Posted by Robert* on Mon, Apr 30, 2012, at 9:22 AM:
That is a lot of information to digest at one sitting. And it is a question well worth discussion. We have lived in a world in which the United States was the dominant world power. How would things change for us if China truly became the dominant world power? How would this affect our liberties? And what would our grandchildren have to look forward to?
Replies (55)
China and Russia have been developing strong ties over the past few years, even engaging in joint military exercises in the past few months.
-- Posted by Shapley Hunter on Mon, Apr 30, 2012, at 9:35 AM
The worst threat to this country IMHO are the politicians (both parties) that are running and ruining this country.
-- Posted by howdydoody on Mon, Apr 30, 2012, at 12:27 PM
The question is not whether China will attack us, it seems improbable that they will, but what impact their economy will have on ours.
We've seen some of that impact in the form of rising prices on the materials for which China and the United States compete - things like oil and steel. If we export those items, then rising prices can be good. If we import them, they are is signicantly less so.
They hold about $1.13 trillion of our debt, or about 20% of the foreign-owned debt, 10% of the total public debt, or 7 1/2% of the total debt. It's kind of hard to just ignore that and worry about the U.S. economy. They have a sizeable stake in our economy, as well as a sizeable influence upon it.
-- Posted by Shapley Hunter on Mon, Apr 30, 2012, at 2:49 PM
U.S. Coal exports to China are expected to double this year, to about 12 million tons.
We may export refined gasoline to China, but they do not appear in the list of the top recipients of such products.
-- Posted by Shapley Hunter on Mon, Apr 30, 2012, at 5:02 PM
12 million tons of coal really isn't that much. About 100,000 rail cars' worth - or a single train a little over 1,000 miles long, or enough to run one power plant the size of Ameren's Labadie station for about a year at 100% capacity, depending on the quality (BTU heat content per pound) of the particular coal.
-- Posted by fxpwt on Mon, Apr 30, 2012, at 5:49 PM
Rick - a nickel here, a dime there - pretty soon we're talking about some real money. :-)~
-- Posted by fxpwt on Mon, Apr 30, 2012, at 7:39 PM
The present administration seems very comfortable with presiding over the decline of the United States. And it's political opponents seem averse to pointing out and describing in detail that decline. Perhaps the emperor has no clothes but no one is willing to take the point and the responsibility for expressing the truth? Remember, we often shoot the carrier of bad news!
-- Posted by Robert* on Tue, May 1, 2012, at 9:15 AM
The administration's pivot to asia strategy will go along way to protect our interests vis a vis out strategic "relationship" with China. -- Posted by Spaniard on Fri, May 4, 2012, at 12:05 PM
I would hardly call China's holding of Obama's $6 trillion massive debt a "strategic" relationship. More like serfdom.
-- Posted by not_sorry on Fri, May 4, 2012, at 1:14 PM
Dug, I think you misunderstand. Spaniard may be referring to Obama's physical pivot in way of a bow and apology. :)
China and other countries have bolstered our standard of living in the past with cheap goods due to the value of our dollar. If our dollar's worth is diminished, the table will turn and we will bolster their standard of living.
The questions of Robert*'s first post are profound.
-- Posted by Old John on Sat, May 5, 2012, at 12:58 AM
"...very comfortable with presiding over the decline of the United States..."
I am of the firm opinion that the vast majority of Americans do not agree with your pessimistic outlook predicting America's decline. Fluctuations in the economy have always been with us and the ongoing recovery will continue, regardless of who is elected in November.
But in comparing the US and China, keep in mind that China imports food, fuel and raw materials, and exports inexpensive products. The US exports food, fuel, raw materials (many in the form of recycled scrap) and high tech products.
Were there to be a "halt' in trade, it should be fairly obvious that the US would be in a better position. Basically, they need us more than we need them.
-- Posted by commonsensematters on Sat, May 5, 2012, at 7:04 AM
"...China exports ipads , cell-phones , and HDTV..."
You might want to think about that. They are really American products being assembled in China because of cheap labor.
-- Posted by commonsensematters on Sat, May 5, 2012, at 1:28 PM
You might want to think about that. They are really American products being assembled in China because of cheap labor.
-- Posted by commonsensematters on Sat, May 5, 2012, at 1:28 PM
Are you saying that American labor chased the factories out of the country? Wow!
