Politics > Politics-USA > China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/ )
| Topic: |
Politics > Politics-USA |
| User: |
"" |
| Date: |
29 Oct 2007 07:34:37 AM |
| Object: |
China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/ ) |
China Threatens To Cripple U.S. Economy
Published 10/26/07 by Thomas Heffner - Print Article http://www.economyincrisis.org
China now has accumulated $1.3 trillion of currency reserves, of which
$407 billion are in U.S. treasury bonds. This has happened through
their escalating balance of trade surpluses with America - they sell
to us much more than we sell to them. In the process, China has been
instrumental in putting many of our American manufacturers out of
business.
Now with this huge stockpile of money and the leverage it gives them,
they are threatening to dump these bonds and our U.S. dollar on the
market. If they take this irresponsible action, it would immeasurably
devalue the worth of our money, send the cost of goods skyrocketing,
and cripple our economy.
This condition has been building up for a long time and puts America
in a precarious and vulnerable position, as we have been producing
less each year and have increasingly been surviving on imports.
Most of us don't realize these dramatic changes are taking place.
America is becoming a much different country then it was when you grew
up in it. You will be leaving your children with a legacy that they
had not expected and will be very disappointed with.
These are the issues our political leaders should be attempting to
resolve. We must do something about this now.
Send this article to your congressional representatives and demand
that:
1. A crash program to re industrialize America be developed
2. Free trade agreements with foreign countries are changed to a tit-
for-tat trade policy
3. We create conditions that will allow us to get out of our massive
debts and once again become a productive, self-sustaining nation.
These economic issues affect us all and should take precedence over
present "wedge" issues that are often concocted to gain votes. America
needs a change in direction, and our political representatives need to
start fighting for sound economic policy that supports the American
worker.
.
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| User: "john bates" |
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| Title: Re: China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/ ) |
30 Oct 2007 07:51:17 AM |
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<david_huang2007@hotmail.com> wrote in message
news:1193661277.274336.109940@z9g2000hsf.googlegroups.com...
China Threatens To Cripple U.S. Economy
Published 10/26/07 by Thomas Heffner - Print Article
http://www.economyincrisis.org
China now has accumulated $1.3 trillion of currency reserves, of which
$407 billion are in U.S. treasury bonds. This has happened through
their escalating balance of trade surpluses with America - they sell
to us much more than we sell to them. In the process, China has been
instrumental in putting many of our American manufacturers out of
business.
*** You are either very young or have been buried for the past 40 years.
The US used to make all kinds of goods Radio and TV being two of
them until Japan took over. The Victor Co once American is now JVC
Japanese Victor Co, God knows how many others went the same way.
America used to make a couple of very good cameras Hasselblat an
exceptionally good one but very pricey, and Kodak. Britain also made
a couple. Now nothing - and today, can you count the amount of top
notch cameras Japan makes? I can't. Same goes for TV's and so many
other items.
Sorry, but America today is out of the game. For some crazy reason
those in command have log ago lost the plot, grossly exacerbated by
this last lot, Bush in particular, how the people keep him in power I
don't know.
75% of the economy is driven by buying foreign goods with money
borrowed from the same countries that make the goods bought.
I feel sorry for the working class people of America, but not for the
loan sharks and those greedy types running the big companies and all
those stupid politicians that have gotten you into this mess. A shame
but I don't see many of those staving when the crunch finally comes, soon!
Subprime is now the biggest problem but it is just the start.
Check some of the stats below. China is a drop in the pond. Well a big
drop.
Best wishes. John.
SUM TOTAL DEBT:
a.. Government Debt: $11
TRILLION
b.. Private Debt: $38
TRILLION
c.. Unfunded Debt: $62
TRILLION
Total Debt:
$111 TRILLION
The Fall Out
As the above figures clearly show, debt levels have exploded exponentially.
Soon, just finding the wherewithal to service the debt may prove to be
unmanageable, let alone ever paying it off. The horrid condition of our
financial house is a national disgrace. It is scary to realize individuals
that call themselves professionals have allowed this to happen. Such
reprehensible and irresponsible behavior is irreparable without a complete
overhaul of the monetary and financial systems - or a cleansing by a severe
deflationary or hyperinflationary bloodbath that wipes the slate clean. For
details click on the following link: Scylla & Charybdis: The Scourge of
Mankind.
END
Now with this huge stockpile of money and the leverage it gives them,
they are threatening to dump these bonds and our U.S. dollar on the
market. If they take this irresponsible action, it would immeasurably
devalue the worth of our money, send the cost of goods skyrocketing,
and cripple our economy.
This condition has been building up for a long time and puts America
in a precarious and vulnerable position, as we have been producing
less each year and have increasingly been surviving on imports.
Most of us don't realize these dramatic changes are taking place.
America is becoming a much different country then it was when you grew
up in it. You will be leaving your children with a legacy that they
had not expected and will be very disappointed with.
These are the issues our political leaders should be attempting to
resolve. We must do something about this now.
Send this article to your congressional representatives and demand
that:
1. A crash program to re industrialize America be developed
2. Free trade agreements with foreign countries are changed to a tit-
for-tat trade policy
3. We create conditions that will allow us to get out of our massive
debts and once again become a productive, self-sustaining nation.
These economic issues affect us all and should take precedence over
present "wedge" issues that are often concocted to gain votes. America
needs a change in direction, and our political representatives need to
start fighting for sound economic policy that supports the American
worker.
.
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| User: "GeekBoy" |
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| Title: Re: China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/ ) |
29 Oct 2007 11:17:37 AM |
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<david_huang2007@hotmail.com> wrote in message
news:1193661277.274336.109940@z9g2000hsf.googlegroups.com...
China Threatens To Cripple U.S. Economy
Published 10/26/07 by Thomas Heffner - Print Article
http://www.economyincrisis.org
China now has accumulated $1.3 trillion of currency reserves, of which
$407 billion are in U.S. treasury bonds. This has happened through
their escalating balance of trade surpluses with America - they sell
to us much more than we sell to them. In the process, China has been
instrumental in putting many of our American manufacturers out of
business.
Now with this huge stockpile of money and the leverage it gives them,
they are threatening to dump these bonds and our U.S. dollar on the
market. If they take this irresponsible action, it would immeasurably
devalue the worth of our money, send the cost of goods skyrocketing,
and cripple our economy.
Um....we buy more from China than anyone else.
And a weak dollar means more jobs and exports for the US.
Stay off the troll and kook juice.
This condition has been building up for a long time and puts America
in a precarious and vulnerable position, as we have been producing
less each year and have increasingly been surviving on imports.
Most of us don't realize these dramatic changes are taking place.
America is becoming a much different country then it was when you grew
up in it. You will be leaving your children with a legacy that they
had not expected and will be very disappointed with.
These are the issues our political leaders should be attempting to
resolve. We must do something about this now.
Send this article to your congressional representatives and demand
that:
1. A crash program to re industrialize America be developed
2. Free trade agreements with foreign countries are changed to a tit-
for-tat trade policy
3. We create conditions that will allow us to get out of our massive
debts and once again become a productive, self-sustaining nation.
These economic issues affect us all and should take precedence over
present "wedge" issues that are often concocted to gain votes. America
needs a change in direction, and our political representatives need to
start fighting for sound economic policy that supports the American
worker.
.
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| User: "" |
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| Title: Re: China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/ ) |
29 Oct 2007 11:24:37 AM |
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On Mon, 29 Oct 2007 11:17:37 -0500, "GeekBoy" <geek@g.com> wrote:
Um....we buy more from China than anyone else.
And a weak dollar means more jobs and exports for the US.
Stay off the troll and kook juice.
Unfortunately our manufacturing base has declined precipitously in the
last 10 years, and even much of that is now owned by foreign
corporations.
www.economyincrisis.org
FOREIGN OWNERSHIP OF SELECTED U.S. INDUSTRIES
Industry Percentage Foreign Owned
Sound recording industries 97%
Commodity contracts dealing and brokerage 79%
Motion picture and sound recording industries 75%
Metal ore mining 65%
Motion picture and video industries 64%
Wineries and distilleries 64%
Database, directory, and other publishers 63%
Book publishers 63%
Cement, concrete, lime, and gypsum product 62%
Engine, turbine and power transmission equipment 57%
Rubber product 53%
Nonmetallic mineral product manufacturing 53%
Plastics and rubber products manufacturing 52%
Plastics product 51%
Other insurance related activities 51%
Boiler, tank, and shipping container 50%
Glass and glass product 48%
Coal mining 48%
Sugar and confectionery product 48%
Nonmetallic mineral mining and quarrying 47%
Advertising and related services 41%
Pharmaceutical and medicine 40%
Clay, refractory, and other nonmetallic mineral products 40%
Securities brokerage 38%
Other general purpose machinery 37%
Audio and video equipment mfg and reproducing magnetic and optical
media 36%
Support activities for mining 36%
Soap, cleaning compound, and toilet preparation 32%
Chemical manufacturing 30%
Industrial machinery 30%
Securities, commodity contracts, and other financial investments and
related activities 30%
Other food 29%
Motor vehicles and parts 29%
Machinery manufacturing 28%
Other electrical equipment and component 28%
Securities and commodity exchanges and other financial investment
activities 27%
Architectural, engineering, and related services 26%
Credit card issuing and other consumer credit 26%
Petroleum refineries (including integrated) 25%
Navigational, measuring, electromedical, and control instruments
25%
Petroleum and coal products manufacturing 25%
Transportation equipment manufacturing 25%
Commercial and service industry machinery 25%
Basic chemical 24%
Investment banking and securities dealing 24%
Semiconductor and other electronic component 23%
Paint, coating, and adhesive. 22%
Printing and related support activities 21%
Chemical product and preparation 20%
Iron, steel mills, and steel products 20%
Agriculture, construction, and mining machinery 20%
Publishing industries 20%
Medical equipment and supplies 20%
FOREIGN OWNERSHIP OF MAJOR U.S. INDUSTRIES
Industry Percentage Foreign Owned
Mining 27%
Information 24%
Manufacturing 20%
Professional, scientific, and technical services 20%
Finance and insurance 11%
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| User: "GeekBoy" |
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| Title: Re: China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/ ) |
29 Oct 2007 12:08:33 PM |
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<retrogrouch@comcast.net> wrote in message
news:u32ci39rbov18h2nj0t0enbc5vl9trih8f@4ax.com...
