Posts Tagged ‘ China ’

Mao’s Pals? Or Did I miss the point?

Mao Tse-tung (Zedong)

Mao Tse-tung (Zedong)

When I was growing up he was called Mao Tse-tung (毛澤東).  He was not a warm and fuzzy philosopher.  He was not known as a champion of democracy, nor for his respect for human life.  One of my better friends is a few years old than I and he was born and raised in Shanghai under the thumb of the man now referred to as Mao Zedong.  My friend is not known for fondly quoting heart-warming or cute Mao quotes.  No, in fact he recalls Mao as Satan incarnate, a man who had his entire nation gripped in fear.  He remembers people afraid of conversing for fear that it might be incriminating.  The slightest suspicious move could prove life-threatening.

Mao was the First Chairman of the Chinese Communist Party.  But prior to that he was the skillful military leader that overthrew China’s Chiang Kai-shek in 1949.  The odds were overwhelming but the mostly rural communists gained control of the world’s most populous nation.

Communism gains its power by promising the lowly people greater power, less poverty, and freedom from oppressing overlords.  The pull can be irresistible when the ruling party shows little willingness, compassion, or power to bring justice to the masses.  However after every communist revolution, the victory for the peasant-class is short-lived.  Lenin, Castro, Pol Pot, Robert Mugabe, and Mao quickly switched from freedom-fighter to persecutor.  In each case rivers of blood followed the revolution.

What made Mao even more hideously evil from his ideological mentor, Lenin, was that the killing did not end.  It ebbed and flowed until 1965 when Mao launched his Cultural Revolution.  Most Americans have no idea the terror and widespread killing that occurred between 1965 and 1969.  It all resulted from Mao’s paranoia and his fear that the country had slipped back into the values of capitalism.  Thus he encouraged the youth to condemn anyone.  They targeted “landlords, rich peasants, counter-revolutionaries, bad elements, rightists, traitors, foreign agents, capitalist roaders and—the Stinking Ninth—intellectuals.  In the fight against ‘class enemies’ and ‘bourgeois reactionaries,’ teachers, people with a college degree or relatives overseas, workers, and members of minority groups such as Tibetans, were all targeted.”

Being too intelligent was a guaranteed way to find oneself tortured and dead.  By the way, this is not unique to Mao, intelligent people can reason, they can see deception, inconsistencies, hypocrisies, and challenge them.  By their very nature, intelligent people make the worst enemies and thus must be crushed for Communism to succeed.  We saw it in the USSR under both Lenin and Stalin, saw it in Cambodia’s killing fields under Pol Pot, we saw it in Zimbabwe under Mugabe, and Castro lined people up before firing squads by the thousands.

The toture technique called: Jet-Plane

The torture technique called: Jet-Plane

Mao was openly proud of the torture and death surrounding him.  He hated his father passionately and during the Cultural Revolution he commented, “My father was bad. If he were alive today, he should be ‘jet-planed.” (Jet-plane is a torture method where the victim is forced to hold the uncomfortable position (shown right) for hours usually more than 10.)

My point is that Mao was not the kind of guy you look up to.  Quoting Mao is really very much like quoting Stalin or that other guy liberal like to compare Bush to.  What was his name?  Oh yeah Hitler.  Although you could quote one of these yahoos without affiliating yourself with them.  It’s how you do it.  So where am I going?

Glenn Beck v Anita Dunn

Last night I listened to Glenn Beck go on and on about White House Communications Director, Anita Dunn.  But before I go into that indulge me for another aside.  Since his inauguration, President Obama has been obsessed with Beck and Beck with him.  Each calls the other a liar on a daily basis.  The administration has even blocked official access to FoxNews largely because of Beck.  I decided to begin watching Beck because of Obama’s cry-baby whining about Beck.  My initial reaction to Beck was to hang on his every word, but watching him now for nine months I’m beginning to see Beck as a bit of a whiner himself.

