Third Party & Independents Archives

Interesting article David. Appears Glenn Beck is right on in suggesting that the Progressive’s in both parties are pressing for a government somewhere between the EU and China. And, he may very well be right in suggesting that the reason for our 30 year rush to globalization is to try and alleviate a nuclear war.

Leaves one to ponder the outcome of the recession, which many economists believe is over. Most metrics are improving, however slightly. The world economic posture has seen some improvement this year. Greece was able to borrow about $7B which means investors think Greece is a good bet. Relative to a year ago, numbers are up in retail sales, home sales and orders for mfctrd goods. Unemployment is holding steady at 9.7% and Congress is working on a $150B jobs bill that would provide a one year extension on unemployment insurance and COBRA health benefits, and renew a number of expiring tax breaks There is growing pent up consumer emotions to get out and shop.

So, we are out of the recession and enjoying a jobless recovery where some 10% of the 153M workers are unemployed or underemployed. That adds about a $100B burden to those who are working and paying taxes. The jobless will have to be carried to some extent for the forseeable future. Currently, there are some 15M Americans and perhaps about the same number of illegal immigrants who will likely be underemployed for years to come.

Therefore, it seems the country could continue to function if the $100B figure doesn’t increase year over year. So long as China can find the natural resources to remain productive and the U.S. consumer does their part it would seem a marriage made in heaven. Something like half of citizens pay taxes and half do not and/or receive subsidies.

The overriding question then becomes, can the duopoly incrementally morph into a bureaucracy that can effectively carry out a central planning function. Certainly, it appears we are headed in that direction as the government is working to concentrate its control of healthcare, finance, state governments, auto industry, etc. This government wouldn’t have to prove itself for another 20 years or so as there can’t be any competition with China until US workers become willing to accept $4-5/hr jobs. But, it seems we are half way there, IMO.

Still, one has to consider that when we do become competitive and begin to use ever dwindling natural resources again, that could cause friction among the dominant nations that could unravel the whole idea of evading a nuclear war, IMO.

Thanks for the very interesting post Mr. Remer. I have read quite a bit about China and visited there about twenty years ago. Our visit was confined to just one province that borders Macau (sp). I found the people in those small farming villages very polite, clean, energetic, inquisitive and engaging. I will never forget the elderly couple who invited us into their home to show us their foot operated sewing machine and huge murial of New York harbor with the Statue of Liberty being prominent.

In this province at that time was the first experiment in a form of land ownership. The State mandated for itself a certain portion of what they produced on their small farms with the remainder of their production belonging to the individual. It was revolutionary and successful for both the State and individual.

The Chineese have many admirable qualities and are making great strides in taking better care of their people. The government has decided to become partners with, rather than overbearing masters, of the population. Much of the government corruption, mostly at the local level, has been rooted out and severly dealt with.

China still faces huge problems with more and more of its population moving to the large metropolitial areas on the coast leaving the small farms and villages behind.

As the population of China becomes more educated and aware of the world around them the government will face enormous problems in keeping them content and peaceful. Quite often riots break out in the provincial towns and the police can still be quite brutal.

Chineese leaders walk a very thin tightrope in keeping this huge mass of humanity in check. Whether they can continue to be successful is anyone’s guess. I hope they succeed.

Mr. Remer’s reference to our own political parties, by virtue of taking turns being in charge, having stymied our national unity and purpose is true. The Chineese have no such problem…yet. Perhaps in the future the populace will demand, and be granted, more political choices.

As for our own broken two party system…I have no answers. It did work well for our country at one time and perhaps can again.

David

We said that same sorts of things about Japan twenty years ago. China has made fantastic gains, but even if Chinese GDP equals ours in twenty years, that will still mean that the Chinese GDP per capita will be only around 1/4 that of the U.S.

There are things we can learn from in China, but I don’t think we want to be China. Let’s give them another ten years and see how it is going.

China will reach the demographic sweet spot next year. That will be the lowest “dependency ratio”. They cut the number of births and still had the old number of old people. This is a great place to be for a developing country. After that, the population ages.

I have some difficulties with this idea. The “brutal” police is the problem.

While both societies have responses to “appease” the masses, China has not relinquished absolute power. The US is fighting the Oligarchs of Corporate America. Both situations corrupt absolutely. America’s ephemeral governments increase the odds of peaceful overthrow of these oligarchs, but does diminish long term goal setting. China has long term planning, but resistance to destabilizing forces may itself become destabilizing. History bets against such forms of government.

Long term, I’m betting on America. By population, China should far outpace America in GDP.

Whether America can weather the storm of economic downturns remains to be seen.

I think the US needs to start thinking hard about what sort of relationship we want with China going forward. They are currently quite dependent on exports, but if they can develop their own consumer base that won’t be a problem. Either the US will have to accept that it might not always be top dog or it will have to keep China down somehow.

I vastly prefer the first option. Given the pace of Chinese development, their eventual independence from exports is mostly a matter of time. The US should use that time to develop a solid diplomatic relationship, and should also do so with China’s powerful neighbors. (India and Japan) This should ease tensions, and give the US a fallback position if tensions rise. Trying to suppress China just won’t work very well. We don’t have the land power projection to invade it. Nationalistic rhetoric about how awesome America is aside, its time to accept Chinese power and figure out how to deal with it.

Calvin, the US/EU does have a game plan to deal with CHina, IMO. Just that the plan has never been discussed/debated in public. The plan was to adopt globalization and deal with the afterbirth as necesaary. Greatest xfer of wealth in human history and all that. World recession and all that. Our grandkids indebted for their lifetimes, etc. Done in such a way that no one can ever be held accountable for any of it. Reminds one of the Regan Contra/Iran arms deal. Or, government without the people.

Some incite as to how it might go based on Paulson’s/Goldman Sacs adulation for all things Chinese. He couldn’t bring himself to ask China to devalue the yuan. China may not be the benevolent partner many think. They have shown their propensity to uphold the material stuff, nationalism, over moral issues such as Iran sanctions and being the lone holdout at the UN in resisting genocide in Darfur, Sudan.

For CHina to continue growing their GDP they will have to find natural resources. I believe David’s article relates that China is heavily involved in Sudan, S. Africa, and S. America. The real test will come when these resources become scarce. Energy comes to mind. At that point and time this globalization fiasco may have been for naught.

David,

Most of the ideas posited in the Naisbetts’ book on China are generally true. However, the part about China’s vehicle manufacturing history is off the mark.

Having spent 24 years in the auto manufacturing business and having travelled to China twice, the Chinese did not ‘start from scratch.’ In fact, the Chinese, over the last 15 -20 years, have had at least three dozen Chinese-led car manufacturers. Many had alliances with Western Europe and Japan.

However, the author was correct in stating that their level of experience building cars was very poor vis-a-vis the rest of the global manufacturers.

One of my colleagues during the early 90s ended up being the President of Shanghai Buick, as well as overssing GM Asia and the Pacific. He did a phenomenal job! Thus GM in China is the biggest and has the most market share of any manufacturer in the world. In fact, it’s the one place where GM makes money year in and year out.

Sadly, after bringing GM China to where it is, he resigned abruptly. He was in line to be the president of GM Europe (next step before taking over as CEO of GM), but was passed over for some GM bureaucrat, who has since been fired. My colleague’s name is Phil Murtaugh (60 minutes did a story on him).

Guess where he works now? You guessed it - for the largest Chinese automaker (he already knows the global market and of course the North American market, too). Thus, Chery motors will be coming to a showroom near you soon! Of course these cars are complete knock-offs of Chevy’s, but hey, since when did China start worrying about intellectual property rights and patent laws?

Thus, the Chinese are taking advantage of their archaic car manufacturing prowess by aligning themselves with those that have been building vehicles for a century and are quickly learning how to navigate the bigger challenge - selling outside of China (although, selling inside China, as ALL other global manufacturers know, is the biggest market on the planet). As China’s economy grows, so does the middle class (once the hundreds of millions of agricultural farmers start to migrate to the industrialized cities and economic zones).

Christine is correct when she compares China now to where Japan once was. The difference being - China does not have to “beggar thy neighbor” for raw materials or technology.

The neat thing about the “China Class” I took back in 2004 is that as a small group (5 - 6 of us), still meet twice a year to discuss changes in China. One gentleman in this group is fortunate enough to be able to visit China 10 times per year as a Director of Operations for Campbell Soup. He loves telling us about recent business and economic trends.

In my last class in grad school in 2004, we studied China. We read three books on China, the most useful one being China and The Legacy of Deng Xiaoping - From Communist Revolution to Capitalist Evolution. (author: Michael E. Marti)

Deng was the ultimate master political and military chess player. He avoided at least three falls from the Party and rose to influence a whole economic revolution, just when it looked like his ‘vision’ wouldn’t be realized.

The implications for the US? There are many. It’s no secret that state-controlled nations twist an arm or two for the greater good of its people (but is it for the greater good of the people, or the greater good of China as a country post Cold War)? China borrowed ‘Glasnost’ from Gorbachev and the former Soviet Union; Deng was savvy enough to not choose ‘Perestroika.’

Roy, Royal, Christine, gergle, and others who will comment, I thank you for taking the time to read this article. It is one of the longest I have written for WB. Covering a topic of this breadth in a short article was a challenge, and I appreciate very much, your taking the time to read it and issue forth you comments.

Roy, ever the pessimist, I think there is an incentive and lesson to be learned from this fresh reappraisal of China’s success to date, and potential success going forward, for America and all horizontal democracies who abdicate future focus for political election cycle victories.

Royal F., thanks. And you are right. Our system did indeed work for a long while with the greatest level of success of any nation on earth. Like China, however, our culture, government, and political system have changed, and while some of those changes have been extremely positive, others have been equally negative in terms of our future.

One of the key fundamental advantages China has, is the ability of its government to act in a rapid and propitious manner. Our government, by original design, is slow, cumbersome, and tedious in its attempts to change anything of consequence, even when the need is glaring. Health care reform and fossil fuel dependency are examples.

Christine is right, we cannot, nor would we want, to become China. However, to compete, and salvage our future from bankrupting debt and its consequences, America must find a resolution to its political retardation, impasses, and election cycle myopic focus, which impede and deny long term solutions to the protracted challenges facing us a United States.

Christine said: “We said that same sorts of things about Japan twenty years ago.” We said a lot of things 20 years ago, some were true and valid, and some were not. What was said about Japan 20 years ago, has absolutely no bearing on the reality of what China is doing today and its potential in the future.

I would argue, that aside from Japan’s very small landlocked geography and population, where Japan failed some of its potential was in becoming more a Western democracy and economy, and far faster, than most Western democracies did. China’s entire governmental, political, and economic approach toward democracy is unique, and nothing at all like that in Japan, which is a modified version of our own, built around a mono-ethno-centric society and culture.

