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Thread: Think Again: American Decline

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    Think Again: American Decline

    A very good and long article out of Foreign Policy Magazine.


    [B][SIZE="4"]"We've Heard All This About American Decline Before."[/SIZE][/B]

    [QUOTE]This time it's different. It's certainly true that America has been through cycles of declinism in the past. Campaigning for the presidency in 1960, John F. Kennedy complained, "American strength relative to that of the Soviet Union has been slipping, and communism has been advancing steadily in every area of the world." Ezra Vogel's Japan as Number One was published in 1979, heralding a decade of steadily rising paranoia about Japanese manufacturing techniques and trade policies.

    In the end, of course, the Soviet and Japanese threats to American supremacy proved chimerical. So Americans can be forgiven if they greet talk of a new challenge from China as just another case of the boy who cried wolf. But a frequently overlooked fact about that fable is that the boy was eventually proved right. The wolf did arrive -- and China is the wolf.

    The Chinese challenge to the United States is more serious for both economic and demographic reasons. The Soviet Union collapsed because its economic system was highly inefficient, a fatal flaw that was disguised for a long time because the USSR never attempted to compete on world markets. China, by contrast, has proved its economic prowess on the global stage. Its economy has been growing at 9 to 10 percent a year, on average, for roughly three decades. It is now the world's leading exporter and its biggest manufacturer, and it is sitting on more than $2.5 trillion of foreign reserves. Chinese goods compete all over the world. This is no Soviet-style economic basket case.[/QUOTE]

    [url]http://www.foreignpolicy.com/articles/2011/01/02/think_again_american_decline?page=0,0[/url]

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    [B]"China has proved its economic prowess on the global stage. Its economy has been growing at 9 to 10 percent a year, on average, for roughly three decades. It is now the world's leading exporter and its biggest manufacturer, and it is sitting on more than $2.5 trillion of foreign reserves. Chinese goods compete all over the world."
    [/B]
    America is not in decline.

    The rest of the world is catching up.

    Former closed communist countries like China, et al, are now recipients of low-wage jobs formerly held by well-paid American workers. Not just IT, but manufacturing.

    If Democrats stood for anything they would be working diligently with employee unions in China and other countries. Increasing wages there and thus making it less advantageous for American companies to ship jobs overseas.

    But the Democrats are too busy counting their money with the Republicans.

    :jets17

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    [QUOTE=AlbanyJet;3961855][B]
    If Democrats stood for anything they would be working diligently with employee unions in China and other countries. Increasing wages there and thus making it less advantageous for American companies to ship jobs overseas.[/QUOTE]

    And how would that work exactly? All Chinese unions are under government control.

    By the way, in what universe could Japan (120mio people) ever have more economic power than the US (310mio people) unless the States suddenly turn into an agrarian economy?

    That is the same reason why China can become a real force. But even now, it is basically a poor country with 12% of their people living with less than a dollar per day. Their GDP/capita is around 16% of the American one, less than Iran. But it has a lot of potential, their GDP could theoretically multiply by 10 before slowing down to a normal growth rate. Probably wont happen though thanks to an already very high Gini-coefficient.

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    [QUOTE=AlbanyJet;3961855][B]"China has proved its economic prowess on the global stage. Its economy has been growing at 9 to 10 percent a year, on average, for roughly three decades. It is now the world's leading exporter and its biggest manufacturer, and it is sitting on more than $2.5 trillion of foreign reserves. Chinese goods compete all over the world."
    [/B]
    America is not in decline.

    The rest of the world is catching up.

    Former closed communist countries like China, et al, are now recipients of low-wage jobs formerly held by well-paid American workers. Not just IT, but manufacturing.

    If Democrats stood for anything they would be working diligently with employee unions in China and other countries. Increasing wages there and thus making it less advantageous for American companies to ship jobs overseas.

    But the Democrats are too busy counting their money with the Republicans.

    :jets17[/QUOTE]

    Protecting low skill jobs that are being automated out of exsitence isn't the job of US Government it's the job of the marketplace.

