I have stated before that free trade is a good idea that enriches all participants. I think I understand that President Trump does not agree.
His latest tweetstorm on the subject seems to me to contain an element of desperation. Each tariff he imposes stimulates a new Chinese response.
But wait! You say, what about all those new American jobs? Surely that’s a good thing? Sadly it ain’t because you lose jobs in areas that can no longer compete because of higher local American input prices.
Then of course there is the job loss caused by China refusing to buy American agricultural products like soybeans. AhHa! you say “but the government can compensate the farmers out of tariff revenue” Of course this is true, but you have just allowed the Federal Government to set a proportion of farmers income. Guess how well that works?
The direct job losses are only a first order effect and the need for farm subsidies is a second order effect. You will see more of those second order effects shortly – government subsidies to folks injured by our trade war. They cost lots of money and take oodles of public servants to administer. Then add in the lawyers and slime balls gaming the system and you can have some real fun.
The real problem your children will see are the third order effects – loss of competitiveness, stagnation, poor exports. You will have jobs but they won’t pay very well. This happens for a simple reason; if you are the manager of a business protected behind a tariff wall and you want to raise profits you have two choices; invest in R&D, buy new plant and equipment to become more efficient or lobby Washington to raise tariffs 5%. Guess which option is cheaper and faster?
I lived in a protected economy. You get frustrated by seeing cheaper and better products available overseas while you are constrained to buy expensive shoddy local product, it takes about 20 years to reach that point.
Its rather like drug addiction; the initial high, then larger and larger doses to keep “up” then the gradual health decline as the drug use affects the body. Good luck with being a closed economy, you are going to need it.
P.S. All that stuff about stealing intellectual property is puffery. We all do it, any way we can, as much as we can. China steals from us. We steal from China. Who cares?
I agree, tariffs are bad for consumes.
However, what so good of having a free trade if locals have no money to bay the goods?
Sure, it serves well the chosen few.
Dom
The problem with Walrus’ argument and yours is that they do not represent the reality of the US at ground level. In fact, the masses are doing well financially and the internal US marketplace is immense.
These tariffs already are having a negative impact on the US and even the world economy. Both are slowing and some segments, like farming, will lose market share for a long time, as others step in to replace them.
The biggest problem with China is the theft of intellectual property, but tariffs is the wrong remedy for the wrong problem and will end up a loss for both sides.
China is a challenge and it will take an intelligent effort to meet it. It appears that Trump does not have what it takes and may make things even worse for the US. UK is busy shooting themselves in the foot and the US is heading that way.
But if you are unable to understand the problem, you will not find the solution.
lars
What a shame to see a long term supporter of Trump like you finally turn against him. (irony)
Fair trade, rather than free trade, is the idea that I believe has a better political resonance with the man in the street, when considering global issues. There are arguments that existing trade practices are not fair, in particular cases, but overall trade is beneficial as a means of improving effectiveness. The art, it seems to me, is tuning the system by creating incentives to adopt better practices. Bashing and grandstanding are not useful, neither as tactic for negotiation, nor in terms of supporting future entrepenurial activities.
I took a tour of central Illinois a few months ago, and made a post Invest in Illinois, on a financial forum, in the face of a considerable headwind of down opinion. With only moderate success. Most people are downbeat, and man in street is also downbeat in economic outlook, though personally upbeat and full of talent and energy. A recent tour of southwest Michigan confirmed my opinion. And here in Ontario, I see a gradual decline of supply chain for spare parts and inventory of ordinary items. The cream-skimming of online supply chain is destroying physical supply without sufficient creation of a durable substitute.
My advice to Pres Trump would be to cultivate Tortoise behaviour despite his inclination to Hare outbursts of opinion. He managed Tortoisism for the past few years to outlast his political enemies, so he has the capability to distinguish among his words and deeds.
I care. Your argument is reductionist garbage.
A political-economy that puts the health and prosperity of its own people before allegiance to a bankrupt neoliberal economic theory does not automatically mean it begins operating under some equally bankrupt Soviet model. Similarly, it assumes that people are economic units and will respond as such, which ignores everything we have know about homo sapiens as such.
This is the theology of Davos Man, whose head the people of the West have begun to call for.
You know what is worse than seeing the same good cheaper elsewhere? Seeing your entire society shredded by market forces while a handful of gangsters who have been wrong about everything for 30+ years open you borders to invaders, commit fraud with impunity, buy off your politicians, rape your children, and laugh while they are dong so.
Walrus,
Free trade is a myth. Tariffs and non-tariff barriers including subsidies have always been part and parcel of the global system. Yes, we have had the rhetoric of free trade but the reality is that from Asia, to Europe and the US we haven’t had a system free of subsidies and barriers. Europe and Asia as well as the US have always subsidized their agriculture for example. China has always protected its market and subsidized everything from steel to solar panels.
Ross Perot and Sir James Goldsmith have proven correct and prescient. We have seen the results of “free trade” that our political duopoly have promoted over the past few decades. While Walmart is flush with cheap goods from China and Vietnam, entire communities have been devastated. Wall St who were the prime movers for this “free trade” did not care about the national security implications of dismantling our industrial base and shipping it overseas. They wanted the economy financialized with rampant growth of leverage where they clipped a coupon on every dollar of debt. We now the worst wealth inequality in history.
The US has run persistent trade deficits for decades. We import around $3.1 trillion and export around $2.5 trillion. Most imports are US and multinational brands bringing their stuff from overseas. A third of our exports are capital goods like aircraft, machinery and semiconductors. Another third is industrial supplies like chemicals and petroleum products. Just 9% of exports are food, feeds and beverages. Meat & poultry of $20 billion, Soybeans of $18 billion and corn of $14 billion. Ag exports are a rounding error for our economy. Even if the entirety of Ag exports were subsidized it wouldn’t dent our already bloated federal expenditures including the elephant in the room our extraordinary healthcare cost structure that consumes over a third of our federal expenditures and continuing to double every 8 years.
The global economy has been weakening for over 18 months now even before any of these trade wars began. Eurodollar liabilities have been shrinking since 2018. German industrial production has been declining for months. So have exports from South Korea and Taiwan. China have had stimulus after stimulus to keep their house of cards including a delinquent banking system afloat. The relatively self-sustaining US economy has been the standout but it too is showing early signs of a weakening in the manufacturing sector. The fact is that capex investment has been weak despite loose monetary conditions as at least in the US corporations borrow money to buyback stock rather than invest in new plant & machinery. The trade conflict’s biggest impact is on psychology. But it has the benefit that multinationals have to rethink their supply chain strategy if we’re beginning an era of de-globalization.