I don’t think any nation’s people would want to trade places with China and swap future threats with China. Other nation’s, including our own, would do well to shoulder the burden of altering their systems in their own unique ways to accomplish many of the same capacities that now empower China to act effectively and efficiently in managing and guiding its future around the potential pitfalls in its path.

gergle, when a nation has 1.2 billion people, it is of little consequence or threat to the nation or government if 10 million or so of its citizens dissent and balk at the nation’s direction or policies. That is equivalent to the U.S. experience of threat from the Green Party or the decentralized KKK, still in existence. With over a billion Chinese (93%) gave Hu Jintao a favorable approval rating in how China’s government is functioning (WorldPublicOpinion.org 2008 survey), such high approval ratings cannot be found amongst people in Western societies toward their President, Prime Minister, or Chancellor. Naisbitt refers to another poll by Pew Research Center finding that the Chinese government has an 89 percent approval rating.

The Naisbitts refer to 8 pillars as the foundation and drivers of China’s new society, which I understand to reference the following:

* Emancipation of the Mind (through huge investments in academic and secular education, the direct opposite of brainwashing camps and propaganda of the former Communist regime)

* Balancing Top-Down and Bottom-Up (government controlled direction and policy setting limits and goals, balanced by grass roots and private sector initiatives and solutions encouraged at the local levels and adopted, where proven effective, by the national government.)

* Framing the Forest and Letting the Trees Grow (Doris Naisbitt: “In China, the government deliberates and makes up its mind. They have discussions too, and they are very smart people — very well educated and prepared. They set one goal. Then they all pull in that direction, creating a framework for the people within which they can try to reach that goal. The big advantage is: If the government is not sure whether something will work or not, they have special zones in which they can try it out.”

* Crossing the River by Feeling the Stones (a focus on pragmatic solutions to get from point A to point B through trial and error, feeling of the stones process, absent ideology and doctrine which would dictate taking the next step without testing it first. )

* Artistic and Intellectual Ferment (growing tolerance and acceptance of artistic and intellectual differences and contest in pursuit of ever more pragmatic and creative solutions.)

* Joining the World (engaging the world’s nations in the global marketplace of ideas, science, and technology and finding a valued place amongst them as an international partner, and leader in manufacturing, exports and increasingly, innovations in cutting edge technologies and scientific research.)

* Freedom and Fairness (Naisbitt: “What does democracy mean? Rule of the people. In China, they respond to the people’s wishes. You may not believe that, but a study done by the Pew Research Center found that the Chinese government has an 89 percent approval rating. There is a lot of openness and freedom. The entrepreneurs and the artists, they love it. The energy it releases is palpable in China.”

Fairness, in the sense that economic prosperity for a nation like China is working to lift all boats, though that task, with 1.2 billion people, is far from complete.)

* From Olympic Medals to Nobel Prizes (referring in part to China’s investment in education and development of its people’s natural talents, to include intense focus on brightest students, to become cutting edge researchers and scientists, entrepreneurs and business leaders: in a similar way that China invested in Olympic athletics as a means of introducing itself on the international stage as a capable and can do competitor.)

Kevin, I don’t think there is any disagreement regarding China’s auto objectives. They tried combustion engine development and it is choking Chinese citizens in urban areas. True to their new emphasis on the pragmatic, their rejection of the combustion model for electric and hybrid models for both domestic sales and foreign exports, does put their scientists and research developers in the same starting gate as western manufacturers with regard to increasing battery life, power, storage, recycling strategies, and cost competitiveness. These are cutting edge technologies in which Chinese scientists and developers can compete from the same starting line as the rest of the world’s auto manufacturers.

My bad if I left the impression that China had no history with the combustion engine. Any photo of their major cities, and their making clean air a national priority, demonstrates China’s history with the combustion engine.

Roy said: “They have shown their propensity to uphold the material stuff, nationalism, over moral issues such as Iran sanctions and being the lone holdout at the UN in resisting genocide in Darfur, Sudan.”

It is important to understand China’s non-aggressive non-interference policy with other nations. China’s place on the world stage as an economic power would be threatened by invoking fears of China using its power to dictate the internal affairs of other nations, which China will not tolerate by others in their own domestic affairs. What you interpret as a lack of moral positioning regarding atrocities in other nations is nothing more than a non-hypocritical and consistent policy of non-interference in other nation’s domestic affairs.

It is a principle which China is adhering to, with the same kind of consequential appearance as some ACLU positions which adhere to Bill of Rights principles, even when sometimes such adherence will appear inappropriate to others in context (defending neo-nazi and communist freedoms of speech and assembly in the public square, for example. Not popular, but, consistent with the principles of the Bill of Rights.)

Calvin said: “Nationalistic rhetoric about how awesome America is aside, its time to accept Chinese power and figure out how to deal with it.”

If the Chinese and U.S. roles were reversed, I think they would acknowledge the reality of a rapidly growing Chinese presence in the market place and world, and ask the pragmatic question, how can we shape our future so that we benefit from the growth of China’s economic power and potential.

I therefore, agree with your comment entirely. We should not want to diminish China’s future prospects, but instead, develop ways to maximize our own in relationship with China.

If the U.S. were to assume a greater adherence to the principle of non-interference with the domestic affairs of other nations, its bartering position with China, in the international marketplace, would be very much more warmly accepted by China.

My daughter went through a developmental phase when she became preoccupied with the faults of others, while defending her own by focusing on other’s faults as being worse, in her view. It was a very trying period for me as her father. She has largely grown out of that phase, assuming responsibility for dealing with her own faults, and more tolerantly leaving others to deal with theirs.

But, I now see America in part in a similar phase of rationalizing away its own faults and weaknesses instead of addressing them, through a preoccupation with the faults and weaknesses of other nation’s and their peoples.

In my own country’s defense, however, I must also acknowledge the history of the 20th century which, catapulted the U.S. into the position of World Cop and defender of freedom loving people. That said, that was last century, and the world has changed enormously in the last 30 years. We as a people must reassess our role in the world in light of those changes, and find a way as a united people to focus like a laser on pragmatic solutions to our own internal weaknesses and faults, before we permanently undermine our position as a world economic superpower and promoter of democracy in the world.

DR
Nice piece. You are somewhat alarmist regarding the debt level. Other countries,notably Britain, have come back from far higher debt/gdp ratios. In the 1950s they reached around 250%. It should also be noted that not only is the treasury having no difficulty selling debt, that debt carries historically low interest rates. What that means is the cost of debt service is extremely low. This is not a good long term policy,of course, but not a logical hindrance to a government pursueing economic stimulus efforts for the time being. Dispite improvements, we still have a severe long term unemployment problem. Actually the real danger is not the amount of debt but a failure of confidence in the nations ability to govern. An example of things that can weaken confidence globally is when a serious effort to reform medical delivery and control medicare cost increases is met with shrieking obstinance like “Death Panels” etc. by a politically powerful block.

China plays rough. In the Philippines they cut a deal to bypass quotas and tariffs on garlic importations. Once that was done they flooded the market with cheap garlic. The big domestic producers either went out of business or started raising other crops. Then of,course, the price of garlic went way up, much higher than it was when imports were limited. This is a normal business practice for them. IMO, Our government has not been very good at thwarting this kind of business practice although there is some light that BHO is moving that way with new tariffs on steel etc.

David

I have been thinking about this for a while too. We should not look at China through the same great power lens that we used in the 19th and 20th Centuries. We are seeing a real globalization, where the units of analysis may not always be countries. It may be regions, firms or even individuals.

China, as you point out, is a country of regions even more than the U.S. The Pearl River delta has grown fantastically, although maybe unsustainably. Meanwhile, rural poverty is unabated.

As you also covered, the big challenge to China is demographic. China has to become rich before it becomes old, and it will become old right quick now.

I don’t mean to repeat what you wrote, but I want to call attention to it. China is still an abysmally poor country. It has a great surplus because it undervalues its currency (and hence its labor etc). Like Japan before it, China has chosen to keep its people poor for a longer time in order to privilege industrial development. It worked for Japan. Japan is now generally rich, although I would much rather still be American. But it is no longer growing as it did because it reached its natural limits. China will too.

We benefit when China gets richer. It is about time they pulled their own weight in the world. We have to mange the competition. China benefits greatly from the U.S. security umbrella. When they have to police their own sea lanes, involve their own troops in keeping peace and reap the same reward we have, things will be different for them.

Yes David, the most interesting article I’ve seen on WB I do believe. Also, like to know what impression I leave on folks as it gives one a chance to change or refute. If I leave you with the impression I am a pessimist then I have failed in my reason for being here. I think a pessimist is someone who believes there is little good to come from anything in general. If that’s a correct assessment then I would consider myself something closer to an optimist. For instance, in taking a long view of our government, from 1776, I can earnestly say that we currently have a failed government. Not just broken, but failed. Your article alluded that we must do something to correct our dysfunctional government. If one considers the power structure and all the associated ramifications with the government I find it hard to impossible to believe the government could or would reform itself in any meaningful way. No pessimistic nor fatalistic. Just my best pea brained take on the situation. In seeking a solution that would be quick and long lived I gave up a lot of my retirement time and put up a website advocating for a new 3rd Party with a different political attitude. How more optimistic could I be?

Taking the long view of China one has to be extremely pleased that the developing world is improving their lot. I really appreciate the different cultures around the world and am not pleased at all with the pending and inevitable westernization of the world’s people. I am displeased that little to nothing is being done to control the world’s population, even as resources, fisheries for example, become seriously depleted. I am displeased with man’s stupidity. For instance, the duopoly can be easily replaced. The federal income tax could be abolished, as could Corporate Personhood, Money Is Free Speech and on and on. Whether it’s us, China or elsewhere it’s really the people who make it or break it. For instance, it would take the N. Kor’s about half an hour to dispense with Kim Jong, etc. Distilled further, it comes down to morals, education and religious perspective.

Interesting how history repeats itself. One can trace individual independence back to the Magna Carta, 1215, the Case of Monopolies, 1602, the Statue of Monopolies, 1623, and the Boston Tea Party, 1733. Remember King George, the British East India Company and the BTP? THE BTP liberated people from monopolistic and oppressive regime that dominated life in the colonies.
James Madison, in a 1792 essay wrote that there is no ‘just government, nor is property secure under it, where - - - monopolies deny to part of its citizens that free use of their faculties and free choice of their occupations’. Put in context in “Cornered” by Barry C. Lynn, he wrote that labor is a form of property, and citizens have a right to work their property – trade their work in open and public marketplaces free of interference by others. Recall that Adam Smith, ‘Wealth of Nations’ wrote that monopolists sometimes destroy men, governments and nations. Any law that aids the monopolist—-and all monopolies are direct or indirect products of law—“may be said to be all written in blood.”

Fast forward to 1913 and the establishment of the IRS, providing the funds to grow the Fed into the huge behemoth we have today. Some 16 intel agencies, created because of a $500k effort to take down a large building in NYC. While N and S borders stand wide open years hence. NAFTA, so egregious to the Constitution that it can’t be ratified by Congress, must be run by XO through the White House. Anti-trust law, 1890, for some 90 years the most effective tool in assuring competition and innovation, tossed aside to encourage monopolization in every sector on a worldwide basis. A teeny-tiny from today: the Fed has taken over education loans providing them more control over the higher education system. The Fed will borrow money at 2.6% and lend to students at 6.8%, spending the profits on more and bigger federal programs.