On Mon, 29 Oct 2007 11:17:37 -0500, "GeekBoy" <geek@g.com> wrote:
Um....we buy more from China than anyone else.
And a weak dollar means more jobs and exports for the US.
Stay off the troll and kook juice.
Unfortunately our manufacturing base has declined precipitously in the
last 10 years, and even much of that is now owned by foreign
corporations.
True, but a weak dollar means we can start increasing manufacturing again.
www.economyincrisis.org
FOREIGN OWNERSHIP OF SELECTED U.S. INDUSTRIES
Industry Percentage Foreign Owned
Sound recording industries 97%
Commodity contracts dealing and brokerage 79%
Motion picture and sound recording industries 75%
Metal ore mining 65%
Motion picture and video industries 64%
Wineries and distilleries 64%
Database, directory, and other publishers 63%
Book publishers 63%
Cement, concrete, lime, and gypsum product 62%
Engine, turbine and power transmission equipment 57%
Rubber product 53%
Nonmetallic mineral product manufacturing 53%
Plastics and rubber products manufacturing 52%
Plastics product 51%
Other insurance related activities 51%
Boiler, tank, and shipping container 50%
Glass and glass product 48%
Coal mining 48%
Sugar and confectionery product 48%
Nonmetallic mineral mining and quarrying 47%
Advertising and related services 41%
Pharmaceutical and medicine 40%
Clay, refractory, and other nonmetallic mineral products 40%
Securities brokerage 38%
Other general purpose machinery 37%
Audio and video equipment mfg and reproducing magnetic and optical
media 36%
Support activities for mining 36%
Soap, cleaning compound, and toilet preparation 32%
Chemical manufacturing 30%
Industrial machinery 30%
Securities, commodity contracts, and other financial investments and
related activities 30%
Other food 29%
Motor vehicles and parts 29%
Machinery manufacturing 28%
Other electrical equipment and component 28%
Securities and commodity exchanges and other financial investment
activities 27%
Architectural, engineering, and related services 26%
Credit card issuing and other consumer credit 26%
Petroleum refineries (including integrated) 25%
Navigational, measuring, electromedical, and control instruments
25%
Petroleum and coal products manufacturing 25%
Transportation equipment manufacturing 25%
Commercial and service industry machinery 25%
Basic chemical 24%
Investment banking and securities dealing 24%
Semiconductor and other electronic component 23%
Paint, coating, and adhesive. 22%
Printing and related support activities 21%
Chemical product and preparation 20%
Iron, steel mills, and steel products 20%
Agriculture, construction, and mining machinery 20%
Publishing industries 20%
Medical equipment and supplies 20%
FOREIGN OWNERSHIP OF MAJOR U.S. INDUSTRIES
Industry Percentage Foreign Owned
Mining 27%
Information 24%
Manufacturing 20%
Professional, scientific, and technical services 20%
Finance and insurance 11%
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| User: "" |
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| Title: Re: China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/ ) |
29 Oct 2007 12:12:13 PM |
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On Mon, 29 Oct 2007 12:08:33 -0500, "GeekBoy" <geek@g.com> wrote:
<retrogrouch@comcast.net> wrote in message
news:u32ci39rbov18h2nj0t0enbc5vl9trih8f@4ax.com...
On Mon, 29 Oct 2007 11:17:37 -0500, "GeekBoy" <geek@g.com> wrote:
Um....we buy more from China than anyone else.
And a weak dollar means more jobs and exports for the US.
Stay off the troll and kook juice.
Unfortunately our manufacturing base has declined precipitously in the
last 10 years, and even much of that is now owned by foreign
corporations.
True, but a weak dollar means we can start increasing manufacturing again.
Or at least the foreign companies that have bought up so much of our
manufacturing capability can. ;->
www.economyincrisis.org
FOREIGN OWNERSHIP OF SELECTED U.S. INDUSTRIES
Industry Percentage Foreign Owned
Sound recording industries 97%
Commodity contracts dealing and brokerage 79%
Motion picture and sound recording industries 75%
Metal ore mining 65%
Motion picture and video industries 64%
Wineries and distilleries 64%
Database, directory, and other publishers 63%
Book publishers 63%
Cement, concrete, lime, and gypsum product 62%
Engine, turbine and power transmission equipment 57%
Rubber product 53%
Nonmetallic mineral product manufacturing 53%
Plastics and rubber products manufacturing 52%
Plastics product 51%
Other insurance related activities 51%
Boiler, tank, and shipping container 50%
Glass and glass product 48%
Coal mining 48%
Sugar and confectionery product 48%
Nonmetallic mineral mining and quarrying 47%
Advertising and related services 41%
Pharmaceutical and medicine 40%
Clay, refractory, and other nonmetallic mineral products 40%
Securities brokerage 38%
Other general purpose machinery 37%
Audio and video equipment mfg and reproducing magnetic and optical
media 36%
Support activities for mining 36%
Soap, cleaning compound, and toilet preparation 32%
Chemical manufacturing 30%
Industrial machinery 30%
Securities, commodity contracts, and other financial investments and
related activities 30%
Other food 29%
Motor vehicles and parts 29%
Machinery manufacturing 28%
Other electrical equipment and component 28%
Securities and commodity exchanges and other financial investment
activities 27%
Architectural, engineering, and related services 26%
Credit card issuing and other consumer credit 26%
Petroleum refineries (including integrated) 25%
Navigational, measuring, electromedical, and control instruments
25%
Petroleum and coal products manufacturing 25%
Transportation equipment manufacturing 25%
Commercial and service industry machinery 25%
Basic chemical 24%
Investment banking and securities dealing 24%
Semiconductor and other electronic component 23%
Paint, coating, and adhesive. 22%
Printing and related support activities 21%
Chemical product and preparation 20%
Iron, steel mills, and steel products 20%
Agriculture, construction, and mining machinery 20%
Publishing industries 20%
Medical equipment and supplies 20%
FOREIGN OWNERSHIP OF MAJOR U.S. INDUSTRIES
Industry Percentage Foreign Owned
Mining 27%
Information 24%
Manufacturing 20%
Professional, scientific, and technical services 20%
Finance and insurance 11%
.
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| User: "The Trucker" |
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| Title: Re: China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/ ) |
29 Oct 2007 07:08:42 PM |
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On Mon, 29 Oct 2007 10:12:13 -0700, retrogrouch wrote:
On Mon, 29 Oct 2007 12:08:33 -0500, "GeekBoy" <geek@g.com> wrote:
<retrogrouch@comcast.net> wrote in message
news:u32ci39rbov18h2nj0t0enbc5vl9trih8f@4ax.com...
On Mon, 29 Oct 2007 11:17:37 -0500, "GeekBoy" <geek@g.com> wrote:
Um....we buy more from China than anyone else.
And a weak dollar means more jobs and exports for the US.
Stay off the troll and kook juice.
Unfortunately our manufacturing base has declined precipitously in the
last 10 years, and even much of that is now owned by foreign
corporations.
True, but a weak dollar means we can start increasing manufacturing again.
Or at least the foreign companies that have bought up so much of our
manufacturing capability can. ;->
These global happenings have much impact on how tax policy should be
managed in the United States. Consider that if the corporations and
businesses are foreign owned then the income from those businesses (the
dividend income and capital gain) is flowing to folks outside the tax
jurisdiction of the United States. The government where the OWNER resides
will get the tax proceeds and NOT the United States government. The
income tax seems to have been obsoleted by globalization.
