I picked up an issue of the Gulf News while in Dubai in January, and I found an article that was of interest related to China’s economy and the trade position of that country. It was in the January 25, 2011 issue, and was entitled “Higher Costs in China Filtering into the Global Economy,” and was authored by Alan Wheatley.
Among the most salient points were:
So here is a conundrum: As we observe the standard of living in China continuing to rise, we can almost simultaneously see the opposite effect here in the United States. (See my blog entitled: “Are Your Children Being Impacted by the Economic Downturn?”) Asserting that the US always comes out ahead in international buying and selling just doesn’t pass the sniff test.
As the standard of living – especially as it relates to manufacturing and other traditionally middle class jobs – in China continues to improve, prices rise for Chinese goods – causing inflation for the Americans who are buying those goods. At the same time, Americans who lost their jobs as manufacturing work moved from the US to China are clearly taking a substantial hit in their income levels. So the US worker is taking it on the chin twice, squeezed between escalating prices for the products they buy, and lower income levels resulting form job loss and subsequent income depletion. Got it? Prices are going up, and wages are going down in the US at the same time. Now, on the other side of things, I think it’s only fair to point out that the last time I was in China (a few years ago), the hourly wage for skilled factory workers with the rough equivalent of a bachelor’s degree was running about $2.50 US, and a Ph.D. level employee commanded about $5.00 US. So we are still seeing a pretty significant disparity between average US wage and Chinese wage levels.
With all these things in mind, what steps do you think the US should take? One option would, of course, be to do nothing and allow the economic course to continue unabated. Another would be for the US to require American work content in all products sold within the United States’ borders. (Other countries do this all the time, and US companies comply – which, of course, is one of the reasons that US manufacturing jobs move offshore – so that they are allowed to sell their products in that national market.)
Does it seem farfetched to you that the US would impose such a measure? Actually there was an interesting article in Bloomberg Businessweek’s January 3-9 issue pertaining to this very matter.
It turns out that in some cases, Chinese companies are investing in the US to circumvent trade barriers and take advantage of other new US legislation such as clean energy requirements. The article was entitled: “Chinese Plants Grow Up on US Turf”. As the article points out, “Buy American” requirements that are part of some US Government contracts are a compelling reason for companies from other countries, in some cases to stand up operations on US soil. Among the companies described are China’s Suntech Power Holdings, (who manufactures solar power cells in Goodyear, Arizona), Wanxiang America (an auto parts company in Elgin, Illinois), and others such as Tianjin Pipe, Pacific Century Motors, and Nexteer Automotive.
Here is an excerpt from the article that I was especially intrigued by: “Suntech is using more advanced manufacturing equipment in its Goodyear plant than in Wuxi [China}, allowing 30 Arizonans to produce the same number of solar modules as 100 Chinese (US production costs are still about 10 percent higher.) “If it works very well, we can integrate the same manufacturing technology in China”, Guo says. “This would help Suntech China make a manpower reduction.” Jobs for Americans and pink slips for the Chinese just one more turnabout in the US – China relationship.” Fascinating, right? Several things about this intrigue me. First of all, the Chinese are now beginning to make small US manufacturing investments. Secondly, China’s investments are resulting in advanced manufacturing technologies continued migration to China, making Chinese producers still more efficient, and thirdly these efficiencies are now projected to impact the labor requirements in China. Still, these investments – in the scheme of overall US business, and more importantly in the scheme of overall Chinese business – are very small, and will take in indeterminate number of years to substantively impact our national economy.
How should the US address the growing pressure on middle class Americans resulting from all these factors, or should we just allow nature to take its course, and bow to an inevitable decline in the standard of living of Americans as it levels out to match the middle class standards of living in other countries?
What do you think?
“We are slowly dying here.” The message, which was part of a Facebook exchange with my friend Riccardo in Italy, gave me cause for real concern. Riccardo is normally a very upbeat guy – ebullient, in fact. A resident of Turin, he lives in one of the most beautiful places in the world and as a young, intelligent, enthusiastic guy, he has a world of opportunity before him. But the recent influx of refugees from Tunisia and the aftermath of refugee camps and embittered politicians have him profoundly worried.