China has had a free ride for at least three decades. Bill Clinton gave them Most Favored Nation status and enabled their entry into WTO which was the culmination of the many rounds of GATT. With the promise of their 1.5 billion people the CCP seduced western companies to transfer their technology and invest their capital. The managements of these companies seeing massive increases in their personal wealth at the behest of Wall St did so. Now we’ve created a monster! The Chinese economy is a CCP controlled entity with no rule of law. It is arbitrary and capricious at the whim of top CCP officials. Xi Jinping and his coterie decide who can sell what and what your tribute is. As Japanese, South Korean and Western companies have recognized they are at the mercy of CCP.
China and it’s people are not an enemy of the US, IMO. The Chinese Communist Party and their totalitarian ideology is definitely an enemy however. Sooner or later we would inevitably have to fight them. Trump for all his flaws at least seems to have the courage to engage in this battle. It’s not only the CCP that he’s fighting but the fifth column agents of CCP right here at home. The advantage of fighting CCP now rather than later is that it doesn’t have to be a military war. We can destroy the CCP through economic and financial means today. The Chinese people deserve the ability to chart their own course without the jackboot of the CCP. I hope Trump and our political duopoly have the resolve to engage this war with CCP with the only objective of their defeat. Like any war the American people will have to pay a price. That price will be much less now than later.
Walrus,
re: Then of course there is the job loss caused by China refusing to buy American agricultural products like soybeans. AhHa! you say “but the government can compensate the farmers out of tariff revenue” Of course this is true, but you have just allowed the Federal Government to set a proportion of farmers income. Guess how well that works?
Iiirc China has themselves put retaliation (since they themselves didn’t start this after all) penal tax on US soybeans.
That was of course very predictable and is of course resulting in the US failing to sell these to China, and is likely over the time resulting in jobs lost – in iirc one of Trump’s homelands (to the extrent he ever worked physically, golfing doesn’t count) i.e. they thankfully pissed him into his re-election party.
US federal or state compensations for the penal tax game effectively kicked off by Trumps more arbitrarily clearly come at the price of US dollars – either printed (inviting in long term instability and inflation), taxed in the US (pissing off GOP donors) or lent (then being even more expensive).
Naturally the money so spent is not available for doing boring stuff like repairing roads, bridges, water lines, health care etc. pp. i.e. it is paid for by the US themselves, not China.
There is a funny story I read how China gets the US soybeans anyway, despite the penal taxery. How? Simple:
They don’t buy the beans from the US. Canada does. China then imports from Canada, which is not under retributal penal taxes. The US penal tax China, China penal tax the US, and Canada earns and China, in free trade, avoids even their own penal taxery.
Does that concern Trump?
I daresay he isn’t concerned because a more serious analysis of this may be longer than 4 pages, exceeding his attention span. He is only interested in not being criticised, looking good (to the extent that is possible), not to debate seriously and especially in his re-eletion.
And he iirc has last week told that he ‘is the chosen one’ (Chosen by whom? God? The electoral college?) or something to fight the trade war with China, which is – acording to Trump, Pence and Navarro – easy to win and perhaps wonderful to masturbate on.
https://foreignpolicy.com/2019/08/23/trumps-economic-iron-curtain-against-china-hawk-peter-navarro-american-factory-obama/
Was the US chosen trade war necessary? Of course not, but to some folks it seems to feel good. Big business damage likely – there is a zero tax game, only when we win and the other side loses it is a good deal.
And then some certain man may just eagerly run to his insecure old phones which are a nightmare of the whitehouse security folks and tweets off some more penal taxes, against … anybody … for … whatever. And then, another 30.000 calories sumo diet and a litre or two of ice cream.
“I have stated before that free trade is a good idea that enriches all participants.”
You lost me there. First sentence. I have a degree in Economics and tend to agree with John Maynard Keynes. That he learnt economics after University.
Ideology blinds most on this subject maybe including me. Though I believe I see it unfiltered.
It’s common sense. We want from a Farming based economy to a Manufacturing Based economy and the elect have decided to bet it all that we will transition to a Service-Based economy.
My view is Manufacturing supports the Service economy. My community which is manufacturing floorcovering is a perfect example. We are still behind 7,000 jobs from the pre-2008 high.
In that time many service based businesses went out of business. We had a release valve in that many immigrants went back to Mexico.
Look at the Rust Belt and the evidence is clear that deindustrialization has been a disaster.
I agree the tariffs will not work. I have an online floorcovering store and the LVP sourced China products are being sourced to Vietnam, South Korea, and Taiwan now. And I plan to sell them. Adapt or die.
Which I am capable but the blue collar worker who relied on his hands has been decimated by deindustrialization and mass illegal immigration.
Many are 6 feet under the ground due to despair via opiates or in jail with the masses of blacks who have little job opportunity.
I find it amazing that financially well off people are blind to this because their 401 and house prices has appreciated so much. The tension in this country is economic. Racists elites use racism to distract from this issues. However, the clock is ticking and the good book does say the meek inherit the Earth.
The present arrangement, or, at least practice, with China puts our supply lines/logistics at their tender mercies. See GAO Report. https://www.gao.gov/highrisk/dod_supply_chain_management/why_did_study
As well, it makes us vulnerable if we lack in the basic capacity for the meat and potatoes of what moves an army. Steel, etc.
Further, a trade deficit of the size we have with China is unprecedented, and, I think, unsustainable. It has contributed to shrinkage of our middle class. It has been long overdue that we challenge this state of affairs. That challenge was ALWAYS going to come at a cost and perhaps a high cost. Trump’s typical bluster and bravado not withstanding. The time to challenge them is most opportune at a time of chronic, low inflation. All things relative. And none of this address China’s theft of our IP. And their spying on our entire business sector. (and yes, I am sure we are not angles in this kind of thing. But we are compared to them). If you think not try bring an IP infringement case in China v. trying to bring one in the US. Trump has the diagnoses down pat. However, as usual, he is much less effective or consistant in the treatment of the problem. Warren, and a good part of the Dem Party, claims, anyway, THEY are on board with the tariffs. So, it seems, are the farmers, at present. Did we think this kind confrontation was going to be pain free?
Lars,
Farming of what? Corn (ethanol, high fructose corn syrup, etc), soy beans, pork, arugula? How many jobs does that account for?
actually walrus the entire 19 century of the rise of the united states into a major world power by the 1920’s was the RESULT of tarifs which protected our nascent industrial base to build itself up into something better before being crushed by already devleoped europe.
our problem is too much of our industrial base was shipped overseas starting in the 1980’s, the short term demands of wall street for good earnings each qaurter when sometime a company has plow its profits back into r and d for the longer term health of the company…..a perfect example of the DESTRUCTION of an american iconic corporation with great r and d and products was john welsh’s tenure as head of GE. he and his ideas destroyed this incredible company in less than 15 years… all so he could show wall street a pennnies more in earnings each quarter.
