Trumps Trade Wars by Walrus.


President Trump is allegedly going to impose tariffs on imported steel and aluminum next week. When the European Union questioned his wisdom in doing this, he doubled down by threatening to impose tariffs on European car imports. He is also alleged to have said "trade wars are easy to win". This is madness and ultimately bad for America. The President seems fixated on trade imbalances and sees an easy and wrong solution to the American trade deficit which last year was 566 billion dollars. His take on this is that "its not fair" that America can't export more – the cause of the deficit is those dastardly furriners  are conspiring against American industry. This is childish.

I will not go into detail about specifics of the product mismatches between America and the rest of the world that are part of the export problem, anyone who has ever been to say, London or Amsterdam would know that a Dodge Ram would be entirely out of place. My main observation, based on a lifetime of experience with manufacturers facing international competition, is that tariffs are an addictive drug for lazy and incompetent business management, featherbedding unionists and bad government. All tariffs do is put off the day when the toxic combination of bad management, lack of investment, poor work practices, rotten infrastructure, overpriced energy, excessive regulation and bad government become too much of a cost for the community to bear.

To put that another way, if you are working for a manufacturing company that is internationally competitive and well run, how would you like it if your raw materials, Steel and Aluminum, suddenly became 25% more expensive next week? …  And all to protect some lazy SOB down the road who hasn't invested in his plant for thirty years? Then there is the question of foreign retaliation.

The correct response to a trade imbalance is to find out why your product isn't selling and fix it. For example American cars are oversized gas guzzlers in the eyes of the rest of the world, that is why they don't sell, but nobody in Detroit seems to want to make what the rest of the world wants, instead they cry to uncle Donald.

Ultimately, Trumpian tariffs will hurt the internationally competitive sectors of American industry while merely postponing the day when the uncompetitive sectors must modernize or go under…and the result is always a net loss of jobs. 

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140 Responses to Trumps Trade Wars by Walrus.

  1. The problem is that our managers have become lazy and incompetent. The free market solution is strong competition for management positions. The traditional American strength was excellence in public universities, which allowed people of any economic background to demonstrate excellence and become managers.
    The elite have destroyed this competition and thus the vitality of the country.
    Trump’s tariffs will only hasten the destruction as they fail to address the real reason for our trade imbalance.

  2. Quite a few well-known economists over the years have denounced tariffs as bad news.
    Against Trump’s Tariffs
    The IMF and WTO agree:
    Trump steel tariffs: IMF warns plan would hurt US
    The European Union retaliates by suggesting Harley Davidson, bourbon whiskey, and Levi’s jeans could be tariffed:
    E.U. Leader Threatens to Retaliate With Tariffs on Bourbon and Bluejeans
    So it seems our “business oriented” President is not only ignorant on foreign policy, immigration, and gun control (“take the guns, then do due process”), but he’s also ignorant on economics.

  3. Then go and live those countries and be gone from ours.
    Other countries that apply Tariffs, that protect their own nations.
    Countries who’s elites understand they must protect their own people from foreigners or be seen as traitors and overthrown – then thrown over lampposts.
    Here is the Truth of you Internationally Competitive types: you have nothing to offer the world but betrayal of your own. We’ve had enough.
    As for Trade we must reciprocate the practices of others or be taken advantage of and seen as weak – and it was the Truth.
    No longer.
    Go. Be the White Dwarf in Emperor Xi’s court.

  4. Fred says:

    “For example American cars are oversized gas guzzlers ….”
    How is the Australian car industry going about that today? Oh, that’s right, you don’t have one! If I recall correctly you once worked for Ford. Perhaps you can tell me about the products made by Ford of Europe, Ford Brazil, Ford South Africa and I’d mention Ford Venezuala but that socialist paradise doesn’t have any car industry right now either. Are those gas guzlers too? Are their designs mandated by Detroit? Hardly. Who in Detroit is crying to Uncle Donald? William Clay Ford? That’s a laugh. Did he impose that 35% tariff on cars crossing the Mexican border that drove Ford nuts back in 2016?
    BTW didn’t Ford just get a giant tax cut? We better keep that quite, tariff policy talk is going to put them right back to, where, exactly, globally? How about currency manipulation? I recall Senator Debbie Stabenow beating that drum for a decade and not doing anything about it but talking – usually right before the election.

  5. steve says:

    I think that you are mostly correct here. As far as I can tell Canada does not subsidize its steel production, so a tariff on them is just a gift to US steelmakers while hurting US consumers. China may be a different story. They clearly subsidize their industry to the extent that non-subsidized companies will have trouble competing. However, that means that China is essentially giving us some free steel. Do we gain enough jobs in the steel sector to outweigh the loss everywhere else? Maybe, but it hasn’t seemed to work very well in the past.

  6. Huckleberry says:

    This is a political move designed to move the White Midwest into the new nationalist Republican Party. Conservatism is dead. The economics are of this are a sideshow.

  7. steve says:

    ” Perhaps you can tell me about the products made by Ford of Europe”
    That is easy, you can look it up. Their top sellers are small, fuel efficient cars. Nearly all European countries have much higher gasoline taxes than the US, to say nothing of the streets.

  8. blue peacock says:

    The fact is barring Hong Kong, the US is one of the most open economies in the world with the least friction to imports. China on the other hand is one of the most protectionist. The EU too is significantly more protectionist relative to the US. It is not just duties but all those other non-tariff barriers including subsidies and regulatory barriers.
    China produces more steel than the rest of the world combined. Way more than they need. Their steel producers then sell their excess product below cost because they get subsidized by their government, running non-subsidized businesses in other countries out of business. This is exactly what has happened in solar panels and in many other product categories. You give the example of automobiles. What do you think is percentage of cars that are sold in China that are actually imported? What about percentage of imports of auto parts into China?
    Under the ideology of free trade championed by the establishment of both parties, Wall Street and US multinationals, the US has voluntarily shipped its industrial base overseas. But the reality is that there is no free trade. China is deeply protectionist. And the EU too but to a lesser extent. Trump is spot on correct that the working class in the US have been screwed not only by our ruling elite but all those mercantilist nations who have taken advantage of the open US economy.
    The real issue behind what Trump, Wilbur Ross and Lighthizer are focused on is the loophole in NAFTA, where parts are shipped in from Asia for example, assembled in Mexico and Canada, and the final product gets a Made in Canada label and comes into the US tariff free, subverting any direct trade arrangements that the US has with Asian countries. This backdoor means is what they want to eliminate and why there can’t be any agreement because of the huge benefit to Mexico and Canada with this loophole. That’s why if they have their druthers the US will exit NAFTA, just to end the end run.
    Trump wants to re-shore the US industrial base and it seems he is willing to risk a trade war to achieve that goal. He’s doing in this instance exactly what he campaigned on. His message is pretty clear if you want unfettered access to the US market, make it here. If the US consumer pays more that is a price he’s willing to take to have the manufacturing base. This is a debate worth having. This is the debate that Ross Perot and Sir Jame Goldsmith began in the 80s and they’ve been proven right in terms of the consequences. They failed then, as Bill Clinton and both the Democrats & Republicans backed by big Wall St & US multinational money steamrolled “free trade” legislation, including granting China, Most Favored Nation status. Wall Street has made out like bandits but the working class has fallen way behind.
    The interview of Sir James Goldsmith:

  9. Steve G says:

    Google NAFTA loopholes and the
    Corresponding links will explicate
    What has been the globalist policies to
    The detriment of US industry.

  10. catherine says:

    ”Ultimately, Trumpian tariffs will hurt the internationally competitive sectors of American industry while merely postponing the day when the uncompetitive sectors must modernize or go under…and the result is always a nett loss of jobs.”
    I think there is more to it than that. The core reason US lost its manufacturing base is cheaper overseas labor. That began in the 60’s after GATT.
    Labor cost can appear in a lot of forms….Ford for instance operates cheaper in the UK in part because of their health system….where all taxpayers pay for it thru their taxes…the employer does not have the cost of providing or administering health care insurance for employees. But in most countries it is the cheaper wages that make overseas production more profitable.
    It would be more beneficial to have put tariffs on ‘finished products’….washing machines, computers, tvs , etc…..covering a much broader array of production and ramping up more types of companies and jobs. Putting 25% on steel right off the bat is too high……US steel needs time to tool up their production to meet demand at reasonable cost for one thing….meanwhile overseas users of steel in their products that are not affected by a steel tariff will continue to export into the US.
    As far as I can see this only benefits the US steel companies and their workers.
    My idea years ago was to establish tariffs and or quotas based on what industries pay their labor in foreign countries vr what US employers pay and adjusted for standard cost of living in that country and if lower then a tariff would kick in. For instance GE or Ford in Mexico or wherever would then have the choice of paying higher wages to their labor––(taking away the overseas cheap labor benefit for US companies)–– or paying a tariff on their imports to the US.

  11. For blueP #7
    “Trump wants to re-shore the US industrial base”
    Believe that this is will be impossible to achieve with the current crop of capitalists/managers.
    They believe that that any returns less that 20-30% per annum are unacceptable.
    They refuse to work hard.
    If they were simple workers you would fire them and hire people who were more motivated, i.e. more hungry.
    Trump is push on string here.
    Hillary likes the idea of paying companies/managers government supplements to work harder and keep jobs in America. Simply put, we don’t have the money.
    Invest in community universities and greatly increase the number and quality of potential managers. Greater supply of managers = lower salaries and far stronger competition.
    Restricting competition is not the solution.

  12. Tel says:

    “My main observation, based on a lifetime of experience with manufacturers facing international competition, is that tariffs are an addictive drug for lazy and incompetent business management, featherbedding unionists and bad government. All tariffs do is put off the day when the toxic combination of bad management, lack of investment, poor work practices, rotten infrastructure, overpriced energy, excessive regulation and bad government become too much of a cost for the community to bear.”

    Sure, take the example of Detroit, it was destroyed by all the things you mention, and it is very unlikely to come back even under Trump’s new economic plan.
    That said, suppose you were a worker who started in a factory at age 18 and 25 years later the factory closes. You have worked hard, you probably joined a union because you had no choice in the matter, you did what the union asked because everyone else was doing it, you have good skills but highly specialized, and you are now 43 years old with no job and no one likely to hire you.
    What are you supposed to do? Start programming apps for mobile phones? Open a coffee shop? Become a pro-surfer?
    That’s the thing about division of labour, it’s a lifelong commitment. Some people choose well and win, other people do what looks reasonable but turns out badly and they lose. Needless to say, the losers want someone like Trump to give them a hand.

  13. Fred says:

    Really. Why didn’t I think of that. Perhaps you should look through the Ford annual reports for the last decade or so and see how much money Ford made or lost in Europe and South America versus the US.

  14. aleksandar says:

    wisedupearly Ceo
    US managers have becomed lazy and incompetent ? No. The core problem is that shareholders want cash, at any cost and without a clear view of how a company should be managed. Take investment ie, it diminish results and dividend.
    Short term financial policy.

  15. rusti says:

    My main observation, based on a lifetime of experience with manufacturers facing international competition, is that tariffs are an addictive drug for lazy and incompetent business management, featherbedding unionists and bad government.
    I think that tariffs and protectionist measures have their place in terms of strategic initiatives to start new industries. How would the South Koreans have developed monster electronics or automotive industries without them? Ha-Joon Chang’s book “Bad Samaritans” provides a bunch of examples from different eras and places.
    But part of having competent administrators is knowing when to cut the cord, and once an industry is competitive on the international market (American cars or steel) subsidies aren’t likely to nurture it back into competitiveness, but just to reward incompetence and cronyism. I agree with Huckleberry, this is not something that is based in any sound strategy for the benefit of the US as a country.

  16. Walrus – your point about the gross inefficiency of Western economies is well made. I do not think the remedy is to destroy them further.

  17. jonst says:

    Barely disguised ad hominem nonsense. Tariffs and such may indeed be a rather blunt tool, of limited usefulness. But it is a tool that built America, and is building up China, SK, et al. Those who oppose them–a respectable position–have a corresponding duty to share with us how they will reduce our massive trade deficit with the rest of the world. Or, in lieu of that, tell us why trade deficits–even the kind like ours–don’t matter to the economic health of a nation.

  18. “have a corresponding duty to share with us how they will reduce our massive trade deficit with the rest of the world. ”
    See my #10.
    We need capitalists/managers who do not come from the insular world of the Long Island rich.
    People from small villages who are able to work smarter for the country.
    We already have far too many globalists in power.

  19. Harry says:

    The battle over trade policy is exactly the same as the battle over the corn laws in Britain. The fight is between different interests in the US. Its a domestic fight. The interests of NYC, LA, and SF vs the others.
    Im sympathetic to Trump supporters, but exactly who can you blame except yourself for opportunists like Weinstein doing precisely what opportunists always do.
    Its your Republic, if you can hold on to it.

  20. Eric Newhill says:

    As you no doubt know, most economic policy is a matter of “squeezing the balloon”. I am surprised at your one sided assessment. IMO, the tariffs cannot be viewed in isolation. Rather, they need to be considered in conjunction with the Trump tax cuts.
    American produced costs more than foreign made. The tariff equalizes the cost between foreign and American produced (actually makes foreign produced cost more, making it less attractive). The tax cut allows American businesses to compete on price at levels dropping to near what the pre-tariff foreign made product costs. Thus American consumers are not harmed.
    I don’t know where you get off on all this poor management to be blamed for US produced higher cost. AFAIK, it is higher employee costs and thicker regulations that drive US produced prices higher. That said, US quality tends to be higher. So the price difference is not as great as some would have it. Quality has a value, of course.

