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Posted on 07/25/2021 2:19:37 PM PDT by blam
Corporate America sacrificed national interests in service of greed, and so did the U.S. government.
As we all know, the source of Corporate America’s unprecedented explosion in profits in the 21st century is the offshoring of manufacturing to China. If you doubt this, please study the chart below of corporate profits. Apologists claim many excuses in an attempt to evade the central role of offshoring production to China, but they all ring hollow: no, it wasn’t increasing productivity or automation or Federal Reserve magic, it was shipping production to China and other low-labor-cost nations.
Whether we like to admit it or not–mostly not–the American economy is entirely dependent on manufacturing in China. America’s short-sighted obsession with increasing profits to fund buybacks and golden parachutes for corporate insiders and vast fortunes for financiers has led to a dangerous dependency that has handed China tremendous leverage, which China is now starting to make use of. (And why not? Wouldn’t the U.S. start using the same leverage if it could?)
A long-time U.S. correspondent who prefers to remain anonymous for obvious reasons recently shared his experiences with parts shortages and price increases from previously reliable suppliers in China. Here is his account of the disruptive shift in the supply chain of essential parts from China to the U.S.
China is laying siege to the USA by slowing down production and delivery of goods. It doesn’t take much to hang up US production, just one missing item can do it. So much stuff is sourced through China they can affect all supply chains. Semiconductors are just the canary–because the chains are so long and complex, and specialized materials are required, etc. But it is happening everywhere.
I have a little manufacturing company and I am seeing this in supply lines. I sent an order to China for printed circuit boards (US prices are astronomical because of various factors). They don’t get back for a week, then they quote, then I send money, then they sit on it, then I call and they say they are having problems with some process… etc. But all the suppliers are like this, it is not an isolated incident. They are sandbagging.
So just as in laying siege, the attackers have the food outside the castle and wait for the people inside to starve.
As prices rise the Chinese manufacturers take bigger profits so the slowdown effects on that end are mitigated. For products they do not have a monopoly on, like PC boards, they slow down. for things like LCD displays and NFeB magnets, the items become unavailable (try buying magnets on Amazon).
I have to say this is a brilliant idea on China’s part, and no one on this side has realized the situation yet. This plan is straight out of Sun-Tzu. implications? inflation and shortages will continue for a long time… maybe forever. The only long-term solution is repatriation of manufacturing to the US. But it is going to cause some serious hurt, vastly more than the sanctioning of Chinese tech companies.
i just sent a request for quote for some radio chips I use to Alibaba. they are $1 each and there are many vendors. I sent notes to 2 vendors i used before and after 4 or 5 days got a ping back that my requests were cancelled. i wound up getting the parts–for 2x the price– from Hong Kong, which at the moment seems to be something of a channel to the mainland. But I expect they will close that leak pretty soon.
I have long made the case that manufacturing, energy and food are all fundamentally national security issues. Those benefiting from “free trade” (there is no such thing, that’s just a handy PR cover) have sold the unwary the fraudulent notion that “everyone benefits” from globalization. Nothing could be further from reality. A handful of corporate insiders and financiers have benefited at the expense of everyone else.
And now the chickens are coming home to roost. Essential parts and feedstocks become unavailable for all sorts of flimsy excuses, prices double, triple, then double again, and since we’ve allowed our entire economy to become dependent on a handful of sources for these essentials because that dependency maximized profits, then there are no alternatives.
(snip)
Which is why manufacturing of our common goods should have never been exported overseas. Everything we purchase should be grown and made here in the USA. Now countries like China have us over a barrel because all they got to do is cease shipping everything the common shopper uses and the store shelves will be empty.
We've poured tons of money into the communists' infrastructure and military, while borrowing money from them to pay for ours.
We sent our technology over there to be stolen. Were we really stupid enough to believe that wouldn't happen?
We chose foreign workers over our own Vets. That's right. We, the flag waving patriots, chose communists over American Vets. Now we have a homeless Vet problem.