-- Posted by InReply on Sat, May 5, 2012, at 3:45 PM
"...American labor chased the factories out of the country"
Not in the least. It was Chinese low cost labor that attracted American factories. American labor did not chase factories away, the owners moved to a more competitive location.
In some cases, the Chinese cost is so low that the product makes more money for Americans that for China. If a flat screen that retails for $500 is assembled with $100 of Chinese labor, then the remaining $300 goes to American transporters, advertisers, and retailers.
-- Posted by commonsensematters on Sat, May 5, 2012, at 4:12 PM
...make that retailing for $400...
-- Posted by commonsensematters on Sat, May 5, 2012, at 4:13 PM
I would sincerely like to know just what is the justification of the FED? Why is it needed at all?
-- Posted by voyager on Sat, May 5, 2012, at 5:07 PM
IF.........
"american labor chased the factories out of the country"
Are you saying it it the fault of the labor unions?
-- Posted by Robert* on Sat, May 5, 2012, at 5:48 PM
I was asking a question. You can draw your own conclusions.
-- Posted by InReply on Sat, May 5, 2012, at 10:54 PM
I was asking a question. You can draw your own conclusions.
-- Posted by InReply on Sat, May 5, 2012, at 10:54 PM
It's kind of like the fish farms in Vietnam that get there pangasious imported into America with a USDA stamp of approval when southern catfish farmers have to have their pond water tested, their product monitored by government agencies and their workers of a minimum age.
And when the American corporation sets up it's offices overseas, they pay a lower tax on profit.
Besides all that, yep, in many cases unions played their part.
-- Posted by Old John on Sat, May 5, 2012, at 11:14 PM
-- Posted by Old John on Sat, May 5, 2012, at 11:14 PM
But Old John... had government limited their involvement here in this country to no greater interference than they cause in a foreign country's production process, we would be operating in a balanced situation in this ccountry. Labor would be paid what their services would bring in a free market and competition would keep prices in line.
There's that hideous pair of words again "free market".
-- Posted by Have_Wheels_Will_Travel on Sat, May 5, 2012, at 11:29 PM
Old John,
I read where 85% of our seafood in this country is now imported. At our house, every package is inspected for US grown labels. Anything with an Asian sticker on it, can stay in the market to rot for all I came. I do not want my fish raised in ponds that have human waste piped into them, as the show I saw a while back showed was happening.
-- Posted by Have_Wheels_Will_Travel on Sat, May 5, 2012, at 11:34 PM
Wheels, I have been an advocate for COOL [country of origin legislation]. Haven't heard much about it for a good while execpt the part where beef is labled product of Canada, Mexico or USA.
The republicans last I understood failed in that. I may be wrong.
So many store brands from such as Walmart and Aldis only indicate distributed by.....
When I see a jar of pickles, product of Pakistan. or such I like to pass on that too.
On the other hand, who doesn't like cheap cell phones and TVs.
I read somewhere that Steve Jobs didn't like the American made prototype of one of his phones because the lens scratched too easily. It was going to take a lot of time for our government to approve the EPA concerns of making the kind of lens material needed and to keep ahead of the competition he contracted the work out to a Chinese company. That gave him time to evaluate the next prototype and go to market ahead of competition.
Our concern as a nation in my opinion should be that we not trash the value of our own currency as the Fed seems intent on doing.
-- Posted by Old John on Sun, May 6, 2012, at 12:04 AM
Again, why do we need the Fed?
-- Posted by voyager on Sun, May 6, 2012, at 7:44 AM
"...very comfortable with presiding over the decline of the United States..."
I am of the firm opinion that the vast majority of Americans do not agree with your pessimistic outlook predicting America's decline. Fluctuations in the economy have always been with us and the ongoing recovery will continue, regardless of who is elected in November.
Common,
I am not pessimistic; but I am a realist. And I have enough of an understanding of basic economics to understand where our nation is headed economically. I am merely attempting to raise my voice and warn others of the ultimate consequences of the economic policies of this administration.
Our economy DOES have enough strength to maintain the present jobless 'recovery'. A true recovery would take place if the government would allow businessmen and wage-earners to invest their time, energy, and money with the expectation of making (and keeping) a profit.