So, the elites, in co-opting the support of the duopoly and with no public debate gave us globalization, a ‘free trade’ economy. Not a ‘fair trade’ economy, but one designed to hide the use of institutions, corporations and our government in seizing our properties and liberties. Done in only 30 years in time. Culminating in the Great Recession, greatest xfer of wealth in history, not from the wealthy but from the poor and middle class workers.

How was it done? We failed to remember our history. Where we once threw the British out we have come to embrace ‘their’ socialist ideas on globalization and world monopolies. Regan opened the door to globalization and with Bill Clinton and Democrats jumping on board in 1992, the process was put on steroids. The supposed business genius, Milt or Mitch Romney, made his fortune by buying up distressed plants, writing a bunch of pink slips and selling off plant equipment to China. At once, the consumer is, again, under the direct rule of the mercantilist government of China and the indirect rule of economic autocrats around the world.

China is a big player in the creation of these globalized monopolies. Bills is right in that China plays hardball and the PI understands that very well. His example of how they monopolized the garlic industry is classical. We recall that China has monopolized a rare earth magnetic material used to make bomb targeting systems for our smart bombs. ‘Uncovered’ relates the monopolization of vitamin ‘C’. Vitamin ‘C’ prevents scurvy. In the 1800’s fresh fruit was limited and controlled by a rapacious Italian cartel. Supply remained limited until 1931 when the molecule we call vitamin ‘C’ was isolated. A pharma race to synthesize vitamin ‘C’ ensued but after 4 years the price for a pound of ‘C’ was $3,415. Through technology the price dropped to $4.50/lb by 1970, eradicating scurvy in the developed world. In the 80’s era of ‘free trade’ a cartel of private firms, mainly from Europe, allied with U.S. financiers to capture the US market for industrial vitamins. Between 1988 and 1992 the cartel grew to include 21 chem mfctrs based in 7 nations and governed the mfctr of at least 16 vitamin products. Then the cartel raised their prices, getting even the attention of the Clinton ‘free traders’ admin. Actions were taken against cartels in 9 other countries. Roche was fined $954M, BASF, some $500M. La Roche and Archer Daniels Midland (ADM) had started the conspiracy as early as 1991. After the cartel was busted up ADM decided not to open a next-generation plant. Hoffman-La Roche decided to sell off its plant in Belveder, NJ – the last US plant. DSM (Dutch) bought this plant and then decided to shut it down and concentrate their production in Scotland. Reason for most of these actions is that by this time the Chinese was supplying the ingredients. The Chinese cartel was “”for some reason ignored”” by the Clinton admin, priced their vitamins so low that the EU and US mfctrs saw no reason to compete. Thus, in 2007, confident of their dominance in US markets the Chinese jacked up the price to American buyers by 400%. Thus, one of the great achievements of US science was undone. In the 1990s, US financiers delivered us right back into the hands of the EU cartel, which promptly abandoned us to the Chinese.

Bills writes: “IMO, Our government has not been very good at thwarting this kind of business practice although there is some light that BHO is moving that way with new tariffs on steel etc.”
This is funny bills. The UN is more likely to take action against some genocide before the US puts tariffs on Chinese steel. Recall that our laws are subservient to the WTO and that we are indebted to China bigtime. Recall that the US was sued by Brazil and the WTO for some $4B because the US subsidized cotton growers. Recall that Brazil is threatening to sue the US for putting a tariff on their ethanol products entering the US. Recall that the US government chose to follow the British down this path.

‘Cornered’ relates that monopolies are responsible for much of some otherwise mysterious phenomena:
Difficulty in launching a successful small business
Why so many jobs moved offshore so quickly
Every rising medical costs
So much time to blend cleaner technologies into our cars and homes
Why the quality of our food, drugs and toys is declining
Why the US trade imbalance is so huge and persistent
Why corporate managers outsource so many activities
Why corporate profits reached such record heights just before the fall
Why the powerful keep getting more powerful

China, in large part, due to plentiful cheap labor, few regulations and a facilitating mercantilist government is a major factor in the demise of our great nation as we knew it. The damage is done, regardless of China’s future.

We’ve taken some major hits and kept on ticking. IMO, we can restore our Constitution, sovereignty and the principles by which we once lived. We can restore our nation to something closer to what the Founder’s intended. Therefore, one might want to consider a 3rd party with a different political attitude, pushing a populist agenda targeted solely at reform of government.
Otherwise - - -

bills, capitalism is capitalism, whether in China or the U.S. The difference is in the government, or international agency that regulates and enforces (or refuses to) the monopoly and oligopoly ends of a nation’s business entities.

All nations that I am aware of who impose anti-monopoly regulation on their domestic business interests, are not concerned about their nation’s businesses monopolistic endeavors in foreign markets. America has turned a blind eye to telecom, airline, and weapons monopolies of American producers in foreign markets. America has also fought international regulation of monopolistic behavior by nation’s business interests, seeing advantage in weak or non-existent enforcement in international trade.

I am sure China is very aware that while the U.S. opposes international enforcement of anti-trust activity, the door is wide open to license its own business interests to pursue monopolistic ends in overseas markets.

Globalization of markets will, if world economies are to thrive, establish and enforce anti-trust international regulations. The question is, will the biggest players accede to such international regulation, acknowledging the longer term benefit?

I have my doubts.

Christine said: “It is about time they pulled their own weight in the world. We have to mange the competition. China benefits greatly from the U.S. security umbrella. When they have to police their own sea lanes, involve their own troops in keeping peace and reap the same reward we have, things will be different for them.”

Isn’t that the prime mover of China’s military development? I am not aware that the U.S. provides territorial security for China. What is your source for that kind of assertion? China has adopted a non-interventionist posture regarding other nation’s internal domestic affairs as a defensive strategy. They are increasing their military development as well for self-defense. And of course, they are a nuclear power. I know of no nation on Earth that has hostile intentions toward China. Seems the Chinese have crafted a very well defined and effective defensive strategy with, or without a U.S. security umbrella.

When so much of what a nation’s internal economy buys and sells, comes from China, it is not smart to bite the hand that feeds one’s economy.

China is capable of making decisions which the vast majority of its people will endorse and enforce voluntarily. Does any nation on Earth want to test creating the situation where China decides it needs to defend China through militaristic means? I don’t think so.

If China was able to teach Russia to respect its potential in the latter half of the 20th century, what nation would be stupid enough to test China’s resolve today?

I think you vastly overestimate any Chinese benefit from America’s World Cop role, which by the way, like Medicare, is becoming unaffordable and unsustainable.

Roy said: “I think a pessimist is someone who believes there is little good to come from anything in general. If that’s a correct assessment then I would consider myself something closer to an optimist.”

Touche’, Roy. Your point is well made and taken. I stand corrected.

Roy said: “For instance, the duopoly can be easily replaced.”

I could not disagree more with that comment, however. Replacing the duopoly will be as hard as replacing the Chinese inner ruling circle. Power entrenched, is NEVER, EVER easily replaced, unless, it becomes populated by the incredibly stupid and complacent. The Republocratic parties, are neither where holding onto their power is concerned.

Roy said: “For instance, it would take the N. Kor’s about half an hour to dispense with Kim Jong, etc.”

Not True. They would have to overtake Kim’s military paying the ultimate sacrifice of their lives in the 10’s of thousands, to accomplish that feat. And, it would take considerably more than one half hour. Then there is the issue of weapons. The N. Korean people are not permitted access to weapons and the government’s internal spy network is akin to Orwell’s, making organization of the people for the purposes of overthrowing Kim, nearly impossible. There are reasons why totalitarian regimes are feared and loathed by freedom loving people, and these are just a few.

Another is the victim syndrome. Victims feel helpless, hopeless, and powerless. Overcoming this syndrome from within a totalitarian regime is truly, a very, very rare event in human history. Totalitarian regimes cull those with the intelligence, communication, and organizational skills to create a revolutionary conspiracy, either by recruiting them for the regime or dispensing with them altogether.

Roy, you leave out a fundamentally crucial aspect of the Tea Party and its relation to today. The Boston Tea Party cry, “No taxation without representation” began as a slogan in the period 1763–1776.

The Colonialists were not seeking to evade taxation. They understood the need for taxation to maintain a nation’s integrity, sovereignty, and operations of law and order. What they objected to was having no ear in England’s government to hear their grievances and petitions for relief or modification of taxation for mutual benefit to England and the Colonies. This piece of history is lost on modern day Tea Partyers whose cry is simply and stupidly, “No Taxation”. They have representation of their minority view and it continues to be a minority view, heard and registered, in the U.S. Congress. There is no parallel here between the Boston Tea Partyers and today’s Tea Partyers.

The concept that truly free markets “Should” be fair markets, is an oxymoron. The goal of truly free markets is monopolism. Government regulation of free markets is how checks and balances are placed on monopolism. Adam Smith never postulated that free markets would be fair markets, absent the concept of “enlightened self-interest” coined by DeToqueville, but, laid down in Smith’s Theory of Moral Sentiments, a precursor to Wealth of Nations, and foundation for Smith’s “invisible hand” having the desired effect of fair and free markets.

We no longer teach the principles of “enlightened self-interest” in our schools, and businesses are run by monopoly dreamers. Hence, the dynamic tension between regulation of markets and free enterprisers. This is not to say there aren’t business people who subscribe to the principles of enlightened self-interest in their business decisions. But, they are transient, as stockholders and boards have no interest in mutual benefit of provider and consumer; their priority is maximizing profit. Period.

I am with you entirely in fostering the concept of fair trade. But, I also understand that in every decision and regulation regarding trade, there will be those who will feel they have been unfairly treated by that decision or regulation. That is the reality absent the idealism.

Perception of unfairness does not necessarily constitute unfairness, however. The Tea Parters of today, are a case in point.

David

The U.S. Navy primarily keeps the sea lanes open. We also disproportionally take care of the global hot spots and disasters. The Chinese will have to do more of this kind of thing and they will get the same sort of love we do for doing it.

I look forward to it, actually.

We saw that 100 years ago, only we were the ones making the change. The Royal Navy protected the sea lanes and took care of global hot spots. We got to sit back and pretend they were oppressing us. When the Brits were no longer able to do it, we had to get involved and it was indeed costly.

Christine said: “The U.S. Navy primarily keeps the sea lanes open. We also disproportionally take care of the global hot spots and disasters. The Chinese will have to do more of this kind of thing and they will get the same sort of love we do for doing it.”

So, you are advocating for a much larger Chinese military. That is a myopically American projection of American thinking. Don’t hold your breath. The Chinese are not thinking like Americans to their credit, and have no intentions of spawning another arms race with the U.S. and Russia.

