Saturday, February 13, 2016

Made in China

Announcements like this have been replicated thousands of times across America since NAFTA became law 22 years ago. (I knew when Congress passed the North American Free Trade Agreement that our politicians had sold U.S. down the river.) Since then, the global chieftains of commerce have realized enormous gains by outsourcing labor and lowering costs, then importing those cheaper products to relatively wealthy American consumers.

At first, we all gained by this exchange. Even the displaced American worker (who got another job) could afford to buy more "stuff" at lower prices. 

But who will pay those prices once all the American jobs are gone?

We used to make everything in America. Now we make almost nothing. With American manufacturing gone, American skills fled offshore. Now even America's "know-how" and "can-do" spirit must be imported. (Actually, that's always been the case. America's premier entrepreneurs have usually been her immigrants!)

Native-born Americans are not just do-nothings. Now they are largely know-nothings. Americans have laid down pick up now made in China. (But even our tools are now made in China!) Unlike their contemporaries in rising industrialized nations, today's American kids graduating from college (or otherwise entering adulthood straight out of high school) have practically no practical skills or knowledge. They cannot build anything! They're hardly even allowed to work! Our laws are designed to prevent children from "competing" with American adult labor. 

Meanwhile, children in other countries make much of the stuff we now buy at Wal-Mart.

Our homes are serviced and constructed, our crops are planted and harvested, our meals are prepared and packaged, our clothes are sewn and our shelves are stocked largely by people who cannot even speak our language! (Some of them were even born here.) 

This doesn't begin to address all the other things we realistically can't live without anymore. Who would stay in Los Angeles, Phoenix, New York or Chicago without modern air conditioning and heating? Transportation? Piped-in, pumped-in water? Electricity? Or all the other stuff that makes modern life possible? Stuff now made almost exclusively elsewhere?

If China (and other countries) stopped selling U.S. the wares all Americans now rely on, we would be thrown back at least 70 years. Worse than that, our cities would become like those our bombers once devastated during WWII. 


First our shelves would be emptied -- as "cheap," ubiquitous imports became both rare and luxurious. (What would be left to buy? Almost nothing.)

Then the real bombing would start. People raised on "entitlements" -- but bereft of knowledge, skills and morality -- are fit only to destroy...and be destroyed. Riots, chaos and civil war ensue.

All because other countries just stopped selling U.S. stuff.

As of 2013, we owed $1.3 trillion to China...and about $4 trillion to other countries. We owed $5 trillion to ourselves. (Those numbers have only gone up.) Now we owe $19 trillion...more than our entire economy can produce in a given year. 

What if we couldn't pay that money back? What if our money became worth less? (Or even worthless? After all, it's only paper, if that.) What if everyone stopped taking our (worthless) paper in return for practically everything we now buy, use and need?

How long would it take U.S. to retrain, retool and reopen our factories (if we still could), getting American workers back to work? (So long as the rest of the world produces things that cost us less than what we would pay ourselves, it would never happen.) Politicians promising to "create more American jobs" without sealing our borders to both imported products and labor deceive us -- unless they plan to produce those jobs by employing us to make everyone else richer. 

But if we seal our borders (and "buy only American"), what would prevent other countries from doing the same? Large countries with abundant resources (like U.S.) can fairly well "make due" on their own. But others (with fewer resources) need international commerce merely to maintain "first world" status.

The rise of the "third" world at the expense of the "first" seems all but inevitable. (It also seems like the "right" thing to do. Why should 5% of the world's population (America) consume 50% of the earth's resources?) Even with plenty to go around, for many (of U.S.), the transition to first-world prosperity and one-world equality is painful. Will our citizens leave our first-world "workers' paradise" to work elsewhere at third-world wages? (If things are so great elsewhere, why are people still coming here?)

I can sense the fear and frustration felt by those now losing their jobs. What will these people do? How will they live (and make a living)? What will they teach and pass on to their children?