You took the words right out of my mouth!
We don’t have to fight anybody; all we have to do is stop importing everything. Tariffs are one thing. War with the PRC is another matter entirely.
While it is overdue in certain respects that the USA try to reverse her international balance of payment record of the last 30-40 years, methinks this came too late:
1., According to the energy department the oil production of USA is set to decline in a few years [3-5 depends on the government’s analyst, while it is also a major money loosing business for over 10 years] thus depriving the economy of necessary surplus power to rebuild the industrial base[while rebuilding the national infrastructure to support the “new” industry].
2., The major corporations are neck deep in debt [financing all the share buybacks/ Private equity “investments”] thus having a shortage of available finance [short of the printing press].
3., As the analysis of “educational level” of the workforce available to “build and operate” the repatriated industry is insufficient, due to neglect of education for the last many years [reflected among others in international comparison of literacy, numeracy, stem]
4., The political/NGO/Think tank world has alienated the world’s two largest economies [China and EU as per IMF, World Bank and CIA on PPP basis] thus foregoing any effort by these major economics to help the USA rebuild.
5., the Monster MIC and corrupt health care system takes too large a proportion of the national income to permit any constructive steps without large scale and immediate reorganization, which the corrupt Congress will never enact.
I understand your anger. I have not made my point very well. I was very angry too as a. young man.
I was angry at having to buy crappy Australian made cars that had half the performance of European and American iron that sold for impossible prices in Australia thanks to 100%+ local tariffs!
I was angry at watching U.S. movies and T.V. which displayed everyday people wearing clothes and using household appliances that were either stratospherically expensive or impossible to buy thanks to 100%+ tariffs.
I was angry like the mining industry and the agricultural industry who were hamstrung because they had to use expensive local inputs for everything.
I was angry at the egg marketing board, the potato marketing board, the sugar price stabilisation scheme, the dairy authority, in fact hundreds of authorities that existed to “stabilize “ the price and marketing of such goods.
Oh sure, we had jobs but your money didn’t go too far because we were constrained to buy local crap with it.
Now to get back on track. You blame Wall Street Vultures for this? Correct, but you aren’t thinking ahead. What do you think the vultures will do now? That’s right. They will game the tariff system and American manufacturing! That’s what I’m trying to tell you!
In gaming the manufacturing base, the vultures are going to do a lot more damage to America than free trade ever did and I speak from experience.
To spell that out, inefficient American manufacturers are going to be given lifelines they don’t deserve because they are providing “jobs”, managers and owners are going to get very fat and happy by screwing Americans just like Wall street financiers did. I grew up in a protected economy and I know what it’s like.
The tariff addiction only ends when it becomes obvious that your truly competitive industries are having trouble competing internationally because local costs are too high and then your currency suffers.
The implementation of free trade in the U.S. should have been accompanied by massive training and education programs to blunt the bad effects on workers, but that isn’t the American way.
As for stealing IP, we all do it, all the time, America included. However I suggest to the Committee that subject warrants a separate discussion.
Walrus,
It has become apparent that you’re an unapologetic globalist.
Turning America around, including getting people educated for the right jobs, putting a check on the Wall St pirates and everything else you mention has to start somewhere. You may be ready and willing to consign the US to a fate of surrender and decline, but some of us are not. Maybe that’s because we live here.
I think a good place to start is creating more demand for American products by balancing trade with China. Everything else should follow if we can get more Trump and not the democrats in 2020.
Walrus,
“As for stealing IP, we all do it, all the time, America included. However I suggest to the Committee that subject warrants a separate discussion.”
I would very much like to see this subject discussed here. I think a lot of people have been conditioned (ie. brainwashed) by the MSM or other interest groups to think China is the only country that actively stealing IPs.
In addition to the outsourcing of basic manufacturing, our country lost internal free / cometitive trade in agricultural products such as flowers and foodstuffs, such as lemons, to Archer Daniels et al.
The stuff on our grocery store shelves arrives via “managed trade” cartels. The price of the same lemons is 25 cents in Mexico, $1.25 in Canada and $2 here. The price has nothing to do with yearly rainfall, transportation or production cost, merely what a controled lemon market will bear. Equally, competitive flower growers in California and Florida were frozen out of the US distribution chain in favor of obscenely large Columbian flower cartels.
We used to have a Department of Commerce alert to such “managed trade.” A return to a legal regime circa 1940 would be very nice.
Yes Ted, your tariffs did protect nascent industries and every American consumer at the time paid for it. That was a political decision.
The American consumer is also going to pay for the current set of tariffs, but nobody seems to have worked that out yet. As Heinlein said “TANSTAAFL’.
Yes Eric I agree with you, except about being an unapologetic globalist. I’m a realist.
What I am trying to say is that trade nationalism of the Trump brand has huge pitfalls – which an overconfident President is ignoring.
Walrus
In my experience, many many domestically produced US products were superior to what replaced them. They were generally better constructed and lasted for decades. A Crown Vic could easily reach 200,000 miles. A Kelvinator, 25 years. The imported products have been generally inferior, specially those from China.
I will take any bet you want to make on oil production futures. I have been hearing the gloom and doom of declining production for years. In the face of increasing production for the last ten years.
‘the evidence is clear that deindustrialization has been a disaster”
Yes it has. I was a college student in 1964 and went to the GATT conference in Geneva with my father who was testifying on behalf of American manufacturers.
Everything the manufacturers warned about came true right down the line and America lost its industrial and manufacturing base over the next 15 years. Half of my state is today a waste land, littered with boarded up textile and furniture plants, a hundred thousand or more jobs lost.
We needed some protectionism,tariffs or quotas in order to encourage investment in a manufacturing come back.
BUT…Trump is doing it wrong. I don’t want to get into a long complicated discussion on what he should have done so just let me say Trump is a mental case idiot….trade is complicated, its not a RE monopoly game.
Yes Babak, I agree. But will new products built behind tariff walls, be of that quality again? Not if the Wall St. slicky boys have anything to do with it. You will get junk, just a dollar cheaper than the imported product.
“intelectual property” is a term with a big fat lie right there in the middle of it. It really means “trade monopoly”.
Has anyone ever seen a free market?
Triffin dilemma, the reserve currency nation runs a trade deficit.
Trump has badly handled the trade negotiations, I think a deal was there to be made but with his poor choice in staff he undermines himself again.