    China has unleashed free enterprise without political freedom to put its underemployed unfunctioning society into low skilled manufacturing jobs that largely compete with automated equitment in the modern world. It's not sustainable and the Chinese know it. Neither is protectionism. The technological and industrial revolution continues...
    Last edited by Winstonbiggs; 02-18-2011 at 08:31 AM.

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    [QUOTE=Winstonbiggs;3962158]Protecting low skill jobs that are being automated out of exsitence isn't the job of US Government it's the job of the marketplace.

    China has unleashed free enterprise without political freedom to put its underemployed unfunctioning society into low skilled manufacturing jobs that largely compete with automated equitment in the modern world. It's not sustainable and the Chinese know it. Neither is protectionism. The technological and industrial revolution continues...[/QUOTE]

    they are likely to get hit with huge inflation real soon- should be interesting to see how they respond...

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    They are already responding by limiting Rare Earth Minerals. This will limit production of Lithium Batteries for cars at least

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    [QUOTE=Jetdawgg;3962185]They are already responding by limiting Rare Earth Minerals. This will limit production of Lithium Batteries for cars at least[/QUOTE]

    It won't limit anything other then the price. These "rare" earth elements are all over the world including the US. Most of the plants were closed because Chinese prices are substantially better. Guess what those low prices helped drive the technology. If the production is limited and prices go up many of these mines in the US will reopen. Some are planning to reopen now.

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    [QUOTE=Winstonbiggs;3962191]It won't limit anything other then the price. These "rare" earth elements are all over the world including the US. Most of the plants were closed because Chinese prices are substantially better. Guess what those low prices helped drive the technology. If the production is limited and prices go up many of these mines in the US will reopen. Some are planning to reopen now.[/QUOTE]

    I agree. However, price is important and in some cases these mines will take years to open. Gasoline spiked up in December in some part due to the Chinese reduction of supply.

    They are clearly manipulating the market places where they can already. By the way, AG has a very large supply of Li.

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    [QUOTE=Jetdawgg;3962197]I agree. However, price is important and in some cases these mines will take years to open. Gasoline spiked up in December in some part due to the Chinese reduction of supply.

    They are clearly manipulating the market places where they can already. By the way, AG has a very large supply of Li.[/QUOTE]

    but obama and the enviromentalnuts are not manipulating market places by disallowing manufacturing, drilling, etc???

    when is the justice department going to take action against the obama administration for being in contempt of court after ignoring a court order to allow drilling in the gulf???

    [url]http://www.bloomberg.com/news/2011-02-03/u-s-administration-in-contempt-over-gulf-drill-ban-judge-rules.html[/url]

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    [QUOTE=Come Back to NY;3962294]but obama and the enviromentalnuts are not manipulating market places by disallowing manufacturing, drilling, etc???

    when is the justice department going to take action against the obama administration for being in contempt of court after ignoring a court order to allow drilling in the gulf???

    [url]http://www.bloomberg.com/news/2011-02-03/u-s-administration-in-contempt-over-gulf-drill-ban-judge-rules.html[/url][/QUOTE]

    Do you understand how the court system works?

  11. #11
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    china has legitimate corruption problems that will stop it from being the world's largest economy. You can't be the world's #1 economy if you can't provide clean milk for your children. It's growing like crazy now but it's not sustainable.

    follow up question, if the USA were #2 why is that so bad? There are people in England who wake up every day and they survive even though they aren't #1 anymore.

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    [QUOTE=cr726;3962317]Do you understand how the court system works?[/QUOTE]

    of course i do....obama's been found in contempt- no big deal....:rolleyes:

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    [QUOTE=Come Back to NY;3962340]of course i do....obama's been found in contempt- no big deal....:rolleyes:[/QUOTE]

    And the DOJ should do what next?

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    [QUOTE=cr726;3962347]And the DOJ should do what next?[/QUOTE]

    same thing they should be doing in florida with obamacare- make sure the ruling is enforced or take action....but hey- no more doing business as usual is Washington....:nono:

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    I cannot see how China will supercede the USA as "the" major superpower in my lifetime. China is effectively being turned into a mafia state - many private businesses have had their assets stripped by people who are effectively gangsters, using government levers to make these actions "lawful". It seems to be mirroring what has happened in the old USSR, just as it did when Mao rose to power. The Wikileaks cables made it pretty open what everyone knew - that Russia and a lot of the old USSR are now mafia states - China is now following suit.

