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Subject: free trade!
Nanheyangrouchuan    5/1/2008 3:30:17 PM
The US Navy...Made in China
China-Mart Takes Over

By PAUL CRAIG ROBERTS

My poor beloved country, trapped in a Middle Eastern quagmire and tricked by Osama bin Laden into subsidizing to the tune of $300 billion (spent or appropriated) a training ground for Muslim terrorists and insurgents while our once fabulous economy disintegrates.

If the US were still rich and just wanted to throw several hundred billion dollars at bin Laden as a good will gesture, that would be one thing. But we are borrowing the money
that we are using to train Muslim terrorists to kill and maim our troops in Iraq and Londoners in England.

The money is being lent to us mainly by Asians, especially the Chinese. China has so many dollars to lend to us because we send so many dollars to China to pay for the goods and services that patriotic American corporations have decided to supply to us from China instead of from America.

US corporations decided that the way to get rich was to destroy their American consumer base by closing their American factories, throwing their US employees out of work and hiring Chinese instead.
The Chinese work for less, you see, and free trade economists say lowering costs makes us better off.

What US corporations and the free trade economists overlook is that giving Americans' jobs to foreigners raises foreign incomes and lowers American incomes. When credit cards and home equity lines are maxed out, there will be nothing to support the US consumer market. The American corporations who moved their capital and technology to China will have to find new customers.

Maybe the Chinese government will let the relocated US firms sell to Chinese customers, or maybe the Chinese government will let the US firms go bankrupt. The latter favors China's strategic interest. Chinese businessmen will purchase the bankrupt firms, and Chinese businesses will sell to Chinese customers.

Americans are pouring so much money into China that China can finance our wars while it buys up our companies.

Everyone was shocked that a Chinese company could outbid Chevron for Unocal. China has already purchased IBM's personal computer business, and is now after US appliance maker Maytag (whose appliances are made in Mexico).

The outsourcing mania has hit the Pentagon, and China will soon be supplying the ships for the US Navy. The Pentagon, seeking lowest cost, is pushing defense contractors to outsource offshore for more materials, components and systems.

This means the end of US shipbuilding capability. Component suppliers to American shipbuilding are already skeletal thin, with most components only having sole suppliers. For example, Manufacturing & Technology News (July 8) reports that 80% of the components for the Virginia Class submarine come from sole sources.

With not enough US Navy ships being built to support even an industry of sole suppliers, Asia is fast becoming the only source for US Navy ships.

While President Bush spends $300 billion recruiting and training terrorists for bin Laden in Iraq, US Navy ship procurement has fallen 33% since 2001.

Meanwhile China is on a rip. China is now the third largest shipbuilder after South Korea and Japan. In five years China's submarine fleet will be twice the size of America's. In 10 years China's navy will be larger than the American fleet.

This is amazing performance for a country that as recently as 1989 had essentially no shipbuilding industry.

This year the US is producing 6 ships, one-tenth of South Korea's output. In 2006 the US is scheduled to produce only 4 ships, because China has outbid us for the steel. The US "superpower" can no longer afford to compete against China for essential materials.

Cynthia Brown, president of the American Shipbuilding Association says that "the manufacture of entire components and systems will migrate to China in the next several years under current Department of Defense policy with respect to outsourcing."

But, hey, we will get ships cheaper, and it is making us rich!

Paul Craig Roberts has held a number of academic appointments and has contributed to numerous scholarly publications. He served as Assistant Secretary of the Treasury in the Reagan administration. His graduate economics education was at the University of Virginia, the University of California at Berkeley, and Oxford University. He is coauthor of The Tyranny of Good Intentions. He can be reached at: paulcraigroberts@yahoo.com
 
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xylene       5/1/2008 6:05:38 PM
It's really sad that the real enemy was a 5th column of Americans. History will show how they sold out their nation to push forward their free trade religion.
 
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Photon       5/2/2008 3:06:26 AM

It's really sad that the real enemy was a 5th column of Americans. History will show how they sold out their nation to push forward their free trade religion.

I think a good enough reflection of current American 'psyche' consist of loads of financial crises -- both big businesses and several layers of governments.  Neither the private nor the governmental sectors have shown even an half-assed attempt to demonstrate financial discipline.  Insofar as the belief in 'free market/trade' is concerned, it does not benefit the wider society unless it is backed by correspondingly stringent set of rules and regulations.  (The ideal free market/trade scenario works, if we can assume with absolute confidence that each and every market players are guided by conscience, thereby can engage in fair transactions with minimal regulatory overhead.  However, does the level of 'enlightenment' within our society approach anywhere close?  I think not.  Otherwise we should not have been saddled with recurring issues like tainted goods.)