Babak is absolutely correct of course.us products are high quality.However I am a pocket knife collector.I even treasure Levine’s guide to pocket knives.The history of pocket knife production is the history of a countries manufacturing. Sheffield england lead the way together with Solingen.Sheffield is gone and with it British manufacturing.All the us brands like case marbles winchester are all made in china now.That is the warning sign.
The workers are the key.Give them jobs and security and they will make gold.Treat them like slaves and they will make junk.China makes junk because its workers are treated like slaves.Create a society of slaves and they can only afford junk made in China.
The house I live in was built in 1969. The original stove was a Sears electric. It was finally replaced in 2009. Great news for me, not having to buy new stove for 40 years; not so great news for Kelvinator, their product was so reliable that its sales were limited to the growth in housing/annum. What is good for the individual goose may not be optimal for the flock.
Thanks for the thought-provoking post Walrus, it has certainly led to some excellent, well reasoned and spirited discussion. My comment concerns the ease of winning the trade war:
With China’s latest retaliation it seems clear they are not interested in a quick ‘deal’ and capitulation to Trump’s demands and why would they be? Gifting Trump his deal will greatly help his re-election chances and China likely calculates they are better off with a POTUS who is “either senile or a lunatic marxist”. I’d therefore expect China to hold out until the election at least.
Jack Ma, founder of Alibaba has been quoted as saying that he expects the trade war era to last not 20 days or 20 months, but “maybe 20 years”. Are US consumers ready for a prolonged confrontation? The Cold War was winnable because there was political consensus in the West that the Soviet Union was an ideological enemy. Unfortunately there is no such consensus yet re China, with it presently being treated by the political establishment as primarily a trade competitor.
Trade wars end when one side can no longer bear the economic pain, or in transition to real warfare. Absent ideological zeal, I fear the average US consumer will quickly begin to question the cost of the trade war. Here China has a huge advantage in that President-for-life Xi’s policies are not beholden to a 2 year election cycle.
So does Trump expect to win by collapsing the Chinese regime from within? As with so many such expectations, this is delusional thinking. This is particularly so in respect of the state able to exert more control over its populace that any other in history. If minded to, the CCP could allow the sleeping giant of Chinese nationalism to awaken in order to direct internal discontent towards the external enemy. Just look at how easily they have demonized the HK protesters.
I am reminded of the following quote from Col. Lang’s 2013 post on the passing of General Giap:
I fear Trump is again being railroaded towards a shooting war, this time with China, by deceivers playing up to the Dealer-in-Chief’s ego. I think this war will end in defeat for Trump or far worse; victory for the extreme China hawks.
Catherine, I for one would appreciate hearing your thoughts on what we should be doing. Setting aside what one may or may not think about particular leaders at present. This is not a quick fix situation but there are certainly paths that we can follow or encourage. I am about your age as I also was a college student in 1964. One of my attempts is to engage younger people. When asked about Biden, my principal objection was that he is too way old. As are others — Sanders, Clinton, Trump — where is the age 45-50-55-60 talent? I retired voluntarily from political activity at age 65, and in my opinion other old farts should do the same, to make room for the new team, to give them scope to make mistakes and learn. But an old guy can still comment if asked. So consider yourself asked to comment! How would you advise someone to help fix your state so it does not remain a waste land? Cheers, KR
Spot on re Triffin’s Dilemma. The problem is the lopsided nature of it with China vs ROW. There is also an alternative hypothesis that the offshore Eurodollar market provides that function and it doesn’t have to be the trade account.
Unfortunately with Trump there’s no knowing what his objectives and strategy are. From my observation of him it seems that his need for adulation and being the center of attention is paramount and may override other considerations. In any case he’s on a course that will not settle before the election unless he caves.
I’m convinced that the time is now to take on the CCP. They cling to power only at the end of the barrel of a gun. There are significant vulnerabilities. As far as trade and the reorientation of supply chains that’s a decade long project. OTOH, we can significantly pressure the CCP and their top brass financially. Even Xi Jinping has much of his family and his wealth moved to the west, just like the rest of the politburo. That’s the level of confidence they have on their authoritarian monopoly on power.
Barbara An says: “The Cold War was winnable because there was political consensus in the West that the Soviet Union was an ideological enemy. Unfortunately there is no such consensus yet re China, with it presently being treated by the political establishment as primarily a trade competitor”.
I do not agree. Colds War was won by the West, because the basic error of Soviet and Chinese (at that time) economy which was so called ,”planned economy”. West stack to the old Adam Smith principle of market economy and won. Soviet economy collapsed or imploded.
Now China and Russia realized that the market economy has some advantage and reformed their systems. To some extend they learned a lesson from US.
In meantime US abandoned manufacturing economy claiming that the Americans are too superior for using our workers labor. We will just retrain our working class to be computer programmers, lawyers and bankers. Chinese will be our remote slaves. It looks that it did not work either. The Chinese are better in intellectual labor simply because they have much more students learning intellectual subjects in US and in China.
RE Intellectual Property theft.
In the first place there is no such thing like “Intellectual Property” which you can put in the safe and will stay there for 100 years, until burglar brakes the code to the safe lock. Invention is in the human mind. Once something is possible to do, secrets is lost. This applied, e.g to the secret of Atomic Bomb. One it was exploded in Nevada every physicist in China or Soviet Union knew that it will take only time and money to replicate it. Execution Of the Soviet atomic spies like Mr and Mrs.Rosenberg was useless. Once we sold some computers to China they replicate it and make it even better than the American eg. IBM-PC and Lenovo a copy of it.
Is it possible to make US as prosperous as it was in years 1945-1975? Maybe, but it will require enormous sacrifice to which neither US society nor US Government is ready to accept. American Prosperity after 1945 was built on devastation of rest of the industrial word, in Europe and Japan by the WW2. For many years after WW2 we in US were the only industrial economy which did not have competition.
The decline in quality of machinery/cars etc. can not be solely blamed on China:
many of the goods are product of US based corporations [in China], who constantly re-engineer products to cost as little as possible.
eg: the US made Maytag commercial washer I had lasted 32 years, the new one, also made in USA is 200 lbs. lighter [though the same size nominally]and depends on front/rear paneling to control vibration- doubt that it will last 5 years.
2., in certain cases sloppy specs allow some funny manufacturing inputs – where blame should be placed on the US designer for the failure of the merchandize.
