I'd rather we attracted the investment here in the US to continue to build our economy rather than having people investing in China. However, our high taxes, inefficient and expensive manufacturing, and to some extent protectionism is making investing elsewhere more attractive.
I'm not suggesting that our workers should work for $2 an hour. However, as long as labor unions keep fighting companies efforts to improve efficiency, we aren't going to be able to be competitive without breaking the unions.
Honda can make cars in the US and make money doing it. Ford and GM can't.
All of which can be done without extensive dependency upon foreign nations, like was done during the first 170 years of this nation's existence.
The United States started out from British Colonies. The US was originally one big British foreign investment. We didn't go our first 170 years without foreign investment. We were a foreign investment that rebelled because we were treated unfairly.
Even after that rebellion and we became the United States, we benefited from foreign investment. A lot of it was simply people from European countries coming here. Some brought with them their life savings, others got money from family or business ties they still had in Europe.
American has ALWAYS benefited greatly from foreign investments.
Sorry, but the majority of that is funded through the purchasing power of US dollars obtained through free trade policies.
You're missing the point. We have done so much trade for a number of reasons. One is we definitely have abundant natural resources. However, in addition to that we invested in being able to harvest those resources efficiently. We built the infrastructure to be able to move those resources where they needed to go quickly and efficiently.
Many, many important inventions have come from the United States because we learned to invest in technology and invest in the people and the resources we needed to continue to improve how we do things.
Much of that investment came from domestic sources. Much came from reinvestment by companies here. However, much also came from foreign investment, and as that foreign investment produced a good return, those foreign investors reinvested their profits in us companies or US branches of foreign companies because we had the world's fastest growing economy.
Without that investment we couldn't have grown nearly as quickly.
The other important point is people with money are going to invest it to make more money. If we tell them they can't invest it in the US, they are going to invest it somewhere else. That money is going to go towards making some other nation's economy strong. It's going to fund advances at other companies in other places.
Correct, they are a major problem since they have become corporations themselves, selling their members to the highest bidder.
They are considerably worse than that. They are artificial and abusive monopolies. They are exactly what they accuse the evil corporations of being.
Isolationism and protectionism are entirely separate entities. This country has been heavily involved internationally during even some of it's most heavily protectionist periods.
They are definitely not entirely separate.
At least after a point the more protectionism you implement the more isolated you will become.
Isolationism also produces protectionism.
They are definitely related.
You can be protectionist in some aspects of your policies while being active internationally in other aspects of your policies.
The results of protectionist policies often take a while to come into play. If you do too much to protect your markets, other countries will do business elsewhere. They will make ties elsewhere, and your ties with those countries will suffer. The end result is similar to being more isolationist even if that isn't the original intent.
And most of that is being etched away by foreign militaries that are feeding on American free trade policies. US trade dollars and technological investments funds most of the military gap closure between the US and China, which most defense groups are in agreement is closing by at least 2 years for every calendar year that passes. Imagine in 15-20 years a Chinese military with equal capbilities in most of it's military (and numerical superiority) and that'll be end result of penny-wise pound-foolish American free trade policies.
So how would you change those trade policies?
Would you impose large tariffs on cheap imported goods so we all pay more for most of what we buy? That means we also need to pay our employees more for them to have the same standard of living.
That means our exports are even less competitively priced. That means we have less to invest in our own economy. This means it costs us more to develop our own advancements.
It costs us more than it helps us. It slows our economy so others can catch up faster. It makes our people effectively poorer because everything costs us more. You can't fix slow economic growth by creating inflation.
If we want to remain on top and preserve our standard of living we need to increase our productivity. We need to reduce the tax burdens that are dragging us down. We need to encourage trade and investments.
That is incorrect. Before 1960 no more than 5% of the US economy was dependent upon foreign trade, and most of that consisted of raw materials and luxury good imports and exports of surplus finished goods.
The US went through isolationist and protectionist cycles. We industrialized our nation faster and more efficiently that most of the world. We built up our infrastructure of roads and railroads. We modernized our manufacturing. You can look at short periods of time and say we didn't rely on trade much during that time. If we scale back military spending and don't choke our economy bu growing the government, we can fund a lot of expansion short term.
However, long term you're either relying on someone else to deal with the problems of fascists and communists. You're assuming that someone else will keep those who would control others through force in check.
A isolationist government can't be a superpower. A protectionist government can be one, but they can't hold onto it unless their competitors are also protectionists and you have more resources than they do.
The basic long-term ability for a nation to remain a world power is industrial infrastructure.
We definitely became a world power because of our industrial power and infrastructure.
For a nation to survive in the long term it has to have a heavy industry base capable of prolonged use for warfare, and as free as possible from enemy interference.
For a prolonged military engagement you must have the heavy industry to support it. Do you have to have it domestically? There's definitely a huge risk if you don't. You'd be relying on manufacturing elsewhere to survive, and that's not reliable unless you're willing to make it reliable by protecting it, or possibly taking control of it.
Our heavy industry is definitely an important strategic asset. However, I want to point out that allowing DB Ports world doesn't take that asset away from us with regards to the ports. The asset is still in our country. The people doing the work are still almost all US citizens. The equipment DB Ports World would be investing in to modernize our ports would be here in the US.
China is playing it smart, they practice protectionism at home while encouraging free trade policies by the United States.
So how are those Chinese policies different than us maintaining ownership of the ports themselves, but having a foreign company invest in modernizing their operation and using their proven expertise to make them run more efficiently?