  21. Pacifca Advocate says:

    Wow. You could not have failed to grasp his point more completely.
    WTO and IMF are in place to erode barriers like tariffs. Any country participating in those organizations is expected to meet certain basic requirements to eliminate barriers to competitive trade.
    The reason we have so many things in the US that are now made in China is not because China has tariffs in place; it’s because US companies moved their manufacturing facilities over to China, so they wouldn’t be forced to pay their workers so much. That, and automation (!), are the two primary villains in the erosion of the American industrial base.
    wisedupearly Ceo up there has it exactly right, and so does Walrus:
    A) America’s heavily industrialized products are generally rejected (Harleys and Levis aside) by foreign countries because they are inferior and don’t meet the needs of the consumers in the rest of the world. American washing machines are huge monstrosities, compared to the washing machines one finds in Asia. Capacity in each are about the same, but relatively little innovation has occurred in American washing machines because Americans have a lot more space than most of the rest of the world does, and they don’t really care if their new machine comes with fuzzy-logic auto-adjustment. Space for the rest of the world, though–particularly in Asia–is a really important consideration. The same goes for American cars. The same goes for lots of things.
    B) American management generally doesn’t worry over these things, b/c the US is in itself a market of >300 million and relative to its continental neighbors (Latin America), it’s the apex economy. This status has allowed the American corporations that serve the needs of Americans to be quite lazy in their outlook. Selling one million washing machines each year makes quite a lot of money, and R&D requires a significant investment–so why bother with doing it if you can just look at what Japan’s doing, and copy that in the safe and secure knowledge that nobody from the US is going to be buying a Japanese washing machine?
    C) The Metric System. Duh. Weapons manufacturers in the US switched over long ago. American automakers…nope. Car accessories are a huge secondary market for auto-manufacturers. If a US auto-accessory manufacturer wants to get into secondary markets, it will need to create TWO assembly lines: one for Americans in the Imperial system, and one for exports, in the metric system.
    D) Apple manufactures its phones abroad, using brokers who engage in horrific abuses of their workers. Those phones could be made in the US, by American workers, who earn a living wage. You should be asking yourself why they aren’t–not pretending as if it’s actually the fault of Latino migrants and Chinese competition.
    E) When was the last time you bought a shoe that was Made in America? Or clothes, for that matter? Do you think that’s China’s fault? NO! That’s the business elite of the US, exporting all those jobs to foreign locales. Since NAFTA, clothing mfg has pretty much been exported, in its entirety, to Latin America and Asia. Taiwan used to be the place where lots of shoes were made; no longer, b/c a living wage here is now too expensive. Those jobs have moved to Vietnam, Indonesia, China, and the Philippines. And yes: the workers who make them barely earn enough to feed themselves and a child or two. For many, attending school is even too expensive a luxury.
    Absolutely NONE of these erosions of the US industrial and mfg base has anything at all to do with tariffs. Each is the result of either actions by our managerial class and ruling elites, or the logical consequence of an American Exceptionalism that believes the world should follow the US, rather than the US work as an equal among many.
    Putin reminded us all of the potentially fatal consequences of such an attitude just a couple of days ago. Implementing a bunch of tariffs are precisely the wrong response.

  22. Pacifca Advocate says:

    >>>China on the other hand is one of the most protectionist. The EU too is significantly more protectionist relative to the US. It is not just duties but all those other non-tariff barriers including subsidies and regulatory barriers.
    Both have more “regulatory barriers” (the rest of the world considers these “quality of life protections”) in place because they have a MUCH higher concentration of population-per-meter than does the US, and then there’s also that lil’ thing called “Global Warming” or “Anthropomorphic Climate Change” which stubborn lobbies in the US have worked hard to discredit and, in the process, deluded much of the population into believing that it’s not really an important problem.
    Regardless if one believes it’s “Anthropomorphic” or not, this next few years we are all going to learn that it’s a Big Fucking Deal, and the efforts to obfuscate its importance have been criminal.
    So–yeah. Europe and China have “regulatory barriers.” So should the US. The Gulf of Mexico is still mostly dead, now–precisely because we didn’t have adequate regulatory “barriers.”

  23. Terry says:

    Yes competition is a good and necessary thing but strangely those that cheerlead for a simplistic view of unbridled competition seem ignorant or lacking experience in what really happens with unrestricted competition: people cheat and take advantage. The largest power bullies and eliminates competition.
    More likely the cheerleaders are benefiting from the ills that come from it and laughing on the way to the bank with gains achieved not from healthy competition but rather unfair business practices.
    Examples such as those with deep resources drop prices and drive out competition creating a monopoly or the big players buying up and burying innovative smaller competitors. Unchecked competition leads to monopoly.
    Sports require ongoing management to ensure fair play. Bullies on the playground are a standard feature of all playing fields. International business is no different.
    As to whether we have the human capital to compete – that has been diminishing for some time. For me the root cause of that is the shift from 70% rural to 5% rural in the last 100 years. Nixon’s big ag farm policies, the destruction of Wallace/FDR’s farm policies (a great example of shifting from fair and managed market policies to rule by the largest power) soon followed by our small farms and small towns ensured that. Lacking the hard work, pragmatic nature, and discipline that naturally emerges from a rural environment requires strong cultural practices and traditions which we generally lack.

  24. Pacifca Advocate says:

    >>>Those who oppose them–a respectable position–have a corresponding duty to share with us how they will reduce our massive trade deficit with the rest of the world.
    That’s quite simple: build products that people in other parts of the world want to buy.
    Japan’s economy took off in the 70s precisely because it sent over lots of young men to study what American consumers wanted.
    Do you think Maytag is doing that? Whirlpool?
    Do you know how rarely Asians come across a product tagged with the GE logo? Pretty much only in lighbulbs–which are metric–which means….

  25. outthere says:

    There is an excellent analysis in LATimes of steel situation there. A big modern employee owned company fabricates many products, and is facing increased costs of steel because of the new tariffs.
    Basic steel slabs are 35 ft long. It is far cheaper to ship steel by ship from China to California than it is to ship by rail from Alabama (or anywhere in midwest USA) to California. So the result of the new tariffs is that Alabama (and all midwest USA) is raising prices, and consumers will pay more for fabricated products.
    Will there be more jobs in USA? Doubtful. Probably net fewer jobs as western fabricators lose business.

  26. divadab says:

    The overlooked worst part of Trump’s proposed tariffs on Steel and aluminum is that it’s a CHEAT: the Trump regime has used “national security” to justify the tariffs. WHat possible national security threats are our free trade partners Canada and Mexico? These are our friends and allies, totally integrated into our supply chains.
    How does this cheating to promote punitive tariffs against our friends and allies and free trade partners going to benefit the USA? WHo will ever trust the USA to honor its commitments when it cheats its friends and beggars its neighbors in actions of dubious use for purely domestic political purpose?
    What are we to conclude but that the USA is led by people who lie and cheat as a matter of habit? They think its normal to cheat their friends. How did this Republic descend so low as to be led by these scum?

  27. Seamus Padraig says:

    In order to know whether or not Trump’s tariff would be justified, we need to know more about the European steel situation. As some commenters above have noted, the steel market is notoriously susceptible to ‘dumping’ — i.e., selling steel below cost in order to win market share and drive competitors out of business. The Chinese, for example, are known for this. When dumping is proven to have occurred, then tariffs or other protectionist measures are fully justifiable. Even the WTO authorizes them in such cases.
    Another issue involves countries where governments give their steel industries cleverly disguised subsidies, or enact protectionist measures of their own–sometimes claiming they are for ‘consumer safety’ or ‘environmental sustainability’. Of course, there are times when such measures may be legitimate; but again, we would have to know more about the situation before saying, definitively, yes or no to tariffs.

  28. Here is where you are wrong. There is a major aluminum manufacturer in China who was sanctioned by the US. That company then started shipping its product to Mexico, where it set up a front company and partnered with one of the Mexican drug cartels. The aluminum is being re-stamped as “Made in Mexico” and shipped to the US under the terms of NAFTA. You okay with that? I’m not.

  29. ISL says:

    You really miss Trump’s point and method. He creates uncertainty (and trump derangement syndrome in some). If the dem’s do poorly in the mid terms, companies will start thinking about six more years with random tariffs popping up like tweets in the night, and will proof their future profits against this uncertainty. I would argue that it is not costs that really drives businesses to relocate (costs can be priced in or strategized against, etc.) its uncertainty (and I will add a highly educated workforce).
    That said, I would be more convinced if Trump had not surrounded himself by G-Sachs execs, who have profited the most from offshoring.

  30. Eric Newhill says:

    Seamus #28
    Exactly right.
    Too many Chicken Littles here acting like econometric modeling is a univariant exercise. Tariffs increase the price of steel from China so prices go up. Done! Analysis complete! Of course real world economies aren’t so simple.
    I will say again that any analysis must include the cost (to consumers) reducing effect of a) the Trump tax cuts b) the Trump regulation reductions on the price of US production.
    There are many other variables involved in the econometric equation and those variables, if kept internal to the US, can be tweaked so as to result in a net gain to the USA.
    I suspect that the leaders of the Chicken Littles are those with a vested interest in the foreign produced products. Then all those suffering from TDS jump on the sky-is-falling train.

  31. If Trump’s target is China, he’s shooting at the wrong target. Canada is the largest exporter of both steel and aluminum to the US. Russia is up there, too, especially in aluminum. I’m waiting to see what his next step would be.
    Perhaps what Trump really wants is a recreation of the Tokugawa policies of sakoku in Japan. America for Americans. American goods and only American goods for Americans. The rest of the world be damned. That would be a very different economy and very different way of life.

  32. Nancy K says:

    Do you really believe that people who don’t agree with you aren’t American and should leave. I’m here to tell you I disagree with everything you have just written, and I am not moving anywhere. There are more people in this country that think like me and the younger generations will just add to that number. If you don’t like it you can always move.

  33. Mark Logan says:

    This is one of the few things Trump has done which I support, every nation during our reign as the world’s titan protected their nascent start-up industries with tariffs, and at the expense of their own consumers. That is the necessary price for long term security sometimes.
    I am not convinced free trade can’t work, btw. The Chinese have for quite some time now have demonstrated they must build their own domestic market, in time the guys who are eating our lunch will have much more expensive labor themselves. The free traders may not be wrong.
    That said Trump did this with the skill of a cub scout with a dull ax. It is possible to get this sort of change without busting the other guy’s balls and thereby igniting widespread outrage, which all but compels other leaders to fight and fight hard. He us stuck in NYC real estate mode. If I were a cynic I might chalk this up to another red herring for the press to get them to talk about something other than his chaotic administration, but for now I will give him the benefit of the doubt.
    Even his few good ideas will be worse for the wear of his advocacy.

  34. Kooshy says:

    US, created the liberal global no border economy. Now wants to walk away from it, do without it. If so, without the third world cheap labor how could the current US wages afford to participate in this liberal capitalist economy. There is an Iranian proverb that fits this new typical Trumpish American bluff, “first you need to dig a well than to go steel the minaret”

  35. outthere says:

    The historic progression is from currency wars to trade wars to shooting wars. We are now at stage 2.
    James Rickards explains
    Rickards wrote the book about currency wars, he knows what he is talking about.

  36. Kooshy says:

    I also thought US’ liberal open market trade policy, was another incentive to keep the status of US dollar as world’ main fiat trade currency, if we close or make export to US expensive on foreign countries, who would need, or, what would be the reason to keep as much US dollars in reserve currency or invest in US bonds? Would that effect value of US dollars ?

  37. Alves says:

    The target is not China. China is just collateral damage in this round of trade wars.

  38. Laura says:

    Again, I must reiterate….Trump is not a businessman. Trump is a real estate investor. These two things are NOT the same. Also, it is interesting how many times “childish” has come up on this blog vis a vis our President. Has anyone else noticed?

  39. Babak Makkinejad says:

    Once again, there is Global Warming but it is not caused by man.

  40. Babak Makkinejad says:

    Yup, keep the popukation rural – to eke out a marginal existence on back-breaking work that kills the body and soul; and watch the loved ones die of avoidable causes. You might like to look at Brazil or India for a reality check.

  41. Babak Makkinejad says:

    There is no other way, USA can no longer be the Global Buyer of Last Resort. Is Oakland any better, in infrastructure than Naples? Or Tunis?

  42. steve says:

    Trump trade spokesperson this morning said this is not about China. This is pure protectionism for the steel and aluminum business.

  43. outthere says:

    I am not here to argue with you about whatever Trump’s “point” is/was.
    I believe the world should use the most economic resources and not waste them, i.e., should NOT waste money on uneconomic shipping costs.
    I do NOT believe these new tariffs will result in either greater efficiency or more employment in USA.
    I do believe these new tariffs will result in higher costs for USA consumers, and also for USA fabricators.
    So the net result may very well be LESS employment in USA.
    Read the article for yourself.