If you think I am full of beans than say so. If not then what would you
suggest as a proper way to fund the world policeman military and all the
rest of the stuff the US government is doing?
www.economyincrisis.org
FOREIGN OWNERSHIP OF SELECTED U.S. INDUSTRIES
Industry Percentage Foreign Owned
Sound recording industries 97%
Commodity contracts dealing and brokerage 79%
Motion picture and sound recording industries 75%
Metal ore mining 65%
Motion picture and video industries 64%
Wineries and distilleries 64%
Database, directory, and other publishers 63%
Book publishers 63%
Cement, concrete, lime, and gypsum product 62%
Engine, turbine and power transmission equipment 57%
Rubber product 53%
Nonmetallic mineral product manufacturing 53%
Plastics and rubber products manufacturing 52%
Plastics product 51%
Other insurance related activities 51%
Boiler, tank, and shipping container 50%
Glass and glass product 48%
Coal mining 48%
Sugar and confectionery product 48%
Nonmetallic mineral mining and quarrying 47%
Advertising and related services 41%
Pharmaceutical and medicine 40%
Clay, refractory, and other nonmetallic mineral products 40%
Securities brokerage 38%
Other general purpose machinery 37%
Audio and video equipment mfg and reproducing magnetic and optical
media 36%
Support activities for mining 36%
Soap, cleaning compound, and toilet preparation 32%
Chemical manufacturing 30%
Industrial machinery 30%
Securities, commodity contracts, and other financial investments and
related activities 30%
Other food 29%
Motor vehicles and parts 29%
Machinery manufacturing 28%
Other electrical equipment and component 28%
Securities and commodity exchanges and other financial investment
activities 27%
Architectural, engineering, and related services 26%
Credit card issuing and other consumer credit 26%
Petroleum refineries (including integrated) 25%
Navigational, measuring, electromedical, and control instruments
25%
Petroleum and coal products manufacturing 25%
Transportation equipment manufacturing 25%
Commercial and service industry machinery 25%
Basic chemical 24%
Investment banking and securities dealing 24%
Semiconductor and other electronic component 23%
Paint, coating, and adhesive. 22%
Printing and related support activities 21%
Chemical product and preparation 20%
Iron, steel mills, and steel products 20%
Agriculture, construction, and mining machinery 20%
Publishing industries 20%
Medical equipment and supplies 20%
FOREIGN OWNERSHIP OF MAJOR U.S. INDUSTRIES
Industry Percentage Foreign Owned
Mining 27%
Information 24%
Manufacturing 20%
Professional, scientific, and technical services 20%
Finance and insurance 11%
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org/extend
.
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| User: "Mark M." |
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| Title: Re: China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/) |
29 Oct 2007 10:23:40 PM |
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The Trucker wrote:
On Mon, 29 Oct 2007 10:12:13 -0700, retrogrouch wrote:
On Mon, 29 Oct 2007 12:08:33 -0500, "GeekBoy" <geek@g.com> wrote:
<retrogrouch@comcast.net> wrote in message
news:u32ci39rbov18h2nj0t0enbc5vl9trih8f@4ax.com...
On Mon, 29 Oct 2007 11:17:37 -0500, "GeekBoy" <geek@g.com> wrote:
Um....we buy more from China than anyone else.
And a weak dollar means more jobs and exports for the US.
Stay off the troll and kook juice.
Unfortunately our manufacturing base has declined precipitously in the
last 10 years, and even much of that is now owned by foreign
corporations.
True, but a weak dollar means we can start increasing manufacturing again.
Or at least the foreign companies that have bought up so much of our
manufacturing capability can. ;->
These global happenings have much impact on how tax policy should be
managed in the United States. Consider that if the corporations and
businesses are foreign owned then the income from those businesses (the
dividend income and capital gain) is flowing to folks outside the tax
jurisdiction of the United States. The government where the OWNER resides
will get the tax proceeds and NOT the United States government. The
income tax seems to have been obsoleted by globalization.
If you think I am full of beans than say so. If not then what would you
suggest as a proper way to fund the world policeman military and all the
rest of the stuff the US government is doing?
Foreign trading partners are paying for the US military, not US taxpayers. When a
Chinese factory sells us widgets they get dollars which they take to their central
bank for exchange. The central bank ends up with a load of dollars they can't get
rid of except to buy US Treasury securities. The US government uses the dollars
from the sale of securities to pay for tanks and planes and other stuff.
See "Super Imperialism - New Edition: The Origin and Fundamentals of U.S. World
Dominance" by Dr. Michael Hudson
http://www.amazon.com/Super-Imperialism-Origin-Fundamentals-Dominance/dp/0745319890
Mark M.
.
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| User: "" |
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| Title: Re: China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/ ) |
29 Oct 2007 11:08:16 PM |
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On Mon, 29 Oct 2007 21:23:40 -0600, "Mark M." <markm@techz.net> wrote:
The Trucker wrote:
On Mon, 29 Oct 2007 10:12:13 -0700, retrogrouch wrote:
On Mon, 29 Oct 2007 12:08:33 -0500, "GeekBoy" <geek@g.com> wrote:
<retrogrouch@comcast.net> wrote in message
news:u32ci39rbov18h2nj0t0enbc5vl9trih8f@4ax.com...
On Mon, 29 Oct 2007 11:17:37 -0500, "GeekBoy" <geek@g.com> wrote:
Um....we buy more from China than anyone else.
And a weak dollar means more jobs and exports for the US.
Stay off the troll and kook juice.
Unfortunately our manufacturing base has declined precipitously in the
last 10 years, and even much of that is now owned by foreign
corporations.
True, but a weak dollar means we can start increasing manufacturing again.
Or at least the foreign companies that have bought up so much of our
manufacturing capability can. ;->
These global happenings have much impact on how tax policy should be
managed in the United States. Consider that if the corporations and
businesses are foreign owned then the income from those businesses (the
dividend income and capital gain) is flowing to folks outside the tax
jurisdiction of the United States. The government where the OWNER resides
will get the tax proceeds and NOT the United States government. The
income tax seems to have been obsoleted by globalization.
If you think I am full of beans than say so. If not then what would you
suggest as a proper way to fund the world policeman military and all the
rest of the stuff the US government is doing?
Foreign trading partners are paying for the US military, not US taxpayers. When a
Chinese factory sells us widgets they get dollars which they take to their central
bank for exchange. The central bank ends up with a load of dollars they can't get
rid of except to buy US Treasury securities. The US government uses the dollars
from the sale of securities to pay for tanks and planes and other stuff.
See "Super Imperialism - New Edition: The Origin and Fundamentals of U.S. World
Dominance" by Dr. Michael Hudson
http://www.amazon.com/Super-Imperialism-Origin-Fundamentals-Dominance/dp/0745319890
More accurately the Chinese are using trade deficit dollar to buy our
treasury bonds and we're paying them the interest on the loans they
are floating us to finance the war.
And they have lots of options of things to do with the trade deficit
dollars and the interest on those treasuries (they hold almost two
trillion dollars now in bonds and cash).
Here's what they're doing:
www.economyincrisis.org
.
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| User: "The Trucker" |
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| Title: Re: China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/ ) |
29 Oct 2007 09:36:15 PM |
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On Mon, 29 Oct 2007 21:23:40 -0600, Mark M. wrote:
The Trucker wrote:
On Mon, 29 Oct 2007 10:12:13 -0700, retrogrouch wrote:
On Mon, 29 Oct 2007 12:08:33 -0500, "GeekBoy" <geek@g.com> wrote:
<retrogrouch@comcast.net> wrote in message
news:u32ci39rbov18h2nj0t0enbc5vl9trih8f@4ax.com...
On Mon, 29 Oct 2007 11:17:37 -0500, "GeekBoy" <geek@g.com> wrote:
Um....we buy more from China than anyone else.
And a weak dollar means more jobs and exports for the US.
Stay off the troll and kook juice.
Unfortunately our manufacturing base has declined precipitously in the
last 10 years, and even much of that is now owned by foreign
corporations.
True, but a weak dollar means we can start increasing manufacturing again.
Or at least the foreign companies that have bought up so much of our
manufacturing capability can. ;->
These global happenings have much impact on how tax policy should be
managed in the United States. Consider that if the corporations and
businesses are foreign owned then the income from those businesses (the
dividend income and capital gain) is flowing to folks outside the tax
jurisdiction of the United States. The government where the OWNER resides
will get the tax proceeds and NOT the United States government. The
income tax seems to have been obsoleted by globalization.
If you think I am full of beans than say so. If not then what would you
suggest as a proper way to fund the world policeman military and all the
rest of the stuff the US government is doing?
Foreign trading partners are paying for the US military, not US taxpayers. When a
Chinese factory sells us widgets they get dollars which they take to their central
bank for exchange. The central bank ends up with a load of dollars they can't get
rid of except to buy US Treasury securities. The US government uses the dollars
from the sale of securities to pay for tanks and planes and other stuff.
See "Super Imperialism - New Edition: The Origin and Fundamentals of U.S. World
Dominance" by Dr. Michael Hudson
http://www.amazon.com/Super-Imperialism-Origin-Fundamentals-Dominance/dp/0745319890
Well Mark, I'm not gonna spend money on a book that tells me what I
already know. My point is that because we offer no goods that will
attract those dollars back into the USA then the Chinese and all the
others have been using the dollars to buy American assets and, yes, those
T-bills are assets that pay interest. The income from the assets will be
non taxable as far as the US gummint is concerned. That leaves the tax
base in the US shrinking. One adverse effect is, of course, that this
means even more taxes must be shifted to wages. That, in turn, increases
the cost of American labor and/or lowers the standard of living for
Americans.
It seems to me that the income tax has outlived its usefulness in the
global economy. Without import duties there is no way to apply a tax to a
foreign owner of American assets. Time for a shift to asset taxation with
an emphasis on land. If the assets are taxed as opposed to the income
then it doesn't matter who owns the assets. The OIL consumption still
needs to be taxed however.