3., I admit that some Chinese do cut corners intentionally to lower standards in some cases, though they also make state of the art goods both for internal and export markets.;
2., Substitution of
Jack
The unsustainable nature of the Dollar as reserve currency was the focus of Mark Carney’s speech at Jackson Hole. You know you live in interesting times when the head of the Bank of England promotes a move away from the current international monetary and financial system and describes the status quo using phraseology from Yeats’ The Second Coming: “Even a passing acquaintance with monetary history suggests that this centre won’t hold.”
https://www.bankofengland.co.uk/-/media/boe/files/speech/2019/the-growing-challenges-for-monetary-policy-speech-by-mark-carney.pdf
There is plenty of petroleum inside Earth, leftovers from when the Solar System and Earth was formed.
Seconded.
I don’t believe our American companies needed any seduction to re-locate their production to China (in this particular case). And I believe that the ” 1.5 billion people market” was more a part of their Free Trade Hasbara campaign against the American public and lawmakers than a real goal.
Their real goal was to re-locate to a place with ultra-low wages, firm anti-union prevention policies and enforcement, anti-environmental counter-standards, anti-social anti-standards, anti-safety anti-standards, etc. The reason being that producing in a slave-wage/pollution haven would be ultra-low-priced against the price of making those things in America. And if those companies lowered the prices of their “sourced-from-China” goods by less than they lowered their price of production, they got to keep the difference as a bigger-than-American profit. They wanted to work the differential-costs-arbitrage rackets.
So they didn’t need any seduction from China since that was their goal all along.
And yes, some people are indeed Corporate Globalonial Plantationists in support of creating economic aggression platforms in China, NAFTAstine, etc., in order to exterminate thing-making in America while toll-gate skimming money by riding the Cost-Differential Arbitrage rackets all the way down.
Apparently the vision is that the American Colonies will sell corn/soy/wheat/beef/coal/minerals/etc. to the Chinese Mother Country. What should this remind us of?
The necessary precondition for that project would be for America to abrogate, reject, cancel and withdraw from every Forcey-Free-Trade Agreement and Treaty in which it is currently en-spider-webbed.
Only behind a Mile-High Teflon Wall of Total Protection will we be able to restore a measure of basic American thing-making. Currently, the Forcey-Free-Trade Agreements we are under make the Mile High Teflon Wall of Protection illegal. That is why we would have to exit and remove ourselves from every such agreement first.
And of course we would have to understand that if we did that, the IFTC ( International Free Trade Conspiracy) and all the Corporate Globalonial Servant-Governments of the entire world would view us with the same horror and hatred with which the victorious World War One powers regarded the infant Bolshevik regime in Russia. They would launch a world wide hybrid war of every kind against us to force us back into the New World Corporate Globalonial Plantationary Forcey-Free-Trade Order.
The entire world would treat a Protectionised America like we were a combination of Cuba, North Korea and Iran.
Yes, we paid for it. And what we got for all that payout was an advanced industrial civilization of our very own.
Which was the deliberate goal of Forcey-Free-Trade to begin with, right from the start.
We don’t need against China. We need a war against the International Free Trade Conspiracy. If Americans were offered a non-deceitful long-term plan by known and credible non-liars, and if the pain our Forcey-Free-Trade trading enemies would conspire to impose on us for trying to achieve that plan, American citizens would at least have a fair chance to decide if they wanted to endure the several decades of torture a Free Trade World would try to impose on us in order to build back an American economy where citizens and legal residents get paid to make, grow and do things for other citizens and legal residents who in turn are getting paid to make, grow and do things for citizens and legal residents.
First, revitalizing American manufacturing/industry would take some time, cant be done quickly.
Therefore any tariffs need to be low enough not to slow consumer spending due to increased retail prices which would then trigger a cut back in jobs…iow,start small and give US manufacturing a chance to fully develop.
Second, there should be government loans with a tax emption for a short period specifically for start up manufacturing of ‘mass products’ that are easy to manufacture such as household appliances, i.e.coffee makers, small tools,etc etc..
Go try to find a coffee maker or radio or fan made in the US…you cant.
Then you have to address the cost factor of goods made in the US so you can be competitive with the cheaper imports. Labor cost is why US companies left to begin with.
So the big problem becomes ‘cost’ ..and how to overcome it without descending American workers further into third world wages and living standards.
The first thing you want to do is go after the US companies that moved overseas.
One tack the US could take in regard to US multinationals is to use the wage and cost of living scales in the countries they operate in as well as taxes they pay, environmental pollution factors and impose tariffs on them based on the difference between their cost overseas and what their cost would be in the US. They would have the option of raising their wages overseas or paying a tariff. A raising of wages in the cheap labor markets would have some effect on their ability to buy American imports in their country. If GE for instance chose to keep their washing machine plant in Mexico…fine…a new washing machine company will start up in the US because they can now compete cost wise.
You could actually apply this to all countries industries of certain sizes that export to the US….it would be a ‘leveler’, so to speak, of global product cost. Shipping cost would also effect final retail cost and could result in more people buying their own country’s core products.
Its not as complicated as it sounds. Use small tariffs while the US retools, apply some quotas to countries like China , protect certain industry until US manufacturing gets on its feet, level out the factors that create enormous price differences without decimating the workers or the environment.
For Neanderthals like “Anon” who believe that all China can produce is “junk made by slave labor” I have news for you. The Chinese beat the world champions in textile product quality- the Swiss no less, in about 1965. We were selling both to manufacturers.
They are perfectly capable of making great high quality products if asked. If you are stupid enough not to insist on quality then indeed you will get junk – it’s the Chinese way to cut corners, ferchrissake they put melamine in baby formula!
They aren’t slaves working in loin clothes in mud huts either. They are into the latest and greatest manufacturing technologies.
I am reminded of pre WW2 comments about the Japanese army navy and airforce. I caution you not to make the same mistake about Chinese capabilities today.
Jan
I carefully chose the word “winnable” and deliberately did not say “won”. This war might be winnable if the American people understood the, to use your words, “enormous sacrifice” that may be required. They do not and Trump has made every effort to con them into believing victory will be quick and easy – it most certainly will not be.
Personally, I do not lack the ideological zeal for this fight. The CCP, its obsession with facial recognition technology and its nice system of social credit (which can already prevent individuals from buying rail or airline tickets) is the early manifestation of a real Ingsoc. Or perhaps even the Beast of Revelation 13:
China might not be the only country but it is the only one doing it at an industrial scale with overall direction from the top. If you think it is okay to steal intellectual property because ‘all do it’ just get rid of patents and stuff. This highway robbery needed to be stopped and stopped long back. You just don’t give your technology for free to your competitor. even Great Britain had capital punishment for stealing textile technology when that was the new new thing which allowed them to dominate that market.
No one give away their jewels for free. if walrus would like to, let me do that with the stuff he has invented and see how that feels!