  44. Jack says:

    For some perspective. Steel production numbers:
    China: 830 million tons
    Japan: 104 million tons
    India: 101 million tons
    US: 82 million tons
    Russia: 71 million tons
    S. Korea: 71 million tons
    Germany: 44 million tons

  45. catherine says:

    ”My main observation, based on a lifetime of experience with manufacturers facing international competition, is that tariffs are an addictive drug for lazy and incompetent business management, featherbedding unionists and bad government”
    Well I am dumbfounded. What exactly is your experience with manufacturers? Also how old are you? Do you own a manufacturing plant or work for one?
    I could give you a tour of my state’s dozens of shuttered plants from textiles to small equipment that went out of business due to cheap imports that were cheaper because they benefited from cheap labor, less taxation, no safety regulations and no employee benefits such as insurance, Manufacturing loss occurred because of free trade and outsourcing, period.
    Did you miss this clue? …..”General Motors Corporation announced plans to cut 30,000 jobs and close nine manufacturing plants across North America. According to its ceo, the decision represented an attempt to “get its costs in line with major global competitors” and “return North American operations to profitability as soon as possible” (AP Nov. 21, 2005).
    Or these?….In 2003, industrial giant Bethlehem Steel folded, causing thousands of employees and retirees to lose their pensions.
    In 2004, Levi Strauss closed the last of its more than 60 American factories.
    How about Boeing? ….. (Newsweek, Dec. 2, 2005). “70 percent of the airframe of the company’s next-generation 787 Dreamliner will be made overseas, including key parts such as the fuselage and wings.” If you think that is because of US ‘failure to inovate ‘ and not about cheaper cost I have some time share in Syria to sell you.
    It has nothng to do with ‘lazy and incompetent ‘ and every time an American manufacturer closes and then reopens elsewhere, the foreign country gains American technology.
    In addition there is a vast difference between management circa the 50’s 60’s and business management today by musical chairs CEOs of inter corps who had nothing to do with creating or building the company and manage for the self benefit of bonuses according to their stock price on WS.
    So I hope you want to avoid being lazy and incompetent yourself and want to understand how all of this came which you can do by starting with GATT and following the tariff and trade bread crumb trail to today’s US problem.

  46. Babak Makkinejad says:

    In regards to Boeing – that was the result of industrial extortion by foreign governments, “use local sources or no deal”.

  47. turcopolier says:

    In what sense is a “real estate investor” not a species of business man? pl

  48. Babak Makkinejad says:

    I think you mean he is not an industrialist; that he is unlike Carnegie, Ford, Durand etc.

  49. Eakens says:

    What exactly is your definition of a businessman? Somebody who is not trump?

  50. walrus says:

    My experience is as a customer of Boeing in the airline industry, as a management consultant with an international firm, as a general manager of a manufacturing company then in various senior management roles in aerospace/IT/defence before working in industry development for Government then culminating as CEO of an intellectual property company.
    I have seen a lot of “protectionist behaviour” first hand including in the U.S. and have had to listen to countless businessmen complaining about unfair competition. In every case when I ran my tape over their business I discovered rotten management, poor work practices, lack of investment and R & D, etc., etc. I was often the go-to guy for the state government when some manufacturer got on talk back radio and complained about taxes and regulations and how the community owed him plenty for creating jobs, yadda, yadda…. In every case the guy had an old broken down plant and no idea how to modernize things.
    Of course when GM, Ford, GE, etc. close a plant they blame costs and regulations, that is self serving crap. Were the plants state of the art with leading edge technology and work practices? Didn’t think so, more likely an old plant whose machinery and workers have been run into the ground, that is now far from target markets and requiring major investment.
    In addition, there is global over capacity in the car industry because every Asian nation uses that industry to bootstrap its other industries and economy. As for Bethlehem steel, were its plants state of the art or hangovers from 1890?
    As for the clothing industry, it has always moved to where labor is cheapest. It moved from China to Vietnam and Bangladesh. It will move again when those countries get expensive. Do you really want the clothing industry back? Sweatshop conditions and lousy wages?
    As for Boeing (and GE) you miss the point. The partnership models used require the partners to come up with a percentage of the development capital for the aircraft and fund and develop the manufacturing tooling and equipment themselves. They then get exclusive rights to build that part. They are ‘partners’ not cheap subcontractors.
    As for intellectual property theft, don’t get me started. The two biggest thieves I’ve seen are Israel and the U.S. although everybody else does it too.

  51. outthere says:

    Agree with you entirely. Universal medicare care in USA would be a huge boost to productivity/efficiency. Far more productive than tariff wars or currency wars.
    Thanks for your perspective.
    It is true that government of Japan helped its big industries, especially steel and automobiles. But it is also true that these Japanese manufacturers were more inventive and hardworking than any manufacturers in USA. I had the honor of working with Ed Demming in 1965 at a time when no automobile manufacturer could comprehend anything he said. But the Japanese heard him, hired him and worked with him to make Japanese cars the world leader. And only then did Ford and GM try to hire him, yet they were largely still deaf to his wisdom. Their fix for the Pinto, K Car and Vega was more advertising. I remember well when my local junkyard owner told me in disbelief “This transmission has bearings made of plastic!”
    The last round of federal regulation of cars and trucks guaranteed that trucks and engines will be bigger. How is that? A sliding scale was created, allowing bigger engines for bigger trucks. So the manufacturers make the truck footprint bigger and then they can put a bigger engine in it, which is what sells.
    There are signs of change in USA, but small. A friend just bought an aluminum Ford pickup, full size, 2.7 liter turbo, gets amazing fuel mileage. But for every sale of such a model, there are 20 full size pickups and SUV’s with v8’s, and very few of them will ever tow a horse trailer or carry a full load.
    Drive the big truck to the gym for a workout, come home and have a beer and watch tv, it’s the American way.

  52. jdledell says:

    I think Trump’s aim was bad on his new announced tariffs. It is not going to produce a lot of jobs, in fact will probably produce a net decrease in U.S. employment. First off, the primary production of steel in the U.S has only 87,000 workers and th primary production of aluminum has only 28,000 workers.
    Raising capacity in these two industries is an expensive long term process. Since tariffs can be eliminated as quickly as they are introduced, I do not see a long term future for these tariffs since both Republicans and Democrats are not fond of tariffs. They might be eliminated in as few as 3 years. It will take longer than that to build the extra capacity and I suspect the steel and aluminum industries will be VERY reluctant to make this kind of investment in the face of American political resistence to tariffs.
    Even if steel and aluminum capacity increases, those increases will probably be highly automated. I suspect at most the tariffs will increase steel and aluminum employment by 10%, or 10,000 to 15,000 jobs at most, a drop in the bucket for the U.S. Now with the increase in costs of steel and aluminum, how many jobs in autos, appliances etc etc will be lost – probably a lot more than 10,000. Then there is the added disadvantage of higher costs to consumers which will decrease their buying power for other American goods.

  53. kgw says:

    Could you lay out the principles of your morality here? Kill or be killed is not even in the picture…

  54. rexl says:

    Laura, who of our past Presidents was a business man?

  55. Harlan Easley says:

    Globalization has been a disaster for our manufacturing base. A country is only as wealthy as its manufacturing base that will never change. Massive inequality is not wealth. The current political tensions in the US can largely be contributed to a smaller per capita pie and a massive slice going to the globalist. Count the massive increase in our prison population along with massive increase in disability claims and the massive increase in food stamp usage in the last 20 to 30 years and you see the effects of outsourcing with has nothing to do with this fool ideology of free trade which has failed throughout history. China is on a glide path of superseding us in all categories and it was all due to the fools who have govern us since Bush I. Either adjust or the US will become a third world country in 50 years. Flint, MI times everywhere.

  56. Stueeeeeeeee says:

    America’s economic strength was not built by eggheads, Poindexters, or pencil pushers. The excellence of America was the pioneering spirit of its people. This spirit germinated a culture that balanced the theoretical with the practical, and the early stewards protected it through protectionist policies. Read your American history.
    Trump’s tariffs will not hasten or improve anything. They are soundbites that fill the news cycle and give the leeches at Wall Street a reason to siphon off some money from American’s 401k and pension plans. The reason for the outrage is not that it helps American management (no need to add lazy and incompetent as those adjectives are redundant), but that it questions the dogmas of the free market religion.
    This insidious religion has been a major reason why we have lost our competitive advantage. It has rationalized and justified the abject greed of our elites. Through the observance of the free market religion we have gifted China technologies and systems that took us almost a century of blood and sweat to develop. Worse, it has given the manager class the impression that the American people are commodities. But what these MBA asses do not realize is that commodities do not develop culture, people do. As a CEO, can you tell me what is the hardest to develop and maintain in a successful company?

  57. different clue says:

    pacifica advocate,
    (Reply to comment 25),
    Actually, your reply ( build more things in America that people outside America will want) is just one of two equally logical replies.
    The other equally logical reply is . . . build more of what Americans want to buy in America. The less we imported, the less we would have to export. Or try exporting. If we have lost the ability to make complex things . . . like computers and servers and routers . . . we are still smart enough to make the simple things that we use, simple things the production of which has been offshored strictly so that upper class investors and comopanies can arbitrage the differential wage rackets and the differential social standards expenses rackets and the differential pollution cost controls rackets, etc.
    I think that decades ago most tableware was made in America. A few decades ago I developed the habit of looking at my tableware in restaurants to see what country it was from. A lot of it started becoming from Japan. Then an lot of it started becoming from Taiwan, Brazil, etc., wherever. Now a lot of it is from China. Are we Americans too dumm stupid ignorant to make our own tableware? No. We are smart enough to make our own tableware. But the only way we can afford to make our own tableware is if we ban the import of tableware from all the trade-aggression slaveryholes and cancerholes and pollutionholes of the world.
    But unless and until an overwhelming majority of American voters can somehow reconquer the government and force it to act upon that basic understanding, the only people who will buy the simple things from America are those who believe in the practice of private virtue, and even then only in those cases where the “made in America” version even exists at all anymore.
    And if a certain thing meets a certain need that I have, and that thing is only made overseas, then I will have to buy it from overseas or do without it. Some needs are relative and I do without it. Some needs are imperative . . . like a garden border fork with the head AND the handle both angled up from the shaft in a very ergonomically advanced way. I needed it so I bought it from China. I would have paid twice price to buy it from America, but I was not given that choice.

  58. Fred says:

    “full size, 2.7 liter turbo, gets amazing fuel mileage. But for every sale of such a model, there are 20 full size pickups and SUV’s with v8’s” Do you just make up your data?
    “56% of Ford F150 sales are turbocharged (ecoboost to use the marketing term).” “upgrading to the 5.0-liter V8 (from the basic 3.3-liter V6) costs $1,995.” “578,000 F-150 sales in the 2017 calendar year …..144,500 F-150 5.0-liter V8 sales.”
    GM has been moving in the same direction with thier trucks due to fuel mileage standards set by Obama.

  59. divadab says:

    @Publius – the solution to being cheated by one neighbor is not to turn around and cheat all your neighbors.
    And one instance of cheating at NAFTA by one company in Mexico is not justification for scrapping the whole deal. And that’s what Trump is doing with this poorly conceived pure protectionism based on abusing the rules of trade. It’s really bad for business and the main beneficiaries will be the top management at US steel and aluminum companies.
    You ok with cheating your friends and trade partners? I’m not.

  60. outthere says:

    thanks, i am glad if I am wrong
    But you have not convinced me.
    You may be correct about new Ford 150’s sold in 2016
    But what I said was that for every 2.7 liter Ford truck
    there are 20 pickups and suvs (all models not just F150, all years, not just 2016, all makes not just Ford) that are v8’s.
    So how many v8’s are on the road compared to 2.7 liter?
    Your article does not say.

  61. confusedponderer says:

    re: “So it seems our “business oriented” President is not only ignorant on foreign policy, immigration, and gun control (“take the guns, then do due process”), but he’s also ignorant on economics.
    The say has it that Trump doesn’t read at all or doesn’t read any reports longer than 4 pages, and that his attention span is limited so that he doesn’t listen to a report to him after 15 minutes.
    That such a man would come up with a gut idea like punitive taxes against somebody, anybody doesn’t surprise or scare me. Rather it is what I expect.
    That written, I think these taxes will harm America, which is bad and that’s why the penalty tax is a bad idea.
    I read an explanation for the taxes on steel and alumunium, which scared and entertained me. It was justified with the assertion that dependence of import for such things does make it more expensive for America to … build tanks.
    Well, now that’s a reason for penalty taxes. If there is one thing the most heavily armed military in the world lacks is is the number of arms.
    So US corporations didn’t invest in US steel plants and moved things like their steel making to cheaper countries and they so limited US capabilities “to build arms cheaply” – for that the rest of the world is to be ‘punitive taxed’?
    If a person gets alcoholic, would that justify penal taxing Jim Beam (or french wine makers or vodka distilleries etc pp) – for making tasting alcohole and make it cheap? Who needs the penal cure – the consumer or the producer?
    I recall Trump lamenting about nasty, bad and evil banks, especially from Germany. Iirc he even mentioned by name the Deutsche Bank.
    The Deutsche Bank folks are SOOOOO BAAAAAD that they accidentally lend him about 2.5 billion, and do bank service to him, Melania and Kushner. How very wicked. Now, in light of that the lamentation is of course idiotic – but then, it’s not a brain that’s speaking or tweeting things like that, but a gut.
    That means to me that, on a day with bad golfing, too much FOX News and some mistweeting, there is a chance for penal taxes on the Deutsche Bank for their … crime.

  62. Reggie says:

    Oh, how the European hypocrisy is in overdrive on the tariff issue. According to BBC U.K. Prime Minister Theresa May and President Trump had a phone call where the British leader expressed “deep concern” over the Trump administration’s pending tariff’s on Steel and Aluminum.
    Mrs. May must think Americans are unambiguously stupid because it was less than two years ago when the U.K. urgently applied tariffs against Chinese steel in an effort to stave off the losses within their own steel industry:
    So Yeah, lets talk about economics, trade, UK and EU tariffs shall we…
    1. 2016
    Steel crisis: UK government plays down China tariff fears
    2. 2017
    EU Imposes Anti-Dumping Duties on Chinese Steel
    3. 2018
    Theresa May tells Donald Trump of ‘deep concern’ over US trade tariffs
    Hypocrisy much?
    The $20 trillion U.S. economy is the market, the customer, that all European countries want/need access to. We are the customers in the equation. We can crush them in any trade conflict. Apply a 20% tariff to imported Audi’s, or simply apply a reciprocal trade tariff toward their auto’s identical to those they apply on ours…. wait and see just how long Germany chooses to play stupid.
    Pro-tip, they wouldn’t last a day without our business.
    What is good for the goose is good for the gander

  63. Balint Somkuti, PhD says:

    And at the end all empires crumble not upon the pressure of their adversaries, but the incompetence of their contraselected elite.
    my saying.
    Feel free to quote.

