Friday, December 23, 2011

China trade: myths vs. reality

By Walter E. Williams

Republicans and Democrats, liberals as well as conservatives, have bought into anti-Chinese trade demagoguery. Former House Speaker Nancy Pelosi suggested that tariffs against China are a "key part of our 'Make It in America' agenda." During his 2010 campaign, Senate Majority Leader Harry Reid, D-Nev., called his tea party-backed Republican challenger, Sharron Angle, "a foreign worker's best friend." In a recent news conference, President Barack Obama gave his support to the anti-China campaign, declaring that China "has been very aggressive in gaming the trading system to its advantage," adding that "we can and should take action against countries that are keeping their currencies undervalued ... (and) that, above all, means China."

Republican 2012 presidential candidates have jumped on the anti-China bandwagon. Mitt Romney wrote: "If I am fortunate enough to be elected president, I will work to fundamentally alter our economic relationship with China. ... I will begin on Day One by designating China as the currency manipulator it is." Former Sen. Rick Santorum, R-Pa., was even more challenging, saying, "I want to go to war with China."

Let's look at the magnitude of our trade with China. An excellent place to start is a recent publication (8/8/2011) by Galina Hale and Bart Hobijn, two economists at the Federal Reserve Bank of San Francisco, titled "The U.S. Content of 'Made in China.'" One of the several questions they ask is: What is the fraction of U.S. consumer spending for goods made in China? Their data sources are the U.S. Census Bureau, the Bureau of Labor Statistics and the Commerce Department's Bureau of Economic Analysis.

Hale and Hobijn find that the vast majority of goods and services sold in the United States are produced here. In 2010, total imports were about 16 percent of U.S. gross domestic product, and of that, 2.5 percent came from China. A total of 88.5 percent of U.S. consumer spending is on items made in the United States, the bulk of which are domestically produced services -- such as medical care, housing, transportation, etc. -- which make up about two-thirds of spending. Chinese goods account for 2.7 percent of U.S. personal consumption expenditures, about one-quarter of the 11.5 percent foreign share. Chinese imported goods consist mainly of furniture and household equipment; other durables; and clothing and shoes. In the clothing and shoes category, 35.6 percent of U.S. consumer purchases in 2010 were items with the "Made in China" label.

Much of what China sells us has considerable "local content." Hale and Hobijn give the example of sneakers that might sell for $70. They point out that most of that price goes for transportation in the U.S., rent for the store where they are sold, profits for shareholders of the U.S. retailer, and marketing costs, which include the salaries, wages and benefits paid to the U.S. workers and managers responsible for getting sneakers to consumers. On average, 55 cents of every dollar spent on goods made in China goes for marketing services produced in the U.S.

Going hand in hand with today's trade demagoguery is talk about decline in U.S. manufacturing. For the year 2008, the Federal Reserve estimated that the value of U.S. manufacturing output was about $3.7 trillion. If the U.S. manufacturing sector were a separate economy -- with its own GDP -- it would be tied with Germany as the world's fourth-richest economy. Today's manufacturing worker is so productive that the value of his average output is $234,220, three times higher than it was in 1980 and twice as high as it was in 1990. That means more can be produced with fewer workers, resulting in a precipitous fall in manufacturing jobs, from 19.5 million jobs in 1979 to a little more than 10 million today.

The bottom line is that we Americans are allowing ourselves to be suckered into believing that China is the source of our unemployment problems when the true culprit is Congress and the White House.



Obama tactic failing

The more Obama pushes class warfare, the more people reject class warfare. That’s certainly not what I expected. It’s the counter-indicator effect. If he’s for it, the opposite will happen. Perhaps he should announce an Unemployment Plan instead of a Jobs Plan. It’s another one of those Obama paradoxes, like the Catch-2012. From Gallup:
Americans are now less likely to see U.S. society as divided into the “haves” and “have nots” than they were in 2008, returning to their views prior to that point. A clear majority, 58%, say they do not think of America in this way, after Americans were divided 49% to 49% in the summer of 2008….

If they had to choose, 58% of Americans would say they are in the “haves,” rather than the “have nots” group. This breakdown has held remarkably steady over the past two decades of economic boom and bust, with a record-high 67% of Americans putting themselves in the “haves” category during the strong economic times of the late 1990s.