China has another far more profitable strategy they are pursuing: Non-interference in the affairs of other nations and making their economy intricately interdependent with the economies of the rest of the world. One does not bite the hand that feeds it with an absence of malice or aggression. The Chinese approach is diametrically opposed to that of the U.S.’s military industrial complex approach, which is rapidly becoming economically unsustainable for the U.S.

Universal health care would be paid for entirely with a paring back of America’s military budget and world footprint. The difference in approach between the U.S. and Chinese regarding security is about as opposite as two nation’s policies can be.

I think their weakness is in their numbers. While their neighbors are fearful of attacking them, a la Nepal, trying to bring a billion or so people on line as consumers will bring out the worst in all of us pretty toute suite. I blog regularly that the EU has run every fish over 4” long to ground in coastal Africa.

I’ll buy in to the idea that technology may avert some needs for natural resources, hydrogen fuel for example. But, seems surealy clear to me that there will be a struggle for resources at some point along the way. And, here we are scratching the space program. Go corporatist duopoly, go!

David

I don’t want to compete with the Chinese. I figure it would be good to have a little more Chinese help with some of the world’s problems.

Christine, perhaps someday when we become like the British and can no longer afford to police the world for profit the Chinese will take their turn. As it stands now the Chinese can reap the rewards by loaning us the money to police the world.

Roy, hydrogen is a natural resource, the most abundant one. Hydrogen produces the greatest source of energy we know of, it is called sunlight.

We have not scrapped the space program, we are actually increasing funding for NASA. We are just turning it into a R&D division and a investor for corporate interests. We are not going to the moon, we are going to help corporations go to the moon and let them reap the profits.

As a matter of fact, most of the people involved with those six or seven start up companies that we are going to assist in privatizing space are major campaign donors to Obama, the Democrats and to a lesser extent the Republicans.

IMO, the main difference between us and the Chinese is one of attitude. We are a nation of no it alls and busy bodies. We know what is wrong with our country and every other country in the world. We also have solution, for all the problems. All we have to do to solve the problems is for everyone to think like ‘me’, think what ‘I’ think.

As to our future, we have chosen our path and it is corpocracy. All that is left to settle is the great schism: shall it be a Social Darwinian corpocracy or a nanny state corpocracy.

“as stockholders and boards have no mutual benefit of provider and consumer; their priority is maximizing profit. Period.”….and these are the people controlling our government, controlling our future.

Pretty much right on, jlw. There, two people in the US agree on something. Feels kinda gud don’t it?
It makes perfectly good sense to me that we should support a new 3rd Party with a different political attitude for no other reason than it hasn’t been done in a long while. Thomas Jefferson said to turn it over ever 20 years or so. Way brilliant man, IMO. Would bring new blood, new ideas and concepts to the public square. Force the old party/ies to pay attention to the voters. Doesn’t take a lot money, TEA Party movement for example. Just takes some determined folks that want reform of government, IMO
A 3rd Party could certainly be no worse in governing than the duopoly. Yet most see a new party as some alien thing

Christine, the U.S. got involved in the Middle East hot spot between Israel and Palestine, and other M.E. nations, and we are paying dearly for it now, with the advent of 9/11 and all the subsequent costs adhering to that event. Why would the Chinese choose to ignore that lesson of current reality? They are very smart people, and have a government that listens to very smart people, unlike ours which ignores smart people if what they have to say is inconvenient to acknowledge for the next election.

David

The Chinese are already interfering in the internal affairs of countries like Sudan.

I was just reading today about Chinese investments in Zambia. They bought a copper mine formerly owned by Anglo-American. The Zambians thought it was exploitative before, but the Chinese take all the profits and even import Chinese workers.

They are making investments and commitments all over Africa and the Middle East. When governments change, as they always do, the Chinese will be seen as propping up the previous evil dictators. Eventually,they will have to protect their investments.

That is how we got into it. That is how everybody gets into it. That is how the Chinese are already in. They really cannot expect the U.S. Marines to bail them out.

Don’t overestimate the Chinese, who have such a good recent record in Tibet & Xinjiang. And you may recall that among the people who we cannot easily release from Guantanamo are Uighurs. We have determined that these guys are no threat to us, but the Chinese evidently think they are a risk to them. The Chinese prop up the dictatorships in Burma (where they are systematically stripping the forest cover)and N. Korea. Sooner or later that is going to hit the fan. The Chinese are not GOING to do these things; they already are.

The Chinese may not make the same mistakes we did, but they will make different ones.

Jlw

You are right. It is tough to be the leader, but it also has some benefits. We have a significant problem with free riders. And historically, the U.S. did indeed do to the Brits what the Chinese are doing to us.

Christine, there you go redefining the language to suit your argument’s objectives, again.

The Chinese ARE NOT intruding in the internal affairs of Sudan nor dictating their government’s domestic policies. They are engaged in contractual arrangements with the Sudanese government for oil.

Their perfectly legal purchase of interests in Zambia in no way constitutes intrusion upon Zambia’s domestic policies.

You mistake doing legal and contractual business with foreign governments with interventionist dictates and ultimatums toward those governments, as the U.S. has tried to do with China on the their Yuan, Taiwan, and Tibet.

Only an American would call the U.S. government’s assistance introducing Coca Cola into China good business practice, and China’s quiet and contractual business with African governments for natural resources, interventionist. Pure hypocrisy. America’s trade agreements with China have been good business for both governments and nations. China’s trade agreements with African and S. American nations are equally good business for these nations. What African nations do with the money received from China, China regards as none of their business. That is a strictly non-interventionist approach.

It is America which signs trade agreements with other nations and then attempts to use those agreements to influence those nation’s domestic policies and governance. Not China. Not currently.

Yes, the US hasn’t had a trade surplus for decades. Every trade agreement negotiated has been a loser for the taxpayer. Reason being the government uses trade and aid as an instrument of foreign policy.

David,

While I’m sure that high poll numbers in Saudi Arabia, Iran, Myanmar, and other places can be found, I’m not so sure of their significance in expressing dissent.

Kissinger in his book “Years of Upheaval” expressed admiration of the ease at which dictatorships could transform policy and move along toward long term goals. I found this disturbing. This is exactly what the founder’s bet against. Indeed, in the beginning years they doubted their own course and wisdom, as they battled with what they often described as rabble.

Hitler’s transformation of Germany was amazing and VERY popular. Henry Ford admired him.

The problem is this power corrupts. It is the reason Rome fell, it is the reason the monarchies in Europe fell.

China will at some point ignore the cries of large enough segments of the population they will find themselves in the need to either relinquish power or become brutally repressive. The end result will not likely be pretty.

America may well find itself in war with Europe or some other region as it’s economic power slips.
But retaining the ever fragile and confusing structure that our founder’s devised to keep the corrupting monarch’s at bay, will win out, in my opinion, as the fleeing intellectuals run toward the freedom of speech.

China may find that loosening the strings does exactly what happened to Britian with it’s American colony. When it tries to reestablish control, it may find it rejected by a group of influential rabble rousers who have captured the energy of the rabble to rise against power.

DR ,gergle
Imperialism is no friend of democracy,including the powers own country. The astonishing rigidity of Briatains class structure is an example. Unfortunately we are following in their footsteps.

DR
You are wrong in your assesment of both parties putting forth divergent policies in terms of imperialism at any rate. Every president since,probably, Mac Kinley, have had expansionist goals, or were willing to maintain previous achievements with a position of global military dominence. This has not changed,Democrat or Republican.

David, If the Chinese are practicing good business techniques, especially in the third world countries, then they are undoubtedly bribing government officials and that is interfering in the internal affairs of those countries.

Will they ever become as economically and politically corrupt or as interventionist as we are? I doubt it because I don’t think the peoples of the world will tolerate the business practices that we employ for very much longer.

“America’s trade agreements with China have been good business for both governments and nations.”

It sure has been for board members and shareholders who don’t give a damn about workers and consumers, only profits.

Fifteen million middle class jobs lost. A whole decade of negative job growth and possibly another. Products that are poison to you, your children and your animals. Prices that haven’t come down a penny. Sure has been a great decade thanks to those Chinese trade agreements.

The Chinese have a long history of isolationism. Their leaders handed what has to be the greatest economic opportunity in history by corrupt, just give me the envelop politicians. They have an opportunity to become one of the, possibly the wealthiest nations on earth. But, they are still isolationists.

I believe that the Chinese are going to at least try to conduct massive international trade while at the same time, keep the large majority of their people isolated from the world as much as possible. They may not succeed in the long run but IMO, they will try to do this and they will be quite oppressive in the attempt.

Roy, you are absolutely right! Our trade agreements have been good for our government’s officials, and the particular corporations which lobbied to open those trade channels. But, whether they have been good, for the America middle class is very iffy. In most cases, the middle class enjoyed lower pricing as a result of these trade deals, but, also a net exporting of American dollars in very large cumulative sums, which removes money from circulation within the U.S. economy, lowering real wages over that 30 year time frame of trade deficits.

gergle said: “China will at some point ignore the cries of large enough segments of the population…”

I happen to know that your crystal ball is no more functional than mine. If China adheres to Deng Xiaoping’s two premises for governance, I don’t see their government ignoring sizable enough minorities to warrant revolution. Now, all bets are off in the event of an economic collapse, which cold occur for many internal or external potential reasons. The West’s averting a global depression is an example of the kind of external event which would cancel all bets.

Still, I think the Naisbitts are correct in defining the new China as a new form of democracy. There are no guarantees. The oldest democracy in the world has only been around a little over 230 hundred years.

bills said: “You are wrong in your assesment of both parties putting forth divergent policies in terms of imperialism at any rate.”

I think this is a red herring straw man argument. I did not speak to imperialism differences between our two parties. Therefore, I can’t be wrong about them. The last Imperialist effort by the U.S. was Viet Nam, unless you want to include Iraq and Afghanistan, but, we are leaving Iraq and they are erecting their own government. Afghanistan might be called an imperialist invasion, but, I think it is clear that our reason for being there is defensive, not imperialist. We really don’t want to own that country as a 51st State or add it to our national territories.

jlw said: “David, If the Chinese are practicing good business techniques, especially in the third world countries, then they are undoubtedly bribing government officials and that is interfering in the internal affairs of those countries.”

Now, now, jlw, don’t play Christine’s game of redefining language to make your argument. The fact that some of those countries are dictatorships does not negate the fact that reciprocal contractual business trades are being struck. What the dictator does with the proceeds of such contracts is none of China’s business, so say the Chinese. That is by definition, non-interventionist.

You are trying to make the argument that in order for China to do ‘legitimate’ business with a dicatorship nation, they have an obligation to first remove the corrupt dictator. That would be interventionist, and that is PRECISELY what America did with Iraq. DO NOT project American paradigms on China. If you do, you will fail to understand and appreciate the reality of China.

And that reality is, many countries with the natural resources the U.S. will need later, are now contracting for those resources with China, rather than the U.S. That is a reality that the U.S. must not ignore if it wishes to objectively manage its future role in the world and economic needs. China is securing very long term contracts at excellent pricing for their long term natural resource needs, while the U.S. is unable, at this time, to successfully compete for those same contracts.

