October 12, 2010

A Foreign Reason to Get Our Own House in Order

Justin Katz

How about a frightening assessment of our relationship with China:

Why would China so brazenly challenge the world's economic powers like this? Because the country's leaders know what our leaders are only beginning to understand — that China would probably win a global trade war.

It's certainly worth reading Eric Weiner's entire essay for the details of his argument, but the point that I draw from his conclusion is that America's indebtedness and creeping cultural dependency have left us with no good governmental cards to play. Extrapolating a way forward, I'd suggest that Americans need to increase their efforts encouraging the Chinese people to push back against the abridgment of their rights and, perhaps more importantly, to begin restructuring our society so that we're less dependent on foreign loans and more apt to produce and to do business with our own countrymen and women.

Which strongly relates, it seems to me, to Peggy Noonan's latest insight into the national mood:

For those who wonder why so many people have come to hate, or let me change it to profoundly dislike, "the elites," especially the political elite, here is one reason: It is because they have armies of accountants to do this work for them. Those in power institute the regulations and rules and then hire people to protect them from the burdens and demands of their legislation. There is no congressman passing tax law who doesn't have staffers in his office taking care of his own financial life and who will not, when he moves down the street into the lobbying firm, have an army of accountants to protect him there.

Washington is now to some degree the focus of the same sort of profound resentment that Hollywood liberals inspired when they really mattered, or seemed really powerful. For decades they made films that were not helpful to our culture or society, that were full of violence and sick imagery. But they often brought their own children up more or less protected from the effects of the culture they created. Private schools, nannies, therapists, tutors. They bought their way out of the cultural mayhem to which they'd contributed. Their children were fine. Yours were on their own.

It all comes down to a desperate need to return the focus of our nation to individual autonomy, which requires, most of all, that more of the necessary restraints on others' behavior be accomplished through cultural means, rather than governmental. Central management and individual liberty are mutually exclusive, in the long run, and since we can't manage our way to a stronger global economic footing, we have to achieve it through our heritage of freedom and personal volition.

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From the linked article:
"he (Obama) had a two-hour meeting with Chinese Premier Wen Jiabao, in which he basically demanded that China stop manipulating its currency. China's response? Ho-hum. Precisely how much money do you owe us again?"

And why isn't Obama's response: "And exactly what do you have as collateral against that debt? Ever hear the term 'jingle mail'?"

Why is China doing so well against us economically? Because they pay their people nothing, they trash their own environment. Rules the US employers can't play by and can't compete with. So China exports things for relatively cheap. However, just because they can export them cheaply doesn't mean that we should import them cheaply. Make that 25 cent superball at the gumball machine now cost the importers $1. I bet US manufacturers can compete with those prices.

Posted by: Patrick at October 12, 2010 10:25 AM

"Jingle mail" is an option if you don't intend to borrow any more money because, even if your creditors have no recourse on existing debts, good luck getting someone else to lend to you. I'm quite sure that no one in the administration, and precious few in
Congress, have any intention of giving up borrowing money. So they have to placate those parties that have money to lend.

Posted by: David P at October 12, 2010 12:21 PM

Central management means that power is centered in the hands of a few, that is what makes it dangerous. It really makes no difference who the few are; in one case the “government”, and in the other case, a few capitalists. Problems occur when either one is ignored as a threat to social and civil liberties. Blaming only one entity as this post does, can only result in half baked solutions.

Posted by: OldTimeLefty at October 12, 2010 12:41 PM
Central management and individual liberty are mutually exclusive, in the long run...

Good to see you anarchists finally coming clean.

Posted by: Russ at October 12, 2010 2:05 PM

"Extrapolating a way forward, I'd suggest that Americans need to increase their efforts encouraging the Chinese people to push back against the abridgment of their rights."

Are suggesting we send in "The Teamsters?"

I think I finally broke through.

