No one ever listens to me. I have been bellyaching about the US trade deficit for two years.
INTERNATIONAL HERALD TRIBUNE – June 20, 2005 -- News of a record $195.1 billion trade deficit for the United States in the first quarter has re-ignited worries that the economy cannot sustain the growing level of global debt and prompted renewed debate over the cause of the problem. … "Clearly the current account deficit can't go on like this forever," said Daniel Griswold, director of the Cato Institute's center for trade policy studies, a conservative research group… (Full Story)
At this pace the United States' current account deficit could reach $780 billion this year, a sharp increase from last year's record of $617 billion.
No, it can’t go on forever. Sooner or later the country on the receiving end of all this trade, China, is going to be so awash in US dollars that it will either have to start dumping them, resulting in a dollar collapse, or start buying stuff with them.
But, selling dollars is risky business. The minute China starts selling dollars the bottom will fall out of the dollar leaving China holding billions of devalued bucks. They’re no fools, so the Chinese have opted for Plan B – buy America.
SHANGHAI, Thursday, June 23 - One of China's largest state-controlled oil companies made a $18.5 billion unsolicited bid Thursday for Unocal, signaling the first big takeover battle by a Chinese company for an American corporation…. The bold bid, by the China National Offshore Oil Corporation, may be a watershed in Chinese corporate behavior, and it demonstrates the increasing influence on Asia of Wall Street's bare-knuckled takeover tactics. (Full Story)
On Tuesday, a consortium led by top Chinese appliance maker Haier Group placed a $1.28 billion bid for struggling, Iowa-based Maytag Corp. And just last month, Lenovo Group Ltd., China's largest computer maker, completed its $1.25 billion purchase of International Business Machine Corp.'s (IBM) personal computer business.
The last two administrations, Clinton first, then Bush II, got us into this mess by pushing trade deals they claimed would create a level playing field for world trade. That’s what they said. What they actually negotiated, if I can use the word in this matter, is an trade environment in which industries in developed countries were left with a Dobson’s choice; ditch a century’s worth of progressive labor and environmental rules to compete with third world nations, or move their operations offshore.
Some domestic companies just went belly up. Others fired their US workers and moved to cheaper and environmentally lenient countries, like India and China. The same goods US workers once produced here got made by cheap labor and shipped back here where eager US consumers snapped them up. “I don’t know how they can sell this so cheap,” shoppers squealed as they filled their carts at Target and Wal-Mart.
And a good thing the stuff is cheap, since those shoppers had to get new jobs after their old ones making that stuff were shipped over seas. Now they make an average of $10,000 less than they used to. So those cheap, quality Chinese goods were a godsend, right?
Apparently. We keep buying them. And so the trade deficit with “Communist” China balloons. And now the rush is on to buy American. Well sorta. The US has become China’s Wal-Mart – tons of quality assets at dirt-cheap prices.
Here’s something to think about. China only has a handful of nuclear weapons and has had no interest in engaging in a ruinous arms race with the US. Ever wonder why? Because, there’s no need to defend against a country that will eventually just become a wholly owned subsidiary.
Lenin predicted all this:
“When we hang the capitalists, they will sell us the rope.”
Sleaze Is As Sleaze Does
I had Jack Abramoff pegged for a mega-sleazebag almost four years ago. I stumbled across him while research I was doing at the time on Enron. House Majority Leader Tom DeLay’s name popped up the first day I sorted through Enron’s smoking debris. There they were, the gruesome-twosome, Jack Abramoff and Tom DeLay, like two horse flies circling a pile of manure. (My full 2002 report is online here.)
Anyway, yesterday the Senate held hearings to determine if Abramoff was the latest white man to screw American Indians. It seems Jack opened his own lucrative trading post on the Indian reservations. What was he selling? Not smallpox-infested blankets, the Indians are onto that old trick. Abramoff’s stock-in-trade was influence, specifically his influence with the powerful House Majority Leader, Tom DeLay.
The Indians wanted Jack to smooth the way for Indian gambling operations, (which Indians ironically refer to as the White Buffalo, for all the white folk who now leave their pelts at reservation casinos.)
But it turns out Abramoff was pocketing most of the Indians wampum for himself and laundering the rest through a shell company to pay for overseas junkets for his pal Tom.
Just how sleazy is Abramoff? Try this on for size:
Exhibit 31 read into the record at yesterday’s hearing was an e-mail from Abramoff to his rabbi:
"I hate to ask you for your help with something so silly but I've been nominated for membership in the Cosmos Club, which is a very distinguished club in Washington, DC, comprised of Nobel Prize winners, etc.," Abramoff wrote. "Problem for me is that most prospective members have received awards and I have received none. I was wondering if you thought it possible that I could put that I have received an award from Toward Tradition with a sufficiently academic title, perhaps something like Scholar of Talmudic Studies? … Indeed, it would be even better if it were possible that I received these in years past, if you know what I mean." (Full Story)
How needy is that? How sleazy is that?
It looks like Casino Jack may be heading for a cell at Camp Beefcake. The same goes for his Texas buddy, former bug killer, Tom DeLay. DeLay is currently under criminal investigation in Texas for violated that state’s laws against taking campaign money from corporations.
Memo to Red State Voters:
So, how do you like your values-loving candidates so far?
Bush Sees Glowing Promise in Nuclear Power
I am not a purest on nuclear energy. I don’t see it as either a panacea or an exercise in collective suicide. Having said that, do I want a nuclear power plant downwind from my tomato garden? No way Jose.
But George Bush does. He sees a new generation of nuclear power plants as an easy way to supply energy-hungry Americans with their juice.
“The president visited Calvert Cliffs to tout nuclear energy as a replacement for fossil fuels. Calvert Cliffs, which produces enough megawatts per hour to meet about one-third of Maryland's energy needs, is a possible site for the first new nuclear energy reactor to be built in the United States in 30 years. "There is a growing consensus that more nuclear power will lead to a cleaner, safer nation," Bush said. "It is time for this country to start building nuclear power plants again." (Full Story)
I am not going to get into the various pros and cons of nuclear power. Here’s all I want to say about this matter.
Until the nation figure out what to do with the waste these things produce, existing waste and future waste, not another nuclear plant should be approved. Period. You don’t build new homes until the slot have a sewer hookups. That’s the least we can demand for new nuclear power plants. No permanent and safe waste disposal, no nukes.
A Burning Issue ?
Wouldn’t it be nice if our elected representatives jumped on real issues, like affordable heath care or the federal deficit, like they jumped yesterday to pass a law against burning an American flag?
“A constitutional amendment that would allow Congress to ban flag burning passed the House yesterday, and congressional leaders said it has a strong chance to clear the Senate for the first time, sending it to the states for ratification.” (Full Story)
What nonsense. Any one who voted for this meaningless piece of legislation should be tarred and feathered and run out of town on a rail. And if we could still do such things -- (those were the days!) -- there would Democrats on that rail this time. 77 Democrats voted for it. Yeah, seventy-friggin-seven Democrats!
Amazing. As though they don’t have real things to do. What’s next, a law against farting in public? It would make about as much sense.
Speaking of Quisling Democrats
The Senate yesterday rejected a measure calling for mandatory limits on emissions linked to global warming, siding with the Bush administration's position that the restrictions would cost jobs, drive industry overseas and run up consumers' energy bills…. Eleven Democrats joined Republicans in opposing the measure…” (Full Story)
How about we get together and warm those 11 Democrat’s little worlds?