Oh don’t get me wrong, when you check his facts, Beck is right or on the right track most of the time.  When I check Obama’s facts, I find him wrong or misleading most of the time.  Of the two Beck is the more reliable, but Beck drains me with his high caliber emotion and repetition.  As a media professional, I call on Fox to shorten Beck’s show to 30 minutes.  Lately I can’t stand more than 15 minutes.  As for Obama, he needs to grow a pair, buck up, realize he’s the President with the power to lead.  If Beck is smearing him then he should honestly refute him with the facts, his perception of the facts, or ignore him.  There has never been a more petty, paranoid President, with the possible exception of Nixon.  But my Nixon comparison is still in the research phase.

Anita Dunn quotes her favorite philosopher.  Or was it just irony?

Enough digression!  So I watched as many replays of Anita Dunn as I could stomach before deleting the show from my DVR.  In fact, while writing this I watched it once more.  Anita Dunn did indeed make a terrible judgment error when quoting Mao.  But was the quote supporting a communist agenda?  Was she quoting political philosophy from Mao’s Little Red Book? No, she was making a point about staying focused on your own agenda and not becoming side-tracked by the critics.  In my estimation her biggest error is also Beck’s point, she said Mao was her favorite philosopher.  Can you image the response from The Daily Kos or CBS had a Bush official made a similar comment? Or worse quoted Hitler?

Excuses, excuses

Just today Matt Gertz on Media Matters made the case that Karl Rove was encouraged to read a biography on Mao by W the President.  In the same piece he points out that a Barry Goldwater adviser once used the Mao quote, “Give me just two or three men in a village and I will take the village.”  To both points I respond, SO WHAT. In fact had Anita Dunn simply quoted Mao without honoring him as her “favorite political philosopher” Glenn would have looked like a fool.  I know, you libs want to call him a fool anyway, but check his facts.  He’s no fool.

That said, I feel Beck made far too much of Dunn’s comments.  However, he latched onto these remarks because there is a clear pattern of Communist admirers in this administration.  It is amazing and alarming.  Acceptance and admiration for communists has traditionally been a political shot to the head in America, but now we are overwhelmed by it.  Just 11 months ago we were being called alarmist and kooks for even bringing up Obama’s quote, “To avoid being mistaken for a sellout, I chose my friends carefully. The more politically active black students; the foreign students; the Chicanos; the Marxist professors and structural feminists and punk-rock performance poets.”  Then during a town hall-style debate Obama asked, “Judge me by the people with whom I surround myself.”

Beck has taken that challenge to heart.  Meanwhile most of America seems to have forgotten that request and the mainstream media is pretending the President never said it while loudly chanting, “LALALALALALA” whenever an administration official comes out praising a Communist despot.

CNN reports Dunns response to Becks attack. Click to read.

CNN reports Dunn's response to Beck's attack. Click to read.

Today, Anita Dunn responded to Beck’s attack claiming her remark was “irony.”  She based this assertion on the claim that “neither were political philosophers.”  Ah, sorry Ms. Dunn, Mao was a political philosopher.  Ever hear of The Little Red Book? I think you have.

Rewatch the Beck clip.  She’s not the best public speaker.  Her speaking pattern is highly distracting and the constant lip smacking makes me uncomfortable.  But stripping away my distractions, I still sense no smirking tell or gesture that would suggest she is being ironic.  Her defense is weak at best.  I think Ms. Dunn should have rewatched her comments as many times as Beck showed them.  Her excuse might have had more credibility if she would have directed us to the point at which she said, “…the two people I turn to most to basically deliver a simple point…

The perfect out was built into her speech.  She could have put the remark in context and brushed it aside as being overly dramatic in using a quote, apart from the context of Mao, to make a point.  A point. Instead she mounted an elementary school defense.  She raised her arm, stretched out a chubby finger, and pointing at Lee Atwater she said, “he said it too!”  Well, ok, she didn’t do exactly that.  Rather, she told CNN, “The Mao quote is one I picked up from the late Republican strategist Lee Atwater from something I read in the late 1980s, so I hope I don’t get my progressive friends mad at me.”

