our current problems than thousands of economists put together.
An important fact taught in economics courses is this. If country X gets into real trouble because of too many imports, and thousands or millions of its workers are unemployed, the currency of country X will go down in value. As a result, imported goods will become very expensive; citizens of country X won't be able to afford them. There will be an opening for domestic manufacturing to re-vitalize. The problem will solve itself!
This mechanism is not working now. Why? Money managers all over the world who want to "park" money in relative safety look around and see the U.S. dollar as the best bet. Despite the severe economic problems faced by USA, people still want to buy U.S. dollars. The currencies of all other countries are worse!
For example, China a few years ago talked about the Euro becoming the world currency. But look at the Euro now! There is a real possibility that the Euro will disappear in the next few months.
Canada and Australia have severe unemployment due to sending manufacturing jobs away but have resources and raw materials to sell. So their currencies are not too bad. However the economies of these two countries are too small to allow "parking" of significant amounts of floating cash from around the world.
People appear not yet ready to park their money in India, China, or other "developing" countries. So the money pours into good old USA, keeping the U.S. dollar high.
It is very important to remember another important economic fact. Manufacturing provides benefits way beyond employment. Manufacturing provides a wealth-creation effect, also referred to as value-added. It is a subtle effect but a very substantial and significant effect. If an item is manufactured overseas, we lose the wealth-creation effect. That is why it is critically important to do our own manufacturing here at home.
Answer: A short video prepared by www.prosperousamerica.org
I was introduced to this video by Mr. Den Black of American Jobs Alliance.
What are some of the frightening things in the video?
+ Destruction of millions of jobs in manufacturing and in service industries.
+ China recently proved its capability to shoot down satellites, and generally is greatly enlarging and upgrading its armed forces, using our money!
+ Chinese graduate students in U.S. research universities are likely to take our new technology straight back to China.
+ A Chinese company is the biggest operator of ports in the world. U.S. west coast ports are not big enough to bring in goods as fast as China would like. A new port is under construction on the Pacific cost of Mexico. Goods will be brought straight to a distribution center in Kansas, via a new "trade superhighway".
Ed Farkas comment
The video is excellent. Every politician in Washington should be forced to see it. But a further frightening aspect of the video is that no strong solution to the problem is presented. The narrator even assures viewers that the organization behind the video is not "protectionist or isolationist".
Why? What's wrong with a bit of protectionism? The pendulum has swung so far in the other direction that we are about to destroy our economy completely.
I believe the U.S. president, the U.S. government, and many Senate and House members, are completely controlled by China*. Therefore nothing will be done to prevent the continued destruction of the American economy and America itself. Nothing will be done to prevent China from becoming the owner of thousands of American companies, including ownership of coal mines, oil fields, gas fields, etc.
*or by groups of American companies active in China, amounting to the same thing
Some possible solutions
A million man/woman march on Washington asking for jobs and the cutting of all ties with China. Might be enough to scare the people who control the U.S. government.
A million man/woman march on Washington asking for limits to terms of office, with maximum 12 years (or other suitable number) in Washington. To apply retroactively to sitting politicians, and of course to future politicians. I believe this is the only way to obtain something approaching rational and honest government of the USA.
(Our founding fathers made one huge mistake in their otherwise amazing and pioneering work of setting up the constitution and the new government and country of "USA". They forgot to put in limits to terms of office. The issue was discussed and was dealt with in early drafts of the constitution. However, limits to terms of office were not included in the final version. As a result, America has NEVER had rational, common sense, honest, government.)
If we could throw out hundreds of Senate and House members who are controlled by China, and bring in ordinary working men and women to replace them, we could get action to rescue America.
In some ant colonies, it has been observed that all the individual ants will suddenly act together to face an emergency. My new dream (scroll down to see previous dream in previous blog) is that Americans will similarly act together, spontaneously, and stop buying goods made in China or other Far East countries. The whole problem would be solved overnight. The people in Washington who are controlled by China, and China itself, would be thrown into absolute disarray.
If this dream were realized even in part, existing American manufacturers would ramp up, and hire additional workers, within weeks. A whole new spirit would be seen in America. We would tell China they don't have to bother completing their new port in Mexico. Or the trade superhighway to Kansas.
A key economic issue
I took some economics courses in college. That doesn't make me an economist. However I have made more sensible comments about causes and solutions of our current problems than thousands of economists put together.
An important fact taught in economics courses is this. If country X gets into real trouble because of too many imports, and thousands or millions of its workers are unemployed, the currency of country X will go down in value. As a result, imported goods will become very expensive; citizens of country X won't be able to afford them. There will be an opening for domestic manufacturing to re-vitalize. The problem will solve itself!
This mechanism is not working now. Why? Money managers all over the world who want to "park" money in relative safety look around and see the U.S. dollar as the best bet. Despite the severe economic problems faced by USA, people still want to buy U.S. dollars. The currencies of all other countries are worse!
For example, China a few years ago talked about the Euro becoming the world currency. But look at the Euro now! There is a real possibility that the Euro will disappear in the next few months.
Canada and Australia have severe unemployment due to sending manufacturing jobs away but have resources and raw materials to sell. So their currencies are not too bad. However the economies of these two countries are too small to allow "parking" of significant amounts of floating cash from around the world.
People appear not yet ready to park their money in India, China, or other "developing" countries. So the money pours into good old USA, keeping the U.S. dollar high.
It is very important to remember another important economic fact. Manufacturing provides benefits way beyond employment. Manufacturing provides a wealth-creation effect, also referred to as value-added. It is a subtle effect but a very substantial and significant effect. If an item is manufactured overseas, we lose the wealth-creation effect. That is why it is critically important to do our own manufacturing here at home.
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