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The Glory of Globalism
If there’s anything the globalist “free traders” loved more than importing cheap foreign labor to undercut American workers’ wages, it was offshoring those jobs entirely by relocating American manufacturing to communist China. According to the GFTs, there was absolutely no downside to this. True, American manufacturing workers would lose their livelihoods by the millions, but all the cheap Chinese-made crap they could buy at Walmart (once they learned to code and got new high-tech jobs {unless East Indian coders imported by the millions on H-visas undercut those jobs, too}) would raise their overall consumer satisfaction. Also, the GFTs told us… try not to laugh… increasing trade with the Chinese would make them more liberal and democratic.
The former thing is working out about as well as the latter thing; which is why you may have noticed a lot of empty shelves (or, more likely “ITEM OUT OF STOCK” labels on Amazon.) This is reported at multiple sources, but we’ll use the Daily Mail:
Dozens of cargo ships anchored off the coasts of Los Angeles and New York face shocking wait times of up to four weeks and railyards and trucking routes are hopelessly clogged due to the lack of manpower to unload goods – with an expert warning that the government needs to intervene or face spiraling inflation and unemployment.
The backlog of billions of dollars of toys, clothing, electronics, vehicles, and furniture comes as the demand for consumer goods hit its highest point in history as consumers stay home instead of spending money on travel and entertainment.
Supply chains have lagged far behind consumer demand due to a lack of manpower at American ports and the restrictions that came with the COVID-19 outbreak early last year. These constraints, which include social distancing and mandatory quarantines, have severely limited the number and ability of port workers to do their jobs.
I can’t help thinking a lot of this could have been avoided if, you know, we still manufactured stuff in America. Also, if we hadn’t treated an upper respiratory infection with a 99.8% survival rate like it was the second coming of the Black Plague. I vaguely remember a guy who warned us that depending on communist China for our manufacturing was a bad idea. I think he got impeached or something.
Published in Economics
I don’t encourage protectionism…just an even playing field. When the international competition is rigged with tariffs and monetary policy that favors them at the expense of our manufacturers, I want leaders who will stand up for my country and my fellow citizens. If globalism ends up with the USA not even able to produce its own military weapons, then globalism needs an adjustment. We cannot be a service economy if there is nothing left to service. Ohio, Michigan, Pennsylvania, and other states are still the USA. We can’t just tell those people to move elsewhere and abandon huge swaths of our country. Globalism needs its own checks and balances. This world has a core of people, very small in number, but way too large in power. They have no allegiance but to themselves.
I follow a smart guy on Twitter that says it’s a total waste of time to not include monetary policy in political trade discussions. Nobody does it.
How about no Free Trade with Communist countries. Just do that.
This was such a gigantic, huge mistake. Terrible. Import your deflation from somewhere else.
When I was in college lots of people were worried about the rise of Japan. But now we realize that Japan’s economy has been pretty stagnant for the last 30 years.
I wonder with the demographic situation in China if the same isn’t about to happen
It’s going to be worse for China, in my estimation, because while Japan is already a very wealthy country, China doesn’t have nearly as high of a per capita income.
So, China will grow old before it grows rich, unlike Japan.
I’ve been playing devil’s advocate. I would like us in the west to become independent of China and guarantee a decent and meaningful way of life to our workers. But in all honesty I don’t know how.
Why the automatic assumption that if something can be produced cheaper elsewhere it should be? Why not ask “why”?
Why is it cheaper there than here?
Are the trade offs worth it?
I get the feeling Americans (and several on this board) uncritically accept that we have sold our neighbors out for virtue without being willing to pay for that virtue. It’s expensive here because we are too virtuous for slavery, but we have no compunction against buying something from a country that has slave labor. We are too virtuous to have no minimum wage, but we have no issue with buying stuff from countries that pay labor next to nothing.
So it does not follow, to me, that we are virtuous. We just like the pretense of it.
China’s second-largest property developer, Evergrande, just defaulted on its loan payments last week. Investors are watching to see if this causes a chain reaction by taking down other Chinese companies.
https://truth-daily.com/china-evergrande-defaults-on-second-debt-payment-in-a-week-investors-fear-big-losses-national/
Generally when people see nearly identical products in 2 different stores but one store is charging 3 times as much for the product, they purchase from the store that charges less.
Now, sometimes when your next door neighbor’s child is doing a fundraiser for his soccer team, you might pay 3 times what the supermarket charges for chocolate or cookies. But that’s more like a donation than a purchase.
People who are having difficulty paying their mortgage or saving for retirement aren’t always going to be interested in paying more for a product than they absolutely have to. It’s an act of self-preservation, to some extent.
Funny thing about the Chinese. They don’t trust their government. That’s why they invest in property and until recently bought baby formula abroad when they had a chance.
***D E F L A T I O N*** is the way God intended man to live. Except that is not how the government and the financial system are set up. It is going to end badly.
Put God on the federal reserve board.
Easy answer: Just go shopping with a woman. Deals, sales, markdowns. two-for-one, close-outs, etc….