  64. ISL says:

    My argument is that the fact that a Republican administration is creating tariffs could put a chill into the entire globalization movement for fear of suddenly being shut out after making a huge investment overseas.
    My reading of the article is that California Steel makers will lose versus east coast steel makers. Hmmm, why would a Trump administration introduce such tariffs that hurt democratic california? And in any case, why is it cheaper to ship steel from China by ship to the US that from the East Coast by ship through the Panama Canal? One might suspect dumping of excess Chinese capacity. But that would clearly be silly. and in any case, dumping is good, or so the shills of the free trade religion sing.
    As a California user of steel and aluminum, I get the best steel prices from California suppliers, but the best aluminum prices from the midwest. I am a real fan of structural aluminum. Maybe its time for the US to shift towards aluminum, particularly if the energy could come from solar power.
    In the short term, there are 8 million users of steel who will be impacted. SO I grant Trump picked a stupid place to start.
    I would have suggested he look at the solar panel industry that Chinese dumping has destroyed in the US and Germany. reading about the German failure is interesting. Management made a bad decision – they thought they could challenge directly Chinese dumping by their own production efficiency. I mean they thought their politicians wouldn’t sell them down the stream. but apparently that is the price for deflating southern Europe.

  65. Adrestia says:

    The polls indicate results as expected. The establishment is surprised, I’m not really. It only shows that the Borg have completely lost touch with the electorate. This will continue until the electorate gets a majority by itself. Delaying actions such as the small-majority governments Macron, Berlosconi, Rutte, Merkel will not last.

    Victory for Eurosceptic, populist parties shocks the establishment in Italy election
    5 March 2018 • 6:14am
    Italian voters have flocked to anti-establishment, Eurosceptic parties and rejected mainstream, traditional political parties, the latest predictions from the country’s election indicated on Monday.
    The populist Five Star Movement, founded by stand-up comedian Beppe Grillo as a bombastic challenge to the established order, emerged as the big winner of the general election, in a result that will be viewed with trepidation in Brussels.
    With around half the ballot counted, it looked as though the Five Star Movement had won around a third of all votes, up from 25 per cent in Italy’s last general election in 2013.
    The Eurosceptic, anti-immigration League also performed well, according to preliminary calculations.
    The numbers suggested that The League and Five Star together attracted 50 per cent of all votes.

    Next steps:
    * interim government for some time when the M5S will try to get a majority coalition (which the traditional parties will not do).
    * a small majority government (like The Netherlands, UK etc) from centre left/centre right, who will continue the pro-Euro(pe) neoliberal policy => this will probably be led by Berlusconi, so Italy will get its own Trump back
    * that centre government will fall (as governments tend to do in Italy) and in new elections populist/far right and left will get more votes

  66. Walrus – Thanks for your article. That and subsequent comments point out that Trump 2016 is going to be difficult to implement in a globalist/neoliberal economy. In fact what you’re saying, as a practical businessman, is that it’s going to be impossible. Maybe it’s time for people like me – you could call us the Trump 2016 true believers – to accept that you could be right. It may be that the President’s piecemeal and tentative attempts to implement Trump 2016 aren’t going to work.
    What exactly IS Trump 2016? In the comments to Alastair Crooke’s article “likbez” sets out some of the shopping list:-
    “I would like to remind that Trumpism (or “economic nationalism” as it sometimes it is called) initially was pretty attractive proposition which included the following elements (most of which are anathema to classic neoliberalism):
    “Rejection of neoliberal globalization;
    “Rejection of unrestricted immigration;
    “Fight against suppression of wages by multinationals via cheap imported labor;
    “Fight against the elimination of meaningful, well-paying jobs via outsourcing and
    offshoring of manufacturing;
    “Rejection of wars for enlargement and sustaining of neoliberal empire, especially
    NATO role as global policemen and wars for Washington client Israel in the Middle East;
    “Détente with Russia;
    “More pragmatic relations with Israel and suppression of Israeli agents of
    “Revision of offshoring of manufacturing and relations with China and India, as well as addressing the problem of trade
    “Rejection of total surveillance on all citizens;
    “The cut of military expenses to one third or less of the current level and
    concentrating on revival on national infrastructure, education, and science.
    Abandonment of maintenance of the “sole superpower” status and global neoliberal
    empire for more practical and less costly “semi-isolationist” foreign policy;
    “Closing of unnecessary foreign military bases and cutting aid to the current clients.”
    That’s one hell of a shopping list to come up with in the crony economic environment that is America and the West today. You don’t need any conspiracy theories to account for the unexampled resistance the new Administration encountered. One look at that list and the status quo merchants from Merkel to Cruz are going to lay down all the fire they can muster. And since they own just about all the firepower there is that’s a lot.
    The trouble is with “likbez'” list it that it all hangs together. You can’t sneak in a bit of Trump 2016 here and a bit there and hope it’s going to work. It’s all or nothing. I’m pretty sure that that’s in effect what you’re pointing out.

  67. Fred says:

    “twenty times” is a big multipliciation factor. F150 is 35 perceont of the truck market. 544,000 F150s, 65% with turbo charged engines. Round numbers that 350,000. Twenty times that is 7,000,000. The total new vehicle sales in the US for 2017 was 17.25-Million. There were a lot more cars sold than trucks, Camry being the biggest seller. The SUV market has a great deal of variety in it too, with a lot of options for engines that aren’t V8s. The later are popular for towing capacity and lifetime durability. Turbo chargers have come a long way but if you tow something you put a great deal more stress on them than if you just commute to work.

  68. Ulenspiegel says:

    “reading about the German failure is interesting. Management made a bad decision – they thought they could challenge directly Chinese dumping by their own production efficiency.”
    Look, there were some mistakes, but most people agree that the support of PV in Germany in 2010/11 was too generous and let to uncompetitive structures, here most blame goes to german decisions, even by PV installers.
    BTW: Even with imported Chinese modules the added value is 60% in Germany.
    Or as contrast: Why is German wind power in very good shape? Why can Chinese producers not compete on the international market?

  69. Ulenspiegel says:

    “We are the customers in the equation. We can crush them in any trade conflict. Apply a 20% tariff to imported Audi’s, or simply apply a reciprocal trade tariff toward their auto’s identical to those they apply on ours…. wait and see just how long Germany chooses to play stupid.”
    Why did the USA agree to different tariffs? What was the other side of the bargain? Don’t tell me the USA did not get something in return.
    And BTW even good bullying requires intelligence when your opponent is as large as you. 🙂

  70. Balint Somkuti, PhD says:

    a small majority government (like The Netherlands, UK etc) from centre left/centre right, who will continue the pro-Euro(pe) neoliberal policy => this will probably be led by Berlusconi, so Italy will get its own Trump back
    Liga Nord wont support more migration as neither will the Fratellis(sp?). Currently EU = more migrants. I see a FI/lN/FR coalition with the Beppistas.
    Undisturbed with the new italian govt Merkel/Macron will go on their path to completely destroy EU’s internal cohesion with their forced migration policies.

  71. LeaNder says:

    Ulenspiegel, glad you are still around. Strictly this is not in any way a field I can add anything to. You realized in our earliest encounters?
    Although, I realized that the easiest way to respond would be a google translate version of Wikimannia. I cannot see on first sight that the articles are otherwise easily communicable to other native speakers:

  72. outthere says:

    you ask
    why is it cheaper to ship steel from China by ship to the US that from the East Coast by ship through the Panama Canal?
    the Jones Act
    another protectionist law that prevents realistic economic decision making in USA and causes higher consumer prices, especially in Hawaii, Alaska, and Puerto Rico

  73. Most of the posting is about management. Giving credit to myself I never got a management degree from Harvard, or otherwise but I run small company for 40 years making every year profit. Such method was possible, because my products were niche products in scientific field, not steel or aluminium.
    Back to tariffs.
    If we are preparing to have a war, as Soviet Union, Germany and US in 1930 ties did, then all economy discussion is no longer valid. We have do it, we have to built it does not mater of cost. The difference is when we have prolonged peace, even as it was cold war in meantime.
    US won the cold war because it still run market economy, while Soviets run its economy as a hot war economy. Soviets were defeated by peace!
    Now back to the cost of steel mills.
    People who are interested in steel, calculate cost of making it in US. They probably know how to do it, taking account of excavation of iron ore, cost of building new more efficient mills, cost of regulations, cost of labor in US including Trade Union wages, availability of labor force with particular skills etc and availability of long time private capital for long time investment. Then management, together with bankers will calculate risk of competing with Chinese steel.
    If Chinese operate more like Soviet Union subsidizing its own still industry for very long time, they will get broke as USSR did, or they will have to increase prices and be less competitive. Therefore all depends if we are going to conventional war with China, or war will be short and nuclear. This is up-to US President to decide.

  74. Degringolade says:

    I have to agree with you about the conservative movement possibly morphing into a nationalist Republican Party. I can’t say such a thing will offend me.
    Look, at the end of the day, we have to rebuild the working class. We aren’t going to do this by passing off cheap consumer goods, made in third world countries as the core of our economy.
    Tariffs are a tool to fix a prior mistake or to allow an internal industry a competitive edge. We made a mistake thinking that “globalization” would fix things. We offshored our industry to allow lazy managers and greedy stockholders the ability to line their pockets at all costs.
    Yes, the move was political. I think that maybe some of the unannointed in Washington are beginning to notice that the 20% of the population that we call the “professional” class isn’t enough to win elections.
    I read this over at that rabidly anti-capitalist site Zerohedge (that’s a joke son)
    “Trade wars are good, easy to win,” tweeted Trump, knowing the statement would trigger every nerd with a college degree. Some worried about their jobs. But not terribly. Because their unemployment rate is just 2%, their labor force participation is 74%. They’re as well off as they’ve ever been. Particularly when set against those who never went to college, 5% of whom are unemployed, and 50% don’t even participate in the labor force. They’ve given up. These trade policies are for these forgotten people. To hell with the consequences. That’s the point.

  75. Huckleberry says:

    Ever looked into how much of that “Canadian steel” actually originates in Canada? Not as much as one might think.

  76. LeaNder says:

    Ulenspiegel: I keep leaving out words. Sometimes my mind is faster then my fingers. 😉
    Correction: Although, I realized that the easiest way to respond [to a legitimate question by an SST member] would [have] be[en] a google translate version of [a German] Wikimannia [article].
    The best other chance to get matters over would have been to Google translate a Swiss article on the issue. That, on the other hand Google couldn’t really handle. The article played with words which rendered words (algorithmic correction – assumed typing errors?) meaningless. I surely can understand the words used were in fact quite exquisitely chosen made up words or Wortspiele.
    Take care. Pleased to see your name around occasionally. 😉

  77. Terry says:

    Family farms, quality products, and applied technology aren’t incompatible. A small farmer is far more likely to value the land he owns than a quarterly profit driven corporation that sees it as a resource to be exploited. Small farmers maintain biodiversity, usually having multiple crops and animals vs monocropping huge tracts of land. I have seen the transformation of a large tract of land where I grew up from diverse small farms with plenty of forested land to now empty large tracts empty of trees and wildlife all producing the same crop.
    The key is FDR/Wallace style government programs that balanced the boom/bust cycles to give the small farmers steady markets.
    The old farmers I know were hardly broken in body or soul, quite the opposite – long lived and hardy salt of the earth souls far healthier, happier, and more sane than the industrial fed drones working in cubes and living off dead foods. My reality check is just fine -and actually based in experience.
    A couple of examples – When Hannibal invaded and occupied southern italy the land was full of small farms regularly producing food products and strong citizens for the Republic. They fled to Rome and after Hannibal was driven out the land was taken by the elites for large estates run by slaves. To this day southern italy hasn’t recovered compared to the north.
    A more modern example is Poland where laws are being enacted that favor big ag vs small farmers in the name of “efficiency”. Efficient yes, in producing cheaper food of poor quality, degraded land, and profits.
    Big ag is a disaster – ecological, cultural, demographically, biodiversity, and healthwise.

  78. ISL says:

    if the goal is simply to support internal German jobs, then the added value means the support was too generous.
    if the goal was to move electricity to solar for the long term health of the German economy, then Chinese solar panels are more economical and the support was too generous.
    And if the goal was to be able to improve balance of trade by exporting to other economies, then the support should have continued.
    Were the German politicians ever clear on what their goals were?