Government can not create jobs but it has the ability to create a business climate which encourages businessmen and entrepreneurs to invest. High tax rates do not increase tax revenue; Growing the economy increases tax revenue.
This present administration favors taxing the productive and giving incentives to those who do not work! That is a recipe for economic disaster.
-- Posted by Robert* on Sun, May 6, 2012, at 11:52 AM
There has always been an abudance of labour outside the United States that was cheaper than United States labour. Even so, there was not a major ouflow of U.S. jobs to these nations.
Improvements in shipping probably has a lot to do with it - It used to be quite expensive to ship cheap products all the way from China. Not so, today.
But, U.S. labour used to be counted among the best - well trained or easily trainable, affordable, and competent. While this is still true in many regions, methinks the quality and affordability of U.S. labour has slipped overall, which is one of the primary reasons for the outflow of jobs. Unions carry the blame for some of that. Methinks the education system carries some of the blame, as well. Our younger generation, simply put, is coming out of the education system unprepared for the workplace.
It would not be a problem paying union wages for quality work. It makes no sense to pay union wages for mediocre work, or less.
-- Posted by Shapley Hunter on Sun, May 6, 2012, at 1:38 PM
"A true recovery would take place if the government would allow businessmen and wage-earners to invest their time, energy, and money with the expectation of making (and keeping) a profit."
US businesses can thrive whatever the conditions. With your understanding of basic economics you might explain why the economy was healthy during the Clinton administration and then went to hell during the Bush administration with its lower taxes.
-- Posted by commonsensematters on Sun, May 6, 2012, at 1:42 PM
There has always been an abudance of labour outside the United States that was cheaper than United States labour. Even so, there was not a major ouflow of U.S. jobs to these nations.
-- Posted by Shapley Hunter on Sun, May 6, 2012, at 1:38 PM
A lot has changed since that was true. Labor has become more expensive, NAFTA has been implemented, welfare programs for the unemployed have been made more enticing and education has lowered its standards.
-- Posted by InReply on Sun, May 6, 2012, at 2:13 PM
With the fall of the Berlin War, this country began a period of reduced spending on the military and military intelligence.
President Clinton had a Republican majority in Congress during the second half of his first term. He chose to go along with conservative economic policies rather than go head-to-head with a Republican Congress. He recognized the rejection of some of his ideology, adopted conservative ideas as his own, and convinced voters to elect him to a second term.
As President Clinton recognized, "the era of big government is over." He knew how to work with Congress for the good of the country. President Obama is too intent upon imposing his ideology on this country.
Both Democrat and Republican administrations used artificially low interest rates to expand the housing industry. Politicians tried to ensure their re-election by making it possible for anyone to qualify for a home loan. Cheap dollar policies at the Fed and lack of an energy policy allowed the price of oil-based fuels to rise. Expansionary monetary policies, the burst of the housing bubble, and high energy costs combined to bring the economy down. But the real culprit was/is a lack of personal ethics demonstrated in government, business, and personal relationships have been the achilles heel creating many of our problems.
-- Posted by Robert* on Sun, May 6, 2012, at 2:36 PM
US businesses can thrive whatever the conditions.
-- Posted by commonsensematters on Sun, May 6, 2012, at 1:42 PM
I would love to see an essay, explaining that kind of logic.
-- Posted by Have_Wheels_Will_Travel on Sun, May 6, 2012, at 4:28 PM
Besides , if a person is not smart enuff to fool around in the White House without getting caught , they definitely ain't smart enuff to be President .
-- Posted by Rick.... on Sun, May 6, 2012, at 4:56 PM
Do you suppose Clinton did it the way the Secret Service did? When are they ever gonna learn? Lay em and don't pay em makes a girl hot... under the collar that is.
-- Posted by Have_Wheels_Will_Travel on Sun, May 6, 2012, at 5:55 PM
US businesses can thrive whatever the conditions. With your understanding of basic economics you might explain why the economy was healthy during the Clinton administration and then went to hell during the Bush administration with its lower taxes.
-- Posted by commonsensematters on Sun, May 6, 2012, at 1:42 PM
And I though you knew all about business. To say they can survive in any condition is a fools game. Right now things are terrible and many businesses are hurting bad or gone. I know personally because I am in the arena instead of on the sidelines watching.