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org/extend
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| User: "Mark M." |
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| Title: Re: China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/) |
29 Oct 2007 10:59:49 PM |
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The Trucker wrote:
On Mon, 29 Oct 2007 21:23:40 -0600, Mark M. wrote:
The Trucker wrote:
On Mon, 29 Oct 2007 10:12:13 -0700, retrogrouch wrote:
On Mon, 29 Oct 2007 12:08:33 -0500, "GeekBoy" <geek@g.com> wrote:
<retrogrouch@comcast.net> wrote in message
news:u32ci39rbov18h2nj0t0enbc5vl9trih8f@4ax.com...
On Mon, 29 Oct 2007 11:17:37 -0500, "GeekBoy" <geek@g.com> wrote:
Um....we buy more from China than anyone else.
And a weak dollar means more jobs and exports for the US.
Stay off the troll and kook juice.
Unfortunately our manufacturing base has declined precipitously in the
last 10 years, and even much of that is now owned by foreign
corporations.
True, but a weak dollar means we can start increasing manufacturing again.
Or at least the foreign companies that have bought up so much of our
manufacturing capability can. ;->
These global happenings have much impact on how tax policy should be
managed in the United States. Consider that if the corporations and
businesses are foreign owned then the income from those businesses (the
dividend income and capital gain) is flowing to folks outside the tax
jurisdiction of the United States. The government where the OWNER resides
will get the tax proceeds and NOT the United States government. The
income tax seems to have been obsoleted by globalization.
If you think I am full of beans than say so. If not then what would you
suggest as a proper way to fund the world policeman military and all the
rest of the stuff the US government is doing?
Foreign trading partners are paying for the US military, not US taxpayers. When a
Chinese factory sells us widgets they get dollars which they take to their central
bank for exchange. The central bank ends up with a load of dollars they can't get
rid of except to buy US Treasury securities. The US government uses the dollars
from the sale of securities to pay for tanks and planes and other stuff.
See "Super Imperialism - New Edition: The Origin and Fundamentals of U.S. World
Dominance" by Dr. Michael Hudson
http://www.amazon.com/Super-Imperialism-Origin-Fundamentals-Dominance/dp/0745319890
Well Mark, I'm not gonna spend money on a book that tells me what I
already know. My point is that because we offer no goods that will
attract those dollars back into the USA then the Chinese and all the
others have been using the dollars to buy American assets and, yes, those
T-bills are assets that pay interest. The income from the assets will be
non taxable as far as the US gummint is concerned. That leaves the tax
base in the US shrinking. One adverse effect is, of course, that this
means even more taxes must be shifted to wages. That, in turn, increases
the cost of American labor and/or lowers the standard of living for
Americans.
Chinese labor is now paying for our federal government expenditure. The Chinese
are the ones getting ripped off. If China dumps its dollars, then American
taxpayers will truly have to pony up for the federal budget. The interest paid to
Chinese Treasury security holders is nothing compared to the cost to our economy
should China sell all those securities off.
Mark M.
It seems to me that the income tax has outlived its usefulness in the
global economy. Without import duties there is no way to apply a tax to a
foreign owner of American assets. Time for a shift to asset taxation with
an emphasis on land. If the assets are taxed as opposed to the income
then it doesn't matter who owns the assets. The OIL consumption still
needs to be taxed however.
.
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| User: "Les Cargill" |
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| Title: Re: China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/) |
01 Nov 2007 09:05:53 PM |
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Mark M. wrote:
The Trucker wrote:
On Mon, 29 Oct 2007 21:23:40 -0600, Mark M. wrote:
<snip>
Chinese labor is now paying for our federal government expenditure.
Did American labor pay for British government expenditure
when cheap American goods flooded British markets ( and the
same debate raged)?
The
Chinese are the ones getting ripped off.
Maybe. Compared to the depravity of the Great Leap Forward, it is
very difficult to say this is bad at all. China has reaped the
fruits of a shockingly conservative worldview, indeed a
worldview that essentially denies the physical world altogether.
Suffering must ensue from that idea. There's simply no
other outcome.
If China dumps its dollars,
Into what?
then American taxpayers will truly have to pony up for the federal
budget.
Fiat currency doesn't suddely vanish. Are the bond prices crashing?
Not even yet. There's no *problem* here....
From Rueters :
http://www.reuters.com/article/bondsNews/idUSN0127858920071101
"U.S. Treasury debt prices rose on Thursday, as safe-haven demand
emerged on an expected weaker opening for the stock market due to
disappointing earnings and worries about more bank writedowns."
The US is , to many people's great dissapontment, still the
copper-bottomed boat in which to place money.
The interest paid to Chinese Treasury security holders is
nothing compared to the cost to our economy should China sell all those
securities off.
Again, sell them to whom? You don't apparently understand how this was
constructed. How do you go about bootstrapping an industrial base? You
parasite off an existing currency - there was significant British
investment in America during its Industrial Revolution.
What's behind all this is the inescapable aroma that "Industrialization
is great for us, but lousy for the Chinese."
The yuan's been disconnected, we're past it now.
Mark M.
<snip>
--
Les Cargill
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| User: "Lysander" |
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| Title: Re: China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/ ) |
01 Nov 2007 09:35:43 PM |
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On Nov 1, 9:05 pm, Les Cargill <lcarg...@cfl.rr.com> wrote:
Mark M. wrote:
The Trucker wrote:
If China dumps its dollars,
Into what?
Might I add why. China is accumulating dollars to keep the dollar
appreciated against the yuan. They influencing demand for dollars and
keeping their currency cheap. Why? Because a cheap yuan makes Chinese
products cheap to Americans and keeps the trade deficit flowing. CHINA
WILL JEOPARDIZE THIS BY DUMPING DOLLARS. They dump the dollars and the
exchange rate of dollars to yaun crashes. THIS IS DISASTROUS FOR
CHINA. Chinese goods would become extremely expensive almost over
night and they could no longer compete in our markets.
The Fed would react by buying back those dollars, selling bonds,
pushing interest rates up. It wouldn't be good for the US but it would
kill the policy of developing trade surpluses that China has worked
very hard to build.
.
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| User: "Les Cargill" |
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| Title: Re: China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/) |
02 Nov 2007 03:56:27 PM |
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Lysander wrote:
On Nov 1, 9:05 pm, Les Cargill <lcarg...@cfl.rr.com> wrote:
Mark M. wrote:
The Trucker wrote:
If China dumps its dollars,
Into what?
Might I add why. China is accumulating dollars to keep the dollar
appreciated against the yuan.
Exactly.
They influencing demand for dollars and
keeping their currency cheap. Why? Because a cheap yuan makes Chinese
products cheap to Americans and keeps the trade deficit flowing. CHINA
WILL JEOPARDIZE THIS BY DUMPING DOLLARS. They dump the dollars and the
exchange rate of dollars to yaun crashes. THIS IS DISASTROUS FOR
CHINA. Chinese goods would become extremely expensive almost over
night and they could no longer compete in our markets.
Yup.
The Fed would react by buying back those dollars, selling bonds,
pushing interest rates up. It wouldn't be good for the US but it would
kill the policy of developing trade surpluses that China has worked
very hard to build.
China's strategy is already in play - they are no longer
the cheapest labor market. They are now outsourcing to even
more deprived regions.
Globalization is like where somebody declares a trade
war and a prosperity breaks out. Big elephants
trample small grasses, but without the attendant growth in
GDP and productivity ( per unit currency ), the world
will be an ugly place.
--
Les Cargill
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| User: "" |
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| Title: Re: China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/ ) |
02 Nov 2007 04:18:54 PM |
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On Nov 2, 3:56 pm, Les Cargill <lcarg...@cfl.rr.com> wrote:
Lysander wrote:
On Nov 1, 9:05 pm, Les Cargill <lcarg...@cfl.rr.com> wrote:
Mark M. wrote:
The Trucker wrote:
If China dumps its dollars,
Into what?
Might I add why. China is accumulating dollars to keep the dollar
appreciated against the yuan.
Exactly.
They influencing demand for dollars and
keeping their currency cheap. Why? Because a cheap yuan makes Chinese
products cheap to Americans and keeps the trade deficit flowing. CHINA
WILL JEOPARDIZE THIS BY DUMPING DOLLARS. They dump the dollars and the
exchange rate of dollars to yaun crashes. THIS IS DISASTROUS FOR
CHINA. Chinese goods would become extremely expensive almost over
night and they could no longer compete in our markets.
Yup.
The Fed would react by buying back those dollars, selling bonds,
pushing interest rates up. It wouldn't be good for the US but it would
kill the policy of developing trade surpluses that China has worked
very hard to build.
China's strategy is already in play - they are no longer
the cheapest labor market. They are now outsourcing to even
more deprived regions.
Globalization is like where somebody declares a trade
war and a prosperity breaks out. Big elephants
trample small grasses, but without the attendant growth in
GDP and productivity ( per unit currency ), the world
will be an ugly place.
