Replies

I love that we manufacture 5 times more than China and that proves to you we are enfeebled.

Remember...we used to produce 100 times more than China, and they had no freaking clue how to make semiconductors or cars...or even quality steel. Now that we have handed all the state-of-the-art production technologies to them, squandering our own investment capital to do so, they are poised to do us serious harm.

Well, considering we imported $22.25 billion from China in May, I'd say not very much.

You can't assume that since you don't know what the U.S. cost of indigenous replication of the Chinese content is. Since their labor price is approximately 1/100th of ours, their product's value is understated. And your analysis is deficient in respect to that:

So they sell us an $80 product for $60? That's gonna make them rich. LOL!

Rich isn't the issue. They are going to get the business. And the manufacturing investments and technolgy to keep doing this. It's like the Titannic. The Unsinkable. Tear a long enough hole in it, and pop enough rivets, that sucker is going down.

A simple test: If our manufacturing sector is so healthy, why don't we successfully export more finished goods to them? You look at the total figures...the net exports to the same country. h'mmm?

Remember their exports to us are almost entirely manufactures, whereas ours are mostly raw foodstuffs, unprocessed iron ore and lumber, and yet still we have a gross negative imbalance:

From the Census Bureau
May 2006 U.S. Exports to China=$4,542.0 Million
Imports from China = $22,253.6 Million
Balance= -$17,711.6 Millions.

This $18 billion monthly net deficit is actually a larger total manufacturing net deficit between China and the U.S...masked to the extent of our unprocessed commodities shipped to them.

Bottom line: They are displacing U.S. manufacturing activity, and the more their manufactures are built up by the West, the more Western manufacturing they will eventually displace. If you look at macro numbers, and say, Aha! US mfg is rising, you miss what is happening at the micro levels that are fundamental and crucial to the continuing viability of U.S. manufacturing. Plus, it is likely that Guiterrez's optimistic assertions don't comport with reality, as inflation is so grossly understated, hence overstating real production.

And you also miss the key factor that China represents in the overall trade deficit, as the N.A.M. has noted:

China’s surplus with the U.S. accounted for 70% of the growth in our manufactured goods deficit in 2005.

Remember...we used to produce 100 times more than China,

We also produced 100s of times more than Japan after we nuked them, so? All you're proving is that they make more than they used to. Not that we make less. Not that we are enfeebled.

and they had no freaking clue how to make semiconductors or cars...or even quality steel. Now that we have handed all the state-of-the-art production technologies to them, squandering our own investment capital to do so, they are poised to do us serious harm.

I agree that there are certain technologies we should not have sold them.

You can't assume that since you don't know what the U.S. cost of indigenous replication of the Chinese content is. Since their labor price is approximately 1/100th of ours, their product's value is understated. And your analysis is deficient in respect to that:

Blah blah blah. You want me to believe that their $22 billion in exports to us makes up a huge chunk of our $400 billion in manufacturing output then prove it.

Tear a long enough hole in it, and pop enough rivets, that sucker is going down.

So $400 billion in May is like the Titanic? What will you call it when our output hits $500 billion a month? The Hindenburg?

If our manufacturing sector is so healthy, why don't we successfully export more finished goods to them?

They're a poor country. How much would they have to buy for you to admit we have a healthy ($400 billion in May alone) manufacturing sector?

Bottom line: They are displacing U.S. manufacturing activity

And you can prove this by showing our manufacturing output has fallen?

Plus, it is likely that Guiterrez's optimistic assertions don't comport with reality, as inflation is so grossly understated,

Says who? You and Paul Krugman?

Perhaps a few years down the road should China decide to attack Taiwan - or the US for that matter, we can subcontract all of our war materials production to China who has absorbed so much of our manufacturing ability.

It's a comforting thought, and maybe we can just wash their cars in return to pay for all the planes, munitions, etc.?