  79. Adrestia says:

    The paradox in Europe is that Europe needs immigrants, but the population doesn’t want them. This is why populist anti-immigration parties get so many votes.
    Merkel said “wir schaffen es” and not as a whim. Germany has a median age of 47; which means that half the population is older. Italy has a median age of 45. In the United States this is 38 years. Older people don’t grow an economy (which IMO is another paradox); younger people are needed for that.
    Ultimately this and the rigid determination not to reform the Euro and institutions (eg European laws are superior to national law) will break the EU. The population doesn’t want it anymore.
    This and the end of globalisation by Trump (international agreements, tariffs, etc) will cause many problems we cannot oversee yet.
    IMO there is no clear solution. Everything is connected and is a house of cards. Since we (the people of the OECD world) are very slow in seeking/implementing reform, this will be forced upon us by the externalities we choose to ignore (inequality, democracy, climate change, war etc)

  80. Ulenspiegel – “Even with imported Chinese modules the added value is 60% in Germany.”
    You identify a problem that is serious in I think all Western economies. Tacit or overt cartels and way over the top compliance and distribution costs
    I installed Chinese solar units a few years back. Unsubsidised, since I didn’t want helpful officials all over the place and in any case me and forms aren’t friends.
    I paid £650 per unit and that was cheap. At the time over the counter prices in China for an identical unit were around £150. That leaves a lot of excess for shipping, distribution and selling costs.
    The “added value” costs you mention can be astronomical. I’ve seen £750 quoted for a part for a tractor gearbox that left the (local) factory gate for £50 maximum. £10 to £20 for shrink-wrapped items that cost a few pence to turn out. It’s often cheaper, if one can find a local machine shop still going, to get an item laboriously made on out-dated machines than to buy it over the counter and get one that comes from a big efficient production run.
    Some thirty years ago a man working for one of the big cement companies told me what happened in his trade. Some enterprising builder would discover that he could supply ready mixed at below the usual cost. He’d invest in the plant, tell all his mates he was open for business, and do a roaring trade. Within a radius of, if I remember accurately, some 20 miles, the prices of all the big suppliers would drop. When the local man had gone bust prices would go up again. That was standard practice.
    You see similar examples in the price of plumbing fittings, or of fixings. Someone enterprising will buy bulk and undercut the big outlets, still making a profit but better quality and lower priced. You then see them get bought up by the big outlets. Prices back up to normal and quality down.
    The stupid thing is that no one local makes more out of it. The profits go to financial institutions elsewhere. I suppose if pension funds and the like invest in turn in them there’s something comes back locally, after the multi-million salaries and the London rents have been paid, but it’s a roundabout way of silting up a local economy and not what Adam Smith ever dreamed off.
    That’s for simple stuff where design and compliance costs are lowl. At the more sophisticated end of the market it’s similar. Design the item. Make the prototype. That always used to be done in-house but now it’s sometimes cheaper and quicker to email the specs to China even for the prototype. Test the prototype and get the final product made in China. Then the real profit is made in selling and distribution. The mark-up isn’t your 60%. It’s many hundreds. That’s fair enough for small runs in a chancy market but when it comes to standard mass produced items, though I’d guess the mark up can’t near be as high, we really are paying more than is justified by what we get.
    Compliance costs are difficult. Of course you don’t want waste dumped in the river or workmen put at risk. But stopping that doesn’t need to cost as much as it does. Moving over to the intricate tick box mechanism of enforcement of farm regulation and subsidy for example was one of the reasons so many farmers sold up. Filling in all the forms drove them mad and subbing the compliance paperwork out to a specialist, or as much as they could, cost them too much.
    It doesn’t work. You end up with large production units that must shave prices by sailing close to the wind on compliance. Or an increasing number of small cowboy farmers whose profit comes not from quality or efficiency, but from fooling or evading the system. What’s the point of having all the good farmers filling out forms as if their lives depended on it, and the bad not bothering? It puts the competitive advantage where you don’t want it. The Foot and Mouth outbreak a few years back was said to be a result of one such failure of the system.
    That’s a general problem with compliance costs. For an increasing number of enterprises survival depends not so much on producing the goods as finding or making the loopholes. That’s before you get into the deadening effects of cronyism, large and small scale, and since a lot of the serious money is made on Government work, that matters.
    It’s not all bleak. There are plenty of enterprises around doing well and turning an honest penny. But too much niche or fringe, I’d guess, seldom that brilliant a prospect for the money and effort put into them, and nowhere near enough of them. The challenge faced by “Trumpism”, as it’s termed above, won’t be met by merely slapping a few tariffs around. There’s a long way to go before we can pretend to have a viable or efficient economy again.
    For a young person starting out I suppose the best solution is to become a snowflake. I don’t know how good the money is but at least then such problems needn’t be thought about.

  81. Babak Makkinejad says:

    Small farmer? In 1982, a fellow trying to start as a small farmer needed 100K just for equipment & implements, let alone the land.
    How do you judge the quality of food? I know tomatoes peaches, and strawberries sourced from US are pulpy and tasteless. But it was not caused by agri business.

  82. Dr. Puck says:

    The first truism derived from the Pareto Efficiency is that no country is great at all productive capacities. The corollary is: what a given country is competitive at evolves, degrades, progresses, in short, changes, over time.
    (Here in Cleveland the graduate engineering and medical schools have many many foreign-born students. Similarly, Silicon Valley has many legal immigrants and VISA holders in their work force.
    The USA is very very good, is the world leader, at educating persons in various fields.)
    The simplistic hydraulic thinking in Trump’s ‘I’m having a bad day fit-of-pique’ tariff policy won’t bring back any manufacturing class at all. imo
    If one wanted to do so, you might look at the Mittelstand in Germany for starters for imagining what a synergistic partnership here between schooling, workers, management, and owners would look like, and, what it could possibly achieve.
    It’s a complex problem in any case. It will not yield to turning one dial in one direction and another dial in the opposite direction as if the global economy is like a variety store on some idealized main street.
    Incidentally, I don’t understand at all the sweeping generalizations being deployed here to demonize managers and unions. We’re the richest and most productive economy in the world for exacting reasons that are conclusions of one of the most researched subjects areas. Those reasons are also why another round of supply-side on steroids won’t showcase people leaping to build supply–prior to the arrival of demand.

  83. TimmyB says:

    Spot on. The entire world trade system was designed and implemented so that a few extremely wealthy people could become richer when domestic industries shipped manufacturing overseas to be performed by first Mexican and now Chinese peasants. The results of these policies have been devastating. Here in the US, millions of high paying manufacturing jobs went overseas. These job losses devastated entire sections of the US. We even made up a name for these places, the “Rust Belt.”
    Sure, it’s more “efficient” from an economic standpoint to have the lowest cost labor on the Earth make stuff in a place where there are no laws against polluting the local air and water and the manufacturer does not have to pay any taxes. But screw efficiency. This policy has hurt millions of American workers and their families. It has improvised large areas of the US. On the whole, it has made my country a worse place for most of the people who live here.
    This is why Trump got elected. The economic losers who live in our formerly vibrant manufacturing centers wanted a change. And now, Trump is doing exactly what he promised, trying to save American jobs. If the completely corrupt world trade system goes down because of Trump, that’s a win too. All the free trade cheer leaders want is a continual race to the bottom, where US jobs will come back only when the middle class is completely destroyed and we will agree to have our children drink polluted water, breath polluted air and work for slave wages in horrific conditions. Screw that.

  84. Barbara Ann says:

    I think that maybe some of the unannointed in Washington are beginning to notice that the 20% of the population that we call the “professional” class isn’t enough to win elections.

    Yes indeed and in many other places besides, Italy being the latest.
    Like the flaw Greenspan discovered in his Randian unfettered market logic, this is the logical flaw in applying unfettered Globalism to democracies. Offshore ‘Human Resources’ all you like, but the associated votes will stay firmly ‘onshore’. Same with the EU’s cherished economic freedom (sic) re the free movement of people; those who move take their votes with them. The inevitable political consequences in the donor countries should not have been a surprise to anyone.

  85. Adrestia says:

    The EU is built around neoliberal thought and globalisation:
    * free flow of capital => restrict this and economies will become more local. Cypris did this recently!
    * free flow of people => cheap labor. Eastern Europeans work for lower wages. In my country this is increasingly creating problems. Eg with construction and truckers
    * free flow of goods => this should be maintained without tariffs. It is as Walrus said. Tariffs and other subsidies don’t make bad-companies and management perform better or less incompetent , but makes them just lazy.
    Add to these the curse of the common currency and the recipe for public discontent and election results is complete.

  86. shepherd says:

    Reading through this, you’d miss the fact that America is actually reshoring a lot of manufacturing, and has been for some time. I’d urge anyone who’s curious to go to the Bureau of Labor Statistics and poke around. Or to read one of the numerous reports on this topic. A couple of points:
    China has become much less competitive. Land costs in the relevant parts of the Yangtze River Valley are 4x what they are in the Carolinas. Labor costs, the chief advantage of overseas plants, are actually less of an economic factor than is commonly believed. They are becoming less relevant as new plants require fewer workers, and wage inflation has soared overseas. It also costs a lot to maintain a lengthy supply chain. As a result, if you’re starting from scratch, you’re more likely to open a modern factory in the US today than to go to China.
    If you look up a category called Digitally Native Vertical Brands (DNVB), you’ll find dozens of new American manufacturers in places like Pittsburg and Detroit. For the most part, they are using local sourcing strategies to produce extremely high quality products at really reasonable costs. An example would be Mission Workshop. They have a factory that produces messenger bags in San Francisco, which has some of the highest real estate prices in the country. Their products are competitively priced and guaranteed for life.
    Manufacturing jobs have been steadily rising not falling in the US long before Trump, as have wages. I believe we’ve added something like a million new manufacturing jobs since hitting bottom around ten years ago.
    Here’s why, independent of politics, the tariff is stupid. Process manufacturing (steel, chemicals) generally employs far fewer workers than discrete (products) manufacturing. For example, the entire US steel industry employees only 135,000 workers, while the auto industry employs 2 million. Protecting steel jobs means you’re hurting industries that employ far more people. It’s a clear case of cutting your nose off to spite your face. And that’s before retaliatory measures-likely aimed at farmers and discrete manufacturers-take their toll.

  87. Fred says:

    ” I know …. strawberries sourced from US are pulpy and tasteless.”
    Why bless your heart. Next time you get to Florida in the winter stop in here for real American strawberries. The others can’t be expoted to Iran, sanctions don’t you know….

  88. Babak Makkinejad says:

    2.5 million jobs created by US corporations outside of US – those people’s standard of living jumped all of a sudden.
    Google Snow Crash.

  89. Fred says:

    You left out Union support for the Jones act.

  90. Balint Somkuti, PhD says:

    Cara mia! I know this.
    I am from Hungary. 😉

  91. BillWade says:

    “How do you judge the quality of food? I know tomatoes peaches, and strawberries sourced from US are pulpy and tasteless. But it was not caused by agri business.”
    You can’t be serious? Those items are picked by big-ag before they ripen and are gassed enroute to the final destination to appear to be fresh-ripe, they taste like crap because they have not matured normally and are lacking in nutrition as well.

  92. Dr. Puck says:

    Eric, do you have any historical demonstration (via credible research findings,) with respect to the USA’s track record that tax cuts and tariffs and deficit spending and deregulation brought intra-country prices on hard goods or commodities to parity?
    Second question. Do you know what externalities are in economics?
    Third question. Whose pockets do you hope to prioritize?

  93. Dr. Puck says:

    I note you didn’t mention the new round of supply-side tax cuts that lower corporate taxes in perpetuity, and income taxes temporarily. On the campaign trail Trump actually said he was going to pinch the hedge fund and financial elites.
    Then he brought Goldman-Sachs to the table of cronies and next did the bait-and-switch for the sake of rewarding the GOP donor class; you know the reaganomics that libtards warned he would inevitably unfold. Easy call, that. . .

  94. Babak Makkinejad says:

    They were bad 40 years ago.
    They are bad today.
    The ones imported from Chile are good.

  95. Babak Makkinejad says:

    You evidently do not shop in the same places as I have.
    Americans can mass-produce produce a lot of fine things but edible peaches, strawberries, grapes, berries, and tomatoes are not among them.

  96. walrus says:

    I understand your feelings TimmyB but you suffer from common misperceptions. The product coming from China aren’t made by “peasants”,nor are they by implication hammered out by hand on the floor of a mud hut for pennies. Nor are they necessarily of low quality. Nor are they necessarily polluting their environment. This is where Trump and the protectionist crowd are fatally misguided.
    The scary reality is that the Chinese workers parents may have been peasants but the Chinese today are relatively well educated, hard working and intelligent and they are enjoying a rising standard of living. They are not ignorant slaves. The cost of living is not as high as the West either. So argument number one fails they like their job, they are good at it, they work hard and are well paid by their standards despite the WSJ running stories about slaves building iPhones.
    Secondly, Chinese products are made in state of the art factories using the most modern technology they can buy. The Chinese saw through the old western scam of shipping old second hand machinery to their Asian subsidiaries a long time ago. They demand the best.
    As for pollution, Yes China has a problem but they are aware of it and the government is doing everything it can to improve things as fast as it can. The problems are a combination of old command economy thinking, Chinese notorious resistance to government regulation and the speed of Chinas industrialisation.
    The Chinese may not be living a Beverly Hills lifestyle but they don’t want, to paraphrase you, their children drinking polluted water, breathing polluted air and working for slave wages in horrific conditions either and they are trying to fix things.
    To put that another way. Chinese products are not made by orcs in the dungeons of Mordor. If you want production back in the USA then you are going to have to work very hard to beat them in efficiency terms. As for regulations, healthcare costs, etc. those are your own problems, fix them yourself.

  97. “There are plenty of enterprises around doing well and turning an honest penny. But too much niche or fringe, I’d guess, seldom that brilliant a prospect for the money and effort put into them, and nowhere near enough of them. ”
    Traditionally the president used his bully pulpit to honor the personally productive and publicise the worthy.
    Compliance costs indicate a failure of common sense. If compliance mechanisms become pervasive and obligatory it means that the citizens are deficit in “common sense”.
    Of course, Wall Street has enough money to buy their freedom from compliance.