Thousands of people, displaced as a result of the demonstrations and rioting in places like Tunisia, are flooding Europe. More than 5,000 refugees landed on the small Italian island of Lampedusa, which only has a population of 6,500. The Italians have been moving the new arrivals to refugee centers, but are finding they have far more refugees than space – several times more, in fact. Most of them appear to be gaining temporary visas as refugees, and then – because of the treaty among several European countries called the Schengen Agreement – utilizing those visas to travel into other treaty-bound countries including France and Germany. “Why would people leave Tunisia after a democracy-oriented revolution has occurred?” one might ask. In an interview with one of the young men involved, EU Observer was told: “I didn’t think Europe would be so unwelcoming. I will not stay in Italy, once on the mainland, I will leave in 24 hours.” This young Tunisian endured a 16-hour trip on a boat filled with 125 other people. He paid €1,000 for the trip and left because “there is no liberty, no democracy – it’s still Ben Ali’s old guard ruling the country.”
Refugees are coming not only from Tunisia, of course, but also Libya. According to some reports, more than 400,000 such refugees have passed through Libyan borders into Niger, Chad, Sudan, Algeria, and Egypt. With Egypt also on a very shaky footing following the recent ouster of Hosni Mubarak, it’s difficult to imagine a lasting sanctuary there.
The flight of displaced refugees through Italy into other European nations has caused a growing rift between the leaders of those countries. On April 17 2011, ten trains carrying Tunisian refugees were stopped at the border by French officials, citing reasons of “public order”, fearing demonstrations inside their country. An April 17 Yahoo news article said: “Italy has been giving temporary residence permits to many of the roughly 26,000 Tunisians who have gone to Italy to escape unrest in northern Africa in recent weeks.” “France says it will honor the permits only if the migrants prove they can financially support themselves and it has instituted patrols on the Italian border – unprecedented since the introduction of the Schengen travel-free zone – bringing in about 80 riot police last week. Germany has said it would do the same.” (http://ca.news.yahoo.com/france-blocks-train-italy-activists-illegal-tunisian-migrants-20110417-052355-689.html) In addition, it is now being reported that France and Italy have agreed to joint sea-and-air patrols to block any new North African migrants from sailing to Italy, including the Italian island of Lampedusa. In light of the state of Europe’s economy, the ebb and flow of tens of thousands of people between these countries places acute and unexpected pressure on an already strained political and economic infrastructure. Thus far, according to the EU Observer: “the EU and the Member States have mobilized around € 71 million and more aid is being considered.”
Bribery hasn’t worked, either. According to the EU Observer: “European Commission chief José Manuel Barroso on 13 April promised Tunisia €140 million of extra EU aid if the new government takes “strong and clear action” to prevent its citizens from leaving for Europe and take back the thousands that have already made it to Italy – which Tunisia has so far already made it to Italy – which Tunisia has so far refused.” (http://centurean2.wordpress.com/2011/04/13/after-arab-“revolutions”-ii-immigration-explosion-eu-members-protesting-wasted-tax-money-eu-war-threats-to-“closed-societies”/)
An “us” (Europeans) vs. “them” (Muslims) situation is developing. It was foreseen as early as last summer. Andrew Brons, MEP from the British National Party, addressing the European Union Parliament on June 20, 2010 said: “The problem is that the EU hasn’t faced up to globalization; it’s embraced it,” he said. “It’s allowed a flood of imports from developing economies with wage rates a fraction of those in Europe. The only way in which we could possibly regain competitiveness would be to drive wage rates down to their levels.” “However, my message is also for Europhiles: Europe, either as a whole, or separately, will fail to protect its manufacturing and it agriculture from Third World competition at its peril. Globalization must be resisted individually or collectively or it will destroy us all,” Mr. Brons said. “Replacing Europeans with people from the Third World will mean that Europe will be replaced by the Third World. Europe is slowly but steadily being ethnically cleansed of Europeans.” (http://centurean2.wordpress.com/2010/06/21/europe-is-being-ethnically-cleansed-of-europeans-andrew-brons-mep-warns/)
I sympathized with my friend Riccardo, mentioning the challenges we have been faced with in the United States with a seemingly unfettered flow of undocumented immigration across our southern border. He was quick to point out, though, that Mexicans illegally crossing into the United States are predominantly Roman Catholic. “They don’t blow themselves and others up with suicide vests,” he pointed out. “If Europe will not change, 40 years from now we will be the next battle field against terrorism. We are slowly dying.”