That's exactly the kind of thing that China is doing to grow their economy. They're being protectionist where they need to be. They're keeping control of assets either by ownership, or by simple location. They are maintaining security. However, they're encouraging foreign investment to modernize their businesses, and not just heavy industry.
I'm not saying that some protectionism isn't necessary. However, killing the BD Ports deal is pure stupidity because it's being done for the wrong reasons.
It's not being blocked for national security reasons. That should be abundantly clear to anyone who's paying attention to the details and who's watching how Congress is not trying to block the deal for things other than national security because the deal is passing muster on issues of security.
With the ports deal we are getting someone else to make our ports more efficient and more valuable while still using US citizens for most of the work. Yet are allowing it to be blocked because of a combination of the labor unions fighting it and what appears to be basically racist fears.
I'm not making claims that racism is playing a role lightly either. There are good reasons to be concerned about Muslims and Arabs when you look those groups as a whole, there are a lot of reasons to be concerned. That's why we need to look closer and see if that concern is really justified. We have looked closer. The treasury department has investigated. Their concerns have been addressed.
However if people are unwilling to look at the facts and continue to hang on to their fears without reason, that's when it goes from being reasonably cautious to being racist.
"I'd rather we attracted the investment here in the US to continue to build our economy rather than having people investing in China."
People invest in China because they see the money they're making off the US market. A lot of investment goes into manufacturing and support for exports to the United States. A well-designed protectionist policy would also have the ripple-effect of reducing China's value as a place to invest. Companies would rather earn some profit than no profit. If they're expecting that tariffs were going to gradually be increased to the point that it will become cheaper to make their products in the United States, they will immediately start re-investing the massive profits they currently are earning to build/move those manufacturing assets in advance.
"However, our high taxes, inefficient and expensive manufacturing, and to some extent protectionism is making investing elsewhere more attractive."
High taxes are definitely a problem, but even moves to high-efficiency manfacturing in many areas would not be enough due to the insurmountable wage/regulation/currency-value differences between the US and China. Those cost differences are what can, and should be, wiped out through the use of tariffs.
"Honda can make cars in the US and make money doing it. Ford and GM can't."
And what percentage of those Honda vehicles are of foreign content? There's a considerable cost difference between final assembly of imported parts and final assembly of domestically made parts.
"The United States started out from British Colonies. The US was originally one big British foreign investment. We didn't go our first 170 years without foreign investment. We were a foreign investment that rebelled because we were treated unfairly."
And that experience is what pushed the Founding Fathers towards protectionism, further reinforced by the economic damage of the War of 1812.
"One is we definitely have abundant natural resources. However, in addition to that we invested in being able to harvest those resources efficiently. We built the infrastructure to be able to move those resources where they needed to go quickly and efficiently."
The overwhelming majority of natural-resource investment, and the infrastructure for it, were the results of the domestic demand of satisfying protectionism-induced American industry.
"Many, many important inventions have come from the United States because we learned to invest in technology and invest in the people and the resources we needed to continue to improve how we do things."
Yes, a lot of it done here in the United States, by dollars from our internal market from American businesses. That's why though we were considerably protectionist, we still led the world in the number of inventions and level of technology.
"However, much also came from foreign investment, and as that foreign investment produced a good return, those foreign investors reinvested their profits in us companies or US branches of foreign companies because we had the world's fastest growing economy."
Only over the last 4 decades. Before that it was overwhelmingly internal market reinvestment.
"You can be protectionist in some aspects of your policies while being active internationally in other aspects of your policies."
The problem is we're barely being protectionist at all. Just look at the increasing dependence upon foreign parts for our military. If ANYPLACE we should have an absolute minimal dependence upon foreign imports it should be for the military. But within MRBM/cruise-missile range of China is enough sources that could bring practically all of our precision-guided weapons, aircraft, armored vehicle and ship combat systems manufacture to a grinding halt in 90 days or less.
"However, long term you're either relying on someone else to deal with the problems of fascists and communists. You're assuming that someone else will keep those who would control others through force in check."
Ah, but there's the problem. We're so fixated on small 3rd world nations with 4th rate militaries we're not even seeing the monster that we're growing with our own trade policies. In the short-term Islamofascism is the greatest enemy, in the long-term it is China that is our greatest threat. We either start choking them off now, or there will be no keeping them in check except through first-use of nuclear weapons.
"A isolationist government can't be a superpower. A protectionist government can be one, but they can't hold onto it unless their competitors are also protectionists and you have more resources than they do."
A nation with a well-designed protectionist policy can maintain world-power status. Can it prevent others from also building up to world-power status? Maybe not. But history itself has shown the massive protectionism-induced success of the United States that so far other nations have not been able to come close to matching without feeding off of American free trade policies or using well-designed protectionist policies themselves.
"We definitely became a world power because of our industrial power and infrastructure."
Which was overwhelmingly protectionism induced.
"That's exactly the kind of thing that China is doing to grow their economy. However, they're encouraging foreign investment to modernize their businesses, and not just heavy industry."
With the goal of building a nation capable of smashing the United States.
"However, killing the BD Ports deal is pure stupidity because it's being done for the wrong reasons. It's not being blocked for national security reasons. That should be abundantly clear to anyone who's paying attention to the details and who's watching how Congress is not trying to block the deal for things other than national security because the deal is passing muster on issues of security."
It's being killed because the politicians sense the general public is getting tired of relying on the Middle East, where their dollars are already getting used against them with each barrel of oil that we buy. Why give them another funding source? Regardless of how closely you try and monitor them, there is going to be money diverted to terrorism. It makes energy independence even more imperative, so we can cut them off completely.