Minds closed so tight only a progressive would call them “open”

Again, SO WHAT. Did Atwater say Mao was his favorite political philosopher?  In the end there is nothing wrong with reading Mao or any other person’s works.  There is really nothing wrong with quoting one of them if you qualify it and use the quote to specifically make a point.  In The Godfather there is a line, “Keep your friends close, but your enemies closer.” (No, it’s unlikely from Sun Tzu.) But here is what hit me from her defensive comments, she is apologizing to the left for having read Atwater.  Not for knowing a Mao quote but for reading the writings of a conservative.

What does this tell you about the “open-minds” on the left?  Quoting Mao mass-murderer of tens of millions while attributing him as one of your favorites, perfectly fine.  Reading the conservative writings of a successful political adversary, something shameful.  Sounds like “progressives” have their brains squeezed so tightly between their butt-cheeks they can’t accept any ideas that might come from anywhere else.  And that my friend is why she’ll never call Beck and confront him like an adult.

Gettelfinger thinks only an idiot would not want a bailout

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My good friend, Reedkeys, over on blogspot, posted this video and expressed his outrage that Lansing’s Mayor Bernero seems to imply that capitalism isn’t working for the auto industry.  I didn’t quite get that same message but then again, I’m an idiot.  I think he was saying that free trade isn’t working for the industry.  [Addendum:  OK, I went back and watched this again and I have to admit I tuned this interview out early the first time I watched it.  I see Reed was really responding to the dumbass comment the Mayor made toward the very end.  He then says capitalism doesn’t work and that the rest of the world is NOT capitalist.  OK, I disagree with all of that and think the mayor’s leftism is shining through.] In fact, I would say free trade isn’t working for any U.S. industry.  Unless you want to classify Wal-Mart as an industry.  Wal-Mart is not only thriving but they are a major reason so many jobs are going overseas.

Lansing’s Mayor Bernero tries to say that the American automakers are in a tough bind trying to compete with countries like China that can pay workers far less than we can.  Do we want an America where career choices for the masses are limited to selling a foreign product, service, or menial labor?

I’m not entirely certain I disagree with the mayor. I  blogged about free trade a few weeks ago, my point then was simply that free trade is a wonderful theory but one that only truly works when the playing field is level.  In pure theory, free trade allows the market to determine which industries live and which die, based on pure competitive factors. However, free trade does not introduce fair competition. It allows competitors into our market without adjusting price for VERY different standards of living.

Getting Fat on Free TradeNow if you believe the U.S. standard of living is far far too high and that we here in the U.S. should all be living without cars, TV’s, or computers, and our homes should be made from mud or other low tech materials, then I see where you are coming from. I think Gore may believe this – as long as he is exempt.  Granted unions are demanding wages that exceed their labor output but what is a fair competitive wage in the auto industry?  Would $10/hr be fair?  How about $5.75 that’s roughly the same as your average high school student. (I think they deserve more than $10 but to illustrate my point let’s go as low as we can go.)

Would lowering every single auto worker’s pay to minimum wage solve the problem? No. The average Chinese factory worker makes $2.20 an hour. Furthermore current trade agreements while eliminating tariffs allow the Koreans to continue import taxes on U.S. products through “taxing cars based on “engine displacement”, including the Special Consumption Tax, the Annual Vehicle Tax, and the Subway/Regional Development Bond.”   The Korean only agreed to “overhaul” and “address” trade concerns.  Meanwhile Korean textile imports to the U.S. go tax or nearly tax-free.  But trade agreements do not address the basic standard of living inequities that exist.

It is not capitalism that has failed it is the tariff system that has been changed to benefit third world producers while exterminating American producers. As I mentioned in my essay on this topic, we need to have equalizing tariffs or demand foreign workers make salaries that are roughly equivalent to U.S. workers. This would mean higher prices and thus no one wants this. But should nothing be done to equalize trade, we will slowly spiral into a world where the standard of living reaches a global median. (Oh, I’m certain it wiull never be totally uniform but more so than we see today.)  A world where those who are able to own a business populate the upper-class and what remains of the middle-class while the rest of the world languishes in the realm of the working poor.  This is when you can truly kiss capitalism goodbye.  A poor democracy will vote itself right into a communist dictatorship. Last month we got a taste of just how little people use reason when they are terrified of the future. Naturally, union concessions are necessary but equally so a little strategic use of tariffs to level the field.