--
Les Cargill
of course that is a wild assumption not backed up by any facts. the
true facts are that from 1960-1980 world gdp was over 4% per year.
under globalization world gdp has never exceeded 2.9%, a direct
contradiction to your indoctrinated belief system.
today the world is running away from free trade, and if you took
india and china out of the world growth equasion, there is little or
no growth going on at all. you have to take out india and china
because they practice protectionism. sorry to pop your bubble again.
.
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| User: "Les Cargill" |
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| Title: Re: China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/) |
02 Nov 2007 07:30:45 PM |
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wrote:
On Nov 2, 3:56 pm, Les Cargill <lcarg...@cfl.rr.com> wrote:
Lysander wrote:
On Nov 1, 9:05 pm, Les Cargill <lcarg...@cfl.rr.com> wrote:
Mark M. wrote:
The Trucker wrote:
If China dumps its dollars,
Into what?
Might I add why. China is accumulating dollars to keep the dollar
appreciated against the yuan.
Exactly.
They influencing demand for dollars and
keeping their currency cheap. Why? Because a cheap yuan makes Chinese
products cheap to Americans and keeps the trade deficit flowing. CHINA
WILL JEOPARDIZE THIS BY DUMPING DOLLARS. They dump the dollars and the
exchange rate of dollars to yaun crashes. THIS IS DISASTROUS FOR
CHINA. Chinese goods would become extremely expensive almost over
night and they could no longer compete in our markets.
Yup.
The Fed would react by buying back those dollars, selling bonds,
pushing interest rates up. It wouldn't be good for the US but it would
kill the policy of developing trade surpluses that China has worked
very hard to build.
China's strategy is already in play - they are no longer
the cheapest labor market. They are now outsourcing to even
more deprived regions.
Globalization is like where somebody declares a trade
war and a prosperity breaks out. Big elephants
trample small grasses, but without the attendant growth in
GDP and productivity ( per unit currency ), the world
will be an ugly place.
--
Les Cargill
of course that is a wild assumption not backed up by any facts.
It is backed up hourly everywhere you look.
the
true facts are that from 1960-1980 world gdp was over 4% per year.
under globalization world gdp has never exceeded 2.9%, a direct
contradiction to your indoctrinated belief system.
Try 3.7 % or reveal your source. http://eh.net/hmit/gdp/ is mine -
US only. Remember - the 1960 world was still in reconstruction from
WWII. So my 3.7% is much more representative of what could be expected.
A deviation of 0.8% should surprise nobody.
today the world is running away from free trade,
Yes, it is.
and if you took
india and china out of the world growth equasion, there is little or
no growth going on at all.
Wrong.
you have to take out india and china
because they practice protectionism. sorry to pop your bubble again.
--
Les Cargill
.
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| User: "" |
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| Title: Re: China Threatens To Cripple U.S. Economy (source: http://www.economyincrisis.org/ ) |
02 Nov 2007 09:32:35 PM |
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On Nov 2, 7:30 pm, Les Cargill <lcarg...@cfl.rr.com> wrote:
i am sure you have seen these before. every time you make your wild
claims, i answer you, but here goes.
On Nov 2, 7:30 pm, Les Cargill <lcarg...@cfl.rr.com> wrote:
Vide...@tcq.net wrote:
On Nov 2, 3:56 pm, Les Cargill <lcarg...@cfl.rr.com> wrote:
Lysander wrote:
On Nov 1, 9:05 pm, Les Cargill <lcarg...@cfl.rr.com> wrote:
Mark M. wrote:
The Trucker wrote:
If China dumps its dollars,
Into what?
Might I add why. China is accumulating dollars to keep the dollar
appreciated against the yuan.
Exactly.
They influencing demand for dollars and
keeping their currency cheap. Why? Because a cheap yuan makes Chinese
products cheap to Americans and keeps the trade deficit flowing. CHINA
WILL JEOPARDIZE THIS BY DUMPING DOLLARS. They dump the dollars and the
exchange rate of dollars to yaun crashes. THIS IS DISASTROUS FOR
CHINA. Chinese goods would become extremely expensive almost over
night and they could no longer compete in our markets.
Yup.
The Fed would react by buying back those dollars, selling bonds,
pushing interest rates up. It wouldn't be good for the US but it would
kill the policy of developing trade surpluses that China has worked
very hard to build.
China's strategy is already in play - they are no longer
the cheapest labor market. They are now outsourcing to even
more deprived regions.
Globalization is like where somebody declares a trade
war and a prosperity breaks out. Big elephants
trample small grasses, but without the attendant growth in
GDP and productivity ( per unit currency ), the world
will be an ugly place.
--
Les Cargill
of course that is a wild assumption not backed up by any facts.
It is backed up hourly everywhere you look.
like where, china, india, russia, japan, korea, taiwan? all practice
protectionism. surely not africa, or south america, so where does that
leave?
the
true facts are that from 1960-1980 world gdp was over 4% per year.
under globalization world gdp has never exceeded 2.9%, a direct
contradiction to your indoctrinated belief system.
Try 3.7 % or reveal your source.http://eh.net/hmit/gdp/is mine -
US only. Remember - the 1960 world was still in reconstruction from
WWII. So my 3.7% is much more representative of what could be expected.
A deviation of 0.8% should surprise nobody.
that was for a country, not the world that i see.
today the world is running away from free trade,
Yes, it is.
and rightly so. people would not run away from a wealth machine.
and if you took
india and china out of the world growth equasion, there is little or
no growth going on at all.
Wrong.
right, not wrong.
you have to take out india and china
because they practice protectionism. sorry to pop your bubble again.
you did not challenge the "fact" that china, india, and many other
strong economics practice protectionism, yet you want to lump their
success in with your failures to give the illusion that your fanatical
cult is working. that is disingenuous.
--
Les Cargill
http://www.dissentmagazine.org/article/?article=3D397
Without Consent: Global Capital Mobility and Democracy
By Jeff Faux
Winter 2004
Shortly after he became the first general secretary of the World Trade
Organization, Renato Ruggiero observed, "We are no longer writing the
rules of interaction among separate national economies. We are writing
the constitution of a single global economy."
The word constitution-with its implication of world government-shocked
some international trade officials. Like a reference to sex at a
Victorian dinner table by an otherwise respectable gentleman, it was
resolutely ignored by the business press and the policy academics,
whose public commentary acts as a Greek chorus for what George Soros
so aptly named "free-market fundamentalistism." The WTO, sings the
chorus, is not a constitution. Its purpose is "free trade," an
arrangement that presumably requires less, not more, government.
Yet Ruggiero was simply acknowledging the obvious. Markets are not
found in a state of nature. They are human creations, defined by
enforceable rules. Even the most primitive markets require rules for
what constitutes private property, valid contracts, weights and
measures, and so on. And they always reflect a social contract.
In modern, civilized economies, rules are enforced by public
institutions-legislatures, courts, regulatory agencies, central banks.
The social contract includes protection of labor, the environment, and
public health from the brutalities of unconstrained capitalism.
The precise content of a market's rules has major consequences for who
gets to be rich and who gets to be poor. Therefore, all markets have a
politics. Political science, as a famous American scholar once
observed, is the study of "who gets what."
When markets expand their boundaries, so must the rules. In our own
history, advances in technology, business organization, and westward
migration expanded the U.S. economy from a series of regional markets,
regulated by state governments, to a continental economy regulated
primarily by the federal government. Note that the federal government
did not just impose rules on trade among the states, but market rules
within the states as well. Because we had a Constitution guaranteeing
some form of democracy and a Bill of Rights, the new rules were
subject to public debate. Political parties evolved around class-based
conflicts over land settlement, the gold standard, anti-trust, child
labor, social security, environmental protections, and so forth.
Today, technology, business organization, and migration are
relentlessly expanding markets beyond the capacity of individual
nation-states to regulate them. Because business must have rules, a
constitution for the global market is being written-at the World Trade
Organization, the International Monetary Fund, and the World Bank.
Befitting a world dominated by one superpower, the U.S. Treasury and
the Pentagon play leadership roles. Because there is no prior
framework of democracy or accountability, the new constitution is
being written piecemeal, in secret, and publicly unacknowledged,
except for an occasional slip of the tongue, as in the case of
Ruggiero.
Who Decides?But if all rule-setting generates politics, what are the
politics of the setting of the new rules for the global economy? Who
gets to decide "who gets what?"
To the typical reader of the world's major newspapers or watcher of
the nightly news, the rules for a borderless economy seem to be set by
a sort of parliament of nations, where finance ministers at the IMF,
trade ministers at the WTO, and economic ministers at the World Bank
pursue their national interests. Interestingly enough, the new
constitution is not being written at the United Nations, which is
presumably our principal world legislature.
This notion of "national" interests dominates the language of
globalization. Thus, the reports from the recent WTO meetings in
Cancun speak of U.S. interests vs. Brazil's interests vs. South
Africa's interests, and so on.. . . The implication of this language
is that when George W. Bush or Lula or Thabo Mbeki turns his gaze to
foreign economic affairs, the domestic conflict over "who gets what"
stops at the border.
National interests are then aggregated into international blocs.
Global economic politics is presented as a conflict between rich
countries and poor countries, the North and the South, the producers
of raw materials and the producers of software.
Yet, as the late Michael Harrington once remarked, there are poor
people in rich countries and rich people in poor countries. And just
as politics in an expanding American economy developed around class
and other interests across state lines, a similar process is going on
in the current globalizing economy.