The long term ramifications of this scenario is going to advantage China and disadvantage the U.S. who will later on be forced to pay significantly higher costs for its import natural resources.

You can play woulda and shoulda games all day long to make your perspective logically true. But, the reality will remain what it is, regardless of the sophistry used to make an argument true.

There are reasons why China’s economy has moved up in rank 136 places in the last 30 years, and there non-interventionist approach to securing long term natural resource needs is one of those policies that is, IN REALITY, working for them, and not for the U.S. We are instead losing resources rebuilding nations in Iraq and Afghanistan, whose long term economic benefit to the U.S. is doubtful, at best.

David,

I think that the most interesting sentence in your post, the most telling, is the following:

The overriding question then becomes, can the duopoly incrementally morph into a bureaucracy that can effectively carry out a central planning function.

Doesn’t this contradict the premise of China ‘loosening up’ and becoming less centralized and thereby more productive?

But it does confirm to me that the ultimate goal and philosophical orientation of progressives is basically (mis)informed by the religion of Marx and State Socialism.

“The Chinese ARE NOT intruding in the internal affairs of Sudan nor dictating their government’s domestic policies. They are engaged in contractual arrangements with the Sudanese government for oil.”

You are cutting them a lot of slack. The Chinese block effective action against the government that is responsible for the massacres in Darfur. They have become Sudan’s patron. What would be your reaction is Halliburton had some contractual arrangements?

The point is not that China is particularly bad. It is that anytime a big player wades into these sorts of things, especially mineral extractions, it gets dirty. China will too. As I wrote, I welcome their intrusion in many cases. It will give the world somebody else to blame.

You are right that China is mostly business and they try not to interfere. American firms would certainly also like that kind of arrangement, but we have that little problem of respect for human rights. The Chinese will face that soon, as in fact they have already.

Chinese workers have been kidnapped and killed by angry factions and mobs in Ethiopia, Sudan, South Africa, Algeria and other places. When this happens to Americans, we figure it is because we have done something to the people involved. While this is not always true of either us or the Chinese, it does show how you just get into trouble when you are active.

David, another example of US trade agreements put in place to help break the back of the middle class worker. $457M in Recovery Act was sent to Texas to build a wind energy farm. The funds created 300 construction jobs in Texas and 2000 mfctring jobs in China. Of course, Slick Willie and crew (administration) will tell you this is a good thing and they will espouse numerous reasons why. But, what they can’t tell you is how to create a ‘real’ job in the U.S. They will say they are going to train you, financially support you, license you up, put you with a mentor, ad infinitum. But, they can’t tell you how to get a ‘real’ job.
Today’s Wash Post relates that a lady lawyer who had specialized in food and drug law recently took a census job at $21.50/hr for 10 weeks. Says a hiring specialist with the Census Bureau, “we’re seeing professionals with advanced degrees taking temp jobs part time. I’ts incredible.” Another lady, an independent business consultant with a low workload and a master’s in public relations and marketing has filed an application for census taker in her district. She has supervised 45 people and served as executive director of three non-profits with budgets of $5 and $6M.

Say, I’d just like to throw the term ‘IPO’ out there just so’s folks don’t forget about them, what the term means, etc. Been a while u-no.

Also, anti-trust, another one we are apt to forget.

Do you recall during the 1992 campaign Clinton said he was totally against NAFTA? And, his hair! Even today I think the ladies would vote for him again.

Otherwise, we have the corporcratic-socialist government we deserve.

Eric, thank you for your candor in revealing a Republican view that government should govern without a plan that it can stick to. No wonder, Republicans harmed our nation so much in just 8 years.

It kinda confirms to me that the ultimate goal and philosophical orientation of conservatives is Darwinian anarchy in which they fantasize their being the top dogs in every fight for what is valued in the nation.

Turnabout is fair play, eh? :-)

Christine said: “The Chinese block effective action against the government that is responsible for the massacres in Darfur.”

Their block is consistent with their with their non-interventionist policy regarding the internal affairs of other nations. Why are your comments so unsettled by this absence of hypocrisy? Has hypocrisy become so common place in America that its practitioners are appalled by the absence of it in others?

I too would expect intervention by the world’s nation’s when a regime undertakes or actively supports genocide. Doesn’t change the fact that the Chinese have set a principle and are sticking with it. Their vote against intervention is consistent with their policy.

Think about it, Christine. They are a nuclear power. They know all too well the consequences of attempting to interfere in the domestic affairs of other nuclear powers like India or the U.S. or Pakistan. Their policy absolutely reduces nuclear tensions and threats by principled example.

The thing about principles is, they are decisions, and all decisions carry an opportunity cost for someone. Non-intervention in Darfur carries an opportunity cost. But, an even higher potential cost attaches to abandoning the non-interventionist policy, when you have 1.2 billion people. When you are that big, it is easy for others to become frightened and project fearful outcomes of interventionist behavior.

You comment contemplates the parochial. The Chinese are thinking globally. The Chinese in my opinion are to be admired for their wisdom in establishing their non-interventionist policy and sticking to it, even if it bears some negative cost. The alternative potentially bears vastly higher costs for everyone in the world.

Roy,

Great Recessions create unemployment. Only massive federal deficits could reemploy most of those who lost their jobs. There is no political will or wisdom for adding even more massive deficits to the debt than are now underway.

It’s a catch-22 for the Democrats, to be sure, having a president (Clinton) who signed the bi-partisan legislation called the Gramm Leach Bliley Act which threw open the doors to this Great Recession. Republicans of course, simply deny any hand in the matter. Welcome to the Republocrat duopoly.

David, you said “Great Recessions create unemployment.” I would counter with - government, thru corruption and/or unregulated commerce creates Great Recessions which create unemployment.

We have a failed government that must be changed. That change must come through a new 3rd Party with a different political attitude and one overiding mission - Campaign Finance Reform. We cannot have a functional government until we remove the money influence from politics. First order of reform - Corporate Personhood and Money Is Free Speech law must be abolished. Then, all donations must be made by the individual through the IRS. The IRS will account, bundle and forward donations to the FEC. The FEC will plan and disburse donations to viable political parties.

From free and clean elections we can expect real, functional government to emerge from the rubble.

Otherwise, we have the corporcratic-socialist government we deserve.

Roy, if political contributions to the IRS are voluntary there probably won’t be any money for elections or campaigns. Glen Beck is not going to volunteer money if it is being distributed to candidates not of his choosing.

If the contributions are mandatory and based on your income, the wealthy that control the country are not going to allow that to pass. They will be paying every conservative and probably every liberal pundit to propagandize against it. They would call it Socialism.

David

Yes, I am parochial. I think human rights are important. They Chinese don’t care and in that regard they are much like some of the imperialists of the 19th Century.

I got no real problem with China, however. They are doing what others have done. I am glad to have them. Soon they can take more of the heat we take mostly by ourselves.

Re Darfur, Iran etc - it is a lot like when countries resisted sanctions against South Africa. We called that realism and arguably “constructive engagement” worked. I suppose that is what the Chinese would say.

jlw, I wouldn’t agree to a mandatory donation. I believe most folks would donate if they believed the money influence was absent from the process. One possible solution to your scenario would be for the government to kick in $20 from general funds for each taxpayer that chose not to donate. Seems a very minor problem given the failed system we have today. I suppose we could envision problems dealing with excess donations as well.
A larger problem might be how the funds are divided among the parties. Just by the number of ‘viable’ parties, or by the number of ‘viable’ candidates within a party. There would have to be some rules of the road as we shouldn’t try to fund every person in the U.S. that would like to stand for election. Any ideas as to a good metric that could be used to determine a viable candidate or a viable party?

Christine, S. Africa’s Apartheid did not end because of sanctions. It ended because of the internal of the people over the issue in their own country.

India was not liberated by sanctions or invasion from without. America did not free itself from Britain via international agents, though France was helpful on an occasional basis.

The Chinese people think far more highly of their government than Americans currently think of theirs. Their history and culture on human rights is different than yours. Which is what makes your parochial view on what China should do, enormously destructive and dangerous for all concerned if translated into American policy toward China to achieve ‘your’ version of human rights for the Chinese people.

Your comment is obviously centered on American world cop assumptions. So be it. But, the last president who assumed that, doubled our national debt and entered us into an entirely unnecessary war, destroying 100,000 lives and injuring more, while also alienating many of our ally nation’s peoples. You know of whom I speak. You supported his presidency often enough.

Your view fails the ‘shoe on the other foot’ test. If it were China imposing sanctions on the U.S. for imprisoning hundreds and killing dozens of innocent people through their jammed and failed justice system, would you uphold China’s actions against the U.S. on human right’s grounds. How about China imposing sanctions on the U.S. for systematically singling out people of color to process through their penal system in disproportionate numbers to White counterparts, many being found to be innocent and released years later.

Thank Buddha, Republicans are not calling such shots anymore. Their hypocrisy was amply demonstrated and rejected not only be the American people, but, the world’s people as well. Along comes a president whose philosophy on such matters is diametrically opposed and the world is so relieved they award him the Nobel Peace Prize for his campaign rhetoric and its underlying philosophical import, alone.

David

I am not calling for sanctions on China for its human rights record. I just recongize it for what it is. I am a little envious that they can do all those things they do w/o getting stuck for it.

The Chinese are engaged in an amoral foreign policy. This is very similar to the type of things we and the Europeans did in the not too distant past. They currently get away with it, although as I pointed out it is not safe to be Chinese in many places already.

I have my own opinions about the morality of their policy, but I am not making a normative judgment here. Mine is just a practical prediction. As Chinese power and involvement grows, they will increasingly provoke reactions.

Saddam was a dictator but, claiming that he is a card carrying member of al qaeda and killing more than 100,000 innocent Iraqis is pretty darn amoral in my book.

David,

Very nice article. I think that the incite into China is particularly revealing.

However, I do question the conclusiong that “The overriding question then becomes, can the duopoly incrementally morph into a bureaucracy that can effectively carry out a central planning function.”

The article actually struck another conclusion to me. If you were to look at the period of greatest growth for the U.S. what paralells would you notice to the China experiences and what differences?

During our period(s) of great economic expansion, we never undertook a central planning bureacracy. The strength of the U.S. like many of the strengths of the Chinese cited in the article lie in our decentralized approach to decision making. What we ultimately don’t know is if economic expansion for the Chinese is hindered or hastened by the central planning and goal setting.

Also, you said, “The goal of truly free markets is monopolism. Government regulation of free markets is how checks and balances are placed on monopolism.” This is just plain wrong. Truly free markets would be crowded not monopolized. The goal of the free market is to find the equilibrium between supply and demand.

There are many barriers to a free market and the government has an important role in removing some of them. Key among these barriers is transparency. Governments have a role in ensuring/ increasing it. Reliablity plays a big role in increasing free markets. The tort system plays a large role in Western economies in ensuring it. Preventing monopolization is actually a key government responsibility to protecting a free market.