    There are still large parts of China's economy that still work as a command economy, and thus still sectors of it that are hugely inefficient.

    Fair enough, the USA owes China (and Japan) a humungous amount of money - but China owes much of its prosperity to the USA. Without the USA they wouldn't sell a great deal of the goods they have. Without the USA there wouldn't be the "boom" China has experienced in recent years.

    Don't get me wrong - US government policy has effectively shipped a stratospheric amount of money out of the pockets of US citizens and into the coffers of the Chinese government (and now Chinese gangsters). China's fixed exchange rate hasn't helped things in that regard. But the US economy is far and away the world's largest - and China's isn't going to match it anytime soon if the current situation continues over there for any length of time. As Italy has found, once you let organised crime in, it's awfully hard to get rid of them, and your economy and ordinary citizens will suffer as a result.

    Anyway - I figure the globe is in for a significant deflationary period at some stage very soon, and that will affect everyone - probably the Chinese the most because they are the ones who have been rewarded the greatest through the absurd US government policy of deliberate inflation over many decades.

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    [QUOTE=Come Back to NY;3962357]same thing they should be doing in florida with obamacare- make sure the ruling is enforced or take action....but hey- no more doing business as usual is Washington....:nono:[/QUOTE]

    Florida? You mean the appeal? Apples to oranges, thanks for trying to pretend you understand the court system.

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    [QUOTE=cr726;3962372]Florida? You mean the appeal? Apples to oranges, thanks for trying to pretend you understand the court system.[/QUOTE]

    good response- well thought out with proven points as usual...:thumbup:

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    [QUOTE=bitonti;3962328]china has legitimate corruption problems that will stop it from being the world's largest economy. You can't be the world's #1 economy if you can't provide clean milk for your children. It's growing like crazy now but it's not sustainable.

    [B][COLOR="Red"]follow up question, if the USA were #2 why is that so bad? [/COLOR][/B]There are people in England who wake up every day and they survive even though they aren't #1 anymore.[/QUOTE]

    Weren't you accused of being an [B][COLOR="red"]elitist[/COLOR][/B] before?:D
    Sounds like you are turning your union card in.....

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    [QUOTE=Jetdawgg;3962533]Weren't you accused of being an [B][COLOR="red"]elitist[/COLOR][/B] before?:D
    Sounds like you are turning your union card in.....[/QUOTE]

    lol I get accused of being alot of things. Commie, fascist, leftist, statist, nazi, terrorist lover, America Hater... you name it I've been accused of it. I like to believe I defy easy categorization but people insist on using labels. Whatever.

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    What Does Red China Intend With Its Rare Earth Monopoly?

    Looks like China is serious here.....


    [QUOTE]Communist China supplies the world with more than 95 percent of the rare earth minerals, resources which are increasingly vital to advanced technology. In September 2009, China announced that it would reduce its production of these minerals to 35,000 tons, with the stated reason being to conserve scare resources and to protect the environment. In July 2010, China reduced the quota of rare earth minerals for export by 72 percent. In September 2010, the communist government halted shipments of critical rare earth minerals to Japan and the next month also halted shipments to the United States and Europe.

    This was widely viewed as a victory for economic nationalists within the Central Committee of the Communist Party of China. A report Tuesday in China Daily, the government newspaper of the nation, predicted a decline of up to 30 percent in rare earth export quotas in 2012; however, the commerce ministry called the report "totally groundless and purely false," adding, "China will continue to export rare earth to the world, and at the same time, in order to conserve exhaustible resources and maintain sustainable development, China will also continue imposing relevant restrictions on mining, manufacture and export of rare earths.”

    Since 2005 China has been reducing the export quota of rare earth minerals as well as imposing steep export taxes on them. And, unless one doubts the Japanese and believes the official Chinese reports, China had imposed an embargo on Japan. Wang Baodong of the Chinese Embassy in the United States denied that his country was trying to gain a bargaining chip in trade negotiations, noting: “With [a] stricter export mechanism gradually in place, outbound shipments to other countries might understandably begin to feel the effect, but I don’t see any link between China’s reasonable rare earth export control policy and the irrational U.S. decisions of [a] protectionist nature to investigate China’s clean energy industries.”