The individuals who negotiate trade and investment agreements and who
sit on the boards of the IMF, the World Bank, and international
financial agencies formally represent different national interests.
But they increasingly act as agents for an international class
interest as well. Globalization has created a global elite-people with
mutual economic interests regardless of nationality. They include the
leaders of multinational corporations and their financiers, their
political partners, and their clients and retainers among the
punditry, the military, the international bureaucracies, and the
academy.
After a speech I gave a few years ago at the Council on Foreign
Relations in New York, a retired State Department official bluntly
underlined the fundamental reality. "What you don't understand," he
said, "is that when we negotiate economic agreements with these poorer
countries, we are negotiating with people from the same class. That
is, people whose interests are like ours."
I call this global governing class the Party of Davos, after the Swiss
site of one of the annual conferences of the global elite. As Adam
Smith reminded us, "People of the same trade seldom meet together,
even for merriment and diversion, but the conversation ends in a
conspiracy against the public." We should expect no less when people
from different countries with the same interests meet at the global
economy's watering holes for merriment, diversion . . . and
conspiracy. It would be odd if it were otherwise. So it should be no
surprise that the rules of the global market written by the Party of
Davos protect and promote the positions of its membership-those who
control large amounts of capital. The rules thus encourage trade
deregulation, privatization, weakening of unions, financial market
liberalization, and a general shredding of the social contract.
This is not to say that the world's governing class is always of
exactly one mind, or that nationality plays no role in the pursuit of
self-interest. Bankers in Miami see the world differently than bankers
in Portland, Oregon. Those in London have a different perspective from
those in Singapore. But when it comes to protecting the generic rights
of capital, the elites of Miami, Portland, London, and Singapore are
united.
Accordingly, issues of concern to other classes are, by joint
agreement, left out of the agendas of the IMF, the WTO, and other
international forums, and therefore out of the concerns of the global
constitution. These include the rights of labor, the protection of the
environment, public health, community stability . . . and of course,
democracy and accountability.
These interests are championed by the minor party in the politics of
global markets. Let us call it the Party of Porto Alegre, the original
Brazilian site of the World Social Forum. This is the party of the
opposition. It includes many labor unions, environmental
organizations, religious and human rights activists, indigenous
groups, and their many sympathizers around the world. They first came
together at the WTO meeting in Seattle in the last weeks of the
twentieth century when they crashed the party of the Party of Davos.
The often bizarre television images that the world sees of the street
activists of the Party of Porto Alegre harassing the Party of Davos
from one meeting of the IMF or the WTO to another are distortions
designed to ridicule any opposition to Davos's hegemony. Yet, the
images do capture an important part of their relationship. The goal of
the Party of Davos is to escape popular constraints on capital and the
goal of the Party of Porto Alegre is to constrain it-making it subject
to democracy and accountability. This is why the constitution of the
new world order is not being written at the United Nations. The UN is
too unwieldy, too transparent, and too susceptible to Porto Alegre-ish
sentiments.
Whatever separate goals its members might pursue, the common agenda of
the Party of Davos is to break the bargaining power of labor. By
labor, I do not mean just labor unions, but the vast majority of the
people on this planet who must work in order to live-from industrial
and service workers in advanced countries to rural laborers and
marginal peasants in the most economically backward corners of the
globe. The bargaining between labor and capital-which takes place
within the firm and in a society's political life-is what makes up the
"social contract" that is required in order to legitimize the unequal
distribution of income, wealth, and power that markets generate.
Still, Davos makes a moral claim. It is that an emphasis on the
distribution of wealth actually makes the poor worse off. In contrast,
says Davos, deregulated capitalism makes for faster economic growth,
and that growth improves life for everyone-especially the poor.
The Davos RecordWe now have been at Davos's neoliberal program for
twenty years, time enough to evaluate this claim. Of course, in a
world of roughly two hundred separate nations and six billion people,
measuring anything on a global scale is very tricky, particularly when
the policies pursued by the different economies have not been uniform.
But some things seem clear.
Most important, after two decades of neoliberalism, global economic
growth has slowed from the previous twenty years. From 1960 to 1980,
world gross domestic product grew at an average rate of 4.6 percent
annually. In the following two decades, under increasing free trade
and deregulation, growth in the world economy slowed to less than 2.9
percent annually. Moreover, those fast-growing countries that provide
the most weight in the aggregate numbers-China and India-were the most
resistant to the advice of the bankers, the international bureaucrats,
and the army of consultants who work for the Party of Davos.
The trends on poverty and inequality are more difficult to sort out.
But it appears that if one eliminates China and India-who represent 38
percent of the world's population-from the calculation, world poverty
has not improved very much. Inequality among nations has certainly
gotten worse. And inequality within nations seems to have increased in
Latin America, Africa, Eastern and Central Europe, Central Asia. All
but five industrialized countries (Denmark, Luxembourg, the
Netherlands, Spain, and Switzerland) saw inequality increase while
France saw no change in inequality. A recent analysis by Christian E.
Weller, Robert E. Scott, and Adam S. Hersh of the Economic Policy
Institute reports that the median income of the richest 10 percent of
the world's people were 70 times that of the poorest 10 percent in
1980, and 122 times in 1999.
Competent scholars argue over these numbers, but one thing is obvious
to all but the hopelessly ideological: the last twenty years have not
produced the surge in living standards that neoliberalism's champions
promised would flow from the liberation of capital from social
constraints and the weakening of the bargaining power of the world's
working people. Even then-World Bank president James Wolfensohn in
1999 was moved to admit, "At the level of people, the system isn't
working," suggesting that there are other "levels" at which the system
is working perfectly well.
The NAFTA ModelOne place to see the process more clearly is here on
our own continent, where in January the North American Free Trade
Agreement (NAFTA) will be ten years old.
Like the WTO, NAFTA does more than just govern trade among its three
members-Canada, Mexico, and the United States. If NAFTA had only been
concerned with free trade, the agreement could have been written on a
few pages. Instead, NAFTA is a thousand-page template for the
constitution of an emerging continental economy.
In fact, NAFTA was a model for the WTO. It is the explicit template
for the proposed Free Trade Agreement of the Americas, the Central
American Free Trade Agreement, and the Asia-Pacific Economic
Cooperation Forum. And it is the inspiration of the economic portion
of the Bush administration's September 2002 National Security
Strategy, openly referred to by its intellectual supporters as an
agenda for "empire."
The vision of economic integration embodied in NAFTA differs from the
vision of the other major model of regional market integration-the
European Union. The development of the EU has been based on the
understanding that common political institutions are the inevitable
consequence of common economies. Every major step of the process was,
and still is, transparent-subject to fiery public debates over the
rules, particularly over the balance between individual rights, local
sovereignty, and market efficiency.
In contrast, the constitution of the single North American market was
merchandized to the citizens and legislators of each of the three
countries as a simple, narrow, stand-alone agreement on foreign trade.
NAFTA does, of course, promote increased trade between Canada, Mexico,
and the United States. Its text lays out a timetable for the
elimination of customs barriers on everything from vegetables to truck
transportation. But it is also as much an investment agreement as a
trade agreement. The document binds each nation to extraordinary
protection of the other member states' investors. It requires
governments to guarantee the repatriation of profits in hard currency.
Its Chapter 11 gives private investors the right to bring suit against
governments over laws that might endanger future profits (defined as
"tantamount to expropriation"). It inhibits efforts by national
governments to liberalize the ownership of intellectual property.
Disputes are settled in secret by tribunals of experts, many of whom
are employed privately as corporate lawyers and consultants.
The result is a framework for the governance of the continental
economy that curtails domestic powers of popularly elected government.
NAFTA restricts the public sector's freedom of action in taxation,
procurement, and capital market policies. Under NAFTA, corporations
have forced state and provincial governments in each country to
rescind environmental regulations. United Parcel Service is currently
charging that Canada's government-owned postal service violates UPS's
NAFTA-given right to provide private mail service. Little by little,
policy proposals in all three nations now must pass the test of
whether they are "NAFTA compatible."
In effect, NAFTA is a constitution that recognizes only one citizen-
the multinational corporate investor. Governments will be punished for
infringing on the rights of investors, whose protection is guaranteed.
But governments may diminish, even abolish, the civil rights of
workers or the claims of the environment with impunity. In contrast to
the detailed protections for investors in NAFTA itself, the fig-leaf
"side agreements" covering labor and the environment are weak and
unenforceable.
Had this formula been proposed as the governing constitution of
Canada, Mexico, or the United States, the electorates of each nation
would have no doubt overwhelmingly rejected it. But, by defining the
debate over its adoption as a dispute between abstract notions of
"free trade" and "protectionism," the promoters of NAFTA diverted
attention from the larger political significance of the agreement.
To be sure, there was protectionist opposition to NAFTA in all three
nations. But the traditional politics of previous trade battles, in
which industrial sectors-including employers, workers, and
communities-
who might lose from freer trade were pitted against industrial sectors
that might win, was muted. The investor protections of NAFTA split off
the interests of large U.S. employers from their workers by allowing
firms to shift production to lower cost Mexico. Thus, U.S. auto firms'
chief executive officers supported the treaty while U.S. auto workers
opposed it.