Should the auto industry fail, can the U.S. economy absorb up to 3 million displaced workers?  I certainly do not want to give the big 3 money, but I think loans with attached strings is a sound rescue plan.  However, if we do not begin to practice “fair trade” and learn to compete, it will be no different than keeping a brain-dead trauma patient plugged into life-support.  The auto industry and for that matter all U.S. manufacturing will eventually falter.  Allowing industries to fail and continuing to import from nations where labor costs are nearly unmeasurable is economic suicide.  Whether it occurs slowly over decades or overnight I simply cannot accept the notion that such a trade policy is good in the long haul.  I am reminded of something I heard as a child, “the production of finished product from raw materials is the only true way to produce wealth.”  That may not be always be true but applied to nations it makes more sense than where we seem to be headed, “Producing nothing, while consuming all the world can produce is the true way for importers to get rich while a nation goes to hell.”

As a  theory, free trade makes a lot of sense, but sometimes there are good economic reasons to stray from a good theory.

How Much Free Trade is Free?

Getting Fat on Free TradeLet me preface this by explaining, I believe in lowering taxes everywhere we can. It just makes good sense. Without exception when taxes are lowered business increases and government receipts increase. What about import tariffs? Tariffs are taxes and lowering or eliminating them stimulates trade, more economic activity, and thus more taxes through greater income and sales. Prior to the 16th Amendment, legalizing the income tax, the bulk of federal receipts came in the form of tariffs. As the proliferation of free trade agreements has grown revenue from tariffs has been on a decline while income taxes have grown in importance as a source of replacement income for the government.

When we discuss tariffs, it is important to understand who benefits and who does not. Naturally, the federal government benefits as tariffs increase the revenues, domestic producers benefit as they are afforded a degree of protection against cheap foreign competition, and domestic workers benefit by virtue of the protection afforded their companies. The losers in the tariff game are consumers who must pay higher prices for imports and domestic products that are unable to reduce their costs due to the tariffs.

I wish trade policy were only this simple. Unfortunately, as Free Trade proponents will correctly point out, no tariff lives in a vacuum. When the U.S. imposes a tariff on say Japanese automakers to protect U.S. automakers, the Japanese government will in turn impose its own tariff on a U.S. import, like beef. Soon a trade war begins and the world economy is negatively impacted. As this chart from Pitzer College illustrates tariffs artificially increase price and potentially decrease supply (should domestic suppliers not adequately fill the void.)

Earlier I mentioned that domestic businesses were aided by import tariffs but interestingly domestic businesses also benefit by removing import tariffs. When import tariffs are removed, U.S. companies are free to outsource. Businesses can move various parts of their processes to locations abroad that offer the lowest cost. Thus, the overall world economy is made more efficient by the lowering of trade barriers. The economic theory says that each country will produce those products it can produce most efficiently. This is a great benefit for multinational companies that can take advantage of it. In turn, it is a great advantage to consumers, as nearly all studies have concluded import tariffs significantly raise consumer costs through higher prices. A no-brainer, really.

Nevertheless, and yes this is where I get into trouble, is this good for the U.S. consumers in the long-term? I agree that in the shorter term, (meaning 0-15 years), free trade is a “nothing-but-net” slam-dunk win. I have my doubt about its long-term benefits. Liberals argue stockholders and business executives win while workers see their jobs whisked away to far off pockets of impoverished slave labor factories. They will lament the poor living conditions of those workers and point out how Americans are profiting from their misery. They may even complain that U.S. factory workers once making $20 an hour are reduced to working minimum wage jobs or worse standing in unemployment lines. (But you probably won’t find them lining up for a more expensive American made car.)  I decided to research the wage issue and I found that since 1980 there has been very little change in the inflation-adjusted wages of Americans. However, this chart shows an average wage, which includes executives and janitors. So while executives expand their income through higher profit (and I don’t begrudge them earning more), nonfarm, nonsupervisory wages are decreasing. However, we all know we’re in the midst of a global recession.