    The U.S. Chamber of Commerce is not convinced by Chinese assurances. Jeremie Waterman, who handles Chinese relations for the chamber, made the following observation about a suspension of exports of rare earth minerals by China: “If it’s true, it’s disturbing to say the least.” The Economist has also questioned the communist government’s motives, noting, “Slashing exports of rare-earth metals … is all about moving Chinese manufacturers up the supply chain, so they can sell valuable finished goods to the world rather than lowly raw materials.”

    In February 2011, China seems to be confirming the fears of the U.S. Chamber of Commerce, the Economist, and others. Its cabinet announced that China would impose tighter controls on rare earth producers and also restrict output in a five-year development strategy. The announcement also promised that China would “reasonably set annual quotas for production and export,” although the government did not elaborate. The government website also said that China would “establish healthy development of earth industry with appropriated development, orderly production, high utilization and technological advancement.”

    This "communist planning" by China, which controls more than 95 percent of the world’s production of rare earth minerals, is troubling. Perhaps at least as troubling is the fact that China seems to be stockpiling these minerals, which it could easily sell for a healthy profit in the international market. How dangerous could this be to the economic health of the United States and other economies highly dependent upon technology? If China pushes hard, the problem could quickly become serious. Although there is no doubt that over time and at some expense these minerals could be produced in other parts of the world, the interruption of supplies could bring some industrial processes to a standstill. Congress is considering setting up a stockpile of rare earth minerals similar to the Strategic Petroleum Reserve.

    These rare earth minerals are not “rare” in the sense that the elements are found only at a few locations in the planet’s crust. For example, cerium, a “rare earth mineral,” is the 25th most abundant element on the planet with 68 parts per million, roughly equivalent to the prevalence of copper in the earth's surface. The rare earth minerals are simply not found in high concentrations, so that their extraction requires more intensive effort than that of minerals such as iron, tin, or silver. Until the 1950s, much of the rare earth mineral production occurred in India and Brazil, not China, with significant production also in places such as California and South Africa.

    So why does Communist China have a practical monopoly on rare earth production these days? Their monopoly is the result of several converging factors. China has a huge landmass, so there are plenty of these rare earth minerals about. The country also has masses of labor to mine rare earth minerals relatively cheaply. And though environmental concerns have depressed production in Western nations, such concerns do not trouble the Chinese nearly as much. Finally, as is so often the case in human history, a resource once thought to have no great value has quickly become vital and expensive.

    This fast rise in economic value, however, can easily lead to a bust over time (as anyone familiar with the oil industry knows). "King Cotton" in the American South was once a very important global resource. In the 19th century India rubber for a while was quite valuable. (This value transformed cities deep in the Amazon.) Uranium became much more valuable after the fission bombs were dropped on Japan. Petroleum replaced whale oil, which had been used for a number of different purposes and was once prized. Lithium is a very important resource these days, primarily because of its use in long-lasting batteries.

    China, may, however, be seeking more than just an economic monopoly in rare earth minerals with the profits from that brief monopoly (because other sources will develop as soon as practicable around the world, if China charges much above market value for long). These rare earth minerals are vital in defense production. The Soviets attempted to use their domestic resources of strategic materials such as chromium, manganese, cobalt, and platinum-group metals and then sought to destabilize and produce client Marxist regimes in those other nations that possessed these strategic metals.

    One of those nations was Rhodesia, now Zimbabwe, which moved from a free, democratic country with a democratically-elected black bishop as its leader to a Marxist dictatorship with poverty and oppression. Another of those nations was the Union of South Africa, which had a treasure trove of vital minerals, and so was squarely in the crosshairs of the Soviet Union.

    Does Communist China have the same plans as Soviet Russia? It is hard to imagine that China is strongly driven by environmental concerns. The Chinese are selling these rare earth minerals at a tidy profit and the alarms that Beijing is creating will, over time, result in more producing nations. The possibility that Communist China has more sinister motives cannot be ruled out. [/QUOTE]

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