Thursday, 12 September 2019 15:47

China trade war, moral and economic

Ask yourself if you were President, what would you do if you discovered that a foreign country has been waging an underground war against the nation you are sworn to protect surreptitiously killing tens of thousands of your people every year by pouring a drug so deadly that merely accidentally touching a small amount could kill you?

What would you do if you discovered that the same country had been engaging in economic warfare against your country designed to emasculate critical industries, gain control of the mining of critical rare earth minerals used in military manufacturing and manipulating your currency on the world market to ensure that key domestic manufactured goods could not compete on the international market?

And what would you do if you were to discover that this same country was stealing the intellectual property created in your country through forced technology transfers, industrial and government spying and outright theft of individual and company’s patent protections, with this stolen creativity fueling their dynamic economic growth?

If your answer is nothing, then you are at some level describing how the United States government had been responding to China since at least the late 1980s.  Some, like the George H.W. Bush and Bill Clinton administrations attempted to deal with currency manipulation, when the Treasury pegged it as a manipulator between 1992 and 1994, and later the U.S. administrations would also try to stop technology transfers to China, but ultimately their attempts failed because they weren’t willing to create a meaningful cost to the Chinese government.

The resulting opiate and economic hollowing out crisis is what led to Middle America to embrace a Donald Trump presidency.  America lost faith that traditional leaders would fight for their interests and Trump promised them that he would put America (them) first when dealing with Washington, D.C. and the rest of the world.

So when President Donald Trump took the oath of office to the Presidency of the United States and pledged with his hand on the Bible he pledged, “I do solemnly swear (or affirm) that I will faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States,” much of America took heart because for the first time in a long time, they believed that he meant it.

Not being a politician who was steeped in the mythology that somehow China was going to forego thousands of years of history and suddenly transform into a western, capitalist republic similar to Japan’s forced Post World War II conversion, President Trump looked at China through a different lens.

President Trump went to Beijing and was quoted as bluntly stating to Chinese President Xi, “I don’t blame China. After all, who can blame a country for being able to take advantage of another country to the benefit of its citizens? But in actuality, I do blame past [U.S.] administrations for allowing this out-of-control trade deficit to take place and to grow. We have to fix this because it just doesn’t work for our great American companies and it doesn’t work for our great American workers. It is just not sustainable.”

While many in the media and elsewhere focused upon President Trump’s seemingly giving China a pass for being a bad economic actor, in reality, he was announcing to China and the world, that there was a new sheriff in town and the on-going hollowing out of our nation’s manufacturing sector would no longer be accepted.

Now, almost three years into Trump’s first term, the President has prioritized four items when dealing with China: stopping fentanyl from China; protecting intellectual property rights; stopping Chinese currency manipulation and normalizing tariffs between the two countries.

Incredibly, publications like Bloomberg, which are supposed to be financial in nature, are publishing articles like: U.S. and China got in a trade war and Mexico won demonstrating that they have little understanding of what is at stake either economically or strategically.

First and foremost, those Chinese apologists who believe that someday the communist Chinese government will suddenly reform into good little capitalists and democrats because we are making them incredibly wealthy are dangerously wrong.  China has been engaged in an on-going war against the United States for more than twenty years, enabled by open economic borders types who argue that we should ignore that Chinese slaves are making our apparel, plastic junk and yes many of our electronics and their internal components, because the low labor costs drive our prices down.

Importing slave made finished goods is no different than importing cotton for the mills before the Civil War more than 150 years ago, it is astonishing that anyone in modern America would make this argument, yet unwittingly that is exactly what the open economic borders globalists do.

It also cannot be missed that President Trump has engaged his Chinese counterpart more on the fentanyl import issue than any other.  Opioid addiction is hollowing out our nation.  It knows no economic class or race.  Opioids are so addictive that virtually anyone can become controlled by the desire to attain them.  And yes, many people die, almost 70,000 a year, from opioids — 30,000 of these directly from fentanyl — which arrived in American bloodstreams straight from China.

Chinese President Xi promised to crack down on the fentanyl trade and his government did recently make it a regulated controlled substance.  Xi has promised time and again to stop the fentanyl flow, and yet, just last week, the Mexican Navy interdicted a shipment of 25 tons of fentanyl directly from Shanghai on order from the Sinaloa Cartel which was planning on hotlining it into our nation using their various border crossing routes that some in our nation don’t believe should be shut down.