As the demonstrations across North Africa turn into riots and government overthrows, things continue to devolve in the adjacent countries, and the repercussions are increasingly sweeping across Europe. Like American politicians who refuse to deal aggressively with the illegal immigration problem along our southern border, Riccardo says, European politicians are reluctant to take action to protect their own sovereignty. “Politicians are the same everywhere”, he says, “they don’t want to take responsibility. They plan and plan and never make a decision. It is the same all over the world except in China. When they decide to do something they do it quickly.”
I think there’s a lot of truth in what Riccardo is saying here.
What do you think?
Everyone knows that objects look bigger when you are standing right next to them. The same is true of events. Usually the events of day-to-day life, when examined after some time has passed, turn out to be somewhat less meaningful or at least less dramatic. The recent shootings in Arizona that severely injured a legislator, and killed other innocent civilians were tragic; no question about it. I don’t know a single person who doesn’t wish they could have intervened somehow to prevent the tragic loss of life. While all of the deaths and injuries are abhorrent, I think most of us are especially impacted by the death of an innocent 9 year old girl whose only offense was standing close to the congresswoman targeted by the deranged assailant. Nothing will ever diminish the terrible impact of that event, and grieving for the losses of the families involved was not only appropriate, it was a natural and required part of the healing process.
So in light of the terrible tragedy that is the Arizona shootings, here is another avenue of thought related to the context of this event: How many Americans have been lost to murderous insurgents in Iraq since the beginning of the conflict there? Without googling it, can you estimate that number within – say – 1,000? Any idea how many civilians have been killed? Again, you don’t have to be exact here; can you estimate within 1,000 people? According to a front-page story in USA Today January 12, 2011, “Insurgents in Iraq killed more than 21,000 civilians and wounded another 68,000 people with homemade bombs over the past five years, according to newly released data from the Pentagon. The highest number of casualties came in 2007, coinciding with the worst sectarian violence and the surge in U.S. Military forces to quell it. In that year, 7,295 people died – nearly 20 a day – from improvised explosive devices, says the Pentagon. Another 21,970 Iraqis were wounded.” Later in the article, a U.S. Official is quoted when he said: “The enemy put civilians purposely at great risk by its tactics and actions.”
I can vouch for that. I flew into Iraq for the first time in December of 2006, and stayed through most of 2007. The violence was everywhere, and it was indiscriminate. It seemed to me that I could at least hear a car bomb going off about every 45 minutes, and many shook the ground. Small arms fire was everywhere, and in the early days of 2007, it was almost continuous. No amount of time passing me by will ever blunt the stark terror of those rides in Hummers through Baghdad, waiting for an IED to blow my legs off – or worse. And at 2AM, when rockets and mortars came in and literally sprayed my little office with dirt and shrapnel, it became extremely clear to me that being the only structure around with lights still showing through the windows just wasn’t worth getting a little more work done that night.
It was interesting for me to follow the flowing river of written and verbal rhetoric running through the internet, the airwaves following the tragedy. The debate around gun ownership split open again, and it took only a few hours for opportunists on the liberal side of the aisle to launch attacks on conservative figureheads like Sarah Palin and Rush Limbaugh for “contributing to the environment” that spawned this horrific attack. The President personally led moments of silence, traveled to Arizona to deliver speeches, and paid his respects to the grief-stricken families in several public venues. One article by Richard Wolf in the January 12 Wall Street Journal that was especially interesting to me entitled: “Amid Troubles, Presidents Inspire and Heal” laid out the words and actions of FDR following Pearl Harbor, LBJ following the Kennedy assassination, Ronald Reagan following the Challenger explosion, Bill Clinton following the Oklahoma City bombing, and George W. Bush following the 9/11 terrorist attacks.
As I mentioned in the opening paragraph, any loss of innocent human life is totally unacceptable, and we need to do everything we can to prevent it and appropriately respond to it when it occurs. But looking at this event – terrible tragedy though it is – in the cold, gray light of dawn, it is interesting to try to achieve some perspective. Pearl Harbor was a sneak attack that killed hundreds – primarily military, but some civilians as well. The 9/11 terrorist attack was an attack on civilians and cost the lives of about 3,000 Americans. Adolph Hitler’s inconceivable reign of terror killed 6 million Jews. The vast majority were innocent men, women, and children. The world has seen unbelievable atrocity and murder on genocidal scales. Even now, in the course of a single month at just one U.S. Marine installation in Afghanistan, we have “Ramp Ceremonies” (also called “Dignified Transfers”) for more true American heroes than we lost in the Arizona shooting spree.
