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How Much is Chinese Subsidized Trade Hurting Our Economy?

Tex

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Guest Opinion: Ken Davis



The following piece was written by K. N. Davis, Jr., former U.S. Assistant Secretary of Commerce.

America’s Leaking Boat, And What to Do About It

Over the years, some of the most telling comments about the U.S. economy have been made by Warren Buffett, “The Oracle of Omaha”. Here are two of his best.

American businessman and investor Warren Buffett was quoted in the Associated Press, Jan.20, 2006: “The U.S trade deficit is a bigger threat to the domestic economy than the federal budget deficit or consumer debt and could lead to political turmoil”.

And recently in a CNN interview he said:

“Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks ,

Our trade deficits from a massive flow of imports replacing sales by U.S. domestic firms to our own huge market are without doubt America’s worst “leaking boat”. The impact on our own industries has been devastating – in the latest ten years more than 40.000 U.S. manufacturers went out of business and at least 6 million workers lost their well-paying jobs If we continue at that rate, our leaking boat will surely sink! Only about 11% of America’s workers are still employed in manufacturing. That’s where our largest potential number of jobs exists. Under proposed balanced trade legislation an estimated 3 to 4 million jobs can be created there within two years and without deficit spending.

Buffett warned us of trouble coming back as 2003 in a Fortune Magazine article “Our trade deficits are selling America out from under us. We’ve got to stop it now, and here’s how to do it!” He outlined a plan for balanced trade with the rest of the world. It would limit our annual imports each year to no more than our own exports. U.S. production would increase, but we’d still be the world’s biggest importer. We’d keep a fair share of our own market and manage it to prosper and grow for the benefit of all nations. But our leaders in business and government had little interest in any change in our wide open “free trade” policies. Buffett’s plan was ignored as was a proposed bill, “The Balanced Trade Restoration Act Of 2006” by then Senators Dorgan and Feingold”.

Now The latest trade news is that three new U.S. solar technology companies have filed for bankruptcy due to intense competition by Chinese government-subsidized companies, This is added bad news because it belies the idea that new high-tech companies can solve our import problems without changing our trade policies, Not so – those are the very industries that global competitors covet the most, especially China.

Let’s hope President Obama addresses this major problem and opportunity in hisbig speech on jobs this week. We must abandon our leaking trade policy boat a
 

hypocritexposer

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three new U.S. solar technology companies have filed for bankruptcy due to intense competition by Chinese government-subsidized companies

If memory serves, the US solar companies were heavily subsidized too.

Regulations cost US companies what, per year?
 

Tex

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hypocritexposer said:
three new U.S. solar technology companies have filed for bankruptcy due to intense competition by Chinese government-subsidized companies

If memory serves, the US solar companies were heavily subsidized too.

Regulations cost US companies what, per year?

The model of just making money available to businesses and they will produce it has been disproven by the solar panel fiasco.

As long as China subsidizes its currency they can predate any U.S. business they want.

The way the U.S. subsidizes is slow and the way China can move is fast. That is what happens when one country has it as a national priority and the other doesn't.

China can do like big businesses and capture all the opportunities of making money they want in the U.S. with the current trade policies. That is what sovereign wealth on one side and an immature and gullible trade policy on the other can accomplish.

China is likely to be able to build all of our military weapons cheaper. They just won't work if we have any kind of conflict with them.


Tex
 

Steve

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Let’s hope President Obama addresses this major problem and opportunity in his big speech

he can babble on as much as he wants... The real question is can Obama "LEAD"








Weren't you the one who said you didn't even listen to his speeches?
 

hopalong

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The answer is. """""Not very likely"" as shown by his past inability to do it.
 

Steve

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hopalong said:
The answer is. """""Not very likely"" as shown by his past inability to do it.

so why is Buffet hitching his train to a person who can not lead...

Buffet is a smart person, so why not seek out the leadership in DC and work with them?
 

hypocritexposer

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Steve said:
hopalong said:
The answer is. """""Not very likely"" as shown by his past inability to do it.

so why is Buffet hitching his train to a person who can not lead...

Buffet is a smart person, so why not seek out the leadership in DC and work with them?

:lol:

Buffett would rather bend an ear and whisper things into it, that will benefit him.
 

Mike

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Buffet wasn't the first to warn of trade deficits. There were literally thousands of warnings before 2003.



September 1, 1986 »
"Volcker issues warning on trade deficit." Chicago Sun-Times


September 1, 1986 | Copyright

VENICE, Italy (AP) U.S. Federal Reserve Chairman Paul A. Volcker said yesterday the United States cannot sustain a record trade deficit while West Germany and Japan post surpluses.

Referring to the U.S. deficit and Japan's and West Germany's surpluses, Volcker said, "The situation is simply unsustainable. Certainly in the United States it is not politically sustainable."

Volcker also told a meeting of bankers, businesssmen and politicians that world growth prospects will be jeopardized if rising protectionist sentiment is not stemmed and collective action taken on international economic policy.
 

Tex

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Mike said:
Buffet wasn't the first to warn of trade deficits. There were literally thousands of warnings before 2003.



September 1, 1986 »
"Volcker issues warning on trade deficit." Chicago Sun-Times


September 1, 1986 | Copyright

VENICE, Italy (AP) U.S. Federal Reserve Chairman Paul A. Volcker said yesterday the United States cannot sustain a record trade deficit while West Germany and Japan post surpluses.

Referring to the U.S. deficit and Japan's and West Germany's surpluses, Volcker said, "The situation is simply unsustainable. Certainly in the United States it is not politically sustainable."

Volcker also told a meeting of bankers, businesssmen and politicians that world growth prospects will be jeopardized if rising protectionist sentiment is not stemmed and collective action taken on international economic policy.


Heck, Mike, the founding fathers were concerned about trade deficits. It makes a huge difference in the national economy. I can't believe the Chinese own 7.5 percent of the debt of the U.S. (or money). That is huge amount.

Tex
 
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