The governement has an important role in protecting free markets. However, their intervention if not monitored and measured can become a barrier to a free market as well. Unnecessary, overly complicated, or outdated regulations increase the cost of entry into a market thus providing an advantage to established entities over potential new customers.

Insufficient or non-existent regulations can provide similar advantages. The key as in most things is in acheiving a balance.

DR
Wow..”strawman” and “red herring” in the same response. Point was, both parties put forth candidates that intrinsicly adhere to the maintenance and some times expansion of American imperial power. Niether have moved to start closing the 500 plus external bases etc. Its taken as business as usual. The parties have not been diametricly opposed regarding that.It cost a great deal.
Iraq was an example of imperialist expansion. The organization of a local government does not change that. That is tactic and an old one. We had various local governments in Vietnam also.Don’t get me wrong. Imperialism has its advantages and when we are at our best, spreading hope and fair governance is one of them. Trouble is we far too often run our policies in thrall to corporate interest.

Rob, your comment truly does not understand the inner workings of shareholders, boards, and executives of corporations, nor managerial accounting. They have one, and ONLY one objective: Profit. Therefore, all other considerations are secondary. The way to the greatest profit is to control the market place, eliminate competitors, and then run the numbers for the new monopoly control to squeeze the most profit from the greatest number of willing buyers.

This is the model of Wal-Mart. Wherever Wal-Mart sets up a store in smaller towns, the competition is virtually killed off. The research bears this out. In cities, there is more competition for Wal-Mart, which is why Wal-Mart sought to control its supplier distribution channels in order to undercut their competitors prices, squeezing profit margins of competitors, hopefully to the breaking point which causes the competitor to leave that area for greater distance from Wal-Mart giving local residents a convenience factor as a competitive edge over Wal-Mart’s lower pricing.

Wal-Mart’s model will, eventually, lead to monopolistic control of the urban department store marketplace, as well as rural. It is a foregone conclusion except for anti-trust regulation and legislation, which had Wal-Mart in the courts prior to the Great Recession. When the Great Recession is over and forgot, Wal-Mart will again be in the courts facing anti-trust litigation.

Profit as motive DOES NOT SEEK BALANCE, Rob. Profit as motive seeks maximizing profit. The greatest maximization of profit lies in monopoly control of the marketplace. Shareholders demand this, Board’s lucrative salaries depend on this, and Executive’s golden parachutes are dependent upon this paradigm. Saavy Investors invest or sell based on market share numbers.

You can ascribe to the benevolence of profit if you wish, but, we tried noblesse oblige through the 1920’s and it ended in failure. We tried it again in the late 1990’s with the passage of the Gramm Leach Bliley Act revoking the Glass Steagal Act, and that too resulted in failure of the economy through oligopoly, which is just a conspiratorial monopoly agenda by more than one industry player.

Unregulated free enterprise is ultimately self-destructive by way of monopolism, inviting and even demanding ant-trust regulation to offset the consequences of unbridled greed experienced by the consumers unless controlled by an authoritarian regime. But, even then, as Saddam Hussein learned, it can be self-defeating. Kim Yung Il controls a monopoly of the markets in N. Korea. Were it nor for China, Kim Yung Il would be long gone as a dictator, either through revolution or invasion. The consumers and people of monopolistic states like Hussein’s and Il’s suffer horribly.

In non-dictatorial regimes everywhere, anti-trust regulation is a key factor separating their societies from dictatorial regimes, like pre-invasion Iraq and N. Korea. As monopolization grew in Hitler’s Germany and Mussolini’s Italy, the German people suffered ever greater privations.

All truly unregulated enterprise market players will, through competition and elimination of competition, lead to monopoly, or at the very least, an oligopoly of only a few producers and/or distributors, at which point, the maximization of profit no longer requires that all consumers be included, and privation and consumer’s lack of access set in, as a counter-force to monopolization. If successful, such consumers and would be competitors, locked out of the market by controlled monopolistic pricing, demand anti-trust regulation. Which is PRECISELY why there is no modern non-authoritarian nation on earth today which has not installed anti-trust legislation and other measures to regulate markets and enterprise. This is why truly free enterprise in the world of modern democratic nations today, does not exist.

It is an ideology which has failed in every modern democratically elected nation on earth.

Christine said: “The Chinese are engaged in an amoral foreign policy.”

Morality = “The quality of being in accord with standards of right or good conduct.”

The Chinese are engaged in an amoral foreign policy, according to whom, Christine? You? According to the polling of the Chinese people, their government’s foreign policy is both right and good. They are experiencing increasing prosperity, which they collectively cannot recall in their lifetimes, as a result of their government’s foreign policy.

Your argument reminds me of the story of a used car sale. S (seller) agrees with B (buyer) to exchange for $500 a used 1964 Ford Fairlane car. B drives off after paying the $500 thinking this was a good buy. A month later, the Ford breaks down and the shop informs B the care will require a new engine, costing $1500. B then curses A for wrongful conduct in selling him the car, and curses deal struck as a bad one.

The point being, China is not forcing any other nation to enter trade deals with it, nor denying any other nations their freedom of choice to engage or not engage in the deals proffered.

You can make a moral judgment about their foreign policy but, your judgment has no universality standard by which to defend itself. Your moral judgment is akin to that of B’s after learning the car would require maintenance, short sighted and extremely personal in its scope and standard.

Christine said: “As Chinese power and involvement grows, they will increasingly provoke reactions.”

Actually, I would agree with you on this. It is sociologically and psychologically true that when one observes another of greater power than oneself, one will experience intimidation by that power. But, note that it will not necessarily be specific actions by the Chinese that will provoke such reactions, only the success of their actions in growing their economic power further. Just as many people in the world reacted as intimidated by the growth of American economic power.

Yes, on this, we can agree entirely.

Though it is empirically too soon to say for sure, I think you are wrong about including Obama in that group of presidents. Obama has not even hinted at any expansion of military power anywhere in the world. He has, in fact, committed to continue with the withdrawal from Iraq, and is taking far more effective steps in resolving the inherited war in Afghanistan.

In the budget last year, Obama proposed cuts in the military budget. Obama has vowed to cut budgets in space, missile defense, and nuclear weapons, which he has made good on for his own part. These actions are not in keeping with your claim of expansion or maintenance of American imperialism.

David

Amoral is not immoral. The Chinese evidently will deal with anybody w/o regard to their human rights, environmental etc behavior. This is an okay way to do business, maybe better than moralizing. But we are not allowed to do that. I am a little envious.

DR
I wish you were right. Its a matter of degree, not fundemental difference. It will be interesting to watch Central America. So far it looks the CIA is busy busy busy.

Christine, Why would you even reply with “Amoral is not immoral.”, when I already defined the term?

The Chinese people have judged their government’s foreign policy as good and right as the polls previously cited attest. Since, judgments of good and right are, by definition, MORAL judgments, your statement that China is engaged in amoral foreign policy is false. Their policy may be amoral to you, but, not to the people the Chinese government has to answer to. And that is not YOU!

Why do your comments insist on creating straw men arguments? It is counterproductive and only leaves the impression that your comment seeks to dodge the reply addressed to you.

Christine said: “This is an okay way to do business, maybe better than moralizing. But we are not allowed to do that.”

Poppycock. We intervene in the domestic affairs of other nations without regard for the consequences to their people, provided it serves the decision maker’s ends here at home. Which means, our foreign policy can be and is, as amoral, moral, or immoral as our decision maker’s ends dictate. Invading Iraq was immoral. Invading Afghanistan was moral. We do business with China and they have a deplorable record of human rights by our standards. We most certainly ARE allowed to do that, and do; still; currently.

bills, it is impossible for a president of the U.S. to micro-manage all the agencies under his purview, even if s/he wanted to. What the CIA is doing in C.A. was largely determined by the last administration, and Obama is NOT an expert on foreign covert operations. A president must rely upon his cabinet agency heads to both maintain continuity of efforts as well as adjustments and modifications as needed.

The man has been in office less than a year and a half. It is a monumentally complex federal government America has. Give the man some time to address his priority list in the order in which they are arranged. Maintenance is easier and less time consuming than change. Give the man some time.

If the Chinese use capitalism to build up a large middle class addicted to materialism and deeply in debt because of it; and an investor class demanding larger returns for their investments, their government may be forced to become just as corporate friendly and “amoral” as our government is in regards to our indifference to the people of other countries.

I don’t think most know how much our government has become entwined with the corporations and their desires to increase profits and monopolize markets. Either that or many of us just don’t want to know or want to rationalize it because of how much our lifestyle is dependent of their behavior.

Take foreign aid to poor countries, nearly all of it is tied to one corporate venture or another. We give food aid, through our government to poorer countries to help feed their people. These countries cannot use that money to improve their agriculture and feed themselves, they have to buy food on the international market. This arrangement pleases our grain producers, processors, shippers and maritime unions. Looks good on the governments export data.

Take a look at Iran, Our government and our closest allies say that Iran getting the bomb would be the worst thing that could happen. We say they will not do this, we will sanction them, starve them into agreement; and if that doesn’t work, we will invade. Does anyone know or care how many of our and our allies corporations are doing business with the Iranians, primarily in the oil and “nuclear” energy arena. It is just business as usual for capitalism. Guess who’s sons and daughters are the WE who will invade.

Correct jlm, I posted above that US trade and aid have never been anything other than instruments of foreign policy. Condums to the people and cash to the dictator’s in exchange for mining access, etc.

On the Iran thing, we recall the Iran/Contra venture and more recent, the selling of F4 fighter parts to their ailing AF. Yesterevening FOX published the names of 4 or 5 Corps currently doing business with Iran.

And, Slick Willie struts around like some great peacock. Amazing country, IMO. Took him and his Progressive pals 30 years to bring the country down but they finally pulled it off. Still, we ain’t working for $4/hr yet and that must be very disappointing to the corporatic-socialist. I’m sure they have plans.
I’ve blogged a bunch that instead of condums and cash (NAFTA) we adopt trade arrangements with each country and help them develop IF they so choose. For instance, for Arican mining access export turn key agra systems, John Deeres, graineries, processors, etc. (and I ain’t talking ADM here) whereby, the local folks can learn long term skills, etc.

David,

You said, “Rob, your comment truly does not understand the inner workings of shareholders, boards, and executives of corporations, nor managerial accounting. They have one, and ONLY one objective: Profit.”

You obviously didn’t read my post beyond where I said you were wrong. You are equating monopolies with a free market, my definition, a monoplized market is not free.

I listed several places where it is the governments role to increase or ensure the freedom of the marketplace including moving forward with anti-trust enforcement.

However, I will pick a bone with your argument on Wal-Mart. The research you cited is heavily disputed. There are major competitors for Wal-Mart, Target, Cost-Co (against their SAMS brand) cheif among them. They are gaining market share not losing it. While there are pockets of the country where this does not exist, it does not by definition make Wal-Mart a monopoly.

