Bush/Clinton/Obama Uni-Party Sold Us Out To China

a reply to: SleeperHasAwakened

I think all are equally culpable. You cannot assume consumers are noble. Everyone operates in their own best interest.

Consumers care about low prices and saving money more than anything else. As such, their purchase decision is based primarily on that factor alone. Yes, there are some instances where someone may pay more for a luxury good, out of convenience, or some other intangible quality; but by in large, price is the driving factor in a purchase decision.

On the other hand, businesses primarily operate in a competitive environment. Business A vs Business B. The company that has the best price (all things considered) will typically win. In addition, businesses also have to make a profit. In order to make profits and still remain competitive price wise, a business has to constantly look for ways to take costs out of their operations whether it be using technology, cheaper labor, outsourcing, etc.

Up until around the 70s, most major US corporation all were US based. However, with transportation, technology, and political stability, many other countries opened up not only for sales of goods, but also as a source of labor.

The reality is that manufacturing is by in large a low skilled job. A business figured out it was far cheaper to go to some third world country and pay pennies to have someone drive widgets than to stay in the US. The first company that did this was then able to offer lower prices and higher profits. The competing companies then have to respond in kind or else they risk being driven out of business.

Consumers have demonstrated with their purchase decisions, they do not value made in america. Wal-Mart understood this dynamic and took advantage of it. They also knew it was cheaper to locate in far out rural areas to build bigger stores and offer cheaper prices than to try to compete against a smaller store in a higher cost area. Wal-Mart simply had a better business strategy.

a reply to: 727Sky

So you and I both agree on that point: most consumers, outside of purchasing something truly large, for everyday shopping, simply can't be bothered to weigh purchases according to where the label says it was made. Even at the peak of the earlier iterations of trade wars, in the '80s, I don't recall hearing "buy American" being thrown around when my mother went to buy groceries or my dad went to pick up lumber fasteners at the hardware store. But then this raises another question: at what point did the question of *where* something was manufactured extend down from sedans and TVs to light bulbs, dish detergent and 12d nails?

Even small commodity items face the same pricing pressures. No industry is immune. The company supplying nails to Home Depot has the same issues. Let's follow it...

Contractor goes to Home Depot and sees nails are 1000 for $5.00. Lowe's has nails 1250 for $5.00. The contractor decides to go to Lowe's instead. Home Depot calls up the nail manufacturer and says your price is too high.

The nail manufacturer discovers his competitor moved their operations overseas to make nails. He looks at his operations and determines the only way he can offer the same price is to move his operation overseas, so that is what he does.

Whether it is t-shirts, socks, toys, etc. It doesn't matter. All businesses face the same decisions and it all goes back to the consumer who rather get a cheaper price.

In other cases, you have situations like American car companies who made bad strategic decisions but also are hampered by unions making them noncompetitive compared to foreign car companies. In order to try to compete, American car companies had to move their plants. However, many foreign car companeis came to the US and located in right to work states in the south to avoid being unionized like the Big 3 automakers.

BMWs are made in South Carolina. Mercedes in Alabama.

Consumers operate in their own self interest, just like people driving cars or riding bikes. It's in my self interest, as a person hopping into a car late for work, to not buckle my seat belt; it takes time I don't have at the moment. It's in my self interest, as a person trying to ride a bike, to not be encumbered and uncomfortable wearing a helmet. See a pattern here? Sometimes we don't have the "big picture" as actors in some system, and that's why we (supposedly) have some higher authority to be the arbiter between self interest and safety. For the American consumer (who unless they are Warren Buffet or Bill gates is simultaneously an American worker) I think you and I both agree, it may not be the job of folks running Ford or True Value Hardware to advocate for those people's long term economic benefit. But in our country, ~somone~ is supposed to look out for us, and make sure our pursuit of short term self-interests aren't made at expense of long term self-interests.

It's pretty evident reading the forums at this particular time that the party/parties (several administrations of POTUS and most especially Congress) who were charged with long term interest of America's economy chose not to "wear a helmet" when exploring manufacturing ops in China, and whoops, look what happened.

I think capitalism is the greatest financial system ever created in our history, but IMO there has to be some (political?) guardrails to prevent the old Lenin prediction from coming true, that "when it comes time to deal with the capitalists, they'll sell us the rope we'll hang them with." Right about now, it's looking like China bought our rope.

I wish I knew what those guardrails looked like and how they can be implemented. Unfortunately we're a bit late in the game to change our strategy now.

2 questions for you edumukated, b/c based on your background and what you studied, you understand economic theory as well or better than anybody on this forum.

# 1 Can you at least admit that China sort of has us over a barrel economically ATM?

# 2 What guardrails or regulations/policy could have prevented this from happening? Truly you can't believe that nothing could've or can be done to prevent what we're seeing now? China has literally owns all of the manufacturing capability for our economy. Our economy has completely morphed into a service economy, which at the moment is locked down like a drum, whilst China's economy is already begging to hum again. Do you feel that simply allowing market forces to operate without any limitations whatsoever will turn out well for us in the long run?

a reply to: SleeperHasAwakened

We agree that there has to be a guard rail. I guess the only area of debate is how high of a rail?

