The author should learn to consistently spell "market" correctly (hint: NOT "markit") before lecturing President Trump on trade.
Posted on 05/30/2019 12:17:47 PM PDT by SeekAndFind
As things stand, America is likely to lose the tech war with China. The stock market should be sending a message to President Trump. U.S. semiconductor stocks are down 20% in the past month, and the broad market has been in freefall for a week. This is a war we can win, by mobilizing American ingenuity to produce technology that will crush the competition. No-one ever won a war by trying to stop someone else from doing something. I'm an Always Trumper, and I want the president to win another term. But he's risking the U.S. economy and his re-election chances on a poorly-conceived offensive.
Last year we produced just 10% of the world's semiconductors, down from 25% in 2011 and nearly 100% in the Reagan era. We don't produce any telecom gear to compete with Huawei's best-of-breed products (we're telling our allies to buy from Ericsson and Nokia, who also make their gear in China). We're trying to stop the Chinese telecom giant from dominating the rollout of a game-changing new technology, but we've got no competing product. We might slow Huawei down by banning exports of U.S. technology--although I doubt we will slow it very much--but we can't stop China from becoming the world's dominant producer of high-tech products unless we rebuild our own high-tech industry.
The U.S. invented the integrated circuit in the 1950s and perfected CMOS chip manufacturing in the 1970s, making cheap, small, and powerful processors the basis for the modern digital economy. CMOS came out of RCA Labs with Defense Department R&D funding, under the direction of Dr. Henry Kressel, then head of RCA's electrical engineering research. Last December, Dr. Kressel and I argued in a Wall Street Journal op-ed that the U.S. had to bring chip manufacturing back onshore, despite the enormous cost of doing so.
Just why has the trade war morphed into a tech war?
Telecom hardwire providers serve their national intelligence agencies. It would be naive to imagine that China's giant Huawei Technologies, the world's largest provider of telecom equipment, doesn't have ties to its country's intelligence service, as American officials allege. I'm sure of this, because that's exactly what our National Security Agency did with Cisco, formerly America's premier supplier of Internet routers and related equipment. The NSA installed "back doors" in Cisco equipment according to documents leaked to the public by renegade NSA consultant Edward Snowden. Yes, the NSA knows where your phone is, even when it's turned off, and when it's turned on, it can listen to your conversations. Whether it actually does or not is a matter of conjecture.
The U.S. intelligence community has led the charge against Huawei, claiming that if the Chinese company leads the global rollout in fifth-generation mobile broadband, China will be able to eavesdrop on the world. It isn't quite that simple. The 5G signal is so dense, I am informed, that it permits end-to-end encryption of voice calls as well as data, with an unbreakable degree of complexity. It isn't so much that China would be able to steal data, but rather that U.S. intelligence would lose its present advantage in signal intelligence.
Much as I fear abuse of power by U.S. intelligence, and suspect "deep state" participation in an attempted coup against President Trump, I want the United States to maintain its advantage in electronic eavesdropping. The problem is that we don't produce any telecom hardware. Zilch. We used to. Cisco was the market leader, but has pretty much abandoned the hardware business (it makes more money in software).
The U.S. economic expansion is at risk. In April the purchasing managers' surveys produced by the research organization Markit fell off a cliff. At barely above the 50 mark, they show that almost as many businesses were contracting as were growing. The trade war is partly to blame: Businesses have postponed capital investment until the shape of global supply chains is clear. The Atlanta Fed is now projecting 2nd-quarter growth at just 1.3%, and JP Morgan is predicting 1%. That's a big drop from the preliminary 3.2% number for the 1st quarter (and that was probably inflated by fluff). Bond yields are in free fall, at their lowest level in 17 months, as investors anticipate economic weakness.
Cutting off technology shipments to Huawei may not have the desired effect. Huawei already produces its own high-end chips for smartphones and data processing, and has been preparing for the worst for a long time. The result of the tech war might be a global round of predatory price cuts that will push U.S. chipmakers out of the Asian market that accounts for most of their revenues. When the dust settles, China may end up with a dominant position in semiconductors.
We've licked this problem before, when John F. Kennedy set the Apollo moonshot in motion and Reagan led a massive, tech-intensive defense buildup. We can do it again. But what we are doing now will sooner or later be a losing strategy.
Bull: Wall Street and the other globalists are the enemies of We-The-People and what is left of USA. If Wall Street _is_ USA we are already dead.
USA is about private enterprise not corporate, capitalism and banks.
Even Japanese Tractors are built here. not saying to invest in them but really why invest in caterpillar? https://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average#Components
And Trump has a message for the Stock Market.