The man making this announcement doesn't fear for his life or livelihood. (He's probably expecting a raise!) Carrier, the corporation, will experience gains after it exchanges its higher-paid U.S. workers (and their benefits) for lower-paid Mexican replacements (with fewer or no benefits). 

But when the incomes of (former) U.S. employees are gone -- a scenario repeated millions of times since 1994 -- who will buy all those air conditioners being imported from Mexico?

This is a short-term gain for Carrier...but a long-term loss for U.S.

(You can only imagine the "love" now being "installed" in every Carrier air conditioner coming off the line in Indianapolis since Carrier announced it was moving operations to Mexico. Care to buy a Carrier, anyone?)

The time will come (it always does) when the scheming, powerful and murderous conclude that the fastest way to wealth and prosperity is to selectively ruin everyone else's. Bombing the rest of humanity into oblivion did wonders for the U.S. economy after WWII. Ours were the only factories left standing! Since everyone needed new stuff (and with competition nil) everybody wanted everything "Made in U.S.A."

That's no longer the case. 

Most of "our" factories are now gone. (They're in China!) China has built entire new cities -- using 50% more concrete (in just three years, from 2011 to 2013) than U.S. used during all of the 20th century! Who will fill those new (now empty) cities China has built? What will they do with the old ones? What are they planning?

I fear the day when China wishes to be as wealthy and powerful as U.S. They may want the same stuff we have. (Why shouldn't they? It's mostly theirs anyway! They made it!) When all else fails -- and all else will fail -- they may propose to achieve wealth and prosperity the same way we did.

We may want to prevent that from happening. But how could we? Once even our weapons are made in China. 

Don't worry. 

They'll "export" them to us.


  1. Gee, I wonder if the problem is, in the end, the "principle" of private property combined with the "principle" of exchange?

    I mean, gee, isn't the case of trade between nations just a larger example of trade between neighbors?

  2. Replies
    1. This is still one of the most impactful discussions for me. I still don't understand it fully, but I haven't been able to listen to the Austrian Economic/Libertarian/Mises/Rockwell arguments with full-investment in them since.

      In retrospect (and it shouldn't really have been a surprise) I'm amazed how easily we can read our own false traditions, assumptions, cultures, and backgrounds into the scriptures and be led into a distracting path.

  3. Good post, Will. You ask "What if we couldn't pay that money back?"

    The reality is we can't. More money is owed than actually exists in the whole country -and it is the American people who hold that debt.

    This is why a massive collapse is inevitable. It WILL happen. And there's not a damn thing any of us can do about it but endure it, or die when we are swallowed up in its destructive wake.

    1. I watched the video, Rock. An important part is his explanation about how money is "created" today as "monetized debt."

      When someone buys a house and the bank loans that someone "the money," the bank's really just "loans" them the opportunity to promise to "pay back the money...with interest." The borrower literally creates the money himself by making that promise to repay -- as a "lien" on his own income, labor, etc.

      Unfortunately, this is NOT a "zero sum" game. The borrower isn't just pledging a return of the principal. He must also pay the interest. And whence comes that interest? Neither the principal nor the interest exist in real terms! (There are no little green pieces of paper in circulation or gold bars stored in Fort Knox to "cover" the principal, let alone the interest! Just the promise of the borrower to repay it.)

      It's a shell game. Since more "debt" is created than there is "money" in existence, the debt can NEVER be paid off -- but just keeps mounting and mounting. More "debt" must be created just to keep the "money" circulating!

      The bankers get to collect the interest while they can, transferring the nation's wealth to themselves while it lasts, using that "money" to buy more stuff for themselves, leaving the "borrowers" (temporarily) with stuff, too, (but that stuff comes with a "lien" on it, which can be enforced, taking that stuff away).

      Eventually, the bankers will have ALL the stuff.

      This is the modern Ponzi scheme called fractional reserve banking (explained in the video).

      All that "stuff" will be wiped out by civil war. (Look at videos of modern Syria. It's a wasteland!)