So as we experience the real and undeniable grief and heartache of the friends and families of these eight victims in the Arizona tragedy, I am hoping that observers will remember that for years now, every single week families and friends receive the shattering news that they will never see their son, daughter, father, mother, or close friend alive again on this earth.
Because we don’t know them, and we don’t have their faces and their personal stories broadcast into our homes all day and all night for days afterward, and because they are usually not respected court judges, congressional representatives, or beautiful little girls, somehow we don’t feel those losses so deeply. We aren’t moved by them to set our flags at half mast or hold an official moment of silence at the White House, or even mention many of their names on a national news broadcast. And while the men and women whose lives are sacrificed in the line of duty – whether that duty is on the battlefield in Afghanistan or on a police patrol in some major U.S. city – are people you don’t know through a media blitz, they are every bit as important. Every bit as deserving of our pity, our grief, and our prayers.
The same is true of the murder victims in Detroit and East St. Louis and Watts. The victims of traffic accidents, airplane crashes, and natural disasters like Katrina. There is no outpouring of national grief and mourning when the victim is a homeless man, or that most helpless and innocent of victims, an unborn child. Scores of murders and tragic accidents occur around us every day. The scope and grandeur of the public outcry around this one terrible event does cause me to wonder how much of what I am saw was theatrics, how much was opportunistic politics, and how much was genuine sorrow – especially on the part of our political leaders and our mainstream media.
What do you think?
I am in my mid-fifties. My first memories of politics are black-and-white images of Richard Nixon and John F. Kennedy debating on national television. I am not a politician of any stripe, and like most Americans, my enthusiasm for politics and for political issues waxes and wanes – typically around national election cycles. But nationalizing health care holds a somewhat higher level of interest for me than most national policy debates in recent memory.
For more than three decades, I have been involved in American business. I started out working in retail stores like Sears and K-Mart when I was in high school, poured molten grey iron in a foundry in college, worked in a factory making paint, worked for a couple of years as a psychiatric aid in a hospital that handled kids with special needs, and from there went into management positions at companies like John Deere, McDonnell Douglas, Boeing, and Computer Sciences Corporation. So I have seen and experienced a fairly broad spectrum of business issues and the plight of American business and American employees.
The broad national health care issue first really came into focus for me while I was Director of Materials Management at McDonnell Douglas back in the early 1990s. My boss, the Vice President of Production Operations, visited my staff meeting and addressed me and my staff jointly about McDonnell Douglas’ decision to discontinue providing life-long health insurance coverage for the company’s retirees. He said that this was the right time to implement such a change, because: “Hillary is going to implement nationalized health care anyway, so McDonnell Douglas can save a ton of money here without impacting our retirees.” I immediately asked: “So if Hillary is not successful, and we don’t get nationalized health care, then the Company will reinstate their plan for retirees?” My boss just looked at me and said: “Riiiiiiiiight.” We all knew what that meant, and the rest, as they say, is history. The cost of health insurance over 60 years of age is not insignificant, and it shifted from a company burden to a burden shouldered by retirees.
As a business leader, I have worked with profit & loss for a long time. I understand how difficult it is to wring additional profit out of the revenue from products and services just to survive in an extremely competitive business environment. I have seen how ruthless executives often become in pursuit of corporate profits, not only for survival, but also simply out of greed. Perhaps it is because I spent some years at the bottom end of the ladder in big manufacturing companies doing things like pouring iron, but whatever the reason, I detest shifting additional burden to the employees who earn the least and – from a physical perspective, at least – work the hardest. I feel as though it violates the partnership between the employer and the employee in many cases. I know that it damages morale, and often hurts the quality of the company’s goods and services. So as I have watched the cost of health care benefits rise over the last 35 years, I have had to work through how those costs were addressed and mitigated (to some extent) through the introduction of Health Maintenance Organizations, Health Savings Plans, and a broad array of other similar initiatives.
Now, as the baby boomers move like the proverbial pig through a snake, the costs of programs such as health care and social security have become critical for retirees. We are into a more-people-taking-out-than-people-paying-in situation. In addition, the off-shoring and outsourcing of much of the middle class work in the US has diminished the power of labor unions to negotiate substantive health care benefits for their membership among current work force. So not only retirees are at risk here; so are our current and future work forces. One solution that continues to come forward is – broadly stated – nationalized health care.