To restate, you said that corporations “have one, and ONLY one objective: Profit.” This is about as true as stating that Democrats have one and only one goal to maintain control of power in Congress. Corporations generally want to do something with their profit, they don’t take all or even most of it to line their pockets, they put it back to work. If they don’t, they don’t stay in business very long; nor for most of them, would they have much fun doing it.

By the way, you should keep in mind that the large majority of corporations are solely owned and operated. If you believe that they do everything solely for profit go to a little league ball field and see who buys the uniforms. I’m relatively certain that most never see a return on that “investment”.

You can continue to judge business in America through the lens of the worst actors, but you will only get as accurate a view of business as if you judged all Democrats based on the action of Chuck Rangel.

Rob said: “However, I will pick a bone with your argument on Wal-Mart. The research you cited is heavily disputed.”

So is global warming. So is the need to pass health care reform. Heavily disputed is not evidence one way or another. We are all aware that any action in any direction will be heavily disputed by those whom, for whatever personal motives, don’t want that change to take place.

Rob said: “To restate, you said that corporations “have one, and ONLY one objective: Profit.” This is about as true as stating that Democrats have one and only one goal to maintain control of power in Congress.”

Quite Right. Both are absolutely true.

Rob said: “Corporations generally want to do something with their profit, they don’t take all or even most of it to line their pockets, they put it back to work.”

Your view does not comport with corporate earnings prior to, during, and post Great Recession by the banking sector, for example. They reinvest some profit to make even more profit. Profit IS the only motive.

Name me one person in ownership of a for-profit business whose actions and motives demonstrate that profit is NOT their primary motive.

Your arguments are opinions, and many illogically constructed in light of the evidence in reality.

I commend, however your wisdom in recognizing that anti-trust enforcement is required to constrain the excesses of free enterprise capitalism. There is a fundamental difference between a mom and pop family business and a corporation. A mom and pop family business can, as individuals, choose to operate their business in an ethical and socially responsible way, foregoing whatever profitability such actions might incur in the short run. That is not the case with corporations. A corporate exec who makes decisions which impair short term profitability is not likely to remain in their position for very long.

jlw said: “If the Chinese use capitalism to build up a large middle class addicted to materialism and deeply in debt because of it; and an investor class demanding larger returns for their investments, their government may be forced to become just as corporate friendly and “amoral” as our government is in regards to our indifference to the people of other countries.”

That’s a big ‘if’ with a lot of specific requirements. China is not structured like the U.S. in some very fundamental other ways. Which is why I don’t think your “if” will ever come to pass in just that way. China’s government retains the power to shut down a Chinese corporation or business, not just litigate fines which the corporation would just pass on to the consumer. This is a fundamental difference, that I think, would preclude their government ever becoming the servant of the corporations. The simple awareness of this fact by Chinese corporate execs, changes the entire prospective outcome of the growth of their middle and investment classes. For better or worse, remains to be seen, but, a different outcome is logically, very likely.

David,

You said, “‘However, I will pick a bone with your argument on Wal-Mart. The research you cited is heavily disputed.’
So is global warming. So is the need to pass health care reform. Heavily disputed is not evidence one way or another. We are all aware that any action in any direction will be heavily disputed by those whom, for whatever personal motives, don’t want that change to take place. “

You seem to ignore my next statement that suggests emperical evidence to the contrary, convienant that.

You said, “Name me one person in ownership of a for-profit business whose actions and motives demonstrate that profit is NOT their primary motive.”

Primay is motive is much different that the “They have one, and ONLY one objective: Profit” above. Which is it? Primary or Only. I will readily admit that it is a primary motive. However, that means that it is calculated among secondary and tertiary motives as well.

I can name many whose motives go far beyond profit. Also, your question is a bit vague. Do you mean the primary motive as the owner of a business entity or as a person. There are quite a few figures that spring to mind that own businesses, but there motivation as an individual to make a profit in those businesses is far less than to make other contributions to society.

You also said, “Your arguments are opinions, and many illogically constructed in light of the evidence in reality.” I’m rubber and your glue whatever you say bounces off me and sticks to you.

You also said, “A corporate exec who makes decisions which impair short term profitability is not likely to remain in their position for very long.” Your statement is an opinion illogically constructed in light of the evidence of reality. You should take a look at UPS, Ben and Jerry’s ice cream and others as examples.

In the news that 70% of stimulus spending on energy projects has gone to China. Understandable, since if you want parts and pieces to fabricate a wind turbine or solar array at slave labor cost you must deal with China. The U.S. has agreements with countries worldwide that we want take protective measures as it relates to commerce. Nothing ratified by Congress, as that would violate our Constitution but, run out of the Presiden’ts back pocket as an Executive Order.

Today’s joke: House Dem’s are recommending a one year moratorium on ear marks to for-profit contractors. House Rep’s countered with a complete moratorium. The Senate has already voiced their disdain for the idea. Since the first ear mark was put through in 1870 I do believe this draws a bigger laugh than the Massa ‘tickle me Elmo’ thing.

Let’s see – we have two jobs ((stimulus)) bills floating through Congress now. One for $150B and one for $15B, I think is right. Now, Rangel’s replacement, Sen. Levin, HWAMC, is working with Sen. Max Bacus, Finance Committee Chair, to push two other jobs ((Stimulus)) bills. IMO, when you can send trees to China, have them turn the trees into plywood and return ship it for a cost savings of $20/sheet over US mfctrd plywood then it’s fair to say it is near impossible to create a job in this country. And, if nothing changes, it will be that way until some 1.2B Chinese and a near billion India’ns achieve upward mobility to something like $4/hr.

Noted in the Wash. Post today that the all-volunteer Wikipedia is the most consulted reference in world while Microsoft closed down its Encarta project after spending millions toward that effort. A case where knowledge workers put more emphasis on autonomy as opposed to monetary. And, there was one CEO, in the NE I believe, perhaps Conn, where the company was headed for bankruptcy and the CEO took out a personal loan to keep the company going, eventually turning it around. It did involve importing some materials as a last resort. I’d vote for him on any ticket. He could have sold out to China and fired the workers. Textile company I believe.

In summation: Regan did initiate the era of ‘greed is good’ but it was slick willie who put free trade on steroids. Phil Gramm introduced legislation to abolish the Banking Act of 1933 and slick willie signed it. Phil Gramm slipped in the Commodity Futures Modernization Act of 2000 and slick willie signed it. What can you say? We watched history being made. Greatest xfer of wealth in human history, etc.

Rob said: “You should take a look at UPS, Ben and Jerry’s ice cream and others as examples.”

NO, you should look at these organizations and the reasons they used altruism as a marketing and advertising ploy. And I assure you Rob, the minute their market share and profit drops in the face of such altruistic marketing, they will abandon it.

Ben & Jerry’s, a member of the British-Dutch Unilever conglomerate since 2000, went corporate. Profit has and will dictate their actions as part of the Unilever conglomerate. Case in point:

“Ben & Jerry’s used to have a policy that no employee’s rate of pay shall exceed seven times that of entry-level employees. In 1995, entry-level employees were paid $8 hourly, and the highest paid employee was President and Chief Operating Officer Chuck Lacy, who earned $150,000 annually. When Ben Cohen resigned as Chief Executive Officer and Ben & Jerry’s announced the search for a new CEO in 1995, the company ended the seven-to-one-ratio policy.”

I see nothing in the UPS history to indicate any other motive than profit through expanded market share, to include store franchisers overcharging customers for services that would be cheaper with the U.S. Postal service.

You should look at the Annie E. Casey foundation related to UPS.

If they are overcharging customers, why are the customers going to them rather than the post office?

The bigger question you dodged though is Profit the Primary motive or the ONLY motive as you so boldly stated above.

Are corporate execs to be viewed only in the frameword as a manager of the company or do their broader life’s work get included in your evaluation.

The problem with your evaluation is that it is entirely economically based. You ignore the many sociological influences the behavior of organizations and their leaders. It is the same mistake that economists make on a regular basis when predicting the behavior of companies.

You also said, “A corporate exec who makes decisions which impair short term profitability is not likely to remain in their position for very long.” This is an entirely illogical statement. Every investment that a corporation makes is made in exchange for short term profitability in favor of longer terms gains.

Rob asked: “If they are overcharging customers, why are the customers going to them rather than the post office?”

Gee, Rob, you really don’t know the answer to that? Think about it. I am sure it will come to you with just a little effort. Give you a hint: prison overpopulation! Give you another hint: Bernie Madoff investors.

In response to your comment: “The bigger question you dodged though is Profit the Primary motive or the ONLY motive as you so boldly stated above.”, I made it clear, Rob. Is there a reading deficiency on the other side of my comments? Corporations have one motive: Profit. All actions, even altruistic, are designed to enhance profit or, market share, which leads to greater profit.

Small business owners may observe many motives, and profit is not necessarily the most important on their priority list. I didn’t dodge the question, Rob. I was just reluctant to be professorial a second time over the same turf.

As for the rest, your comments haven’t a clue what they are talking about. I got an A in graduate Organizational psychology, and a B.A. in psychology. I am very aware of the sociological workings of organizations, corporate and otherwise.

This comment of yours demonstrates an abject ignorance of the topic:

You also said, “A corporate exec who makes decisions which impair short term profitability is not likely to remain in their position for very long.” This is an entirely illogical statement. Every investment that a corporation makes is made in exchange for short term profitability in favor of longer terms gains.

The lack of logic and relevant information is contained in your response above. If I were you, I wouldn’t invest your money in stocks based on that belief. Does the Big Three’s response to the Japanese incursion for market share not ring a bell with you? There short term balance sheet and income statements for shareholder profits resulted in their complete abdication of enormous market share to the Japanese who anticipated the longer term trends and supplied that market what they wanted.

Of course, having achieved a stable share of the American market, Toyota’s Toyoda capitulated on quality for increasing profits, and look at what it got this grandson retard now in charge of Toyota.

How about Lehmann Bros? Ameriquest? CountryWide? All gone now to bankruptcy by shooting for the short term gains. In fact, shooting for the short term gains is an enormous contributor to this last Great Recession, by corporate banks, CDS and derivative traders, mortgage corporations, etc. For a great many of those short term investors, hundreds of billions in their personal portfolios were lost.

Learning what one does not know can be a challenge. But, its worth the effort to overcome.

I would argue that the oil companies and their allies, the automakers and the government have forced us to think short term on energy for decades and they are still trying to force us to do that.

Now David please forgive me if I misjudged your education, it was just that your arguments betray it. The idea that corporations and their decision making are not influenced by other sociological forces has not been true in my experience. Because your argument specifically states all, then my experience disproves your thesis.

Regarding the big three, how many of the corporate execs that oversaw the erosion of their marketshare are still there? It appears based on this example that the converse of your argument is true. Warren Buffet’s, Bill gates, and the google guys on the other hand have consisently made the choice to invest rather than emphasize short term profits. That seems to run contrary to your emphatic argument to the contrary. The notion that corporations and their decision making process are not influenced by a myriad of sociolgical influences like other organizations does not match with my experience and as such disproves your overly general argument.