  98. Kooshy says:

    Babak, I suppose most of fruits bought from grocery stores are now days engineered for color, preservation etc. so like you say they are tasteless. But here in LA, local street farmers market stuff, are much more tasty, although still not same as the old days. The Persian cucumbers grown here in Mexicali Mexico or here in imperial valley SC are very good and tasty. Tomatoes are for sure engineered, we get this tasteless tomatoes in rainbow of colors.
    One thing that they haven’t been able to get right or make right is the taste of American central valley pistachios, which has to do a lot with soil, soil salinity and minerals in water coming from Sierras. A few Rafesanjan Iranian farmers have huge pistachio farms and processing plants here in Fresno/ Central Valley, but to me the nuts don’t taste right.
    Here is my California pistachio tasting notes:
    Too much body, no Bouquet, woody with hint of lava rock taste,in imbalanced saltine.

  99. catherine says:

    You don’t like Georgia peaches? In season I buy all my fruits and vegetables from local farmers stands…they are quite good and totally fresh…not like what is shipped in at grocery stores.

  100. catherine says:

    ”My experience is as a customer of Boeing in the airline industry, as a management consultant with an international firm, as a general manager of a manufacturing company then in various senior management roles in aerospace/IT/defence before working in industry development for Government then culminating as CEO of an intellectual property company.”
    Sorry but your positions were “jobs’, not ownership so you didn’t have any real skin in the game as they say. I could tell you what I think of management consultants but it would be censored. lol
    And this is pure BS—–>”Of course when GM, Ford, GE, etc. close a plant they blame costs and regulations, that is self serving crap. Were the plants state of the art with leading edge technology and work practices? Didn’t think so, more likely an old plant whose machinery and workers have been run into the ground, that is now far from target markets and requiring major investment.”
    So you are saying, and expect anyone to believe, that the reason for GE,etc. moving abroad was to have a state of the art plant and for some reason they couldn’t do that in the US?
    And this—->”As for Boeing (and GE) you miss the point. The partnership models used require the partners to come up with a percentage of the development capital for the aircraft and fund and develop the manufacturing tooling and equipment themselves. They then get exclusive rights to build that part. They are ‘partners’ not cheap subcontractors””
    Which explains/justifies nothing….you are saying that these partner contracts couldn’t be done in the US? What would be the reason for doing them overseas or Boeing simply doing it themselves here in the states?
    rotflmdo… your argument looks more like self serving crapo than American manufacturers complaints –given that you had to make a living telling Americans how run down their plants were because they were lazy and dumb.
    Sorry…you’ve not disproved anything I said or proved any reason other than cost for offshoring.

  101. BillWade says:

    Like Fred, I too live in Florida. You cannot find better tomatoes, strawberries and especially oranges than here.

  102. Jack says:

    Walrus #100
    I’m on the board of a communications equipment and a medical device manufacturer. Their experience in selling into China is not exactly gratifying. First, there are the tariffs of 30% and 45% respectively. Then there are a host of regulatory barriers including certifications from governmental authorities. In each case they are advised by the regulators that if they set-up manufacturing facilities and transfer technology to a local partner then their certificationso will be granted immediately. China is not an open market by any stretch of the imagination. They want the technology and they push and cajole companies to provide the intellectual property to access their market.
    IMO, Chinese economic development took place with massive foreign direct investment in capital and technology. All on the promise of this huge market. It hasn’t worked out as well for many foreign companies. The case of cisco and Huawei is a good one where technology was stolen. There are many such cases.
    Sec. Wilbur Ross in a recent interview gave an example of automobiles. The tariff in the US is 2.5%. EU imposes a 10% tariff while China imposes 25%. These types of examples abound. There is no free trade. At the behest of Wall St, the US ceded it’s manufacturing base. Trump is trying to change the equations. Exiting NAFTA would be the first step. Indeed Wall St and the multinational corporatist amen corner are howling trade war. The US needs to re-balance it’s trade relationships. It cannot run hundreds of billions of dollars in trade deficits in perpetuity and it needs a solid manufacturing base both for jobs and national security. Don’t get me wrong, managements of many US companies need to be shaken up too. Share price growth shouldn’t be the only metric of performance.

  103. walrus says:

    Taking the Boeing B767 / GE jet engine type partnership contracts first, you don’t know what you are talking about. I have sat across the table from a GE Vice President and was offered such a contract. These are partnerships not subcontracts. They are design and build costing upwards of $500 million each from each of the partners as the partners contribution to Boeing/GE development costs because each of these commercial projects are so big even Boeing can’t fund them alone. These projects have a minimum of five years lead time and manufacturing continues fr mmaybe 30 years..
    To put that another way, these are business marriages lasting the life of the aircraft, not some cheap two bit lowest bid construction deal. As for finding partners in the U.S. – with who? Boeing bought McDonnell Douglas and Lockheed is Boeings competitor. Then there is the little matter of corporate strategy; you can’t sell aircraft to the rest of the world without them asking for a quid pro quo. That is how Airbus got started in response to what was seen to be an American monopoly.
    As for Ford, GM, etc. you are hopelessly naive. Big corporations are whores when it comes to plant location. They scour the world for Governments willing to put out in the form of tax breaks, subsidies, free land, etc. to attract businesses to their locations. Why Amazon is holding such a beauty contest as we speak:
    And you are doubly naive for not understanding that ALL businesses ALWAYS say taxes and wages are too high ALL the time to whoever will listen and use them to justify whatever business decision they are making at the time.
    As for your comments about consultants, I worked in corporate strategy and worked for plenty of owners, some of whom were good and some dumb as rocks.

  104. You are judged by your statements
    “rotflmdo… your argument looks more like self serving crapo”
    Hopefully this a community of correspondence not invective.
    Build a plant inside America and you are subject to American taxes. Build the same plant overseas and the lawyers will find 15 ways to hide the income and achieve a tax of 4% or lower. Why are taxes so high? Because income has not increased for most people and the social costs have only increased. No jobs, no pay, more welfare, higher taxes.
    I see conservatives self-excusing themselves by claiming red-tape and regulation for outsourcing and exporting factories as equivalent to people throwing trash onto the highway and excusing themselves by saving that “it was just a small piece of trash and the highway is so large.” Once the American economic inequality was moderate, the middle-lower class had money to spend. The steady increase in inequality and the loss of economic strength has reached the point that we can no longer speed down the highway but are forced to slowly maneuver around the detritus of companies who decided that America was not worth the effort.

  105. walrus says:

    I understand your frustration and council you not to fall for the chinese local manufacturing gambit, it generally ends in tears for Western companies in my experience.
    However Chinas bad behaviour is not an excuse to dump free trade per se.

  106. Jack says:

    We’re not gonna fall for the Chinese sales pitch of big market if you hand us your technology. Too many companies have got screwed falling for that trap. There is no real intellectual property protection in China in any case.
    I believe we need to separate free trade theory from the reality of trade which is managed trade. For the first time in many decades there is an administration that recognizes that. Their policies may not be the best but at least they recognize the problem that there is no real free trade and are willing to counter the financial and media interests who have sold the American working class down the river. Hopefully this will spark a real debate but unfortunately TDS is a huge affliction that prevents real discourse. Ross Perot was prescient. His giant sucking sound has proven far too correct. I recall him being laughed at and parodied by the medis during that election.

  107. Jack says:

    The simplest way to keep managements honest is to have a competitive domestic market. That means real enforcement of Robinson-Patman. Unfortunately the symbiotic relationship between big business, big finance, big media and big government over the past 50 years is what has brought us here.
    Unfair trade arrangements only benefit the more mercantilist party in the longer term.

  108. Tim B. says:

    I don’t care about China or the Chinese. Efficency isn’t one of my major concerns either. My focus is on America and the reversing the deteriorating living conditions of the people who live here.

  109. Balint Somkuti, PhD says:

    The chinese industry can produce almost and literally anything except items submitted to extreme conditions (space/vacuum not included) such as high thrust military aircraft engines, and similar items where adhering to extremely small tolerances is essential.
    In my humble and not researched opinion such production technological discipline is the (by)product of generations of disciplined and precise production. Something China still lacks. Foreseeably for maximum 1-2 generation.

  110. Eric Newhill says:

    Dr Puck
    Yes, I think I heard about externalities when I was earning a masters degree studying economics. What do externalities have to do with trade with China, steel or anything else in this discussion?
    I prioritize the pockets of all Americans. BTW, I don’t care if the rich get richer as long as the lowest income quartile is also gaining. Too many people get upset when corporations and the executive class make more money; as if there is a set amount of money and if the wealthy get more then that means less for the lowest quartile.
    As for the USA’s track record that tax cuts and tariffs and deficit spending and deregulation brought intra-country prices on hard goods or commodities to parity, I must ask if you the background to succinctly discuss such a complicated subject. I mean it’s not like it’s clear cut settled science like global warming is real! or the notion that importing a gazillion no skill third worlders is great for the economy and wages.
    So what’s your plan? Everyone in the lowest income quartile is going to become tech workers and/or small business entrepreneurs? Seems I’ve heard that one someplace in time before.

  111. Ulenspiegel says:

    one goal of course was to provide “green” electricity. However, the too generous FITs led to an explosion of demand and structural changes that were too fast for the German companies.
    Now we have the situation that still very good research is done in Germany but the stuff is not longer produced there. For somebody with a German mindset this is not good. 🙂
    The development of windpower was slower and more “sustainable”, German companies could defend both, R&D and production.

  112. Ulenspiegel says:

    “If Chinese operate more like Soviet Union subsidizing its own still industry for very long time, they will get broke as USSR did, or they will have to increase prices and be less competitive.”
    You miss the alternative: Support the Chinese economy in strategically important fields until the competitors are out of business, then increase prices. It is working in case of PV, and IMHO will work in case of EVs.

  113. RC says:

    Canada does not produce steel — not 10 tons per year. Canada fabricates steel purchased, at below production cost, from CHINA. Same story for Mexico.
    Now why would China sell so much steel at below production cost? A country that has to purchase steel from China is not in the national defense business.

  114. Jack says:

    Alves #54
    Do you actually read the articles you link to? Do you apply any critical thinking to what you read? How much steel does Canada produce? Where does all the steel that Canada exports to the US come from?

  115. ISL says:

    Ummm, happy news indeed. But deceptive – my advice is never trust a politician who references statistics.
    So, the BLS shows that manufacturing is recovering from the recession. Guess what, it is recovering slower than most other sectors of the economy. That jobs recover to some level from a recession is not news. it is just what happens.
    As a fraction of the US economy, manufacturing continues its downward spiral. That small companies with VC funding at 0% interest rate are hiring a few folk means nothing. What do you think will happen when the Fed kills QE which they plan to do over the next few months? The shakeout will be severe. Or what will happen when the next recession hits (oh a politico said the business cycle is over, did they?)?
    So far every shake-out has pushed US manufacturing abroad. Bottom line, looking at numbers without considering the business cycle is as bad as cherry picking the intelligence. You get propaganda not information.

  116. ISL says:

    Ulenspiegel – good point, you might also mention it worked for Walmart and now for Amazon very well to the detriment of the US economy and US customer and pretty much anyone who is not a Walton or a Bezos.

  117. steve says:

    Have a source for that. All I can find is stuff like this showing they get the large majority of their steel imports from the US. Other reports claim they produce quite a bit.

  118. Pacifca Advocate says:

    >>>The other equally logical reply is . . . build more of what Americans want to buy in America.
    That’s provocative, but there remain an awful lot of things we need to import to continue to manufacture the things we use.
    There is also a regulatory regime that continues to impose artificial limits on the productivity of our land (hemp vs. paper, for instance).
    But yes, the point is arguable–yet to focus on this approach would be to reinforce the “American Exceptionalism” problem I emphasized, above.
    American washing machines could be smaller and more efficient, but they aren’t because American washing machine companies don’t bother with active R&D. Japanese companies do, and US companies largely leech off of their advances in a wiggledy-piggledy fashion, picking certain features from here-and-there and including them in a carefully planned marketing campaign.
    Many other industries feature this same pattern: kitchen machines, autos, motorcycles (!), even clothing….

  119. Pacifca Advocate says:

    The scientists I believe (!) are most honest and accurate do not agree with that.
    We can argue about the scientists, but both you and I know that neither of us are experts.
    Yet, overall:
    A) The science of Climate Change was inspired by the (basic) scientists I follow,
    B) The science of Climate Change was taken up as an issue by the (basic) scientists I follow,
    C) The models created by the science of Climate Change have been well within the limits of predictions that were established, even if their accuracy has often been wildly divergent (sometimes on, sometimes off)
    D) The scientists who criticize the science of Climate Change have been entirely outside the actual practice of Climate monitoring, and
    E) Your own objections are mostly religious, and have nothing to do with the science.
    Please correct me about E, there: if I am wrong about that, I will be happy to adjust my perspective.
    As for A, B, C, and D, though: those are just observations based on historical fact. “Climate Change,” as an idea, was born of observations gleaned from the planets Venus, and Jupiter; and also from the realization that the Earth’s atmosphere is a relatively tiny layer of extremely sensitive balances, which have been empirically proven to have undergone massive shifts in relatively (thousands of years?) short periods of time.
    Perhaps you believe in the Myth of Progress.
    I, personally, do not.

  120. Keith Harbaugh says:

    Walrus said:

    All tariffs do is put off the day when the toxic combination of bad management, lack of investment, poor work practices, rotten infrastructure, overpriced energy, excessive regulation and bad government become too much of a cost for the community to bear.