The main reason Clinton had an easy ride was the tech boom and easy loans. Not to mention he rode on Reagan's coattails for one of the best economic booms we have had in my lifetime I did vote for him but he was not as grand as you think.
I guess you don't remember 9/11 when almost everyone that had saved their hard earned money lost 50% or more in their 401K. That was the beginning of the drop but things were coming back when Pelosi and crew came into the game. Thank god Obama wasn't the president or we would be done.
You say "well the market is back up" but people are just now getting back to where they were 10+ years ago and now there is talk of seizing 15% of retirement accounts because it isn't fair because I was responsible and others weren't.
BO has no idea how business works and has NO experience in the private sector except knowing how to dip ice cream. He does know how to create divides, steal from the doer's, give it to the leeches and destroy free markets.
-- Posted by We Regret To Inform U on Sun, May 6, 2012, at 10:05 PM
The 2011 Fortune 500: The Big Boys Rack Up Record-Setting Profits
By CNN Money Posted 8:10AM 05/07/12 Posted under: Market News
"The Fortune 500 generated a total of $824.5 billion in earnings last year, up 16.4% over 2010. That beats the previous record of $785 billion, set in 2006 during a roaring economy."
Right, the president Obama administration knows nothing about business....
-- Posted by commonsensematters on Mon, May 7, 2012, at 8:03 AM
Right, the president Obama administration knows nothing about business.... -- Posted by commonsensematters on Mon, May 7, 2012, at 8:03 AM
Another "Obama did it" democrat. Not only is Obama good at running a record-size government he's also the reason some companies are profitable. He truly is the messiah Common.
Just like I posted yesterday. Obama said "I took the shot" when referring to killing bin Laden. The only shot he took was on the golf course that morning before bin Laden was killed by the US Military - brave Americans that risk their lives. Not this narcissistic man-child. He took the shot? Remember, you support these statements. Not me.
-- Posted by not_sorry on Mon, May 7, 2012, at 8:08 AM
Common,
I am glad that the big boys are doing well. But, the Obama administration DID take our tax money and bail them out. I would expect them to do well. After all, they are 'too big to fail'!
On the other hand, I work for a small company in the construction business and we do not seem to count. No one seems willing to make the difficult choices necessary to get that industry back on it's feet.
-- Posted by Robert* on Mon, May 7, 2012, at 9:29 AM
Robert,
People like us who are small, but paying taxes, are lower than a snakes's beltbuckle on the Government's list of priorities.
-- Posted by Have_Wheels_Will_Travel on Mon, May 7, 2012, at 9:35 AM
"US businesses can thrive whatever the conditions."
Then how do you explain the recession?
That's the type of thinking that gets us into trouble. We can impose whatever conditions we want on business, and they will figure out how to thrive despite it. I don't think it works that way.
-- Posted by Shapley Hunter on Mon, May 7, 2012, at 10:02 AM
Right, the president Obama administration knows nothing about business....
-- Posted by commonsensematters on Mon, May 7, 2012, at 8:03 AM
Thank you for agreeing.
-- Posted by We Regret To Inform U on Mon, May 7, 2012, at 2:25 PM
"Then how do you explain the recession?"
As you are well aware, there are economic cycles that operate independently of what politicians desire or think they can do.
Above, someone complained that President Obama's administration was making it "impossible" for business.
I simply pointed out that the Fortune 500 were doing better than they were during the President Bush administration.
I said nothing about any one's business "skills" and only commented that American businesses can thrive to a much better degree that conservatives give them credit for.
-- Posted by commonsensematters on Mon, May 7, 2012, at 5:34 PM
-- Posted by commonsensematters on Mon, May 7, 2012, at 5:34 PM
Do you really think the assault on small business by the Democrats was part of a normal business cycle. Most of US businesses are small business.
Obama has slammed us in favor of big labor. The private sector has very little going on while the public projects are running full tilt. I see the waste on the Dodge Reports weekly.
-- Posted by We Regret To Inform U on Mon, May 7, 2012, at 6:58 PM
"...companies had $824.5 billion in earnings last year, up 16.4% over 2010. That beats the previous record of $785 billion, set in 2006...:
Better? Seems 2011 was more conducive to earnings than 2006. No names, just fact!