Unlike an American president, the president of China and his government controls all economic activity including the shipping from China’s ports.  The Lazaro Cardenas port where the drugs were seized is Mexico’s largest port and has, off and on, been controlled by the Sinaloa drug cartel. Given the Chinese government’s relatively iron-fisted control, it is more likely than unlikely that they were directly involved in pushing this poison onto the streets with their Sinaloa partners.

A simple understanding of how China lost the first and second Opium Wars to the British in the mid-1800s, is enough to explain why the Xi regime views the destruction of America by attacking the soul of our nation through the same addiction that many believe took China 100 years to recover. And in their wake, they leave millions of broken people and tens of thousands dead each year.

If 30,000 dead Americans each year due to Chinese fentanyl and the burden of supporting human slavery don’t fully make the moral case for changing our fundamental relationship with China, then the theft of intellectual property might.  America uses the best research university and government laboratory systems in the world to create the science which will drive the 21st century world.  And then China either steals or purchases the ideas flipping them into products that they sell back to the U.S. at ten cents on the dollar.  Meanwhile the critical applied sciences manufacturing sector that will determine which country will lead the 21st century ends up in China, as it doesn’t make economic sense to make it in the United States.

It is this last point that head in the sand conservative globalists fundamentally don’t understand.  So, here is the point — when a company decides that it makes more sense to make a product in Mexico, Japan, Vietnam, South Korea, India or Australia to export to the U.S. rather than China, it is a win.  China’s manufacturing sector is diminished and more importantly, the U.S. has supply lines for crucial products outside of the Middle Kingdom.

When Bloomberg declares that Mexico is the winner in the trade war, that means that the United States wins on multiple fronts.  As stated in the paragraph above, Mexican supply lines are secure, which benefits the U.S. consumer.  Also, as China has to compete with other countries to supply goods to the world, suddenly there is real leverage against the Xi government to crack down on fentanyl production and trade, in exchange for more favorable tariff rates.

And it should not be forgotten that it is in the United States’ interest for the Mexican economy to be healthy as a strong Mexican economy is the most natural barrier against illegal entry into the U.S. of all.

Winning the trade war is not only about transferring manufacturing from China to the U.S., it is about ending China’s opium war on the U.S, its role as a virtual sole source provider, and diversifying the markets which serve the United States.  On that front, the Chinese are clearly losing and the U.S. is winning (along with other economies like Mexico).

Diversifying trading partners also allows U.S. consumers a choice. If you are upset that Chinese Christians are jailed for simply having a Bible, say no to products made in China.  Upset about the forced organ donations those in concentration camps, the Trump trade war is giving you a “not made in China choice.”

While the market is not moral per se, it is made up of hundreds of millions of transactions by people who are.  And by providing a “not made in China” option, President Trump is allowing those choices to have a moral component.

Because ultimately, the so-called trade war by President Trump is a moral and economic fight for the future of the world.  It is just sad that so many very smart people are so divorced from any sense of morality, that they cannot see it for themselves without having it explained in explicit terms.

 

Rick Manning is the President of Americans for Limited Government and a guest contributor to pennypress.com: the conservative voice of Nevada. His views and opinions are his own. This article was originally published at pennypress.com and has been reprinted with permission. 

Published in Opinion

Gee, the Chinese seem to want a trade war.

 

That should raise the blood pressure of the Chicago School of Economics students.

 

Why should you care?

 

The truth is that the Democrats want you to care only because they sense a vulnerability they might be able to exploit in the 2020 election.  Of course, what they know about business you could stuff in a thimble and still have room for the 20 mental midgets who want a chance to get the losing party’s nomination.  Elizabeth Warren indeed.

 

If you were to add the IQ of the 20 candidates for the Democrat nomination together, it would not equal one American steelworker—and it is not my intention to insult steelworkers.

 

The other reason one might care is that your really cheap flat screen TVs will have to be made in Korea or Viet Nam in the future.

 

Here’s the fact.

 

China has been ripping us off since President Nixon went to China.  We’re the bank they have been robbing.  If we catch a cold, they get pneumonia.

 

They tax the hell out of our manufacturers one way or another, they keep their markets essentially closed to us and they steal our intellectual property.  And we’re supposed to allow them to continue?  Their next step is to try and replace the dollar as a primary currency.

 

The truth is that a little pain—slightly more expensive cheap Chinese crap, as an example—probably won’t hurt us.

 

In case you haven’t seen past the Shepard Smiths and Rachel Maddows of the world, things are pretty good right now for the middle class.  However, economic hucksters on cable tv would like you to think we’re headed to 2008 all over again.  Remember, when the market drops 700 points in one day, they get more viewers.  

 

Of course, in 2008, crooks on Wall Street and crooks on Main Street had been deliberately making crappy home loans, packaging them up as securities, selling those securities to each other and betting against them.

