FacebookTwitterGoogle+RedditEmail

China-Mart Takes Over

by PAUL CRAIG ROBERTS

 

My poor beloved country, trapped in a Middle Eastern quagmire and tricked by Osama bin Laden into subsidizing to the tune of $300 billion (spent or appropriated) a training ground for Muslim terrorists and insurgents while our once fabulous economy disintegrates.

If the US were still rich and just wanted to throw several hundred billion dollars at bin Laden as a good will gesture, that would be one thing. But we are borrowing the money
that we are using to train Muslim terrorists to kill and maim our troops in Iraq and Londoners in England.

The money is being lent to us mainly by Asians, especially the Chinese. China has so many dollars to lend to us because we send so many dollars to China to pay for the goods and services that patriotic American corporations have decided to supply to us from China instead of from America.

US corporations decided that the way to get rich was to destroy their American consumer base by closing their American factories, throwing their US employees out of work and hiring Chinese instead.
The Chinese work for less, you see, and free trade economists say lowering costs makes us better off.

What US corporations and the free trade economists overlook is that giving Americans’ jobs to foreigners raises foreign incomes and lowers American incomes. When credit cards and home equity lines are maxed out, there will be nothing to support the US consumer market. The American corporations who moved their capital and technology to China will have to find new customers.

Maybe the Chinese government will let the relocated US firms sell to Chinese customers, or maybe the Chinese government will let the US firms go bankrupt. The latter favors China’s strategic interest. Chinese businessmen will purchase the bankrupt firms, and Chinese businesses will sell to Chinese customers.

Americans are pouring so much money into China that China can finance our wars while it buys up our companies.

Everyone was shocked that a Chinese company could outbid Chevron for Unocal. China has already purchased IBM’s personal computer business, and is now after US appliance maker Maytag (whose appliances are made in Mexico).

The outsourcing mania has hit the Pentagon, and China will soon be supplying the ships for the US Navy. The Pentagon, seeking lowest cost, is pushing defense contractors to outsource offshore for more materials, components and systems.

This means the end of US shipbuilding capability. Component suppliers to American shipbuilding are already skeletal thin, with most components only having sole suppliers. For example, Manufacturing & Technology News (July 8) reports that 80% of the components for the Virginia Class submarine come from sole sources.

With not enough US Navy ships being built to support even an industry of sole suppliers, Asia is fast becoming the only source for US Navy ships.

While President Bush spends $300 billion recruiting and training terrorists for bin Laden in Iraq, US Navy ship procurement has fallen 33% since 2001.

Meanwhile China is on a rip. China is now the third largest shipbuilder after South Korea and Japan. In five years China’s submarine fleet will be twice the size of America’s. In 10 years China’s navy will be larger than the American fleet.

This is amazing performance for a country that as recently as 1989 had essentially no shipbuilding industry.

This year the US is producing 6 ships, one-tenth of South Korea’s output. In 2006 the US is scheduled to produce only 4 ships, because China has outbid us for the steel. The US “superpower” can no longer afford to compete against China for essential materials.

Cynthia Brown, president of the American Shipbuilding Association says that “the manufacture of entire components and systems will migrate to China in the next several years under current Department of Defense policy with respect to outsourcing.”

But, hey, we will get ships cheaper, and it is making us rich!

PAUL CRAIG ROBERTS has held a number of academic appointments and has contributed to numerous scholarly publications. He served as Assistant Secretary of the Treasury in the Reagan administration. His graduate economics education was at the University of Virginia, the University of California at Berkeley, and Oxford University. He is coauthor of The Tyranny of Good Intentions. He can be reached at: paulcraigroberts@yahoo.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paul Craig Roberts is a former Assistant Secretary of the US Treasury and Associate Editor of the Wall Street Journal. Roberts’ How the Economy Was Lost is now available from CounterPunch in electronic format. His latest book is The Neoconservative Threat to World Order.

May 02, 2016
Michael Hudson – Gordon Long
Wall Street Has Taken Over the Economy and is Draining It
Paul Street
The Bernie Fade Begins
Ron Jacobs
On the Frontlines of Peace: the Life of Daniel Berrigan
Louis Yako
Dubai Transit
Bill Quigley
Teacher, Union Leader, Labor Lawyer: Profile of Chris Williams Social Justice Advocate
Patrick Cockburn
Into the Green Zone: Iraq’s Disintegrating Political System
Lawrence Ware
Trump is the Presidential Candidate the Republicans Deserve
Ron Forthofer
Just Say No to Corporate Rule
Ralph Nader
The Long-Distance Rebound of Bernie Sanders
Ken Butigan
Remembering Daniel Berrigan, with Gratitude
Nicolas J S Davies
Escalating U.S. Air Strikes Kill Hundreds of Civilians in Mosul, Iraq
Binoy Kampmark
Class, Football, and Blame: the Hillsborough Disaster Inquest
George Wuerthner
The Economic Value of Yellowstone National Park
Rivera Sun
Celebrating Mother Jones
Nyla Ali Khan
Kashmir and Postcolonialism
Mairead Maguire
Drop the Just War Theory
Weekend Edition
April 29, 2016
Friday - Sunday
Andrew Levine
What is the Democratic Party Good For? Absolutely Nothing
Roberto J. González – David Price
Anthropologists Marshalling History: the American Anthropological Association’s Vote on the Academic Boycott of Israeli Institutions
Robert Jacobs
Hanford, Not Fukushima, is the Big Radiological Threat to the West Coast
Ismael Hossein-Zadeh
US Presidential Election: Beyond Lesser Evilism
Dave Lindorff
The Push to Make Sanders the Green Party’s Candidate
Peter Linebaugh
Marymount, Haymarket, Marikana: a Brief Note Towards ‘Completing’ May Day
Ian Fairlie
Chernobyl’s Ongoing Toll: 40,000 More Cancer Deaths?
Pete Dolack
Verizon Sticks it to its Workers Because $45 Billion isn’t Enough
Moshe Adler
May Day: a Trade Agreement to Unite Third World and American Workers
Margaret Kimberley
Dishonoring Harriet Tubman
Deepak Tripathi
The United States, Britain and the European Union
Eva Golinger
My Country, My Love: a Conversation with Gerardo and Adriana of the Cuban Five
Richard Falk
If Obama Visits Hiroshima
Vijay Prashad
Political Violence in Honduras
Paul Krane
Where Gun Control Ought to Start: Disarming the Police
David Anderson
Al Jazeera America: Goodbye to All That Jazz
Rob Hager
Platform Perversity: More From the Campaign That Can’t Strategize
Pat Williams
FDR in Montana
Dave Marsh
Every Day I Read the Book (the Best Music Books of the Last Year)
David Rosen
Job Satisfaction Under Perpetual Stagnation
John Feffer
Big Oil isn’t Going Down Without a Fight
Murray Dobbin
The Canadian / Saudi Arms Deal: More Than Meets the Eye?
Gary Engler
The Devil Capitalism
Brian Cloughley
Is Washington Preparing for War Against Russia?
Manuel E. Yepe
The Big Lies and the Small Lies
Robert Fantina
Vice Presidents, Candidates and History
Mel Gurtov
Sanctions and Defiance in North Korea
Howard Lisnoff
Still the Litmus Test of Worth
Dean Baker
Big Business and the Overtime Rule: Irrational Complaints
FacebookTwitterGoogle+RedditEmail