Another easy answer. People in third-world countries are willing to work for peanuts. They don’t have technology and they don’t own a lot of property, but they’ve got plenty of something we call “human capital.” Plus, people in third-world countries don’t have exorbitant welfare programs to live off of.
Depends on the person.
I don’t see what is un-virtuous about a buyer and a seller setting a price that is agreeable to both of them. Your point would be strong with deals that involve slave-labor, but that is really a miniscule fraction of what is going on. The people working these low wage jobs for us in other countries are more appreciative of their pay than many Americans are with their welfare payments.
When this economic theory was invented or observed, we were talking about streamlining, efficiency, and production scale.
When we are talking about getting stuff from China, we are talking about none of those things.
Hence the question “why is it cheaper”? It isn’t because China has mastered efficiency. They just don’t have a do-folder society looking over shoulders and saying “stop killing the planet!”
Insert Greta Meme here…
”How DARE you!”
You’d think this would go without saying.
It is unvirtuous to demand labor from someone that you are unwilling to pay for.
We pretend we are virtuous in demanding it here, but with our pocketbooks, we refuse to pay for it.
We want our cake and we want to eat it, too. But that’s not how the world works. And we will pay for our lack of virtue eventually.
You may be lucky in being dead before that happens, so you can continue feeling virtuous without paying for it. This attitude is no different than the one that bankrupts future generations with continuing resolutions and a growing deficit.
I think the environmental thing certainly weighs in their favor, but the overwhelming engine driving this is that they have 1.4 bilion people who are willing to work.
I don’t understand this. Nobody is demanding work for no pay. Please expound or give me an example of what you are talking about.
Trade opened up after the Soviet Union fell. There are 1 billion poor people that will work for nothing.
Automation and computers also lower prices.
Our government and financial system should have stopped with the inflationism around 1992.
You are here.
It does go without saying. You think I’m not aware of it? Of course someone will choose a free hand out instead of working for it. It’s the exact same thing.
But you are acting like somehow you are above free handouts. You aren’t. It’s just better disguised. Nothing is free. Your free handout comes at someone else’s expense. Where the expense is streamlining and efficiency, it frees up resources (Both labor and financial) to pursue other goals. But slavery and slave wages, pollution, and poor quality do none of those things. It abuses and destroys other kinds of capital (environment, human labor, raw material) and treats them as worthless garbage, easily replaceable. And maybe they are replaceable, but it is very poor stewardship.
And good stewardship is high on those virtues we should be pursuing.
A friend of mine only purchases “fair trade” coffee, coffee that is ethically grown, meaning that people who pick the coffee beans are paid “a living wage.”
I don’t know how she verifies that this “fair trade” coffee is actually delivered to her market only with “living wage” labor. Who is checking to make sure that the coffee growers are paying their employees more than X per hour?
So, while I understand the people don’t want to buy any product that is produced with slave labor. How do you know unless you watched the product get made with your own eyes?
If our society demands high wages in our country because that is what is moral and ethical (for workers to be paid “fair” wages), but then go and buy product produced in a country that does not pay a fair wage, and may even use slave labor, then you actually do not believe workers should be paid a fair wage.
In the cases of product being made in China, we are talking about paying for product that is being produced at very low wages. Is it a fair wage? Are they paying their labor?
Of course people would rather take something for far cheaper. We all would. I would rather someone hand me something for free, instead of having to pay for it, too. Does that make me good?
Someone is producing that product if I didn’t work for it. My taking it for cheap (or free) is approximate to my saying their labor isn’t worth higher compensation.
If this were strictly a conversation about efficiency, it would be a very different conversation. Efficiency is a part of stewardship. But treating people who work like their labor has no value is not stewardship.
Seeking cheaper prices may be human nature, but it is not good if those cheaper prices come with bad stewardship (poor wages, pollution, poor quality).
It’s a political and a geopolitical question.
For this reason it’s very tricky to switch to deflation. It gets very technical if you don’t want to do it.
So it will and the hard way.
We shouldn’t have been dealing with China.
The policy should be they are halfway decent to their people, and they are halfway decent to the environment. There are a lot of countries that would fit I think.
1 billion people need any money more than they need anything else.
I don’t want to get all lefty with this, but if our society wants clean environment, high wages, and safety standards out the wazoo, then we should be willing to pay the price tag that comes with that.
Tarriffs on countries that don’t follow our virtuous regulations may be a way to enforce it, but currently, those regulations have been used to destroy our own industry while letting other countries produce for us without any of those caveats.
Id be far happier if our country had no minimum wage, the potential for homes without electricity or plumbing, or willing to live with dirty rivers. We clearly aren’t willing to pay the price for cinderblock homes with running water, high wages, and clean water, so we really shouldn’t have regulations to those effects.
There is only so much we can do about other countries that need our money.
The faster the planet adopts deflation and no war as policy, the faster everybody’s prosperity goes up. There are a million reasons this isn’t going to happen and none of them are good.