We sent our kids to college to get tech degrees, then shipped the tech jobs out of the country. I know about the kids with their useless degrees in homosexuality in homo-sapiens studies, but many got into debt for tech jobs only to watch those jobs get shipped out of the country. Now they're out there rioting instead of holding down jobs. What did we think would happen?
All of this to save $.10 on communist made paint brushes.
The US has lost the (trade) War without a shot being fired. All the fancy hardware from the latest in aircraft carriers to stealth war planes and the latest tanks are not of much use when the country is being run by a bunch of crooked, corrupt politicians. It is the spirit and idealism what makes a country great and without it, it is a given that it will fail
Five years ago I was ridiculed, even on FR for talking about corporatist globalist Republican candidates which meant everyone but Trump.
Trump broke up that small group. But the managerial class and the political class are still around. They are from both political parties and every type of corporation .
Their goal is money and power over us first and the world ultimately.
Wipe every single one of them off their path to power by talking, voting boycotting. Teach your neighbors to do the same. Open small neighborhood business. Garden. Build. Make things Teach others.
Add on please
Bump
If only the citizens of China who yearn for liberty would throw off the yolk of communism. Same holds for a good many in the USA.
Prepper ping.
I’m doing my share in growing food here.
I just can’t make everything we need.
That is exactly what tariffs are for. Back in the day we knew that and used them. Oh and guess what? China also uses tariffs to protect it's domestic industries.
> That is exactly what tariffs are for. <
Right. Our politicians reduced or eliminated tariffs. Then they burdened our domestic companies with high taxes, smothering regulations, etc.
China really couldn’t ask for more.
“Nixon’s grave should be dug up and whatever remains left should be placed north, south, east, and west to remind generations of what a traitorous piece of crap he was.”
Nixon was trying to isolate the Soviet Union. What happened later isn’t his fault. He succeeded and probably hastened the fall of the Soviets by a good decade or more. The problem was, everyone thought that China would follow South Korea, Taiwan and other dictatorships into more classically liberal and free societies. It worked for them, why not China? Because technology changed enabling China to strengthen its hold. Also, the CCP was much more brutal than the other dictatorships...possibly smarter, too. It’s just too simple to blame it all on Nixon. Every political move made is tailored for its particular moment in time. But that moment moves on...
Any sane economist knew the USSR was not viable in the long-term. The internal leadership was a joke (Because the damned Politburo was too busy stabbing each other in the back to gain control) as well as their economy due to demographics for instance. Nixon/UN chose to side with the Chinese devil for short-term political expediency and deserve hell because of the consequences they unleashed. BYW, the USSR and China had one thing in common yet let us just fellatio that one thing in common (And the UN actually got pissed about that). For that, Nixon deserved everything he got.
I’m trying to stock up on things like crackers, tuna, peanut butter, bottled water, stuff that will keep several months. Sure, it’s not a four course meal, but at least I’ll have something to eat and drink.
“Containerized shipping where one ship can carry 57 miles of containers lined up end to end is an overwhelming trade juggernaut.”
I agree. The world has too much interdependency. I read somewhere that the cost to ship halfway around the world is $26 per ton (a number that fluctuates). That’s basically nothing.
I did remodels on a few Walmarts. My favorite saying was, “ the only thing in here not made in china is the employees”.
Pasta keeps forever, as does white rice. Brown rice can go rancid after a few months unless you freeze it. It’s far more nutritious, though.
Don’t forget salt.
One thing I always thought would be a great prepper supply was something like Progresso’s canned soups. They make some great ones and they are a good deal on sale. Soups are generally well balanced and those would be a decent source of salt. One can could make a meal.
Don’t forget tea or coffee, flour, sugar, and other baking supplies. Pasta sauce is good. Canned fruit works, too.
Well met mom, once again I’ve begun stocking up for this ‘new normal’ roller coaster affecting our commerce. Be it China or covid or whatever else this administration touches....it all rings bad!
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