-- Posted by commonsensematters on Mon, May 7, 2012, at 6:59 PM
So how long does it take to make up the difference of the $150 billion last year.
9-11 and the 401k drop caused many to lose 50% of what they had. When they got back to where they were at 10 years later Democrats would think they had a good return on their investment.
-- Posted by We Regret To Inform U on Mon, May 7, 2012, at 7:22 PM
BTW...... Did you notice after 2006 it slowed down. Maybe because Pelosi and crew took over in 07.
-- Posted by We Regret To Inform U on Mon, May 7, 2012, at 7:25 PM
In 2006 Pelosi claimed Bush had the worst jobs record since the Great Depression. Unemployment was 4.4%. What is she saying now since Obama doubled it?
-- Posted by We Regret To Inform U on Mon, May 7, 2012, at 8:35 PM
Politicians, are they worth arguing over?
BC, Me being too lazy tonight to look it up promps me to ask when that was written.
-- Posted by Old John on Mon, May 7, 2012, at 11:21 PM
BC, I was thinking it sounded like timeless wisdom. :)
-- Posted by Old John on Tue, May 8, 2012, at 12:41 AM
"As you are well aware, there are economic cycles that operate independently of what politicians desire or think they can do."
What you said was that American business could thrive whatever the conditions. Clearly, if that were the case, there would be no business cycles, and no recessions, since they would thrive regardless.
-- Posted by Shapley Hunter on Tue, May 8, 2012, at 7:57 AM
An interesting study on Economic Policy Uncertainty.
"We develop a new method to measure economic policy uncertainty and test its dynamic relationship with output, investment, and employment. We find that since 2008, economic policy uncertainty has been at a level approximately two times its long run average."
Of particular interest to me is the overall rise in economic policy uncertainty that occurred around 2007, and from which we have yet to recover. This is consistent with my argument that the Pelosi/Reid Legislature, and the current Boehner/Reid Legislature, have failed the people. While it is not specifically cited as a factor, Methinks the inability by both houses to pass a budget has much to do with it.
The House of Representatives, under Mr. Boehner's gavel, has passed budget resolutions for both fiscal years 2012 and 2013, but the Senate, under the gavel of Mr. Reid, has now been three years without doing so.
This commentary builds on the idea that economic policy uncertainty may have an influence on economic activity:
"We find statistically significant negative effects of policy uncertainty on small business owners' plans to hire and make capital expenditures over the 1986 to 2011 period. We also find a large effect of the economic downturn on small business plans, but the two effects do appear to be independent. The negative effects of policy uncertainty show up even when we weight the components of policy uncertainty in several different ways. The results also stand up when consumer confidence is controlled for, suggesting that the effects are distinct from consumer sentiment.
"While this statistical analysis is informative about the relationship between policy uncertainty and small business expansion plans, we cannot say that "policy uncertainty" causes small business hiring and capital expenditure plans to decline. That is because a purely statistical model cannot identify fundamental causes. But whatever the fundamental cause, our analysis indicates that adding information about policy uncertainty improves our ability to explain the survey responses provided by the NFIB's survey respondents.
"In that sense, we can say that the correlations between the two are strong enough to reject the argument that policy uncertainty is irrelevant for currently weak small business expansion plans. In our view, policymakers should take seriously the widespread anecdotal reports that policy uncertainty is adversely affecting small business owners' expansion plans."
-- Posted by Shapley Hunter on Tue, May 8, 2012, at 8:38 AM
"...find a large effect of the economic downturn on small business plans, but the two effects do appear to be independent."
Perhaps they should look into the impact of millions of jobs being transferred overseas by American companies.
Uncertainty is always a factor, but at the same time conservatives have a strong penchant to praise and laud the "risk-takers," who should be astute enough to overcome insecurity. Are all of them waiting to 100% certainty? It's not going to happen. And what about the Fortune 500's with their record earnings? Shouldn't this eventually trickle down to smaller companies?
-- Posted by commonsensematters on Tue, May 8, 2012, at 3:39 PM
Record earnings are typical of the early signs of recovery.
When a downturn begins, companies produce until their shelves are full, in hopes that they will not have to layoff qualified workers. Once the shelves are full, layoffs necessarily begin, as there is no use in manufacturing product that you cannot sell or store.