 

When it all blew up, they turned to us, the taxpayers, for a bailout and got it.  That solved Wall Street’s problem.

 

But on Main Street, the credit markets seized and millions of people found themselves with mortgages worth more than their houses because the market values of those houses crashed.  Those with incomes could power through.  Those who got loans which nobody in their right minds would have made, got evicted.  And it represented a great buying opportunity for those who got bailed out.

 

Fast forward to today.

 

We have a real businessman in the White House—not a community organizer.

 

If Goldman Sachs and their buddies came to Donald Trump for a bail-out, they might get it but the terms would be much more onerous than the days when Barack Obama was there.  Think of our President as negotiating for US in such a situation.  We’ve never been in such good hands.

 

Now is not a good time for Wall Street to come begging.

 

So, they won’t.  They will keep things under control.

 

There will be no securitization of NINJA (no income, no job or assets) loans like lenders were encouraged to make before 2008.

 

When you see the amateur economists—like the people responsible for the last crash—predicting another economic crash, remember two things.

 

One is that we can develop new markets for our exports.  

 

Second, Chinas’ biggest market is us.

 

As far as China goes, how can they replace us?  Especially if we stick with the President in keeping the pressure on.

 

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Fred Weinberg is a columnist and the CEO of USA Radio Network. His views and opinions are his own and do not necessarily reflect the opinions of GCN. Fred's weekly column can be read all over the internet. You can subscribe at www.pennypressnv.com. His column has been reprinted in full, with permission. 

 

 

 

Published in Opinion

I have a question for those screamers who claim to be students of the Chicago School of Economics. Or have a gig at one of the business television networks.

 

What part of the Bill of Rights says “Congress shall make no law or allow no tariff abridging the right of citizens to gather at Walmart and buy cheap Chinese crap”?

 

To listen to most of the folks on CNBC, Fox Business and Bloomberg, you’d think they replaced the Second Amendment with that.

 

I’ve been in business, negotiating deals, for most of my adult life.  A bad deal is when you memorialize being taken advantage of.  A good deal is when all parties to the deal get something they want.

 

Our trade deal— from the beginning of modern time to date—with China can generously be called a bad deal.

 

Apparently we want the cheapest flat screen television sets so badly we’re willing to give up our rights to sell stuff in China to get them.  And if President Trump thinks that’s a bad deal and wants to impose tariffs to correct it, the companies importing and selling those sets scream that the American consumer is going to take a beating.  As opposed to the American worker, who of course, are one and the same.

 

Then, when it all is sorted out by the Wall Street Journal, that beating appears to be about $800 a year per family.  And, keep in mind that the Journal is also populated by many of the same screamers on TV.

 

The big weekend story was that Apple could be hurt because most of its products are assembled in China.

 

As an iPhone user (in fact, I use just about every Apple product except the Mac) my humble suggestion to Apple CEO Tim Cook would be build your products in, say, Viet Nam or, here’s a real idea: how about Minnesota, down the street from where Mike Lindell makes My Pillows?  No matter how much you say the words multi-national, living in Cupertino has to be nicer and more efficient than Beijing.

 

At some point you have to realize that the word “nationalism” is not a four letter word.

 

Steve Jobs and Bill Gates started their companies because you can do that in the United States.  They expanded to markets like China in a search for new markets.

 

And, let me tell you a little about our “friends” in China.  They owe me and millions of other Americans millions of dollars in defaulted bonds which their government doesn’t want to pay.  Those bonds were issued before China became Red China and many of us either bought them or inherited them.  (You can read about that at the American Bondholders Foundationhttp://www.americanbondholdersfoundation.com)  They were sold by Wall Street firms who today are still selling Chinese debt.

 

So, I’m not very sympathetic to the words “trade war” because I doubt that the Chinese have the economic muscle to cause us much pain—not nearly as much as the folks on business TV would like us to believe.

 

Simply put, President Trump is right and these guys are wrong.  After all, God, it is said, invented Economists to make Astrologers look good.

 

And if it costs us $800 a year per family—or even significantly more—to make that point to the leaders of Red China, buy less cheap Chinese crap and more stuff made in America.  It will strengthen our hand and, in the long term, make our lives better.

 

Trump advisor Larry Kudlow explained the issues very succinctly to Chris Wallace on Fox News Sunday.  “Intellectual property theft has to be fixed. Forced technology transfer and ownership of American companies has to be fixed. Cyber interventions have to be fixed. Tariff and nontariff barriers have to be fixed. And there have to be very, very strong enforcement provisions.”