I consider a jargon like 'free market/trade' = 'Get your hands off of my ass!  I do whatever Goddamned I want, OK?  That's what "freedom" means, baby!'.  Somehow, the prevailing ruling elites resemble spoiled and pompous brats.
 
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Nanheyangrouchuan       5/2/2008 3:41:41 PM




It's really sad that the real enemy was a 5th column of Americans. History will show how they sold out their nation to push forward their free trade religion.



I think a good enough reflection of current American 'psyche' consist of loads of financial crises -- both big businesses and several layers of governments.  Neither the private nor the governmental sectors have shown even an half-assed attempt to demonstrate financial discipline.  Insofar as the belief in 'free market/trade' is concerned, it does not benefit the wider society unless it is backed by correspondingly stringent set of rules and regulations.  (The ideal free market/trade scenario works, if we can assume with absolute confidence that each and every market players are guided by conscience, thereby can engage in fair transactions with minimal regulatory overhead.  However, does the level of 'enlightenment' within our society approach anywhere close?  I think not.  Otherwise we should not have been saddled with recurring issues like tainted goods.)

I consider a jargon like 'free market/trade' = 'Get your hands off of my ass!  I do whatever Goddamned I want, OK?  That's what "freedom" means, baby!'.  Somehow, the prevailing ruling elites resemble spoiled and pompous brats.


You only hear "free market" calls when people can make a lot of money, when their business models show flaws that cause them to lose money or they just over extend themselves, the government suddenly has a responsibility to keep the economy afloat and save these businesses/people because "they are important to the economy".

Capitalism means that you make money from being smart, daring and lucky and lose money when you screw up and/or luck runs out.
 
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displacedjim       5/2/2008 7:13:45 PM


Capitalism means that you make money from being smart, daring and lucky and lose money when you screw up and/or luck runs out.

Whoa!  What's going on... room spinning... lights flickering...  Audrey?  Rex?  What are you two doing here, why is she singing silly rhymes, and who is George...?

 
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theBird       5/4/2008 12:12:53 PM






I consider a jargon like 'free market/trade' = 'Get your hands off of my ass!  I do whatever Goddamned I want, OK?  That's what "freedom" means, baby!'.  Somehow, the prevailing ruling elites resemble spoiled and pompous brats.
Don't worry, they'll get theirs when people realize that the Chinese can be pompous spolied brats for 1/20th the cost and outsource the ruling elite jobs to as well!

 
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Photon       5/18/2008 5:55:45 AM
Now that I am thinking about the woes of US economy ......

A disproportionate amount of focus has been gathered into the consequences of US economic woes, not the causes.

'It takes two to tango together!':  On one hand, just about each and every American politicians have been more than willing to spend money somehow, but less than willing to find sources of money somehow.  On the other hand, American taxpayers are just as idiotic as their political masters -- since when has American taxpayers have shown much financial discipline in the first place?
 
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CJH       5/25/2008 1:26:03 PM
US corporations are moving jobs overseas because the friendly business environments are over there. The governments of those other countries want those jobs for their people much more than our government wants the jobs for our people.
 
The mindless, larcenous rapacity of our local governments, state governments (kleptocracies) and of our federal government is the problem.
 
 
 
 
 
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Nanheyangrouchuan       5/26/2008 11:07:42 AM

US corporations are moving jobs overseas because the friendly business environments are over there. The governments of those other countries want those jobs for their people much more than our government wants the jobs for our people.

The mindless, larcenous rapacity of our local governments, state governments (kleptocracies) and of our federal government is the problem.


That depends on what you consider a "friendly business environment".  They are lured with promises of low taxes, unbelievably cheap wages and no labor laws and in the case of China,  a vast and expendable workforce (the CCP considers most of its own people expendable) which could be converted into the world's largest consumer market.

But those companies also found out that they cannot win in IP disputes, can quickly become subject to laws that domestic companies are exempt from, constantly required to transfer their most advanced and sensitive technology to domestic and government run entities and can have a very hard time repatriating or moving profits around the world since those profits can be kept in national banks to boost those banks' lending abilities.  And lastly, these companies have found that if they want to pull out the only company assets that will be permitted to leave will be the expat employees.
And I'm not just talking about China.

So where is the "better" business environment?

 
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CJH       5/26/2008 2:45:16 PM




US corporations are moving jobs overseas because the friendly business environments are over there. The governments of those other countries want those jobs for their people much more than our government wants the jobs for our people.



