The New York Times came out recently with an essay supporting the role of government to pay people money if they get displaced by offshoring. The idea is catching on. This sounds compassionate but it’s like the guy spreading the plague offering you a band aid for your bleeding boils. The government’s trade policy has […]
The New York Times came out recently with an essay supporting the role of government to pay people money if they get displaced by offshoring. The idea is catching on. This sounds compassionate but it’s like the guy spreading the plague offering you a band aid for your bleeding boils. The government’s trade policy has created an employment/wage nightmare and no one should suggest that they be let off the hook by extending your unemployment insurance and food stamps. (- not to mention that it’s a budgetary lose lose)
The problem is that Chinese exports are massively subsidized. The knowledge that (virtually) free labor exists in China infects the mindset of all executives and US workers. We have to equally subsidize our exports to them. If they block our exports then, , we have to shut it down – unless we enjoy sinking into a permanent downward wage spiral. Does anyone still think that laid off workers will someday move on to other high paying jobs after some modest transition period?
The political class has been sold the idea that China is marvelous because multinationals can make cheap stuff for US consumers over there. They thought the whole thing would be a win win – lots of multinational campaign contributions and happy voters who can get really cheap flat screens. Clearly part two is over (as Donald Trump has discovered) and a part of the multinational dream is fading. “We” thought that all those Chinese plants would allow us to sell “our” stuff in China, to the 300 million Chinese who make more than $10/hour. How’s that turning out?
I wrote in July 2014 that Apple must know that they would never be allowed to sell their stuff in China. There are many companies who have been shut down before them (Google, AMD, IBM, Microsoft, Cisco) . Apple was living on borrowed time. Here’s how the NY Times put it:
It’s time to abandon certain words that have become pervasive for no good reason:
- Folks – all people/voters/ISIS members/NPR listeners are not “folks”. Folks are ”
- On the ground – allow me to assume that all international reporters and army men are on the ground. If they happen to be floating in the air then I expect you to mention it.
- Free Trade .. all evidence from the past 20 years has exposed that most trade is anything but free. Trade deals are thousands of pages long (even NAFTA) . Goods may travel on the open seas freely but there are surcharges, subsidies, and quotas everywhere and they are very unevenly distributed. If you can show me a trade deal where the US runs a (larger) surplus after the deal then we can use this ridiculous term – otherwise, its use must be restricted to the pages of economics text books.
The Wall Street Journal has another article describing the huge demand for skilled workers coming primarily from the technology sector. (Go Here). The shortage is so severe that the government is instituting a special lottery to help out all those poor companies that just can’t get any work done.
If the cost of an imported […]Continue reading →
Many years ago I had a good friend (Bob) who was a high end real estate salesman in Connecticut. He didn’t have a fancy education and never got the respect of local investment bankers or doctors but he didn’t care. It brought in good money with relatively little stress and left him lots of free time for […]Continue reading →
It’s much easier for Hollywood to play to existing tastes and beliefs than to create new ones. It’s hard to be a trend setter. Donald Trump knows this as well as anyone. He is not a leader, he just morphs into the crowd that has been prepped by Rush and Glen. Someone was bound to go […]Continue reading →
We all know the saying: “If you’re young and conservative you have no heart; If you’re old and liberal you have no money.” Millennials are not doing some of the things that previous generations of young people used to do – they (virtually) don’t get married, they don’t buy houses, apartments, or cars and they […]Continue reading →
I’ve described the Apple Computer method of generating extraordinary profits:
Make everything in the third world. Sell everything you can in the first world. Depend on other entities to pay those buyers first world wages. Pay your own first world workers as little as possible, regardless of profitability.
This has worked like a dream and […]Continue reading →
So we hear that our giant blood inflated parasite has a cold or it may be worse – a disease based on corruption. Will any of this reduce its need to suck our (economic) blood – hardly. If anything it makes China scared so it devalues its currency, thereby opening up the vein a little more.
If […]Continue reading →
The Paris climate talks ended with no agreement of any kind – none. The “deal” is to allow every country to set its own happy level of CO2 emissions. Isn’t that friendly? Go ahead China, India, America – knock yourself out. Pollute away. There are voluntary guidelines and NO penalties.
This is of course no different […]Continue reading →
We saw something this week that we have never seen before: GM announced that it will import the first 100% Chinese made car. It’s the Buick Envision.
GM is, as you might remember, the car company that survived the 2008 economic meltdown only by virtue of government money. Now that money is being used to […]Continue reading →
The Rabid Independent
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