 

To say that none of this is worth taking strong steps like tariffs is exactly like the Democrat House saying that there’s no crisis on the border.

 

This President fixes things.  The Chinese aren’t used to dealing with a President who fixes things.

 

They will learn soon enough.

 

In the meantime, while they are dancing, pay attention to Kudlow’s observation about that, “Some of the Chinese officials have said the agreement was too unbalanced.  No.  The relationship has been too unbalanced and because of these problems of unfair and sometimes unlawful trading practice, we have to have a very strong agreement to correct, to right, these wrongs before we would be satisfied.”

 

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Fred Weinberg is a columnist and the CEO of USA Radio Network. His views and opinions, if expressed, are his own and do not necessarily reflect the opinions of GCN. Fred's weekly column can be read all over the internet. You can subscribe at www.pennypressnv.com. His column has been reprinted in full, with permission. 

Published in Opinion

If you think the American economy is booming now, just think what it would be like if American collegians had an extra $1.5 billion to spend—especially with President Donald Trump’s tariffs set to raise the prices of imported consumer goods despite he and his administration saying the tariffs won’t result in price hikes.

 

Well, if prices aren’t increasing, tariffs aren’t working. The point of a tariff is to make locally produced products more attractive to local consumers by raising the price of imported alternatives. This, in theory, would result in more local production and fewer imports. But a tariff is paid by the importer of a product, not the exporter. So the 25-percent tariff Trump recently leveled on Chinese imports is transferred to the American consumers of those goods, not the Chinese producers.

 

The trade war isn’t taking money out of the pockets of Chinese manufacturers; it’s taking money out of the pockets of American consumers of Chinese products and Chinese consumers of American products. And since the United States runs a $375 billion trade deficit with China, the only way Trump can “win” his trade war is if Chinese economists can’t do the math to match Trump’s tariffs dollar-for-dollar. It’s even becoming more likely trade with China ends altogether. China has already cancelled planned trade talks with Trump.

 

It is impossible for America to run a trade surplus with China because China produces more products Americans consider essential than America produces for the Chinese, including car, computer and mobile phone components. It’s lower labor costs and Americans’ addiction to consumption allow China to perpetually have the upper hand in a trade war. If an iPhone were made entirely in America, it would cost as much as a brand new car, so while Trump might be making some American-made products more attractive to American consumers, he’s doing so at the expense of American consumers who can’t do without many of the Chinese imports found in their technology and automobiles. Even the Tesla Model 3 can only be 95-percent American-made at most.

 

Since Americans will be paying more for computers, mobile devices and cars, it’s not entirely unreasonable to forgive the $1.5 billion in student loan debt and allow those accepted into college two years of college education free of charge. Students and parents are going to pay more for the devices required to attend college, and colleges are going to pay more for them as well, which will be reflected in tuition costs, which will further increase student loan debt while decreasing consumers’ available income for spending in the American economy, potentially sinking the stock market.

 

There are other reasons besides boosting the economy for the government to payoff student loan debt. First, today’s Associate’s degree, usually obtained in two years at a community college, is the equivalent of a 1980s high school diploma. Advances in technology have made working in what is now a global economy much more complicated and necessitates further education be obtained. Students are not leaving high school with the education necessary to provide for themselves let alone a family, and it’s not their fault.

 

Secondly, with 17 states offering tuition-free college programs, the trend seems to be students at least delaying the accumulation of student loan debt for two years, potentially lowering accrued interest as well as principal loan balances. In short, future college students in the United States will be saddled with considerably less student loan debt than current and past college students. Meanwhile, entire generations (and student loan debt does span generations), are suffering student loan debt and unable to stimulate the American economy by spending money on anything but debt and living expenses.

 

Finally, the collective credit rating of American college students, past, present and future, would receive a boost that could spur entrepreneurial growth and investment in businesses as a whole. America was the land of opportunity, where you could go from “rags to riches” with enough hard work. America used to be the best place to start a small business and be your own boss. That isn’t the case these days because despite incomes increasing for middle-class Americans, their purchasing power has barely budged since 1965. You can’t grow an economy in which most consumers have hardly more purchasing power than their grandparents did over 50 years ago, and consumer confidence in the stock market can’t increase if consumers have no means to express their confidence by purchasing stocks.

 

Lifting the $1.5 billion in student loan debt owed by 44.2 million American borrowers would allow 44.2 million Americans to spend their student loan payment, averaging $351 per month, stimulating the American economy instead of simply paying off interest. Lenders can’t be the only ones making money if the American economy is going to grow.

 

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Published in Opinion