    You really miss the boat on a cancer that is sucking up the resources of America:
    Also, though calling it a cancer is unkind,
    there is the devotion to spending literally infinite amounts of money on people whose productive value is questionable.
    E.g.: google “autistic son heart transplant”.
    Then there is the amount spent on keeping diagnosed with dementia alive.
    I have been told by people with knowledge of the situation that hundreds of thousands of dollars, per year, are spent on the care of such.
    I certainly have compassion for such people, but how much should be spent,
    not only on caring for them when they cannot care for themselves,
    but on prolonging their natural life?
    Meanwhile, the national debt builds, the infrastructure decays, etc., etc.
    Too much compassion, if you ask me.

  121. Babak Makkinejad says:

    Do not persume to patronize me. You h
    are just wrong but all is not lost. Read Ice Ages and Astronomical Causes – if you can download the data and MatLab code and crunch the numbers for yourself. Buy a subscrption to Nature and start educating yourself. Then you might actually have some grounds to engage me on this topic.

  122. Babak Makkinejad says:

    Fred lives in Michigan and is now enjoying the fruits of decades of corruption in that state’s Road Comission.

  123. RC says:

    “The fact is barring Hong Kong, the US is one of the most open economies in the world with the least friction to imports. China on the other hand is one of the most protectionist. The EU too is significantly more protectionist relative to the US. It is not just duties but all those other non-tariff barriers including subsidies and regulatory barriers.”
    Secretary Wilbur Ross, speaking at Davos, reinforced blue peacock’s statement when he challenged WTO director Roberto Azevedo to name a nation that was less protectionist than the US. He got no answer. He then cited a study of tariffs on 20 items that China had higher tariffs on all but 2 and the EU all but 4. Again no contradiction. So Wilbur Ross then went on to say:
    “Before we get into sticks and stones about free trade, we ought to first talk about is there really free trade, or is it a unicorn in the garden.”

  124. Dr Puck – “I note you didn’t mention the new round of supply-side tax cuts that lower corporate taxes in perpetuity, and income taxes temporarily.”
    I saw that, obviously not following it near as well as you and the other commenters here. Also the crony stuff you mention. As with American foreign policy I haven’t the faintest idea whether the extent to which Trump 2018 deviates from Trump 2016 is because he’s boxed in or because Trump 2016 was fake.
    My guess for the little it’s worth is the former. Seems stupid to me, electing a new President and then half the country and most of Congress, the Beltway and the media piling in, industriously cutting the ground away from under his feet. Doesn’t result in your getting the Clinton you might have wanted. Nor in getting the Trump others wanted. Just results in nobody getting much of anything.
    Except of course the Swamp. That still seems to be getting plenty of everything and if there’s one thing that neither the Trump lot nor the Sanders lot wanted it’s that. Score 0 for Constitutional Democracy so far.
    I believe such arguments as you engage in are in any case not central. You would argue for a specific way of adjusting the management of the economy. You could be right on that, I don’t know; so many variables that the argument’s usually conducted by picking out the variables that suit the conclusion one wants.
    But though the correct way of adjusting an economy is certainly one that needs examining it’s not where one should start from here. What’s the point of getting het up about all that when there’s damn all viable economy to adjust?

  125. Ulenspiegel says:

    “The “added value” costs you mention can be astronomical.”
    You got the situation wrong: PV is cheap in Germany despite being a high wage country, i.e. installation is very efficient. The red tape costs are very low, German legislation worked in case of PV in comparison to the US situiation.
    The added value is real: Silicium produced in Germany, PV-production lines made in Germany, BOS made in Germany, …..

  126. Ulenspiegel says:

    I am indeed very critical in respect to Amazon et al. However, they flourished because of US legislation and decisions. It was in your hand.
    The issue with China is that the Chinese government has a huge domestic market and can nurture with low risk strategically important industries without real chance that competitors become a real problem, not having heritage industry (car makers) helps a lot.
    Russia was never in the same situation, when Russia had a lot industry, western countries much had more.

  127. Fred says:

    Potholes are fabulous works of art. Robert Ficano finally lost an election so there’s hope for SE Michigan.

  128. Ulenspiegel.
    My mistake and I’m grateful you pointed it out. I took it you were meaning costs after production. Your English is obviously better than my German.
    I regard Germany as the only truly successful large industrial economy in the West. You’ll be better informed but I have seen these problems raised and have sometimes seen these problems myself:
    1. Some contrarian German economists I ploughed through, must be twenty years ago now, argued that the emphasis should have been more on satisfying internal demand and less on the export drive. Put simply, it makes more sense to put a Mercedes in every drive in Germany that to sell them to countries that can’t afford to pay – and then get in a muddle with the bad debts.
    2. Could be sob stories, but I met gastarbeiter who said that the conditions for them on the factory floor were brutal. They called the foremen or production managers Kapos. Not a one-off – I’ve heard the term used by other immigrant workers at the bottom of the pyramid. Not conducive to social cohesion and may partly explain why it’s mostly the whites in Germany who are singing Kumbaya.
    3. Enterprising and very successful small businessmen were outsourcing labour intensive fringe products in the 70’s. By the late 90’s printing was getting done abroad as a matter of course. Now of course outsourcing is common.
    4. The quality of everyday products is going down. In the 80’s German power tools for the building site were the Gold Standard. Now it’s Japanese power tools. As for cars, the iconic German product, quality is drifting down and has been for some ten years. They say. True?
    5. I don’t know what’s happening to the famous German tradesman. I notice that plumbing and electrical work that I see done now is done by Eastern Europeans. Of course cleaning and so on is now mainly immigrant labour. That’s my limited observation and perhaps you find it different. Mainly cash, and I don’t go with the notion that the Grey Economy can be good for starting people off. It’s good for putting the conventional tradesman out of business and keeping him out.
    Of course I’m seeing this from the gloomy side. We in England have done all that and have been doing some of it since well before I was born. It’s a very long time since “British Made” was the acknowledged Gold Standard and some time since we effectively dismantled our superb apprenticeship system in so many trades. So what I see with foreboding may be to you just a few blips in the success story. And I read that it’s the Germans who are putting in the escalators in China. There’s still a lot of success story around.
    But what do you think. Blips or straws in the wind? Looks like haystacks to me.
    I take little account, by the way, of the undoubted fact that the Germans have made a real go of alternative energy. That’s fashion frills for the Gutmenschen and you’ll agree with me that impressive though the effort is, it’s no answer.

  129. Babak Makkinejad says:

    Over 40 years?
    The corruption has been systemic.
    Look at NYC roads – Ficano was not there.

  130. LeaNder says:

    English Outsider,
    so glad, you let me know that the surplus-neo-Nazis sucking the very life-blood out of the rest of not only Europe, but the world is about to end. And soon. That relieves me.
    They called the foremen or production managers Kapos.
    Would you have expected anything else? Seriously? You must have met them too? Thus you should know, this racial superiority runs deep. We can’t help. It’s a defect in our DNA we Germans are born with.
    Only variations on the Nazi patterns possible over the decades. Good you realize the “Gutmenschen”/do-gooders is only a rather superficial “fashion frill”. Great coinage. It had to come out. 😉

  131. mikee says:

    “Xiao Fang thinks she’s one of the luckier workers making Barbie dolls for the Christmas market at the Mattel toy factory in Chang’an.
    True, she says, she works 11-hour days, six days a week, and shares a dormitory with nine other women and gets to see her husband only once a week. She had to leave her three-year-old daughter back home in Sichuan. And there is only a communal bathroom, and if they want hot water they must fetch it from another floor. But at least she has a job, she says. And others have it worse.”

  132. LeaNder – “Thus you should know, this racial superiority runs deep. We can’t help it. It’s a defect in our DNA we Germans are born with.”
    I’m not sure if you’re being ironic here but if not, I really don’t think that’s true. Other points –
    1. I have said before that the Continental Europeans generally do face a potential problem. Political dissatisfaction or dissent tends to run in channels already cut. You see this in France, Eastern Europe, the Ukraine of course, and Germany.
    You’ll be more familiar that I with the dissatisfaction with the status quo gaining impetus in Germany. We both know, however, that it’s there. It gets demonised by the status quo forces. The more that dissatisfaction is repressed – the more difficult it is to express that dissatisfaction through “respectable” democratic channels – the more likely it is to run perforce in those old channels.
    Some of my more left wing friends in Germany think that’s already happening in any case. They see Nazis on every corner. I’m more cautious and think that what they see is more froth than substance most times. But the channel’s certainly there.
    I also think that the status quo forces and the supporting intelligentsia have hit upon the trick of categorising any deviation from their views as Fascist and thus suppressing such deviation.
    You see this being done crudely in that Menasse novel “Die Hauptstadt” that received such acclaim recently. In that book the “populists” are explicitly equated with the retrograde forces of Fascism and Menasse rams home his “Nie wieder” message (Never Again!) by proposing that the “Hauptstadt”, that is, the EU capital, should be re-located to Auschwitz. Just in case we forget what it’s all about.
    We must understand, Menasse is saying, that for all good people the fight against “populism” is in reality the fight against Nazism and its attendant horrors.
    No wonder that novel won the prize at the Frankfurt Book Fair, for all that it’s decidedly inferior as a novel. Menasse’s message is just the message the status quo forces want to put across. All the old Holocaust guilt is exactly the weapon they need to defend their swamp.
    As an Englishman untouched by Holocaust guilt all this looks pretty dumb to me. What happened before I and most Germans were born isn’t relevant today and certainly shouldn’t be elevated to some sort of religion. For many East Germans and I think for a lot of the German young that’s how they see it too. They see their country being badly run and many would like to see a bit more common sense applied. But when they say so they come up against this nonsensical “Foundational Myth” that the Menasse novel exemplifies and find they’re being regarded, not as people expressing legitimate political dissatisfaction, but as some sort of neo-Nazi freaks.
    Again, you’ll know better than I whether this trick of characterising common sense dissent as “populism” and thus a throwback to Nazi times is likely to be effective in protecting the status quo. But if it doesn’t work there’s going to be a heavy price for so demonising dissent and driving it into such a channel.
    2. “Gutmenschen” was used in the sense that Duden gives. I’ve no time for all the nonsense now surrounding the use of the word and think that German intellectuals and journalists should have better things to do than agonising endlessly about its connotations. “Bien pensant” is perhaps a more neutral term.
    As an ultra-fanatical environmentalist I genuinely admire the effort Germany puts into solar and wind; whilst wondering how it is that a country so renowned for its engineers can screw up so mightily when it comes to ensuring its energy requirements are met.
    3. I think I may possibly have failed to get across the opinion underlying my comment. It is this. Even in Germany, the country that is perhaps now the only really successful large industrial economy in the West, globalism doesn’t work. It doesn’t benefit an increasing number of German citizens. It doesn’t benefit the poorer EU countries chained in the EU with it to provide it with an export market. Its insatiable demand for cheap labour denudes neighbouring countries of their citizens and impoverishes many of its own. It benefits only the wealthier German citizens and even that, as I see often, less reliably than it used to.
    Take all that lot together and you’ll maybe agree it might be a good idea to go steady on the globalism that can only benefit your cronies, to give up the ruinous addiction to ever more cheap labour, and to listen to your dissenters – give them their due space in the political arena – instead of screaming “Auschwitz” every time they poke their heads above the parapet.
    I doubt it applies at all to you, LeaNder, but I see so many Germans being blackmailed by their distant past into accepting a present that doesn’t work. Let’s applaud those who can see through the trick, not demonise them.

  133. LeaNder says:

    I am definitively not going back to proofread this. Let’s talk about tea bags. 😉
    EO, I have no deep desire to go into details on populism, and/or Gutmensch. The latter seems to be a neologism over here based on the English do-gooder. We do not have an equivalent to the exquisite EOD. Meaning hear it only recently.
    “virtue signalling” is actually a helpful coinage*. It might be even more relevant in the age of the internet. Were superficial verbal self-representation may be a big part of the cake.
    Dear, there could be a lot said about your earlier maybe semi-informed, no insult: stereotypes?, comment to which I responded my own way. Fact is, I wouldn’t have know where to start.
    Let me take one:
    I don’t know what’s happening to the famous German tradesman. I notice that plumbing and electrical work that I see done now is done by Eastern Europeans
    Why do you use trade instead of craft? I am admittedly not familiar with the British tradition and or laws in this context. Vaguely aware there is a difference in the US, no standard structures. No solid institutional framework? Wrong?
    Fact is in Germany it needs a solid training and education with the accompanying schools (a friend of mine shifted from engineering to such a school) up to the master craftsmen. The only one who can start a business. And then, yes, as–tradesmen–can trade this knowledge.
    Meaning this scenario is highly unlikely: I notice that plumbing and electrical work that I see done now is done by Eastern Europeans.
    Yes, occasionally, I am sure: Of course cleaning and so on is now mainly immigrant labour.
    But it is hardly a standard gray market economy.
    Moving on in this somewhat curious associative chain: The ex-wife of a cousin, a teacher, at one point due to job-frustration told her husband she would prefer to do something with her hands, everything, even cleaning. I was reminded of it a couple of years later and realized it wasn’t that easy. The tradesmen that by now control the cleaning trade (efficiency?**) prefer people with provable experience. They register their employees according to the German standards were tax, health is deducted automatically as a standard. Yes in cities there are ‘foreign looking’ people among them. Around me that is. If I do not talk to them, I wouldn’t know if they are German anyway. City. My cleaning lady was a German single mother till recently, she often brought some of her kids to help.
    I vaguely realized that the craftsmen vs the tradesmen must be a pretty different matter in the US. I don’t remember that business from my time on the British Isles, admittedly, in that trade sector. How could I have? There sure were specialist agencies. No?
    Last but not least, Robert Menasse. ..?.. I haven’t read his Hauptstadt. But as far as I know his capital is Bruxelles/Brussels not Berlin.
    Irony Alert: Can we two keep to exchanges on tea bags? Not that I wouldn’t have a lot to say along the lines of your existing or invented liberal German friends.
    ** efficiency. A friend, a master roofer once told me he could only take jobs he could guarantee based on his crew. Again? What’s your business and/or your German friends.
    By the way a friend close to me just screamed out. Since in Kosovo something about electrical currents is not quite quite right. His clock has been seven minutes late recently. Apparently the sudden scream may be related to disinformation on the German MainStreamMedia which he watched at that point.

