04.25.11

Economic Treason: Evisceration of US economy, in a graph

Posted in Made in China, Permanent Fail at 8:42 am by George Smith

Taken from data provided by the US Census Bureau, the above is DD blog’s graph of the increasing trade imbalance with China, plotted over twenty years.

The horizontal axis starts at 1991. The vertical axis tops out at just below three hundred billion dollars for 2010, the number that results after you subtract US exports to China from the stuff we buy from that country.

When I read stories in the news today, you still see politicians, generals, pundits and wealthy celebrities who still either lie about the nature of this disparity. Or who are simply ignorant of reality because only servants do their shopping.

As far as the US middle class is concerned, this country makes virtually nothing non-military but cars, SUVs, wine, beer, prostitutes and high end goods for the plutocracy. Everything that was made here was shipped off by US multi-nationals to China. And that business took off during the Bush administration, slowing only momentarily in 2001 as a consequence of 9/11.

Readers will note it stumbled again in 2008-09 as a consequence of the Great Recession. Wall Street blew up the world economy and demand plummeted on main street in the face of mass layoffs.

If you stare at the graph long enough (a larger version is here), you must virtually arrive at the conclusion that it’s not fixable.

The bottom has been ripped out of the US boat. Full stop. And our leaders and businessmen, through a combination of greed, inaction and malfeasance did the job on us. China was just the enabler.

Look at the slope on the line. There’s no coming back from this level of disaster in our lifetime. What this means for the middle class is obvious.

The President and the ruling class’s pundits, as well as the apologists for the plutocracy, continually make assertions that the US must be retrained for manufacturing jobs of the future.

This is all bullshit. No one in China hired by US multi-nationals needs retraining in any plants making stuff for Apple, Boeing, or Fender and Gibson guitars.

It is, rather, a fob argument used to place the blame for economic evisceration on the alleged failings of the general populace.

The graph makes clear that the US sells minimally to China. Statistically, its insignificant in terms of the larger picture, so any additional arguments on opening up their markets, or the Chinese government allowing its currency to float freely, seem pretty much more bullshit aimed at covering up the underlying calamity.

We sell China some cars and SUVs, one supposes, perhaps meat, booze and some novelty candies.

You think perhaps they might be interested in Disney’s Civil War app for the iPhone?

The graph does not show US arms manufacturing. Outside of cars and jet engines, which are going away fast too as Boeing and GE continue to outsource overseas, weapons (as an exercise in socialism for the benefit of the corporate sector), are the only things this country now gives the world in terms of material goods.

This graph, however, published last year by the New York Times, does make a nice bookend to mine.

This was the “reprise” to China Toilet Blooz on US of Fail. Fashioned as a Captain Beefheart-like tune, the video is of Tom Friedman getting hit with a cream pie, overlain with his standard miscellaneous hogwash on the imagined virtues of China, other than cheap labor. In this particular case, as if it’s participating in some green revolution centered around plastics, to fight global warming.

The quotes were taken from a column in which he dug up one US businessman, who operated “plastic mines” in China, the poor man lamenting on how much he’d like to have jobs here but the US guvmint and people just won’t support him.

Lyrics:

I bought a new toilet
It was made in China
That’s were all the jobs went
Nothing could be finer

You buy that toilet
It was made in China

Crap in a hole!
Crap in a hole!
Crap in a hole!

Buy a bag of lime

They still make that here


This is what makes Donald Trump’s recent claims about fixing jobs lost to China so laughable.

Trump proposes adding a 25 percent tariff to Chinese goods. Since China makes everything the middle class uses as daily sundries, there are no options to “buy American” left here.

Such a step would immediately be felt as a big price hike aimed straight at the US middle class. It would be debilitating and would probably cause an immediate decrease in demand, putting even more people out of work. Of course, the economic contraction caused by this would also cause layoffs in China in the manufacturing sector.

But it would almost assuredly again tank the US economy, or the part of it still based on middle class consumer demand and not Wall Street financial products.


So, how about the jobs left, those in retail, selling all the Chinese-made goods we used to make.

A profile of Paul Krugman in New York magazine concludes in this manner:

“Suppose an alternative history in which big-box stores, Wal-Mart and others, were unionized,” he says. “You could easily imagine that you could have a large number of service-sector workers who were, if not like autoworkers, like manufacturing-sector union workers in the golden age of private-sector unions.”

But that’s impossible now. It doesn’t fit with the plutocracy.

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