Posted by: michael at October 12, 2010 2:48 PM

This is an amazing post and replies-everyone is sounding counterintuitive to what I thought they were about.
Life never ceases t surprise.
China is a great country with a scumbag government.
I have to say that rather than blame the Chinese for taking an opportunity(a commandment of the free enterprise system)we should think seriously about WHY we gave away our enormous industrial muscle and replaced it with vermin like AIG and Enron.
My answer is:NAFTA,GATT(WTO);CAFTA,enironmental insanity,repeal of Glass-Steagall,over regulation of manufacturing combined with under regulation of banks and the investment "industry"-I guess I could go on but I think we all get the point.

Posted by: joe bernstein at October 12, 2010 4:01 PM

Manufacturing in China basically means you can copy anything designed in the US and have people make it without really concerning yourself with intellectual property (copyright or patents), environment, wages, or even captivity of workers.

You can find any successful product designed in the US on the internet, copy the specs, create a 3d drawing in CAD, bring the design to China and have it farmed out to any factory.

You can have them ship containers of copies back to you and dump the product on the market, basically putting any US based manufacturer that originally designed it out of business. You can rent a warehouse, advertise your stuff, and drop ship it or use a product fulfillment service to cover that for you.

Wages are really only part of the equation. Yet, decent wages actually allow local consumers to buy the products and recycle taxes into the economy for the common good.

Posted by: Robert Balliot at October 12, 2010 6:13 PM


There's nothing new, here. Remember how much umbrage you took when I noted that "it's a much more comfortable (and remunerative) project to extort money from local communities than to fight foreign tyrannies on behalf of a distant workforce"? I'd be much more sympathetic to the union cause if it appeared that the concern for workers' rights in the abstract were more visibly manifested in actions that didn't ultimately take resources from one group of workers (non-unionized) and pass it to another (unionized), as is the current game in the United States.

Posted by: Justin Katz at October 12, 2010 8:12 PM

It's no game, Justin, though the players treat it as such. Those of us in the trenches fully understand the result of a weakened union. Management can and will use whatever power it possesses to cut benefits and pay regardless of their bottom line.

Look at Snapple in upstate New York. Workers there are facing pay cuts and benefit reductions not because the company is losing money, (40% profit increase this year) rather because the economy allows them to squeeze the workforce, allowing their stockholders to profit even more.

The rich exploit the poor. Its been that way since time first began. We can't all own the company, or invent the wheel, or run the city. Some of us are content to earn our pay and contribute to society by being productive, without the constant need for more. WE just won't settle for less.

Posted by: michael at October 13, 2010 12:12 PM

I've said before that I draw a distinction between public and private sector unions. Moreover, I've acknowledged a worthwhile purpose to a company-specific union, essentially banding together those who work for one company. It's when unions expand throughout industries and make the leap to government that the difficulties arise... and that it becomes conspicuous that these supposedly high-minded organizations, while romanticizing the violence in their domestic past, aren't too keen to head over to Asia and face down the Communists.

Posted by: Justin Katz at October 13, 2010 6:44 PM

How foolish, how one sided, how willfully blind of you to accuse unions of romanticizing their past while completely ignoring "the goons and the dinks and the company finks" that corporations laid upon the workers throughout our history.

Here's George Fitzhugh, Southern sociologist declaring in 1857:

We warn the North that every one 0f the leading Abolitionists is agitating the Negro slavery question as a means to attain their ulterior ends...Socialism and Communism... no private property, no church, no law...free love, free land, free women, and free children.
This was not an isolated case, for almost 30 years the Abolitionists had been described as "Communists and Socialists using the cry of Negro liberty as a shield to hide their plot of Socialist insurrection." So, it's an old scare tactic to beat down labor by crying "Socialism" or "Communism". Unfortunately it seems to work. You really can fool some of the people all of the time. You may see ugly echoes of Tea Parties throughout our history if you really care to look. Again, unfortunately, Know Nothings have returned. We seem to always have room for ignorance.

Here's another instance: Franklin Gowan, the "King of the Reading Valley in Southern Pennsylvania, who during the depression of 1873 charged that The Workingmen's Benevolent Association (WBA) was in reality a foreign conspiracy to overthrow society by force and violence. He broke up the union, and all of its leaders were executed, imprisoned or banished. The WBA had been formed in 1868 when it went on strike for an 8 hour day.