So far, my argument has been pro-free trade, but I have serious concerns over free trade as a long-term policy. The obvious benefits of adopting a free trade regime is the lower cost of goods and the freeing of resources to produce items in which our country has a comparative advantage. However, my concern is not about the advantage but rather the costs. The one cost nearly everyone recognizes is the loss of American jobs. I would like to add another, the loss of knowledge and innovation.

As we ship technical and manufacturing jobs overseas in search of ever-cheaper labor we are losing the ability not only to manufacture goods efficiently here but we are losing the ability to innovate new product ideas. U.S. companies not only export low-tech factory jobs but also have begun exporting knowledge-based jobs, such as recruiting R&D engineers in Asia. These engineers cost less and have economical access to production plants.

Excessive dependence on too few exports is another risk presented by free trade agreements. If a nation reduces the diversification of its industries to only those in which it has a comparative advantage, there is risk to the economy if global demand should drop for those products. This is closely related to another risk, the risk that an industry might be permitted to die and this could come at a cost to national security; such as losing the ability to produce aircraft, automobiles (thus tanks), or shipbuilding. Yet another risk is losing an historic industry, such as the auto industry. What happens if we find ourselves the victim of an economic embargo? Probably not much today but in 20 years it might be a different story.

Lowering tariffs naturally leads to outsourcing, as we have seen. This results in workforce reductions. Companies are freed to provide lower priced products but the discretionary spending of consumers is lower slightly, (through higher unemployment and lower income), which produces an increased demand for lower prices. This precipitates more outsourcing, automation, and/or other job reductions to facilitate still lower prices. This again lowers aggregate income slightly, thus discretionary spending and so the cycle repeats. Corporations benefit, stockholders benefit, host nations benefit (for a while), but we ultimately pay a long-term economic cost in the form of a reduced standard of living.

It is a very slow turning wheel because people find new sources of employment as technology changes and these new jobs come and go. Simple logic should tell us that you couldn’t put a hole in a bucket and expect the rain to keep it full. Alright, not the best analogy, my point is resources are flowing away from our country faster than they are flowing in. How long can this go on? I would argue until the standard of living is obviously impacted, then the people revolt.

Finally, many trade agreements are lopsided benefiting one partner more than the other. For example, The 2007 KORUS free trade agreement with Korea lowered nearly all restrictions on South Korean imports to the U.S. yet permitted South Korea to maintain nearly all of its barriers against U.S. auto imports. I keep hearing people say, “Let it die” – these people are not strategic thinkers. We need the auto industry, it is the backbone of what makes our nation strong, and it is a historically American product. Granted we need to address problems associated with bad management and poor labor arrangements. Part of the labor problem is the American standard of living. No American factory worker would tolerate living in a small hut and unable to purchase a car him or herself, yet in some countries, this is normal. I say forcing the auto industry to redesign its business model, coupled with a loan, and a modest import tariff on imported automobiles would be a reasonable bailout. Letting it die would be reckless. Do you really want to displace so many additional American workers?  My opinion is that the use of tariffs and subsidies is justified here.  Using tariffs in this sort of bailout makes far more sense than throwing money at the big 3.

We have being giving the house away in free trade agreements that do not benefit the long-term economic or strategic interest of America as a whole. We have getting fat off cheap stuff from China while throwing our own jobs under the container ship without realizing there is a price to pay. What will the American economy look like in 40 years? Can a purely service-oriented economy maintain our current standard of living?

Just because we can does not mean we should. Are protectionist tariffs the answer? Should we use tariffs to protect American industries like the auto industry?  Should we demand workers in other countries make competitive wages? (I made myself chuckle) Do we tax the crap out of business that ship jobs overseas? Do we force American companies to just finish the job and move completely offshore? How far do we go in job creation and what types of jobs do we want?

US flag Made in ChinaI’ll leave you with this interesting thought; I am a history buff and a few years ago, I was reading a book containing a letter from a British soldier stationed in the American colonies just prior to the Revolution. A paraphrase from memory goes something like this, “These colonists would procure their flags from the enemy if they could save a farthing.”* Last year, on the 4th of July, my daughter commented that our Walmart-purchased flags were made in China.  Guess it’s true.

* Farthing: Smallest British Imperial currency measure. 4 farthings made 1 penny.

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