Confused,
So Canada is going to dump US soybeans in China the same way they helped China dump steel and aluminum into the US. That is very kind of the prime minister. I’m sure that helps some lobbyists and politicians get just compensation for their value add.
Absolutely right.
I think the media is not talking about how much under stress the financial system in China is under. The growth in their social credit has been much larger than that of subprime in the US a decade back. The crash when it comes will be all the more worse.
3 banks went bust in China in the last few months. The last one was a few hundred billion dollars big. The govt. made the institutional and corporate creditors take a 30% haircut when Baoshang bank went down.
Many of their exporters have margins in the single digits. With the tariffs that Trump is proposing, a lot of them will be unable to continue being in business. Hence, the immediate currency devaluation by China which allows its exporters more room. But that buys a little time.
I predict increasing pressure on the financial system in China, which is over burdened anyways, and on the exporters. Hold on to your boats guys. A little push might bring the house of cards down in China.
Norbert,
So the left has completely failed in running education at all levels. And Obama care is corrupt? Who knew!
Barbara,
One of the challenges with contemporary financial media is their inability to express fundamental principles and frame debate in philosophical terms. One reason of course is none have spent much time on understanding how our financial system evolved over the centuries and the debates at each juncture. Consequently they are easily bamboozled by the sophistry of the Ph.Ds.
The other consequence is the conflation of different aspects of the architecture into an incoherent narrative. From the Financial Times to the WSJ to the Economist and CNBC we don’t see perspective or context. It is always the current propaganda du jour presented in hysterics.
Central banking and monetary policy is one issue. Fiat and asset backed currency another. Trade, investment and trade finance as well as currency convertibility. Then there is government finance and debt. And of course banking and credit markets. There have been philosophical debates on these topics for centuries. Nothing is new except the packaging of ideas by the Ph.Ds in boxes of shimmering glitter.
Reserve currency is not an unalloyed good for the issuer. Carney’s “currency” is what the SDR was supposed to be. The dollar is king precisely because it is unmatched in market depth and liquidity. IMO, our debates need to be framed in first principles and consider the debates we’ve had in the past.
walrus,
re china product quality – depends on what you want.
China can be excellent, but the cheaper stuff is good enough at a rather fair price. I am serious. Sure, of course there is a lot of lower pay price crap stuff, often sold online.
I have two chinese pocket knives. They are ok and do the job, but excellence … is something else. 10 $ price, so-so-made and sent once about all over the world.
But, anyway, I also have a one hand auto opening knife from Gerber. Excellent and from a different league in quality.
I have also have two chinese Celestron binoculars, an 8×40 allrounder and a 15×70 star glass. The point? They do their job pretty good – especially for the price.
Now, they are not excellent but, again, good enough and only cost a fraction of the prices asked for Nikon, Steiner, Swarovski, Leica (their 8×42 are excellent) and Zeiss (another fav, especially an 8×56).
For an excellent new Leica 8×42 I can pay about up to almost 2000 €. That would have been nice but was not in the budget. In contrast the Celestron 8×40 cost me iirc 65 €. The star glass was about iirc 75 €.
It would take a comprehensive plan of some sort as you described. The problem is Trump is it and once he is gone the Washington Consensus of Global “Free Trade”(Jack correctly states never existed) will resume.
And the continue slide into Third World poverty will continue for a large portion of the population. Populism resurgence is part culture but a bigger part economic in my opinion. The Yellow Vest came out due to a Carbon tax.
You can’t lose 1/3 of your manufacturing capacity and retain the “American Dream”. Which is dead. The dream referred to a large and growing middle class. That is no longer the case.
And with 7 billion plus people “American” companies will always find lower cost abroad.
China is mercantilist to their core and this model will prevail in the 21st Century if the Nation State is to survive. I wouldn’t bet against the Globalist they have the Prince of this World on their side. At least for a time.
Barbara Ann
Excellent post!
I find it really amazing how much has changed over the past 18 months. Importantly, the contrary viewpoint of China and specifically the CCP has entered our discourse. This view had been previously suppressed in our media and the CCP perspective was what was packaged under “free trade” and parroted by the Chamber of Commerce, Wall St mavens, many think-tanks and our establishment politicians. Our MSM also was on that bandwagon.
What is most interesting is the success Trump has had in injecting the counter-narrative into our discourse and how even folks like Chuck Schumer & Marco Rubio are beginning to sing from a similar song sheet.
IMO, when Trump called China an “enemy” recently it crossed the rubicon from just a trade dispute to something larger. As you point out the CCP may have calculated that it is best to wait him out. But, what happens if he wins re-election?
As it is playing out right now, Trump has increased tariffs on Chinese goods and they have likewise done the same on our products. I haven’t looked at it recently but I believe we may be on tariff parity on many goods as Chinese tariffs were significantly higher relative to ours prior to the tariff war. In the case of China, it is not just tariffs, they have had significant non-tariff barriers and they have even outright banned some US companies from operating there for sometime. Considering our acquiescence for all these years they were IMO very surprised at Trump’s action and Lighthizer’s negotiating stance. This has been a change of dynamic that has caught them unprepared and they don’t have the necessary consensus at the highest levels of the CCP on how to respond.
I believe the US has a much stronger hand in this dispute and that strength is being masked by the NeverTrump media that is painting a much more dire picture. His stance of a more balanced trading relationship is being obscured in the reaction to his tweet storms.
One thing to keep in mind is that the top echelons of the CCP have spirited and stashed their kleptocratic gains in the west. While Xi may seem invincible and in absolute control of the CCP today, if that “wealth” is seriously in jeopardy there could be an internal coup. We’re talking hundreds of billions of dollars!
Another issue is the situation in HK. If & when the CCP decide to crack down violently which seems inevitable, we could see a significant escalation with a coordinated move by the US, UK & EU to sanction the top CCP officials, effectively freezing their assets in the west. This must be a significant bone of contention currently in the deliberations among the CCP politburo and among the various CCP factions.
The CCP have substantial strength too as they have financed many entities and personalities in the west. They represent voices who have much access especially to the NeverTrump megaphone. The only certainty I believe is that the lead up to our election over the next 15 months will see increasing volatility in financial markets & media hysteria.
Carney’s speech exemplifies what Jack wrote about the Ph.D class. He once again trots out the Global Savings Glut canard which Bernanke used earlier. I recall Bernanke’s “portfolio balance channel” transmission mechanism to the “wealth effect” which would increase “aggregate demand” sophistry. We’ve had the weakest economic growth globally after a recession despite the tens of trillions of monetary stimulus and now they say they need to do more. A carnival barker does a better job as a hustler.
