We are seeing some trade wars brewing as American trade deficits mount and the money flows moving to China. We see OPEC manipulating our supply a tad and China’s thirst for oil increasing, thus furthering the supply issues. We must keep our trading partners and play on a balanced field to keep peace in the world. When playing fields are tiled feathers get ruffled and history shows the unfortunate possibilities that can ensue.
The Germans before WWII used the trade payments as a tool and established a bureaucracy to slow out flow, while collecting the inflow of goods, thus insuring it owed money and therefore existing trading partners would not want to go against them for fear they might not be paid. Literally becoming a cancer or parasite on the out flow of money or on the flow the float. Often still countries attempt to manipulate flow. Trade organizations are set up to keep flows fair and products and goods flowing so no one trading partner can hurt another. When the parasites of flow attack and manipulate the flow of trade whether in or out they do so at the expense of the people and business, jobs and families of their trading partners. This is why in WWII, the Japanese literally felt as if the act of war was the US, not their attack on us at Pearl Harbor. The world is still not perfect. Today we find China manipulating currency to get an edge. Tying their currency to the dollar, even though their growth is 8% higher and has been and probably will be for some time. Meanwhile China is stealing technology or we are secretly giving it. For instance their satellite programs and recent man in space, all US technology. Stealing of the P-3 and the problems at Los Alamos where secret scientific research was collected and then the spy for sex FBI scandal. The FBI knows of many spy groups in Silicon Valley collecting information as fast as it comes out. Our trade deficit with China today is a hundred Billion annually. And we figure 2.7 million jobs have ended up there. China also owed in 2002 88 Billion in US Treasury notes to hedge against their undervalued and manipulated currency, all this very interesting. The Japanese come to America with trade delegations and take pictures of every thing we make. Stealing technology and taking information from niche manufacturers of components, then copy the stuff and manufacturer it there. Problems of piracy are on a grand scale, but the PTO in the US favors the foreign competitors who scan thousands of inventions per day and take and make the stuff there in other countries; all US based technology.
There is so much disclosure in America forced onto American public and even private companies that a corporate intelligence gatherer has little trouble in finding anything they might want. For every dollar of products we sell in China, they sell six dollars here. Industries like plastics, toys, electronics, heavy equipment parts, shoes, junky trinkets, aerospace parts, semi-conductor components for computers. It is a huge issue. And with 3.5 billion people to employ, before that thirst is satisfied there is no end in sight or possibility of their labor source balancing out with unions or supply and demand issues to drive the labor costs up anywhere near that of the US. The average worker there could cost as much as $1200.00 per year there, here try above $24,000.00 . Shipping the products half way around the world also irrelevant considering the low labor costs. To compete our companies are hiring them to make the stuff there, costing jobs here, but in the end staying in business. Why are companies here doing this? Well unions, lawyers, regulations all drive up costs of production and make efficiency rather irrelevant.
Some condemn China for working in their own best interests, yet we really cannot fault them for that. We would do the same thing, to protect our best interests. Any nation would. The real problem is that we are attacking our capitalists, entrepreneurs and corporations with burdensome regulations and we keep piling them on day after day, week after week, year after year. OSHA rules are 57 stories high if you stack the pages on top of each other. You can buy a copy, it comes of FIVE CD ROMS? What about Elliot Spitzer in his rule interpretation of the day or his market sector attack of the week? The SEC admits it made a new regulation every 6.7 days in all of 2004. Let’s talk about Sarbaines Oxley? SOX they call it. Industry has called for government to follow SOX and the OMB and GAO originally agreed and then reconsidered; “If the government follows the Sarbaines Oxley Standards it would be shut down.” Really? Interesting isn’t it?
The fact is that the United States is it’s own worst enemy to our own future and competitive position in the world. It is true that China should stop infringing on our patents and trademarks and do it’s own homework, but more so the real issue is the fact that we expect our entrepreneurs and corporations to compete with our hands tied behind our back. Think about it.
“Lance Winslow” – If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs