It is said that a “stopped clock” is correct twice a day which means that it is correct for two seconds out of 86,400 seconds. Nevertheless, it is correct for these two seconds.
Trump is a serial liar and speaks to our “worst angels” and not to the “better angels” called forth by Abraham Lincoln. Nevertheless, he is correct on one thing: China.
So, why correct on China? One law enacted in the 1970s was a requirement that goods sold in the United States should bear the country of origin. The notion was that American consumers would prefer “Made in the USA” goods. As it turned out, American retailers and consumers deserted American goods for the cheaper variety.
One of the first industries to lose jobs to foreign competition was the apparel industry. The loss started in the 1970s and is now almost totally in place.
The result: I am writing this clothed in a tailored shirt made in China, an expensive sweater also made in China, jeans made in Mexico, socks made outside the United States and even my Fruit of the Loom underwear was not “Made in the USA.”
And if you think that the “China” problem is limited to apparel, check the next time that you buy an alarm clock, a vacuum cleaner, a hose, picture frames or household items. What I call the “China” problem really is about the production of almost all “stuff” used by Americans outside the United States.
President Xi Jinping is intent on making China the world’s leader. As Trump withdraws to Fortress America, Xi reaches out to the world. His biggest effort is the “Belt And Road Initiative” which is an extensive transportation (air, rail, road, sea) infrastructure linking China to Asia, Africa and Europe. It is the fabled “Silk Road” on mega doses of steroids. Xi has the advantage of a “command economy” where he is the commander; at the same time commands can be wrong and Xi is not infallible and may well overreach. Remember the China “one child” policy which totally misfired so that now there are very few to support the very many retirees. China’s current “Social Security” system is so bad it makes ours appear to be over-funded even though ours will see deep benefit reductions by 2034 if there are not significant changes.
Trump’s main “talking point” is the persistent trade imbalance between China and the United States. As the “bull in the china shop,” he will produce nominal results but China is in for the “long game” and knows that Trump is gone in a few years. Xi has already indicated that he will purchase over $1 trillion of American goods in the next three years to remedy the trade surplus imbalance.
Trump “tweets” this a “GREAT” win and it is an improvement. But it is not enough because America needs to be as committed to the “long game” as Xi and China are. Xi’s commitment on the trade surplus is really a throwaway to quell a temporary political problem. An increase in soybean exports to China may help red state farmers but it is not a “long game” solution which must involve protecting “intellectual property.”
China obviously considers the 21st century to be “China’s century” just as the 20th century was the “American century.” The Beijing Review reflects official Chinese policy and stated (1/28/19) that “China and the U.S. are the world’s chief political and economic actors.” The European Union doesn’t even merit a mention much less India or Japan.
The United States manufacturing base was decimated over the last 40 years, leaving many hollowed out American communities. But, the economy also created different types of jobs. Microsoft, Apple, Google, Dell, Amazon and countless others did not even exist when the outflow of jobs from the apparel industry started. Hence the current concern over China stealing “intellectual property” is real and needs to be rectified.
Trump has neither the discipline nor attention span to solve the “China” problem. He will be on to the next “tweet” and taken to the cleaners by the Chinese in the “long game.” However, other Americans can and will take up the Trump slack.
The United States Government needs to do two things to remain in the “long game”: (1) restore a semblance of proper trade balances and, more importantly, (2) encourage and protect the biotechnology, artificial intelligence and computer economy where America excels.
As to the job of the present and future, America has three assets that will allow it to stay in the “long game.” Two reside in our present educational system.
First, America has world class colleges and universities aided by Federal research funding. Second, elementary and secondary school teachers started – many years ago – to emphasize STEM (Science, Technology, Engineering, Mathematics) education efforts.
Third, hardwired in the American culture is an entrepreneurial ethos which starts trillion dollar companies in garages and dorm rooms. In America millions of “nobodies” believe they can be “somebodies.”
My bet is that the state run “command economy” of China will falter and the entrepreneurial economy will survive and create meaningful jobs for the grandchildren of American textile workers.
Will everything then be “hunky doory”? No, but at least some relief may be in sight for the American middle class.
Jay, your essay is a wise one I’m reading soon after reading New York Times columnist David Brooks essay about what rural America can teach us (mostly, Nebraska and the strong culture of community service). Somehow, the two articles relate, with David Brooks’ impressions adding to the hope you express. My own opinion about trade relations is that we should consider total cost, not just the price of an exported good. This means that we consider the inequity of American manufacturers bearing health care costs, worker pension costs, environmental and safety regulations that manufacturers in other places do not suffer. The consequence is that air quality deteriorates across the globe, populations emigrate (as refugees too often) and the world community suffers consequences. As a remedy, add those costs back into the equations. – Tom Figel
Jay, I congratulate you on your blog, we need more discussion about a lot of issues. While I agree with much of what the President is doing policy wise I cannot stand to hear him talk. I would love to have a great statesman to espouse the benefits of a free democracy and promote America on the world stage. Unfortunately Trump was elected to do exactly what he is doing. We needed a disrupter because congress has totally failed in it duties for the last 3 decades or more. They have abdicated their own authority to the last few presidents by their inability to accomplish anything. Everyone really needs to think about why Trump won. I assure you it isn’t the reason the democrats and the left are saying or the major media outlets. He won because most Americans feel we need something different, we need to get things done. I for one feel like he is trying to accomplish what he said he would do right or wrong. I do agree with you that China is the big threat to our way of life. We have empowered them by allowing globalism to feed their economy in exchange for cheap consumer goods much of which we simply don’t need. If we are to survive we need to rebuild the middle class by bringing manufacturing back home and being prepared to pay for those goods we produce. Technology should help keep prices reasonable but we will have to pay strong wages for the workers. What we must guard against is allowing unions to impose ridiculous work rules, which is what really drove business away, and under-funding pensions while the union leadership feathers their own nest. Finally we need to change how Americans absorb information. Unfortunately when news becomes entertainment and the ratings are more important than the truth we have a problem. I think Edward R. Murrow said something to that effect during the McCarthy era.