Jan,
the intellectual property has some value which deteriorates with time, so you are right that in long run the secret of a production or a process once it is out, and proven as successful, many other people will know that it possible to do that, and over short or long time they will reproduce it even without stealing the secret by spies or for money. The time lag in which someone enjoys the monopoly on the secret is that valued time, and therefore money. Stealing intellectual secrets has possibly has an inhibitory effect on ones own creativity, by simply adopting someones else´s product.
As far as China dramatic development is concerned, it was predicted almost 100 years ago by a German writer, Colin Ross, in his book (I believe first edition in 1929!) Die Welt auf der Waage. He made an observation of the young chinese Intellectual class, which ´meant business` with progress, and people like Chou en Lai and Deng probably evolved from that movement.
https://www.bloomberg.com/news/articles/2019-08-25/china-s-companies-have-unseen-foreign-debt-that-s-maturing-fast
Yeah, the nuclear option that so many write about how China will unload their Treasury holdings and crash the TBond market causing the Fed to buy it all. These Chinese companies are scrambling for dollars and will need much of those reserves. If we cut dollars going into China it will increase the pressure on CCP.
Speaking of “the farmers” China is buying up U.S. farm land at an accelerated pace. I wonder do they also benefit from subsidies to compensate
for the tariffs?
“re china product quality–depends what you want”, so true. And if someone wants tons of fentanyl they seem to be the go to source, combined with Afghan heroin we’re loosing thousands of mostly young people a year,
more dead kids than from our shooting wars, mass domestic shootings combined. Tariffs don’t put a damper on that poison, all hopes rest solely on interdiction.
Good ideas, thanks. What I take from this … Gradualism, not to make dramatic shifts, and especially not to depend upon whims of an executive office which shifts with prevailing wind. Some sort of tariff admin office. Avoiding sweeping agreements that disrupt the plans of entrepreneurs who have to make multi-year payback projects.
What about using the purchasing power of govt? What fraction of annual spending goes thru a govt office? 30 to 50 pct I guess. At a local level, I’ve seen a 10 pct advantage given to local suppliers. Why not something like that for state and federal purchasing? Maybe based upon percent of non-domestic content.
I work with chinese tradesmen all the time.you have no clue as to there work conditions in china and abroad.You would not know if your a……. had been popped or riveted
https://www.npr.org/2019/03/30/707949897/chinas-global-construction-boom-puts-spotlight-on-questionable-labor-practices
The only way to build a manufacturing economy is by protecting local manufacturing; that concept was true in the early US and was also true in Japan after WWII and in the PRC after the late-1970s reforms.
However, after you develop a manufacturing base, you need to go to free-trade to protect the consumer, now the basis of your economy. there seems to be an inevitable “J-Curve” there, seen in Great Britain and the US.
Really tough question.
On one hand, if you build a better mousetrap, you want to protect (and profit from) that innovation.
On the other hand, good ideas only matter if they culminate in a better product or service and that is a messy thing.
There is a reason why George Lucas let so many people license his Star Wars Intellectual Property; it made his ideas pervasive and relevant.
I don’t think we have heard the last of this issue.
But did that work? was China able to keep the production of Silk away from the Romaioi?
Ask the DPRK how well Junche has worked for them . . . .
Very true.
Do we have some sort of clueless Babak impersonator?
I would be interested to learn the location of these petroleum-bearing rocks. And oil if a leftover from the formation of the Solar System in the about the same way that I am.
“China steals from us. We steal from China. Who cares?”
…forest for the trees. China is a symptom of the disease, not the disease itself. Pres. Trump is trying to destroy globalism without physically destroying globalists, in much the same way as Vlad Putin destroyed the Russian version, the so-called ‘oligarchs’ (who at one point reduced Russian male life expectancy to 55 years) without a pogrom.
Keeping in context that this is a fallen world and politics the most noxious of trades, Putin’s achievement was a remarkable act of high morality. Trump’s will be too, if he can pull it off. If he can’t, this anti-white globalist empire is going to end badly.
Fred,
you miss my point.
What I meant was that Trump can twitter his ass off with more arbitrary decrees, brainstorms, effects of severe over-golfing or severe over-ice-creaming – enthusiasm is not a suitable alternative to planning and especially thinking.
Imagine a big orange clown determined to prevent you from entering your living place by planting himself in his all his overstable overgeniousness in the entry of the place.
And what could do you do in this case? Think of it: Beat him up? Well there is that secret service staff around him … Then, what else: Call the cops? Likely won’t work. Call a vermin exterminator? Impolite and likely it’s not going to work either.
So what else can you do? Well, incidentally there’s a much more easy way:
You go to the neighbours estate, climb over the fence and enter your house through a window that you break or a backdoor that you open. Then you make yourself a coffee and whatch the clown from a comfortable chair freezing his ass off. Oh, it’s snowing now, too! Ah well, too bad he had that idea in december …
Likely that’s about all the pity he gets from China here. Trump’s problem here is that in thinking he can’t get beyond his loved trade war song:
(down with) China!
(down with) China!
(down with) China!
(down with) China!
(down with) China!
… ahem …
MAGA!
MAGA!
MAGA!
MAGA!
MAGA!
A simple song for a simple mind?
To get what he wanted – badly hurt China economically (a geostrategic and economic rival) with penal taxery – he would have had to penal tax the entire rest of the world for … because Trump wanted so for whatever reason or impulse. Well, he didn’t.
What Canada is doing is simply FREE TRADE (once theoretically something holy for the US), which is precisely what Trump’s penal taxery is not.
The problem is not the existence or lack of existence of petroleum in the world, the problem is the cot of production, processing and distribution. At present the USA fracking business does not meet the return on invested capital [heavy monetary losses for total fracking industry since oil was $100.00/barrel to today, aka, a Ponzi scheme].
Conversely the total cost of exploration, production and distribution in terms of energy requirements must be considerably smaller than the total energy content for the final user. At present tar sands of Canada, some fracking plays in the USA barely meet the energy requirement [theoretically the net must be 3 times the input, while historically the original Texas plays returned over 100 times the energy needed for the process].
When the
The left started destroying educational standards wherever they could in the middle of the last century:
case study the decline of educational achievement in Hungary after US input for “educational quality”. Similarly the USA has never met in the last 40 odd years the literacy level of earlier times.
It looks as though Trump is winning from this morning’s news. China blinked.
Once again, all of the Chicken Little hysteria over Trump is quickly being revealed to be what it is.
Some people never learn.
Pre-WWII Japanese Forces were excellent; very well trained. There was some good equipment, notably the Mitsubishi A6M “Zero.”