The conflict over NAFTA thus reflected a new, class-based politics of
trade. The opposition was led not by industrial "losers," but by the
social movements-labor, environmentalists, consumers and nationalists
in all three countries who were alarmed over the potential loss of
national sovereignty and the domestic social contract.
The central claim for NAFTA was Davosian: the agreement would create a
sustained economic boom in Mexico that would more than compensate for
any social costs. One typical prediction, by a U.S. undersecretary of
commerce, was that Mexico would grow, "between a supercharged 6
percent a year, worthy of Asia's tigers, and a startling 12 percent
per year comparable to China's recent economic growth." The growth
would lift the country's poor (more than 40 percent of Mexicans live
on less than $2 a day) into the middle class.
The Mexican boom, in turn, would bring economic benefits to the United
States and, to a lesser extent, Canada. First, the immigration of
undocumented Mexican workers would diminish, if not disappear. In
1990, then-president of Mexico Carlos Salinas asked an American
audience, "Where do you want Mexicans working, in Mexico or in the
United States?" Second, NAFTA would create a new middle-class market
in Mexico for the more expensive goods produced in the United States
and Canada.
NAFTA at TenIt is now painfully obvious that the promise of greater
economic growth was not fulfilled. Over the last ten years, Mexico's
growth has been at best half of what it needs to create enough jobs
for its expanding labor force. Since 2000, Mexico has scarcely grown
at all. The record would have been worse but for the unsustainable
U=2ES. boom in the late 1990s which boosted Mexican exports. Since the
mid-1980s, when the neoliberal reforms began, growth has fallen to
less than a third of the 3.4 percent rate at which Mexico grew in the
years of the 1960s and 1970s-the so-called "bad old days" of
government industrial policies and import substitution.
While the economic benefits fell short, the human and social costs of
the continent-wide reallocation of investment rose dramatically. These
costs included the destruction of livelihood of millions of workers,
particularly in Mexican agricultural labor and U.S. manufacturing. On
both sides of the border, the promises made to these working
populations were abandoned almost as soon as the ink was dry on the
agreement. For example, Mexican farmers were promised that they would
receive generous financial and technical assistance to help them meet
competition from U.S. agribusiness. But after the treaty was signed,
funding for farm programs dropped dramatically. Meanwhile, the U.S.
government massively increased subsidies for corn, wheat, livestock,
dairy products, and other farm products exported to Mexico. This,
"comparative advantage" enabled U.S. agribusiness to drive thousands
of small Mexican farmers out of their own markets. When the displaced
campesinos and their families arrived in nearby cities, few jobs were
waiting. NAFTA concentrated growth along Mexico's northern border,
where the Mexican government keeps unions out so that the maquiladora
factories can process and assemble goods for export to the United
States with workers who are desperate, pliable, and even cheaper than
elsewhere in Mexico. Between 1994 and 2000, maquiladora employment
doubled while employment in the rest of the country stagnated.
In the absence of labor and environmental protections, the expanding
sweatshops of the north created a social and ecological nightmare.
Rural migrants overwhelmed the already inadequate housing, health, and
public-safety infrastructures, spreading shantytowns, pollution, and
crime. Maquiladora managers often hire large numbers of women, whom
they believe are more docile and more dexterous than men at assembly
work. Earnings are typically about $55 a week for forty-five hours-not
enough for survival in an area where acute shortages of basic services
have raised the cost of living. Families break up as men cross the
border in search of jobs, leaving women vulnerable to the social
chaos.
An Amnesty International report on the border town of Ciudad Ju=E1rez,
where hundreds of young women have been killed, quotes the director of
the city's only rape crisis center (annual budget: $4,500): "This city
has become a place to murder and dump women. [Authorities] are not
interested in solving these cases because these women are young and
poor and dispensable."
In the United States, workers were betrayed by major multinational
firms that had assured the U.S. Congress that their interest in NAFTA
was solely in the middle-class Mexican market. Once the agreement was
signed, these same firms began to shift production south of the
border, eliminating hundreds of thousands of jobs in the United States
Clearly, the object of their desire was the low-wage Mexican worker,
not the mythical high-wage Mexican consumer.
The net effect was to undercut wage levels on both sides of the
border. Indeed, despite the shift of manufacturing to Mexico, average
real wages in Mexican manufacturing in January 2003 were some 9
percent below their January 1994 level. No doubt some Mexicans have
benefited from cheaper prices of expensive U.S. and Canadian goods.
But in a country where the poverty rate is above 50 percent, the basic
cost of living for most people seems to have gotten worse. For
example, in December 1994, the minimum wage (currently $4.20 per day)
bought 44.9 pounds of tortillas. Today it buys 18.6 pounds. In
December 1994, it bought 24.5 litres of gas for cooking and heating.
Today it buys seven.
So the dangerous migration across the border continues. "If you're
going to improve your life, you have to go to the United States," said
a neighbor of one of the nineteen undocumented Mexican migrants found
asphyxiated in a Houston-bound truck in May 2003.
The failure of NAFTA to produce sufficient growth to absorb its own
labor force should not have been a surprise. The conventional economic
argument for free trade is not that it promotes growth, but that the
reallocation of capital among the lines of comparative advantage
promotes efficiency gains in the form of lower prices. Freer trade can
produce such gains, but most efforts to measure them consistently
produce small numbers.
Recently, the World Bank estimated that the Doha round agenda would
add roughly $160 billion in static gains-the gains consistent with
free trade theory-to the GDP of the world's developing nations. The
number was used in the chorus of recrimination against the third world
nations for letting the meeting in Canc=FAn fail. Yet, a closer look at
the estimates shows that they completely ignore any costs of
dislocation, unemployment, and the loss of markets by local producers.
Even so, these "gross" gains represent an increase of only 1.5 percent
of GDP by the year 2015. Harvard economist Dani Rodrik has observed
that "no widely accepted model attributes to postwar trade
liberalization more than a tiny fraction of the increased prosperity
of advanced industrial countries."
Frightened by the disputed election of 1988 that almost installed a
leftist president, elites in both countries wanted to make it much
harder for a future populist Mexican government to pursue
redistribution politics. It was a shared objective: inasmuch as the
ownership of assets in a single market is commingled, there is little
practical distinction between the rights of Canadian, U.S., or Mexican
multinational investors. Moreover, NAFTA created new opportunities for
Mexican business elites to broker privatized assets to foreign
investors at enormous profit. For example, an investment group headed
by the well-connected Roberto Hernandez bought Mexico's second largest
commercial bank from the government for $3.1 billion and resold it to
Citicorp for $12.5 billion. Foreign investors now own more than 85
percent of the Mexican banking system, yet credit available to Mexican
business has actually shrunk.
The problem of Mexican growth will not disappear with the revival of
the U.S. economy. Mexico's temporary faster growth in the late 1990s
was a function of an extraordinary boom in the United States that we
now know was unsustainable. With generous injections of fiscal
stimulus, U.S. growth may accelerate for a while, but the chances of a
return to those years of excessive speculation are remote. With the
U=2ES. trade deficit now expanding to worrisome levels, policymakers may
soon be looking for more ways to limit imports. The ominous shifting
of production from Mexican maquiladoras to even lower cost China is
further evidence that the assumption that Mexico's needed growth would
automatically flow from free trade was na=EFve.
In many developing countries, the largest part of Mexico's economic
problem lies not in restricted export markets, but in the stifling
maldistribution of wealth and power that restricts internal growth.
The rich pay hardly any taxes. Despite the image of Mexico as a
country with a strong state, the public revenue is 19 percent of GDP,
compared with the more than 30 percent that the presumably more
conservative American public sector takes.
Seeking an AlternativeThe alternatives thus far presented by the Party
of Porto Alegre seem to be caught in a web of contradictions. For
example, at the same time that demonstrators demand that the IMF and
other world institutions respect local sovereignty and end efforts to
impose the neoliberal model, they demand that a wide variety of their
own rules-independence for indigenous tribes, gender and racial
equality, priority for small farmers, environmental regulations-be
imposed on sovereign nations
Moreover, the Party of Porto Alegre is caught in a Catch-22 situation:
o Social justice requires global political institutions to regulate
the global market
o Global political institutions are dominated by the Party of Davos
o The Party of Davos is hostile to social justice
The Party of Porto Alegre is thus forced back into a defense of
national sovereignty as the only available instrument for achieving
social justice. Yet sovereignty is steadily eroding under the
relentless pressure of global markets. Moreover, nationalist politics
undercut the cross-border cooperation needed to balance the cross-
border political reach of business and finance. Nationalism
perpetuates the myth that national identity is the only factor in
determining whether one wins or loses in the global economy. It
obscures the common interests of working families in all countries
when faced with the alliances of investors that now dominate the
global marketplace.
Still, human rights and social justice will become part of the
"constitution" of the global marketplace only when enough nation-
states demand it. Therefore, the global opposition must pursue a
common global program for working people that reinforces their
national struggles for economic and social equity. Such a program
would support national democratic movements and leaders who understand
that national social contracts cannot be maintained in a global market
that lacks one of its own, and that a global social contract cannot be
established in the absence of effective social democracy at the
national level.