In terms of a corporations motive being only profit, please execuse my confusion. First it was only, then it was primary (implying more than one), now it is only. I’m just having trouble keeping up. If you are stating only, then how to explain the large amount of charitable giving done by companies? Are you really that cynical that you believe that it is all done in the search for profits?

David and Rob:

Google this: Corporate Charitable Giving: Victor Brudney and Allen Ferrell

What kinds of charitable giving are done by corporations

What do they expect to get in return or not get in return

What do shareholders think about it

Sorry fellas, I mised one: What does business law say about charitable giving by corporations

Rob said: “Because your argument specifically states all, then my experience disproves your thesis. “

Your anecdotal experience proves nothing as the word is defined in science and math. It may convince you, that is all. But, a child is easily convinced by Christmas morning presents that there is a Santa Clause. The anecdotal experience proves NOTHING.

jlw said: “I would argue that the oil companies and their allies, the automakers and the government have forced us to think short term on energy for decades and they are still trying to force us to do that.”

That is demonstrably true, jlw. Reams of research have been conducted on this short term profit and market share focus to the detriment of the longer term viability of a host of corporations.

But, its far worse than that. Corporations are eating up small businesses and creating small group monopolies, called oligopolies. In the last 5 years, 80,000 small family farms have bellied up or been bought out by corporate agri-business. In Missouri alone there were 2000 family owned hog farms in 2001. Today there are TWO left!

One Mo. farmer was quoted on NPR this morning as saying the backyard swing set for his kids was what his hog farm was all about. But, the corporate farmers have dropped hog prices so low in the last decade in an attempt to increase market share competition with beef and poultry and fish in supermarkets, that, small hog farmers were driven into bankruptcy, forcing cheap sale of their farms to the corporate farmers.

And folks wonder where all the small business jobs are going. Why they wonder is answered in a single word: Ignorance and not caring to know.

David: Who do you blame for what has happened?

IMO, shareholders are to blame.

David,

You said, “But, a child is easily convinced by Christmas morning presents that there is a Santa Clause. The anecdotal experience proves NOTHING.”

I disagree because my anecodotal experience is based on facts that I’m well aware of based on my position within my company, not mere impressions. But leaving that aside for the moment, how do explain Buffet, Gates, and the google guys surving despite emphasizing long-term results over short-term profitability?

Look, I’ll bring this back to the realm of civility. There is undoubtedly truth in your arguments for several if not many corporations. However, your insistence that it is true for all makes your arguments difficult to impossible to disprove. Espcially when you are trying to gauge the professional and personal motivations of all executives. This is too large a pool of individuals to prove any theory for. There is diversity in this pool just like any other large gruop of people.

jlw, trying to blame shareholders goes nowhere. Shareholders are not empowered to make operational decisions regarding the corporation they buy stocks in. The investigation into Lehman Bros. was reported out this week, claiming the Exec’s and Accountants were responsible for their bankruptcy. I think that is where the responsibility lies, mostly.

Very large stake shareholders attend the shareholder meetings and vote for Directors of the Board. They bear some responsibility when poor management fails shareholders in general. But, pension plan participants, and 401K investors, and small shareholders and day traders cannot reasonably be held responsible for the management of the corporations their funds are invested in.

Rob, you have now drifted into assumptions that have not been validated. I never said all corporations torpedo their corporation’s future in lieu of short term profitability. There are some very well run corporations, whose management reflects an ability to enhance BOTH short term profitability and long term growth and benefit.

My claim was not that corporations are incapable of managing long term interests. My claim was that the structure of corporations prevents them from losing focus or priority on short term profitability.

Corporations rely on investors loans (buying shares) to expand and grow their business. Investors make those loans on the bet that their returns will be positive, not negative. Ergo, corporations MUST, in order to maintain and/or grow those loans (shares outstanding), provide a short term profitability to those shareholders. Failure to do so will cause those shareholders to sell their shares and invest in some other corporation that IS prioritizing the short term profitability.

There is no way around this structure of corporations. It is systemic, as Adam Smith alludes to referencing the ‘invisible hand’ of human behavior which moves to adjust and correct for optimal gains.

Ok, so now we have further constrained the corporations you have in focus to only publicly traded ones. This excludes some very large companies that are closely held (not publicly traded), as well as partnerships (also not publicly traded).

This further undermines your point, that all companies set their priorties the same way and in the same caculus. Additionally, you have submitted that all companies set their priorities based in a stock price. While this us the case often, there are certainly those where the stock price is a secondary or even tertiary concern.

Your comments began with an assessment of all companies, moved to large companies, and now publically traded ones. If you continue to constrain your argument, I’m sure we can get to agreement.

Rob, your reading deficit is remarkable. You say: “This further undermines your point, that all companies set their priorties the same way and in the same caculus.”

Which is in total contradiction to what I said, which was, that small business do not necessarily set their priorities the same as for-profit corporations.

InvestorWords.Com defines corporation this way:

The most common form of business organization, and one which is chartered by a state and given many legal rights as an entity separate from its owners. This form of business is characterized by the limited liability of its owners, the issuance of shares of easily transferable stock, and existence as a going concern.

If one has to redefine the English language to make their argument, the argument is already lost.

David,

I think it is your deficit that is amazing. Most small businesses are corporations. However, you started your last argument about those that sell stock to investors. Thics is a very small percentage of most corpoations.

Rob, you are confusing being incorporated with being a corporation. These are distinctly different terms. The biggest businesses are corporations. Ever heard of the S&P 500 ? Just the tip of the ice berg of corporations.

Yes, the majority of all businesses in America are not corporations, but LLC’s, family owned, or non-profits. Finally, something we can agree upon.

Doesn’t negate my argument, however, regarding corporations, nor smaller businesses. The structure of corporations is profit motivated from stem to stern. A great many, if not most LLC’s are also structured toward profit as their primary motives as the owners, and often, friends and families and business partners have their own money invested in the LLC. There is however, a distinct difference between corporations and LLC’s as I alluded to ealier. LLC’s are companies, not corporations. What they share in common with corporations is limited liability. Many medical and legal practices are established as LLC’s, for example. But, because of the owner investment in the LLC, it would be a foolish LLC exec who didn’t work to maximize profit in the short run.

A doctor in an LLC, can promote altruistic health goals for their patients, if they are scrupulous. A great many however, see no profit in health which causes patients to stay away. That is one of the fundamental and rudimentary problems with a for-profit health care system, and why many other modern nations have been moving away from them, toward non-profit health care systems.

David said:

“That is demonstrably true, jlw. Reams of research have been conducted on this short term profit and market share focus to the detriment of the long term viability of a host of corporations.”

“But it is far worse than that” ….driving small farmers out of business, driving small business out of business etc.

jlw, trying to blame shareholders goes nowhere. Share holders are not empowered to make decisions regarding the corporations they buy stock in.” “pension plan participants, and 401k investors, and small shareholders and day traders cannot reasonably be held responsible for the management of the corporations their funds are invested in.”

“rob,” “corporations rely on investors loans (buying shares) to expand and grow their business. Investors make these loans on the bet that their returns will be positive, not negative. Ergo, corporations MUST, in order to maintain and/or grow these loans (shares outstanding), provide a short term profitability to those share holders. Failure to do so will cause those share holders to sell their shares and invest in some other corporation that IS prioritizing the short term profitability,”

They may not be empowered but, from what you have written, it would seem they have quite a bit of power and influence over decisions made by corporations.

….I own shares in a corporation that is encouraging and helping big farmers drive small farmers out of business. I own shares in a corporate pig producer that is driving small pig farmers out of the market. I own shares in a corporation that is driving many small businesses out of business. I own shares in a corporation that has outsourced it’s labor force to China.

I don’t like these practices but, they are giving me a darn good, positive return on my shares.

“Who knows what evil lurks in the hearts of men.” “the invisible hand” knows.

Well said, jlw, “Who knows what evil lurks in the hearts of men?” “The invisible hand” knows.

Greed as primary motive in the investment world is as instinctual as breathing or defecating. When you have to provide for a living using currency instead of being self-sufficient, one does have little choice, but to invest. We all invest in one way or another, our time, energy, and focus, on making money, and the money, though it need not be the primary objective of our behavior, for the majority, it will be. That is human nature in modern societies. Money buys the skills and trades for hire which our lives depend upon but, which we alone, are incapable of specializing in to produce for ourselves.

Adam Smith 101, Wealth of Nations.

David,

You said, “But, because of the owner investment in the LLC, it would be a foolish LLC exec who didn’t work to maximize profit in the short run.”

What is the short-run? Is it days, weeks, months, or years? When you say short-run, I think quarters. However, I have some investments where the goal is not the short-run at all. It is the long-run, years from now that the profit expectation is based. It could be a company that is going to make a new device. It will not see profit because they are still running experiments. The stock price is based not on the amount of money they made, but rather on the progress of their research to develop a product that one day may be ready to sell and make a profit. They may not have sold a single unit yet. This is not a short-term oriented profit making company. This is true regardless of the legal structure of the business entity.

There are also corporations that believe in being good citizens and devote some of their revenue to charitable giving either through direct giving or matching employee charitable gifts. Nearly every time I get a gift form, I’m asked if my company will match my charitable gift. It will. I can imagine little profit motive for this action.

I will absolutely agree that there are companies that are organized and motivated by short-term profit, but they are certainly not all.

David, I am not talking about greed. I understand greed and realize that we are all possessed by it.

I’m talking about hypocrisy. I talking about decrying what is happening while continuing to support what is happening by investing in what is happening.

“There are also corporations that believe in being good citizens and devote some of their revenue to charitable giving either through direct giving or matching employee charitable gifts. Nearly every time I get a gift form, I’m asked if my company will match my charitable gift. It will. I can imagine little profit motive for this action.”

Eob, common law suggests that charitable giving by corporations without receiving something of value in return for the shareholders is illegal or at least illegal without unanimous consent of the shareholders. Many shareholders are complaining, some are trying to force the issue.

That may well be the case, but the fact that it occurs points to motivations other than profit correct?

David,

You do know that the ‘darwinian survival of the fittest economy’ is not a conservative concept?

Besides that, you seem to be saying that there are only two choices, Big Government Central Planning, or total anarchy. This is clearly a fallacy. It may be more convenient for you to substitute a version of your opponents argument but that’s called a strawman.

You might want to read this article and throw it into the mix:

Is China actually bankrupt?

Governments would never try to hide their debts with shell transactions and corporations a la Enron… would they? Oh, Nooo. Governments are never corrupt, greedy, etc…

Here’s another good article explaining why the Chinese are financing our debt: America’s Foreign-Owned National Debt: Is it a threat to the U.S. economy?

In short, the acquisition of Treasury securities by the Chinese is the necessary complement to their trade policy. As long as they insist on holding down the value of their currency to stimulate exports they have no choice but to buy large amounts of Treasury securities. If the Chinese stop doing so then their currency will rise against the dollar, which will make Chinese goods more expensive in terms of dollars and American goods cheaper in terms of Chinese currency.