The mindless, larcenous rapacity of our local governments, state governments (kleptocracies) and of our federal government is the problem.




That depends on what you consider a "friendly business environment".  They are lured with promises of low taxes, unbelievably cheap wages and no labor laws and in the case of China,  a vast and expendable workforce (the CCP considers most of its own people expendable) which could be converted into the world's largest consumer market.

But those companies also found out that they cannot win in IP disputes, can quickly become subject to laws that domestic companies are exempt from, constantly required to transfer their most advanced and sensitive technology to domestic and government run entities and can have a very hard time repatriating or moving profits around the world since those profits can be kept in national banks to boost those banks' lending abilities.  And lastly, these companies have found that if they want to pull out the only company assets that will be permitted to leave will be the expat employees.
And I'm not just talking about China.

So where is the "better" business environment?


In not having out of control tort law practicioners, high tax environments, unnecessary regulation, unnecessary enviromental restrictions, etc. Basically, our government punishes companies for employing people.
 
The people who run the corporations aren't saints but they aren't stupid. They move the jobs on the basis of real practical reasons.
 
In light of your criticisms of (Chinese) foreign business environments, you ought to be asking yourself what, since those foreign situations are so bad, all this says about us here in this country that those foreign coutries are still preferable.
 
If all you can come up with is some conspiracy to sell out to the PRC, please spare us that.
 

 
 
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Nanheyangrouchuan       5/27/2008 10:33:37 PM








US corporations are moving jobs overseas because the friendly business environments are over there. The governments of those other countries want those jobs for their people much more than our government wants the jobs for our people.





The mindless, larcenous rapacity of our local governments, state governments (kleptocracies) and of our federal government is the problem.






That depends on what you consider a "friendly business environment".  They are lured with promises of low taxes, unbelievably cheap wages and no labor laws and in the case of China,  a vast and expendable workforce (the CCP considers most of its own people expendable) which could be converted into the world's largest consumer market.

But those companies also found out that they cannot win in IP disputes, can quickly become subject to laws that domestic companies are exempt from, constantly required to transfer their most advanced and sensitive technology to domestic and government run entities and can have a very hard time repatriating or moving profits around the world since those profits can be kept in national banks to boost those banks' lending abilities.  And lastly, these companies have found that if they want to pull out the only company assets that will be permitted to leave will be the expat employees.
And I'm not just talking about China.

So where is the "better" business environment?



In not having out of control tort law practicioners, high tax environments, unnecessary regulation, unnecessary enviromental restrictions, etc. Basically, our government punishes companies for employing people.

You mean those pesky product defect lawsuits?  Yeah, companies should be allowed to put out whatever they want, mislead consumers about what the product is and does, and let the buyer beware.  Guess you've never seen babies starve to death by eating "baby formula" made from pulverized paint and woodchips.  The "tax relief" offered by developing countries is just that, a holiday that ends.  Then the tax collection begins.  Those other "unnecessary" regulations like labor regs that keep people and many times children from working 12-15 hours (and this happens in the white collar sectors as well), as well as enforcing pay for work principles.  Shouldn't people be paid on time for the work they do?

Unnecessary environmental regs, you have no idea what you are talking about.  Every had dysentery?  Ever had chronic hemorrhoid inflammation?  Chronic irritated eyes, sore throat and skin problems?  And the sources of those health problems are obvious when cars are covered with oily film, the waterways smell like open sewers (because they usually are open sewers) and organic waste coats the sidewalks.
 
The people who run the corporations aren't saints but they aren't stupid. They move the jobs on the basis of real practical reasons.

Slavery can be justified by practical, capitalist logic.
 
In light of your criticisms of (Chinese) foreign business environments, you ought to be asking yourself what, since those foreign situations are so bad, all this says about us here in this country that those foreign coutries are still preferable.

It is not the developed countries that are overwhelmingly favored, it is the developing countries that are assumed to be as up to speed with human rights awareness and have easily corruptible governments.  The foreign situations have become bad for MNCs because the foreign governments got wise and the MNCs are too embedded to be able to quickly pull out.
 
If all you can come up with is some conspiracy to sell out to the PRC, please spare us that.

Why don't you read "David Copperfield" again and get back to me.

 
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xylene       5/29/2008 3:03:16 AM
But the USA will always have more regulations and more litigation than China. China will always have cheaper labor. We will never be able to pay lower wages, have less litigation , or be a lower cost producer than China. The capitalist free market has made its choice and its allegience is to China.
 
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FJV    Now, now   5/30/2008 1:02:49 PM
Cheap labor will end up competing against robots and automatic machines in the future anayway.



 

 
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