Companies will reduce manpower until they have only what is needed to keep the shelves full, consistent with the reduced orders that typify the downturn.
As the economic recovery begins, product inventories begin to deplete faster than they can be replaced. This results in increased earnings, as they have income from product that costs them nothing (those costs having been factored in at the beginning of the downturn).
Once the economy stabilizes, the companies will rehire, increasing the cost of manufacturing inventory.
Now, this only applies to manufacturing concerns, mind you, and not all Fortune 500 companies are manufacturers. But it is a typical sign of recovery.
Uncertainty is a factor, because companies are loathe to hire new employees or expand business in order to manufacture product they can't sell, or if the cost of hiring them or expanding the business (due to tax issues, for example) will outweigh the benefit of the new hire.
Companies are not, after all, in business merely to pay taxes.
And, yes, theory the Fortune 500 earnings should 'trickle down' as they buy products and services from those smaller companies.
-- Posted by Shapley Hunter on Tue, May 8, 2012, at 3:50 PM
Risk takers, to the best of my knowledge, have never been able to overcome purchasers insecurity about making purchases.
I seem to recall a while back that there was a chicken/egg debate regarding the question of supply and demand. I said then that it is possible to create demand by supplying and marketing a product that is desirable, but such is not always the case.
It is true that one can build a better mousetrap and the World will beat a path to your door, but not every company is adept at creating new micetraps, but are slaves to the market for extant ones. For them, demand dictates supply.
-- Posted by Shapley Hunter on Tue, May 8, 2012, at 3:58 PM
The interests of big business and small businessmen are often diametrically opposed. Big businesses use the present political system to gain an inordinate influence over the writing and enforcement of laws and regulations. Small businesses do not have that kind of influence.But you would necessarily need to own and operate a small business in order to understand that. Those who have worked in government agencies seldom have any concept of/sympathy for the problems small businessmen face daily.
-- Posted by Robert* on Tue, May 8, 2012, at 5:27 PM
Perhaps they should look into the impact of millions of jobs being transferred overseas by American companies.
Uncertainty is always a factor, but at the same time conservatives have a strong penchant to praise and laud the "risk-takers," who should be astute enough to overcome insecurity. Are all of them waiting to 100% certainty? It's not going to happen. And what about the Fortune 500's with their record earnings? Shouldn't this eventually trickle down to smaller companies?
-- Posted by commonsensematters on Tue, May 8, 2012, at 3:39 PM
I remember a thing called NAFTA. Nuf said.
There has never been 100% certainty going into business or future plans for your business. Most times it is a 70/30 call or way less.
When you have plans on investing $2 million and making 5% profit on a product or service but Obama is telling his constituents he is going to make me pay more for labor, taxes, healthcare, unemployment, fuel, etc. I take that into account. If I cant see making the 5% any longer it gets pushed back 4 years until he is gone. Dithering has had the greatest impact.
I have bought very little equipment or tools since 2008. I cut back the same as millions of businesses have. That cost millions of jobs.
One thing I learn going to conventions is if Obama wins I along with many other businesses will liquidate.
BTW I thought you guys said trickle down was a farce?
-- Posted by We Regret To Inform U on Tue, May 8, 2012, at 6:01 PM
Rick, A true liberal says he cares your dog is over weight while tossing fat over the fence trying to make the dog like him. :)
-- Posted by Old John on Tue, May 8, 2012, at 8:28 PM
Rick
Facts:
Cats hate everyone.
Obama eats dogs.
-- Posted by We Regret To Inform U on Tue, May 8, 2012, at 9:28 PM
"conservatives have a strong penchant to praise and laud the "risk-takers"
We praise and laud them because they are so rare. It is the same as the manner in which we praise and laud heroes.
We had this discussion back in the 'Joe Paterno' thread. I noted that we praise and laud those who 'go above and beyond the call of duty' because so few do so.
If such things were not rare, there would be no reason to praise and laud them.
-- Posted by Shapley Hunter on Wed, May 9, 2012, at 8:33 AM
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That is a lot of information to digest at one sitting. And it is a question well worth discussion. We have lived in a world in which the United States was the dominant world power. How would things change for us if China truly became the dominant world power? How would this affect our liberties? And what would our grandchildren have to look forward to?
Replies (55)