The creation of a true global alternative requires a perspective
through which the interests of workers in all countries are linked. In
a global marketplace, workers' living standards increasingly rise and
fall together. When workers in Brazil win a wage increase, it raises
the bargaining power of workers in Germany. When workers in Indonesia
improve their working conditions, workers in Nigeria benefit.
Likewise, when the social safety net is strengthened in one country it
helps those struggling for human economic and social rights in other
countries as well.
In a world of countries desperate for investment, the development of a
global political movement powerful enough to bring the investor class
to the bargaining table is clearly a long way off. But, with a nod to
Margaret Thatcher, there is no alternative.
I believe that it is time for us to concentrate on a feasible project-
the building of a model of cross-border solidarity among the ordinary
people of our own continent.
A Modest Continental ProposalDespite the failure of NAFTA to deliver
on the promises of its architects, it is here to stay. Every day more
intracontinental connections in finance, marketing, production, and
other business networks are being hardwired for a consolidated North
American market. Almost 70 percent of U.S. imports from Mexico are
within the same firm or related firms producing the same final
product. Ford pick-up trucks are now assembled in Cuautitlan, Mexico,
with engines from Windsor, Ontario, and transmissions from Livonia,
Michigan. Labor markets are relentlessly merging, for professionals as
well as migrant workers.
Post- 9/11 border security concerns in the U.S. slowed down the
process. But commerce will prevail, and is now above pre- 9/11 levels.
Ultimately, the War on Terrorism is more likely to constrict the
political freedoms of North Americans than the freedom of money and
goods to cross their borders.
Moreover, the writing of the North American constitution continues.
Out of the public eye, trigovernmental task forces and committees are
discussing proposals ranging from guest-worker programs to continental
transportation systems and the privatization of Canadian water and
Mexican oil. Think-tanks, new academic institutes, and business
associations are debating ideas about the harmonization of taxes and
regulation, monetary policies, and a single currency. As the former
Canadian ambassador to the United States recently commented, "Few days
go by without new ideas for keeping NAFTA." The shared assumption is
that the necessary political governance of the North American economy
can be achieved by stealth, by grafting new agreements onto the basic
NAFTA framework without stirring up public concerns over sovereignty
and accountability.
But, sooner rather than later, the question of NAFTA's future must
become part of the domestic politics of each nation. We need a process
in which electorates of all three countries share an honest dialogue
over the common future that was denied them in the first NAFTA debate.
In all three countries, the sense that globalization is beyond the
influence of the majority of people has disempowered the public
discussion of how to shape a common future. A focus on the question,
"What do we want North America to look like ten or twenty years from
now?" might be a way to revive that discussion and eventually generate
the basis for a new and more comprehensive bargain among all people of
the three countries.
Shortly after his election, Mexican president Vicente Fox suggested
that NAFTA countries adopt a version of the European Union's program
for investment in poorer areas. Mexico-even more so than the poorest
nations of Western Europe-needs substantial investment in education,
health, and infrastructure to create sufficient jobs for its people.
Fox's proposal was rejected in both Washington and Ottawa. It may be
time to revive that suggestion to create a new Grand Bargain. In
return for long-term financial assistance for Mexico's public
investment, the working people of Canada and the United States would
get an agreement on enforceable labor and environmental standards, so
that as Mexico grows, wage levels and working conditions will rise-
creating a middle-class market in Mexico and preventing the
undercutting of labor standards north of the border. It could also
build a middle-class constituency for modern tax, legal and public
administration systems. The credible prospect of widely shared
prosperity in Mexico that is creating enough jobs for its people
would, in turn, make it easier to achieve a satisfactory accord on
migration.
Debate over a new bargain might also recognize that democracy is
incompatible with Chapter 11 and other NAFTA provisions that undermine
the authority of the local public sector. And it might initiate an
honest effort to apply the principles of sustainability to the
continent's economic growth.
A continent-wide project for economic and social justice has another
great advantage. It could provide a way to work out a model for the
governance of a global economy that reconciles the tension between the
relentless drive of technology to expand the boundaries of the market
and the human needs of a decent society. Focusing on building such a
decent society in our own continental neighborhood could also help
redirect our political energies away from the temptation of global
empire.
Just perhaps, if we could achieve economic integration with social
justice between two first world societies and one third world society
on this continent, we might have something to contribute to the
development of a just and prosperous global society.
Jeff Faux was the founder, and is now Distinguished Fellow, of the
Economic Policy Institute. This article is adapted from a paper
delivered at the Villanova University Conference on Catholic Social
Teaching and Globalization in November 2003.
he West's old Cold War rivals China and
Russia, now operating under authoritarian capitalist, rather than
communist, regimes. Authoritarian capitalist great powers played a
leading role in the international system up until 1945. They have
been
absent since then. But today, they seem poised for a comeback.
http://frontpagemag.com/Articles/ReadArticle.asp?ID=3D28427
The China Fantasy: How Our Leaders Explain Away Chinese Repression
By James Mann
Charm Offensive: How China's Soft Power Is Transforming the World
By Joshua Kurlantzick
Our China policy is based on a social science theory: Rising per
capita GDP inevitably leads to democratic political change. As
incomes
rise, a growing middle class will demand more rights and fewer
restrictions, and have more time to participate in voluntary civic
associations that curb the power of government.
In the case of China, this theory has been articulated emphatically
by
the administrations of Presidents Clinton and George W. Bush as the
premise of our approach to that country: "Trade freely with China and
time is on our side," said candidate Bush in making his case for the
inevitability theory. Earlier, Clinton national security adviser
Sandy
Berger had said something similar: "Just as NAFTA membership
eroded . . . one-party rule in Mexico, WTO membership . . . can help
do the same in China."
But as James Mann's new book argues, there is little evidence that the
democratic inevitability theory is unfolding in China. China has
grown
richer, but it is still authoritarian and repressive. The China
Fantasy is a brave book. Mann takes on what he sees as a self-serving
business, expert, and policy-making elite that is perpetuating an
unsuccessful policy.
Mann reminds us that as late as 2005, there was an increase in state
repression. Political dissidents, lawyers, and activists have been
detained or placed under house arrest. There has been a crackdown on
what is allowed to be communicated via the Internet. China holds tens
of thousands of political prisoners. Peasants and workers challenging
the existing order were subjected to violence at the hands of hired
thugs. In addition, the Chinese Communist party cracked down on NGO
activity.
And yet, Mann says, we are told by policymakers, the elite press,
Sinologists, and business leaders that we need only be patient:
Political reform is coming to China. He calls this conventional
wisdom, the "Soothing Scenario." But there are other scenarios that
are less soothing: One is a scenario of instability, the other a
China
that grows richer through trade but is no less authoritarian. Mann
believes the latter to be most likely.
This book is brave because Mann names names: Thomas Friedman peddles
the Soothing Scenario, as has Richard Haass, president of the Council
on Foreign Relations. Cisco, Google, Yahoo, and Microsoft have
cooperated with China's efforts at Internet censorship. Most China
experts support and believe in the Soothing Scenario, and engage in a
"lexicon of dismissal" of those who question whether an engagement
policy will lead to a democratic China. Such dissenters are
"provocative" or "ideological" for pointing out Beijing's manifold
human rights abuses.
To complicate matters further, there are financial incentives for
propagating the Soothing Scenario: Berger, Madeleine Albright, Carla
Hills, and the prominent Sinologist Kenneth Lieberthal all consult on
behalf of clients doing business in China. And the Communist party
punishes those who criticize, making dissent bad for business.
Mann usefully explains why Sinology is prone to a particular kind of
conventional wisdom. Today's China hands came of age at an exciting
time, just as China was opening to the world and Sino-American
relations were improving. At the same time, many American Sinologists
still retained memories of the McCarthy era. This generational
coming-
of-age has led to the following dynamic: a belief that life in China
has vastly improved since the Cultural Revolution (undoubtedly true)
and that radicals in and around Congress could, at any time, engage in
McCarthy-like demagoguery and freeze China relations once again.
Every discipline has its historical and political baggage that
creates
distortions, and China Studies is no different. Mann offers an
important insight as to why the China field seems to be prone to
impulses and attitudes that may not be serving China policy well, and
convincingly explains why the inevitability theory is, indeed, a
fantasy. Many observers look at the successful political transitions
of Taiwan and South Korea and believe China will follow a similar
pattern. But they ignore important differences. Though it is true
that
Taiwan had developed what Seymour Martin Lipset termed the social,
economic, and cultural prerequisites for democracy, it also faced
tremendous pressure to change from its American security guarantor.
But Washington never really had much leverage with China, and has
even
less as the People's Republic grows richer and stronger. Moreover,
for
the democratic inevitability theory to work, a country needs a
substantial urban middle class. China's urban middle class is a tiny
proportion of the country: There are some 800-900 million peasants in
China. China's 10 biggest cities have a population of 62 million
people, or 5 percent of the population. The small urban elite has
done
well under the Communist party and may, in fact, be afraid of
democracy in China.
What if a Chinese government had to be responsive to the desires of
the vast majority of the Chinese population? A coalition of the rich
and the powerful may be working hard against the establishment of
democracy in China.
So, Mann argues, the most likely scenario for China may not be
soothing at all: an authoritarian, rich, and powerful country. And
why
does that matter for Washington? Because | | | | | | | | | | | | | | |