The days of your being the tail that wags
the American dog are OVER!
A significant part of the tone I get from that PJM post are these sentiments:
- ‘1. The Chinese are using tech to steal secrets’
- ‘2. We might lose our lead in intelligence gathering’
- ‘3. We shouldn’t care about #1 or #2’
Memo to PJM: yes, we should care. A lot.
Economist Gary Shilling: US to ‘Be Better Off’ as Trump Wins Trade War
“When you’ve got plenty of supply in the world, and I think you do. It’s the buyer that has the upper hand not the seller. The buyer has the ultimate power and who’s the buyer? U.S. is the buyer, China is the seller,” he told BI according to Hellenic Shipping News.
“If we weren’t buying all those consumer goods from China…where would China sell them? They have no other place to sell them, and in the meanwhile, China’s growth is slowing,” said the president of economic consulting and forecasting firm A. Gary Shilling & Co.
Shilling, also a Newsmax Finance Insider, urged Trump to continuing challenging China’s “underhanded” trade practices. “They [China] basically have not fulfilled their promises, they have not opened up their technology, they’re not opening up to our investments, they steal our technology, they demand tech transfers for companies that want to operate in China and so on,” he said.
Shilling predicts Trump will eventually win long-overdue concessions from China.
http://freerepublic.com/focus/f-news/3753261/posts
Dude ... Markit is the name of the research company that publishes that manufacturing index. LOL.
Thanks. Unfortunately, it ruined what would have been a good joke at my expense.
Hey Dave! Don’t second guess the Donald. You should have learned that by now.
This idiot doesn’t seem to understand everything China invented they stole from us. China never had an original tech thought ever.
Relying on Chinese hardware is giving the Chines a broad avenue to all information that their hardware touches. Their back doors in every device is why the military and the airlines and some industries have been ripping out and replacing all the Chinese components they have put into their systems over the last decade. Chinese components are cheap to purchase but extremely expensive to use. A Chinese chip on your/my motherboard is likely sending every bit of data on the computer back to the Middle Kingdom.
“No-one ever won a war by trying to stop someone else from doing something.”
Well, this guy certainly has no understanding of history whatsoever. Ever heard of Barbarossa and the defense of “Mother Russia” in WW2? How about the Napoleonic Wars? Gettysburg?
All their R&D and manufacturing is subsidized by the state.
**********************************
Their R&D has been “subsidized” by mandatory tech transfers by any company (including our military industry giants) doing business in China as per the old trade agreement, and whatever got sold to them by our corruptocrats, and they stole from our research colleges and universities with their foreign students and visiting researchers, and whatever else they could steal.
RE: The author should learn to consistently spell “market” correctly (hint: NOT “markit”) before lecturing President Trump on trade.
That *IS* the correct spelling. MARKIT is a global financial information and services company with over 4,000 employees which merged with IHS to form the company IHS MARKIT.
The above index : MARKIT PURCHASING MANAGER’s INDEX is one of their Index products.
See here: https://en.wikipedia.org/wiki/Markit#Index_products
[No-one ever won a war by trying to stop someone else from doing something.]
The market isn’t brainless.
Part of it is automated by machine learning and is both brilliant and dumb as a rock; ML is limited both by lack of foresight and by the intrinsic bias of its users (who in this case are risk-averse)
A big chunk is run by globalist finance managers who are very eager to trash the Trump economy. These two groups cause the drops the writer is panicked about.
Increasingly us regular people provide a true invisible hand as we invest through 401k and other means; and we trend towards things out of the hands of these globalist money managers.
Smalll wonder articles now run bemoaning the rise of low-load index funds.
You're right - but on the lighter brighter side our 'intelligence' boys spend billions - our CIA and FBI boys - trying to find out that some pervert five degrees away from Putin is into child sex and can be compromised. Oh and that Trump once paid off some porno slut to stop her from telling his wife - you know - blackmail...
So the destruction of our country's not that bad... the 'intelligence' boys who are suppose to protect us are playing cowboys and Indians with a country that has a smaller GDP than Italy.
Do you find it scary as hell that YOU arthurus know more about REAL threats to our country than our corrupt overpaid 'intelligence' thugs?
Here's what we should do - assume our enemies will do everything they can to harm us - then spend our money making every vulnerability tougher so they can't hurt us. Manufacture our own computer equipment. Keep industries that could be converted to war manufacturing if necessary... find out where a war would cripple us and do the work NOW to avert future shutdowns...and disasters. Plan for the worst - hope for the best.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.