On the other hand, much of their equipment was **highly** sub-standard: the Arisaka was an undistinguished bolt-action rifle; their tanks and artillery were vastly inferior, they never really developed an effective sub-machine gun and their service pistols were almost pathetic.
The discipline, toughness and basic soldier-skills of their troops let them punch well above their weight.
“Stealing intellectual secrets has possibly has an inhibitory effect on ones own creativity, by simply adopting someones else´s product.”
But it worked for Rome, which developed its naval technology from the Carthaginians; its metallurgy from the Celts; and the secret of silk from China.
Nice Orange Man bad rant. How’s Merkel’s EU free trade policy with China working? Don’t have one because the EU has borders and importduties? I wonder why.
Canada’s, to use your bolded term, “free trade”, is simply a mechanism to aid US firms avoid taxes via fraud. The product origin is China, the Canadian value added is essentially zero. Trump has done something about that. Enjoy your free trade recession.
Norbert,
You mean diversity and immigration are not our strengths?
John Minehan
That is true but their logistical sustainment skills were appallingly bad.
everywhere they fought for extended periods they starved and died of disease in droves.
Fred,
I have a proposal for the canadian value added. Actually is quite simple:
The canadian value added is China getting soy beans without that arbitrary penal tax … tweets … ejected by Mr. Trump on one of his worse tweetery days?
You know, in such trade wars, just as in more physical wars, the nother side shoots back.
And as far as “free trade recession” goes, maybe we in the EU or Germany have that, maybe not. We’ll see, and we are not careless (hopefully) or (certainly not) arbitrary in that.
Now look at the US for a change:
Trump is gambling with the US perhaps getting a “arbitrary penal taxery trade recession”, which – if his rather vicious attacks at the Fed and its chair are an indication – a thing Trump is apparently afraid of.
I read that Trump has delayed the time his latest China penal taxery goes off for a few months.
Reason? Nah, there’s not reason at work. It likely is vanity:
Likely he IMO did that so that the prices of all the things the US (need to) import from China won’t rise before christmas and so that he’ll avoid having driven away supporters by hurting their purse (and likely for some of his supporters their purse is almost their heart – likely be a thing Trump can empathise with).
But then, it is as with his new friend Boris Johnson – Brexit is an easy peasy thing (never mind that odd Yellowhammer plan for the worst) – and for Trump, Pence and Navarro trade wars, especially with China, are easy peasy to win.
It’s all just like playing ball in the kindergarten, all easy peasy.
But then, even kindergarten is not without risk: I iirc hit the first time another person then when a loon boy suddenly started to strangle my sister. Then he stopped immediately and was as surprised as I was.
Alas, let’s have fun – scream Geronimo! and jump out of the aircraft, hopefully not forgetting the parachute – and that’s for Johnson as much as for Trump.
A Army Officer gave me a Nice Push Dagger that his Moro guide had given him During WW2…..It looks Persian …. Nice Teak wood sheath…
Yes I know that Anon. They even added melamine to baby formula so that it appeared to meet specifications, killing thousands of Chinese babies as a result. There is very little the Chinese won’t do to make a dollar.
What I said was that if you insist on good quality from China you will get it. The fun and enjoyment in this game is how you “insist”.
From what I’ve read, being able to continue the mission under appalling conditions was a big part of their military ethos.
Having that level of discipline and training is a good thing, lack of concern for Soldiers as an assumption is not.
Good point.
John Minehan
Spare me the hoo hah BS about how tough you have to be. I am an SF man. I know how tough you have to be. Soldiers who are not fed, clothed, medically treated and re-supplied LOSE. Operational imaginings are nothing without sound logistics. Conventional forces like the IJA in WW2 are inherently vulnerable if not well supported logistically. Their early victories against the US and British Empire did not require prolonged fighting and were against ill prepared opponents.
CP,
Believing it is all about money has been a sacred belief of the left long before “Don’t Think an Elephant” came out. To quote Pascal “The heart has reasons that reason knows nothing about.”
Actually, that’s my point.
The Japanese Empire had great, well-trained, disciplined troops. But you do them a vast disservice if you don’t give them the tools they need to succeed, the logistics support to sustain ops and the equipment they need to sustain their training advantage and turn that into beating the enemy.
Two seemingly divergent points by GEN Patton sum it up, “A pint of sweat will save a gallon of blood” and his idea in War As I Knew It, to have the Infantry carry as little as possible in the attack and trucking in what they needed after the fight.
Training people to operate under the worst conditions has great training value but it is not something that is an end in itself. The end is winning and logistics is a big part of that.
The Age of Trump will be very valuable in that it will force all kinds of people who never wanted to understand things like “trade” and “economics” to begin to have to do so. Maybe even begin to want to do so.
And those who are already interested in these things might begin digging around for many neglected sources and much neglected wisdom. People might begin studying past periods of success to try really understanding what made those periods successful. Perhaps recovering and relearning and re-doing what worked in the past ( where suitable) might become as respected as forever inventing something new.
What is the opposite of “innovation”? Is there even a word for it? Perhaps reverse-innovation might become so important and useful that a word will be coined for it; a word like “retrovation” perhaps.
”And with 7 billion plus people “American” companies will always find lower cost abroad.”
It wouldn’t benefit them to chase the lowest cost labor countries if the price ‘leveling’ plan was instituted.
Just this week Africa was declared ‘free trade zone’ for importing into the US. The multinationals will be all over that cheap labor market like a herd of locust.
We cant control where companies the US buys from locate but we can make the rules for importing into the US.
Why not something like that for state and federal purchasing? Maybe based upon percent of non-domestic content”
You’ve got the idea. Paper products would be no problem but other things like uniforms, clothing would be because we no longer grow
enough cotton crops and even synthetic fabrics usually contain at least a percentage of cotton….most of it is imported from Egypt.
BUT…even that could change. Two young fellows a few years ago found and rehabbed a small old cotton gin mill in NC and started buying cotton from a few farms that still had cotton fields…they started making T shirts and have a pretty good cottage industry now of both individual and commercial customers.
There is plenty of entrepreneurial spirit left in Americans if they can just get a level field to compete on.
“And those who are already interested in these things might begin digging around for many neglected sources and much neglected wisdom. People might begin studying past periods of success to try really understanding what made those periods successful. Perhaps recovering and relearning and re-doing what worked in the past ( where suitable) might become as respected as forever inventing something new.”
“What has been will be again, what has been done will be done again; there is nothing new under the sun.” Ecclesiastes 1:9
Though there can be new-ish versions of the old things been and done, re-adjusted for new-ish versions of old situations.
Still, there is much scope for useful retrovation, and much retrovation to be done.