  134. kemerd says:

    trade deficit is good for the US: in return for some electronic bits in some computer systems of the FED, they get real goods and services. This is essentially free lunch as long as USD stays the premier currency of the world, that is.
    Do someone in the US think the position of USD is threatened and furthermore cannot be defended?

  135. LeaNder – thank you for your reply.
    1. What matters is whether an economy is a cheap labour economy or not. In cheap labour economies large numbers of people get the short end of the stick. The economy and indeed the society no longer delivers the goods as far as they are concerned. I assert this is happening in England. I believe it is happening in America – at least there are great numbers of people in America who assert it is happening. Is it happening in Germany?
    Without putting words into your mouth, I’d say that you don’t believe it is happening. You see a stable and prosperous economy and society. There are problems, of course, what I called “blips” above, but those are inevitable under any conditions. They have little significance.
    I might see much the same problems as you but I don’t see them just as “blips”. They look to me like indications that Germany is going down the same road that we in England have travelled. Those indications I have called “straws in the wind” above. For me they show the way things are going.
    As I said above, I could be taking too gloomy a view because I’m relating it all to my English experience. I could therefore be wrong.
    But that is probably the difference between our points of view. The problems you see as not significant, I see as indicative of economic and social decline. So far a less serious decline than we see in England or the States but going the same way.
    You live there and I don’t, or at least haven’t for a while, so you are very much more entitled to consider your view right than I am mine. When I visit I might also be fitting what I see and hear into an already fixed mental framework – the famous “confirmation bias” – so it’s possible that my personal observations and experience count for very little. But although that’s entirely possible, do keep in mind the possibility that you also might be subject to “confirmation bias”. I could well be making far too much of problems that aren’t in fact that significant; but you might just possibly be missing problems that are.
    2. We need not be so tentative when we consider the political situation in Germany. An increasing number of Germans are not happy with the way things are going. Those Germans are being excluded from the political process.
    Part of the exclusion process involves social or ideological pressure. I sketch out above how that works by taking as an example that Menasse novel. Political dissent is identified as “populist” or nationalist. That in turn is characterised as “Fascist”. That in turn leads to Auschwitz.
    Menasse insists that the foundation of the modern European order is based on a determination to prevent Auschwitz happening again. The site of the camp is woven into the plot and at one point we find the suggestion that Brussels/Strasbourg should be relocated to Auschwitz incorporated into the story line. Menasse is aware of the problems of “Globalism” – he’s something of a dissenter himself – but whether he intends to or not he provides those who wish to suppress political dissent with a formidable weapon. When it is possible to suggest that deviation from status quo politics can be associated with the horrors of Nazism that exerts powerful social pressure on many not to deviate.
    In addition to social/ideological pressures there is, as you will know better than I, the usual political manoeuvring and combination to ensure that the dissenters don’t get close to power.
    Your take on all this will be conditioned by your own ideological convictions. If you regard the “populists” as deviants then you’ll think all is fair that keeps them away from power. If you regard them as a legitimate political force then you won’t.
    All I am saying above is that repressing dissent by such means might well work in Germany – I simply don’t know. But if it doesn’t the backlash will be the stronger for the repression.
    3. Now we can get back to the subject Walrus’ article is on. As Trump has repeatedly pointed out there is no such thing as “Free Trade”. Never has been. All governments everywhere and in all times regulate or interfere with international trade. All Trump is attempting to do is to adjust the current terms of international trade so that the Americans don’t carry on losing the shirts off their backs when they trade abroad.
    He’s in for a hell of a rough ride on that, because of course it’s not all Americans who are losing the shirts off their backs. Those who belong to what is loosely called the crony class, and the top few per cent of the population underneath them, do very well out of so called Free Trade and so called Globalism. They’re fighting him and they’re going to keep fighting him. We’re still waiting to see the outcome of that contest but let’s not fool ourselves. It’s going to be a brutal one.

  136. fanto says:

    EO at 136 and LeaNder at 137
    IMHO EO is correct about the “german status quo swamp” (this is not exact quote, only the paraphrase) in the s.c. intelligentsia and nomenklatura within german mass media. The quality of german intellectual and of the industrial product have declined. The intellectual level suffers from inflation of grades in schools – recently I read that teachers (in believe in Bavaria) asked to increase the difficulty in teaching material and correspondingly make it more difficult to complete the curriculum. Btw. this is not unique to Germany, the same goes –probably worse – for the USA schooling. The quality of political discourse suffered a lot as well, the new social democratic “leading light” – Mrs. Nahles – was talking of ‘hitting in the muzzle’ of the political opponents (‘ die Fresse..). Chancellor Merkel is also not exactly an intellectual big wig either – IMO she is just very cunning, she does not enter a serious debate, does not bring rational arguments if she meets a serious challenge to the liberal/leftist mantra. An example is her critique of the bestseller “Deutschland schafft sich ab” by Sarrazin, written in 2010 if I remember correctly. She did not read it, but she just said – “unhelpful”. End of debate. And the german intelligentsia just ducked and swallowed and went on to throw Sarrazin under the bus…as racist, right winger etc. usw.. Lately, after the massive problems with the illegal immigration, she changes her tune, and even brought in the new cabinet a person who knows the problems of ethnic ‘others’ – (…”Eine zentrale Rolle kommt dabei Franziska Giffey zu, der bisherigen Bezirksbürgermeisterin von Berlin-Neukölln. Mit ihr rehabilitiert die SPD-Spitze nicht nur ihren Vorgänger Heinz Buschkowsky, dessen politischen Geist Giffey in Neukölln fortsetzte und der wegen seiner oft schonungslosen Worte über Kriminalität, Islamismus und verfehlte Integrationspolitik vielen Linken in der Partei ein Dorn im Auge war…“ )
    Btw. Bushkovsky and Sarrazin have actually met and have found a lot of common ground. Neither of them can be accused of being ‘right winger’.
    The quality of industrial products – also is in bad shape, as I see it; the emission scandal with falsifying engine emissions shows how low the intellectual level of the leadership of car manufacturers has fallen. Notable exceptions where german product still shines is the robotic industry (“Kuka” was bought by Chinese because it was one of the two best ones in the world, next to Japanese industry – and Japanese would not dream to sell or share it with anyone…). I am sure there are other ‘niche’ areas where the old german solidity and quality can still be found. (Let’s start a list of those ‘good old german quality products’).
    The health ‘industry’ is an area I can speak about with some authority, I worked in Germany as Oberarzt, and from the experience how my brother Urologist who worked as Oberarzt as well; when he got older and after heart attack he moved to a desk job reviewing cases (for government) – his opinion was that in the whole of Hessia he saw only one or two urology department where a solid work was done and where he would go for treatment. My sister was treated in a very renowned cancer center in Frankfurt and I saw how mediocre the treatment has been, and how lavish the treatment was one floor higher where the VIP’s were attended to. Let me not go into the details of medical malpractice and cover-ups, which I was able to observe myself as well. That does not mean that there are no excellent places with top notch people who work as clockwork with their teams. But that is it – too much variation between places, one has to know where one can expect excellent care and where there is a lot of hype and falsehood. On the whole, the German attitude to health care is more down to earth, without the hysterics of US system, with politicians screams of ‘killing my grandmother panels”.
    Let me now turn to the response of LeaNder. (#134 and 137) I am a uneasy – how much of it is irony, jeering, pretense not to know what is discussed, evasions, changing the topic, making allegations that EO said something , which he did not say, and avoiding the main issue which was in EO’s comment #136 clearly how german mass media, print and Radio and TV, to dominate the intellectual life, and shape it in spirit of total guilt. I would like to add, that on the other side there is subservience to the globalists and ‘atlanticists’ (those are the people belonging to the German Marshall Fund, Atlantic Council usw.), ‘without daylight’ between the russophobia in US and Germany. The “Putin Verstehers” are vilified.
    LeaNder accuses EO of ‘semi-informed stereotypes’ and herself talks about the ‘deep racial superiority in the DNA of us Germans’… this irony, I hope . If not, LeaNder ought to read the column of David Brooks in NYT about Israeli geniuses.
    LeaNder would rather talk about tea bags. Hmmm.. not particularly pleasant, if tea is bitter, but what do I know, I am a nitwit about tea bags. . Deflexions are typical for LeaNder comments. A difficult topic gets ignored and instead an artificial or side issue (the ‘tradesmen’ etymology) gets massaged. The bulk of EO’s comment was about the socio-political climate in Germany – and LeaNder devotes exactly two lines to it, just to deflect and insinuates that EO said “Berlin” instead of “Hauptstadt”. Likwise the insinuation that EO had ‘invented his friends’. The topic of Menasse’s book is too tea-bag worthy. I did not read it, but I had the opportunity to listen to several half hour readings from that book on the Hessen Radio “Kultur”, every morning while driving. It was in mid October last year, and I was truly shocked by the amount of venomous anti-german sentiment. For young people it was either a put-off (pushing them into the radical nationalist camp) or a serious dose of guilt for crimes of their ancestors (pushing them into the arms of the ‘nomenklatura’). Time will tell.
    Lastly, EO says “…but I see so many Germans being blackmailed by their distant past…” – here I can say that this method of blackmail of ethnic Germans also has been used against myself here it he USofA. I was compared to Hitler, and was greeted by (physician colleagues) with the raising hand Heil Hitler Gruss.
    Let’s talk about weather, not about tea-bags. Who am I, a nitwit! (as a surgeon I can confirm that Ernst Bloch, a philosopher, was right when he said – “eine Chirurgie die sonst nichts ist, eine vom Gewissen, Samaritertum emanzipierbare Chirurgie imstande war, die Verwundeten fuenfmal wieder schussreif zu machen…“ ‚ –surgery which otherwise is nothing, was able to make the wounded capable to be shot again five times over – ) (Ernst Bloch – Durch die Wueste, he talks there about 1st World War).

  137. Fanto – After seeing your reply I spent an evening or two checking that German bestseller again.
    I think you are right. Menasse’s book is, maybe not so much anti-German, as anti-European. Anti-European in that it ignores where it does not belittle whatever does not accord with Menasse’s narrow vision. His Europe is a cramped and inward-looking Europe, obsessed with a time that is past and proposing only a further retreat into that obsession. As Menasse was writing the book world-changing events were occurring in all of which the EU was involved. Barely mentioned. The book is so parochial it hurts. NOT my Europe and clearly not yours.
    Here’s a small sample of the reviews I came across. The cognoscenti know a literary dud when they see one, seems to me, even if they swallow the message. The “populists”, those hardy souls who don’t buy the status quo, recognise the message well enough.
    Looks like being a succes d’estime. Bed time reading for the bien pensants and not just in Germany. It’s getting translated into several other languages, we are told.
    I think on balance it’ll be good if Menasse’s novel does take off outside Germany. The more people get to see such nonsense the better. Not all will fall for it, surely?
    As to how it will go down in Germany. particularly with the young, as you say, “Time will tell.”

  138. Walrus – might I as a footnote to your discussion on Free Trade add a contrarian view on US unemployment figures? (Lifted from ZH)
    Perhaps as serious is the shift to low paid jobs. At one end the Ford settlement, in which the union seems to have acceded to a pact with the devil – existing workers kept current pay and conditions, new workers didn’t. There wasn’t, one imagines, much choice but to accept that deal, for fear that Ford would have outsourced the lot, but that deal was a side effect, if concealed for the present, of the cheap labour economic framework that the orthodox economists insist on.
    At the other end workers moving from steady jobs to zero hours jobs and the like. One sees in this country families keeping their heads above water by both husband and wife doing two jobs each. Long hours, low pay, and the jobs themselves insecure.
    One also sees the problem moving further up the pay scale, notoriously with IT workers in the States and possibly further than that if the talk here about routine legal work getting outsourced is anything to go by.
    With respect, I don’t believe either that the argument that we can all shift to high-tech jobs works. That argument is clearly out of date. It worked, sort of, in the nineteenth century when non-western countries were not industrialised and there seemed to be no prospect of their becoming so. Steam engines for raw materials or bananas, or the later equivalent trade until fairly recently. But these days, when the Chinese can outsource even to Ethiopia, the amount of work that only we can do has greatly reduced. “Comparative advantage” is now more and more a shopworn mantra and not a reality.
    What is the reality now is that businessmen are forced into outsourcing or cheap labour – they simply go bust if they don’t – and the welfare and other social costs are born by the community and not included in the reckoning. Then the businessmen become hooked on cheap labour and raise merry hell if they have to employ local – as we are starting to see. It’s a vicious spiral down and the bottom isn’t going to be a place we’ll want to be.
    And automation proceeding apace … I’m hoping that Trump will get a move on and get jobs in quantity back to America, that the other Western countries will see the light too, and that the Western economies will be back to some degree of viability before that problem has to be confronted. Hopeless optimism? Well, they voted Trump 2016 didn’t they? That’s a start.

  139. fanto says:

    EO at 141
    English Outsider, thank you for your reply and links. I will spare myself reading Menasse. The link to Der Tagesspiegel is really spilling the beans, and the polish catholic killer explains it all, “sapienti sat”.

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