I've never liked or supported companies moving to China. I understand why they do it, but I also see it as a huge national security issue. The question is if it isn't China, is Mexico OK? What about panama? Vietnam? India? The issue is labor costs as the driving factor in the business decision. Companies that move from China are still probably going to go to some other low cost second or third world country, not back to the US.

I believe govt needs to just create an environment that is inviting to business so that the attraction of moving overseas is not so great. Lower corporate tax rates to something like 1 or 2% for companies that keep manufacturing in the US. I believe we should have tariffs on goods from certain countries that aren't equitable with our standard of living.

Consumers need to hold companies accountable too though by favoring companies that do try to keep jobs local and put the interest of the US first.

a reply to: 727Sky

The government didn't sell America to China, big business did. Big business saw all of that cheap labor and all of those disposable factories and it jumped right in with both feet. It's no coincidence that stores like Walmart stock their shelves with cheap Chinese goods.

The government signed the treaties that big business wanted them to sign. China opened up its markets but wanted America to do likewise.

But back then China was poor so nobody thought that it would be able to take advantage of these treaties. Now it's wealthy and it's simply doing the things that big business got the government to allow it to do decades ago.

It wasn't just Clinton, Bush was just as bad. He didn't pull the plug on China's MFN status.

a reply to: 727Sky

Correct, it certainly appears that a globalist cabal has been running the country since Bush one.

Nice overview, just wanted to add that after Nixon resigned George H.W. Bush took over, becoming the unofficial ambassador to China in the early 1970's and since had played a key role in the US-Sino relationship, even years after he left office.George Bush 41 has had the most impressive resume of anyone in our lifetime, remarkable.

George H. W. Bush's life in China opens a fascinating window into one of the most formative periods of his career. As head of the United States Liaison Office in Beijing from 1974 to 1975, Bush witnessed high-level policy deliberations and daily social interactions between the two Cold War superpowers. The China Diary of George H. W. Bush offers an intimate look at this fundamental period of international history, marks a monumental contribution to our understanding of U.S.-China relations, and sheds light on the ideals of a global president in the making.

www.amazon.com...

An odd source but google is not very helpful these days

originally posted by: Stupidsecrets
All Presidents starting with Nixon sold us out to China. Go read a book about the US and China relationship. It was Nixon who opened up trading with access to China's slave labor. We even cleaned and dredged their rivers filled with junk boats to facilitate more trade. Before that it was impossible to trade with them. Large boats could not make it through China's main waterways.

Once trade took off look what happened. Every President has steadily sold out American workers and families. Quality of goods and materials have declined, massive trade deficits, lowered wages, obtuse environmental laws making it impossible to keep businesses in the US and corporate raiding on a massive scale.

originally posted by: Edumakated
a reply to: SleeperHasAwakened

We agree that there has to be a guard rail. I guess the only area of debate is how high of a rail?

I've never liked or supported companies moving to China. I understand why they do it, but I also see it as a huge national security issue. The question is if it isn't China, is Mexico OK? What about panama? Vietnam? India? The issue is labor costs as the driving factor in the business decision. Companies that move from China are still probably going to go to some other low cost second or third world country, not back to the US.

I believe govt needs to just create an environment that is inviting to business so that the attraction of moving overseas is not so great. Lower corporate tax rates to something like 1 or 2% for companies that keep manufacturing in the US. I believe we should have tariffs on goods from certain countries that aren't equitable with our standard of living.

Consumers need to hold companies accountable too though by favoring companies that do try to keep jobs local and put the interest of the US first.

I'd like to see an incentivized tax structure, one that promotes "onshoaring" production and jobs that have been moved overseas. Set up a sliding scale corporate tax rate that lowers effective tax% the more jobs and domestic spending/resources that a business creates. Also, look at ways to have a similar approach to improving the the earnings ratio of C level employees to front line workers, no it's never going to be 5 or maybe not even 50 to 1, but come on, earning several hundred times what a typical employee makes? That is very distorted and not sustainable, yes good topline leadership is incredibly harder to find than low skilled widgetcraft or telephone support, but 250-300x more important? No. With the way the American middle class has been eviscerated, we're not going to have a vibrant future as a nation with a small set of insanely wealthy executives, masses of people who spend every last penny of their pay check to pay living expenses, and nothing in between. That's not capitalism, that's feudalism or some kind of North Korean dystopia.

a reply to: StoutBroux

the only problem with that assumption everyone seems to have is that its not actually cheaper but with how we over tax domestic businesses and over regulate, it makes our own products more expensive even though its actually cheaper to produce at home. its after manufacturing that costs get added on to made American goods more expensive, basically we need a vat tax to correct the imbalance and bring down the cost of American goods and products closer to where they should be.

American products used to be cheap and better quality but we haven't kept up with global trends in taxes and regulations, as a result china and other nations have taken advantage and many American companies have failed, been bought out by foreign companies or been forced into mergers to compete with foreign companies.