Minister Told He Will Face Potential Arrest for Reading Christmas Story from the Bible at Capitol Christmas Tree

Rev. Patrick Mahoney to read the Christmas Story at the Capitol Tree on Thursday, December 22, at 12:00 P.M. The Capitol Christmas Tree is located on the West Lawn of the United States Capitol Building.

Rev. Mahoney met with Capitol Police officials telling them of his plans to sing Christmas Carols, read the Christmas story, pray for peace, justice and religious freedom, hold a small 5 inch Nativity Display and pray for political leaders at the Capitol Christmas Tree. Police officials told him some of his activities may be prohibited or constitute an illegal demonstration.

Rev. Mahoney contacted his attorney, Jim Henderson Senior Counsel for the American Center for Law and Justice, who in turn called the Office of General Counsel for the Capitol Police on Tuesday, December, 21.

After talking with the Assistant General Counsel for the Capitol Police, Mr. Henderson sent Rev. Mahoney this email:
"Your use of the Bible or the ornament (Nativity Scene) would convert your activity, in the view of the Capitol Police, into a prohibited demonstration. If you failed to discontinue that activity on police direction you would be risking ticketing or arrest."

Rev. Mahoney told Capitol Police officials he would still read the Christmas Story and hold the Nativity Display on Thursday even if it meant arrest or citation.

This threat of arrest for reading from the Bible comes in the wake of national news stories reporting that the Capitol Christmas Tree has no ornaments depicting the Christmas Story, The Nativity or Jesus.

Rev. Patrick J. Mahoney, Director of the Christian Defense Coalition, states:
"It is hard to imagine that a minister, or any American, would face possible arrest or citation for reading the Christmas Story from the Bible or holding a Nativity Display in the palm of their hand in front of the Capitol Christmas Tree on the lawn of the United States Capitol Building. "Yet, this is what I am facing on Thursday at noon.

"Sadly, we are seeing a growing hostility toward public expressions of faith in the public square especially during the Christmas Season.

"We are now seeing that at the Capitol Christmas Tree where there are no ornaments of Christ or the Nativity and a minister is facing arrest for reading the Christmas Story from the Bible.

"I was told I could hold sheet music, an instrument or camera in my hand, but if I hold a Bible or small Nativity Scene that would be considered a 'prop' and cause me to face arrest or citation.

"I want to make to clear that every American should have the right to express their faith in the public square free from government intimidation or harassment.

"If that means spending time in jail for reading the Christmas Story from the Bible, then I consider that a small price price to pay."



Britain's main Leftist newspaper going broke

Guardian News & Media is to shrink the Guardian, axe its Film & Music supplement, and reduce its sport supplement to a two-days-a-week publication as it battles to stem pre-tax losses of more than £40m a year.

It will also reduce the number of pages in the Guardian’s flagship supplement G2, under wide-ranging changes to be introduced in January.

The media group, which also publishes the Observer newspaper, is briefing staff about the changes today and early next week. “As part of our digital first strategy, we have been looking in detail at how we produce our newspapers and website, and over the next few days we will be telling staff about our plans for a new, simplified production process,” a spokesman said.

“This will be introduced in January, along with some changes to the printed Monday to Friday Guardian. The changes to the paper take account of changing patterns of readership and advertising and are based on research with our readers.”

GNM will continue producing the Guardian’s sports supplement on Mondays and Saturdays, but every other day it will be folded into the main newspaper, which will itself have space squeezed due to a reduction in the number of pages. The Film & Music supplement will be replaced with a section in G2.

Last year GNM, which is propped up by the Scott Trust, went £43.8m into the red. The previous year the figure was £57.9m. The reduction in the Guardian’s activities is part of an effort to make £25m of savings over the next five years, which is also expected to include large-scale job losses.

The group is still seeking volunteers for redundancy but is expected to start the firing gun on compulsory redundancies in the new year, after too few volunteers came forward. Insiders say the company plans to cut around 100 jobs in total, although a Guardian spokeswoman said she did not recognise that figure.

GNM has cut more than 300 jobs in the last two financial years, reduced pagination and closed The Guardian's media, education and society supplements. It is also considering closing the £80m printing plant it opened just six years ago, leading to further job losses.