And another instance: Ten men were hanged on June 21, 1877, six at Pottsville,PA and four at Mauch Chunk, PA. Miners and their wives silently surrounded the two jail yards while the Pennsylvania state militia stood guard with bayonets fixed to hold back the miners during the execution.

And one more: On May 1, 1894 General Jacob S. Coxey led a march of 500 unemployed to Washington DC ready to present their demand for jobs through public works projects to congress. Coxey's Army, as it was known at the time, was stoppede by police, Coxey and others were quickly arrested for stepping on the grass and the demonstrators dispersed. Here is Coxey's public statement following the incident:

Up these steps the lobbyists of trusts and corporations have passed unchallenged on their way to Committee rooms, access to which we, the representatives of the toiling wealth producers, have been denied. We stand here today in behalf of millions... whose ... remunerative labor have been taken away from them by unjust legislation, which protects idlers, speculators and gamblers.

There are a thousand more citations, these few will make the point.

Now tell us about the romance of capitalism. Try typing without having your fingers fall off.

Posted by: OldTimeLefty at October 13, 2010 11:36 PM

Take a deep breath, OTL, and you'll see that your objections entirely miss the point that I'm making. I wouldn't under any circumstances rail against romanticism, and I'm not, in any way, making accusations that unionists are romanticizing their past. They do so, and to some extent it's justified, but the point that I'm actually making is that talking about the courage and triumphs of predecessors falls a bit short when the current battle is to entrench union power in peaceful governments in order to create further imbalance between unionized and non-unionized workforces.

Those unionists who actively stare down such real enemies of the "working man" as the Chinese government have a right to romanticize their intellectual heritage. Otherwise, they're like flabby aristocrats dressed in ill-fitting clothes at effete dinner parties dedicated to their martial ancestors.

Posted by: Justin Katz at October 14, 2010 7:34 PM

Worked in West Virginia in a non-union plant. Got to know the shop foreman to the point where he trusted me enough to speak frankly. The company management was very concerned about the threat of unionization and offered a decent benefit package to the workers. The workers voted every year on whether to unionize or not. The foreman told me in confidence that the vote would be against unionization, "We got the votes counted". The guys got together, made some noise as if to vote union and pushed the company into offering union like benefits. Foreman Jack said that the workers used the union threat to gain the benefits without the dues. "Couldn't have done it without union presence in the state."

The moral of the story is that unions push wages up for everyone. It's the down home version of a rising tide lifting all wages.

That puts the boot to your idea that unions somehow harm non-union workers. The boys in West Virginia knew how to work it. You might want to explain how unions hurt non-unionized workers, then we'll talk about romance.

Posted by: OldTimeLefty at October 15, 2010 12:58 AM
... unions push wages up for everyone

Except, of course, for those who remain unemployed or in lower-paying jobs because companies are reluctant to hire additional workers at union or union-like wages. And let's not forget the barriers to entry that unions push through the legislative process requiring governments to pay union rates and contract with companies that will do so. Add in more direct barriers to entry that drive up the cost of doing business for non-union companies.

Posted by: Justin Katz at October 15, 2010 8:31 PM

OTL-how about the romance of communism?
The Hungarian Uprising in 1956 was led by WORKERS and suppressed by the communist regime with Soviet armor.
Or Cambodia and Vietnam?Those death camps in the former and "re-education" camps in the latter didn't exist,did they/
And let's not forget the grandaddies of communist savagery-the Soviets and Chinese made Hitler look like a rank amateur as mass murderers.You spout the same party line crap every time you post here.
The unions were essential to a safe workplace and decent wages.
They have changed over time into corporate power structures of their own.
In RI they control politics through use of their members' dues without the input of said members.
You have the Crowleys and walshs taking money from teachers and using it for every left wing cause coming down the pike.
I belonged to unions for 27 years so don't even start your rant about me being a corporatist-I have never owned stock in any company.Have you?If all you can reply is the "freely deny"pile of BS that you're so fond of,svae your time.

Posted by: joe bernstein at October 16, 2010 9:11 AM