Gene, After I shot off that email in reply to yours yesterday, I revisited the subject of the new vs. old economy dichotomy.
You have gained a lot of insight on Economics lately and I'm sure that you realize that the so-called new economy is a figment of fertile imaginations. It is a term people use, people like taskmaster Thomas Friedman, to justify the dislocations caused by the one-sided benefits of globalization. When people complain that the industrialized world is being shafted by the likes of China,India, Brazil and Mexico, the pundits merely point out that there is a new international economy where the survivors are the most technologically astute and the best educated. Tom Friedman keeps telling Americans to become more educated. That, he says, is the way of the future and is the only way Americans can compete. There is no doubt that we need better elementary and secondary schools in America. The American youth tend to goof off, etc. There's all of that. The reason America and Europe are losing, however, is not because we are not as educated as the Chinese, the Indians, the South Koreans and Singaporeans, etc. It is because we are being victimized by countries like China, which are still operating in the so-called old economy. The tactics employed by China are old economy tactics. 1. China protects its industries from foreign competition through outright tariffs and through an official Buy Chinese policy. 2. China is seeking to corner rare earth metals as well as vast mineral and metal resources in Africa. 3. China has polluted its skies, its rivers (the Yangtze and the Yalu) to the point that there are very few birds along those rivers, and the rivers have few fish. Reminds one of Los Angeles in the 60s and 70s and notorious polluters like the defunct W. R. Grace Company. 4. China provides export subsidies to Chinese companies, in clear violation of the World Trade Organization rules. 5. China manipulates its currency by undervaluing it up to 40%. 6. China's 2.5 million strong armed forces will enable it to effectively fight an Iraq-size war, an Afghan-size war, a war in the Korean peninsula and still impose its will in the South China Sea. 7. China is using its trillions of dollars in foreign exchange to buy the loyalties of African dictators, assuring a continuous flow of raw materials to feed China's booming industries. 8. China uses its United Nations veto power to frustrate the efforts of free industrialized nations to assure freedom of commerce and preservation of human rights, which are vital to a fully-functioning "new" economy. The above observations are not mine. They can be found in the book "Death by China," a runaway New York Times bestseller written by Peter Navarro and Greg Autry. The book has been so successful that it has been turned into a movie, "Death by China, Confronting the Dragon." Nearly everything that we are accusing China of doing has at some point been done by the likes of the U.S., Great Britain and former colonial powers. That is, all the tactics that China is employing are "old economy" tactics, including the strong military that backs up its commercial might. China is mercantilist, but so were the U.S., Great Britain, Germany, etc. China is decidedly operating in the old economy, complete with virtual economic colonization of African countries. Since China is the biggest economic engine of the 21st century, the economic war is being waged not in the so-called new economy but in the very real old economy. The authors of Death by China point out that there is an economic war between the U.S. and China currently, but the problem is only China is firing its cannons. The U.S. is not fighting back. Even our beloved President, Obama, seems to be intimidated by the Chinese. I am not intimidated. Neither are the thousands of regular readers of my blog in us-consumer.com. There is a growing community of blog readers and bloggers who regularly check out my blog and are encouraging me to speak my mind on the subject. I can feel that the growth of this community is accelerating and that someday the doctrine of 51% American-made products will become a movement. Once it becomes a movement, American multinationals, Chinese mercantilists, Koreans, Japanese, Brazilians, etc., will start manufacturing in the U.S. again. Then people will realize that there is really only one economy. It is neither new nor old. It is the economy of enlightened self-interest, written about by Adam Smith in The Wealth of Nations. C . On Tue, Apr 16, 2013 at 9:56 AM, Cesar Lumba <[email protected]> wrote: > Gene, > > The new economy is not necessarily a good thing. Remember, this is the > economy that brought us junk bonds, collateralized mortgage obligations, > credit default swaps, the dot-com bubble and others. > > What we need is to bring back some of the old economy, which is on track > to make China the richest country in the world. China gets to flourish in > the old economy while we pontificate about the alleged virtues of the new > economy. > > You are very right in that the wealth has not trickled down to the 98%, > and it will never trickle down as long as Wall Street, with its culture of > unrelenting greed, is calling the shots. > > American consumers must force the issue of bringing manufacturing back to > our shores by insisting that a lot of their products are made in the U.S.A. > Buy American must become a grassroots movement. It's the only way. > > C > -- You received this message because you are subscribed to the Google Groups "Center for Good Governance" group. 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