It has opened talks with Trinity Mirror, owner of the Daily Mirror, about shifting its Berliner printing presses to the red-top’s Watford plant.

At one point it considered abandoning its print products altogether, but Andrew Miller, chief executive of GNM’s parent company Guardian Media Group, has told staff it will continue to have a print presence “for the foreseeable future”.



Obama’s Middle Class Betrayal

Barack Obama literally can’t stop talking about the American middle class. During his unofficial 2012 campaign kickoff speech in Kansas earlier this month, he used the term “middle class” eighteen times as he derided those of us who still believe in free market principles like individual ingenuity and self-sufficiency.

“We simply cannot return to this brand of ‘you’re on your own’ economics if we’re serious about rebuilding the middle class in this country,” Obama said, passionately defending the doctrines of government dependence and class warfare that have been the hallmarks of his regime.

But beyond the not-so-thinly-disguised “us-against-us” rhetoric emanating from his teleprompter, what has Obama actually accomplished on behalf of the middle class?

Not much. Despite his administration’s unprecedented investment in the expansion of an already obscenely-big government, the middle class has wound up paying for – not benefiting from – Obama’s policies. In fact the numbers would indicate that Obama’s stated intention to “spread the wealth around” has actually produced a shrinking middle class – one with less income and more debt.

According to census data released earlier this month, a total of 97.3 million Americans are currently classified as low income. Meanwhile an additional 49.1 million Americans are currently living below the poverty line. Add those numbers together and you’ve got 146.4 million people – or 48 percent of the country – who are currently either poor or low income, an increase of 4 million people from 2009.

Within that total an estimated 44 million people – or 15 percent of the population – are currently receiving food stamps, a 69 percent increase from 2007. More than 50 million people – or 17 percent of the population – are currently on Medicaid, with Obama’s socialized medicine plan scheduled to add another 14 million to government health care rolls beginning in 2014.

Meanwhile an estimated 16 million people – or 15.6 percent of the nation’s available work force – are currently underemployed, while more than 6.2 million people have been out of work for longer than six months.

Want more evidence of the “great middle class betrayal?”

Despite a massive federal bailout of the housing industry, 10.7 million American mortgages were underwater as of September 2011 – meaning the debt on these properties exceeds their fair market value. Another 2.4 million borrowers had an equity stake of less than 5 percent in their homes.

Also, bear in mind that these dismal stats don’t include the nearly four million U.S. homes that have already been foreclosed on since the recession began in December 2007.

While Obama likes to blame his predecessor for the ongoing sluggishness of the economy, it’s important to remember that he wholeheartedly endorsed the interventionist policies championed by George W. Bush in response to the initial economic downtown. In fact he put Bush’s approach on steroids – dramatically upping the federal government’s Keynesian ante in an attempt to “stimulate” the economy.

Obviously even a cursory look at the “American Recovery and Reinvestment Act” revealed that the only thing it intended to “stimulate” was the growth of government – as evidenced by the fact that it created more than 30 new government programs and expanded more than 70 existing ones.

Not only that, Obama’s bailout effectively repealed America’s welfare reform laws – putting states back on the old “bounty system” that incentivized them to add names to the welfare rolls. And since then, Obama has successfully pushed for the perpetual extension of unemployment benefits – basically incentivizing workers to remain on their sofas instead of on the job site.

Who’s paying for this dramatic expansion of the dependency culture? You guessed it – the “middle class,” the very people Obama claims to be fighting for.




Portugal: Supreme Court denies US appeal for fugitive killer: "Portugal's Supreme Court has refused a request from the U.S. to extradite American fugitive George Wright, his lawyer said Thursday. Wright's lawyer Manuel Luis Ferreira said the court rejected an appeal by the U.S. against a lower court's decision that denied extradition a month ago."

France: National Assembly passes Armenian genocide censorship bill: "Turkey is fuming over French legislation that would criminalize any public denial of what the bill calls the Armenian genocide last century in Ottoman Turkey. 'We are reviewing our relations with France,' Turkish Prime Minister Recep Tayyip Erdogan said after the French National Assembly passed the so-called Armenian genocide bill. 'We will take our measures phase by phase depending on France's behavior from now on.'"



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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


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