I have a little experience with nationalized health care. I actually lived and worked in Canada for a few years, and was part of the Canadian health care system. (I genuinely enjoyed my time up north; I found Canadians to be friendly, intelligent, and industrious. I made some life-long friends in Canada.) One day while working up there, I noticed that one of my colleagues was limping in a more and more pronounced way. I didn’t say anything at first, but weeks and months went by and he only seemed to get worse. When I finally asked him about it, he said, “I have to have my knee replaced.” I asked him when that was scheduled, and he told me it wasn’t scheduled yet. He was on a waiting list. At the time I asked him, he had been on that waiting list for 18 months. This guy was in pain, and it made me wince just seeing him walking around like that. Whenever I think of nationalized health care, I think of my former colleague.
And then there are the statistics. Unfortunately, over the course of the debate, some conservatives – especially the right wing of the right wing – have made claims about Canadian and UK health care differences that are untrue. I am very impressed with an analytical piece published in the UK recently that debunks some of these claims, entitled “Is public healthcare in the UK as sick as rightwing America claims?” authored by Denis Campbell and Girish Gupta.
However, even in this very even-handed article, the authors have to admit things like: “Breast cancer does claim more lives, proportionally, here [in the UK] than in the US. According to the 2002 Globocan database run by the World Health Organisation’s cancer advisers, 19.2 of every 100,000 Americans die of the disease, but 24.3 per 100,000 here die. On prostate cancer, a Lancet Oncology global study last year found that 91.9% of Americans with the disease were still alive after five years compared to just 51.1% in the UK. With heart attacks, 40% of Britons who suffer one die from it compared to 38% in the States”, and “Breakthrough Breast Cancer cite two recent studies from Lancet Oncology. One says that 83.9% of women in the US diagnosed with breast cancer between 1990-94 lived for at least five years compared to 69.7% in the UK – a 14.2% difference. The second showed that, among women diagnosed with the disease in 2000-02, 90.1% in the States survived for at least five years whereas in England it was 77.8% – a 12.3% gap.” The performance of nationalized health care systems is simply not as good as private systems like the US system – and that difference translates into higher mortality rates.
America does spend a great deal on health care, which intuitively explains why the health care available in the United States is world class. Looking at expenditures for health care per capita, the NHS posted the following numbers on annual per capita Health Care spending:
And in the spirit of objectivity, it’s useful to note that this world-class health care has not necessarily resulted in longer average life spans in the US. Due to our rich diets, poor exercise, and general propensity for obesity, we actually lag many other countries by 2 to 5 years. However, Obamacare is very likely to make it much worse.
Nationalized health care in its current manifestation, known among the citizenry as “Obamacare”, has traveled a byzantine route to gain passage. It almost certainly would not have made it through a full vote of citizens as a referendum. I have never seen anything quite like it. Former Speaker Nancy Pelosi actually said, “We have to pass it so that we can see what’s in it.” No kidding, I actually SAW her saying those words on national television! What always fascinates me is how these people keep getting re-elected; but I digress. After watching the debate, the Corn Husker Kickback, the Louisiana Purchase, and the other brass knuckles shenanigans surrounding the passage of this bill, it seems to me that anyone who did not foresee an effort to repeal it at the first opportunity must be blind.
So what’s actually in the new 1,000+ page Obama Health Care bill? Among the specific items that many of us are concerned about:
At this point, of course, Congress has passed it (along party lines of course, with Democrats pushing it across the top) and the new Republican-led Congress has voted to repeal it. But there are not enough votes to over-ride the presidential veto, so there will be an enormous amount of time, energy, and taxpayer money spent to modify, de-fund, or otherwise mitigate the damage done by this legislation.
The bottom line then, from my perspective is this: Should Obamacare be repealed? Yes. It should never have been passed in the first place. The fact that this legislation got passed with all the back room deals fully exposed in the press says a lot about the rotting, putrid condition of our current legislative process, and the moronic condition of the citizens who re-elect these criminals to represent them in Congress. Will it be repealed? No. I don’t think the Republicans will garner the Democrat’s support in this issue any time sooner than the next Republican presidency. In the mean time, as I said earlier, there will be an enormous amount of time, energy, and taxpayer money spent to modify, de-fund, or otherwise mitigate the damage done by this legislation. Your tax dollars at work – wasted once again.
What do you think?
In a Recent blog on Dating and Desirability, I noted a number of patterns that had been observed in one brief study that related to the impact of income and physical attractivemness on dating and mate selection. Some respondents noted – and I noted as well – that the population in that study was potentially skewed by virtue of the fact that the entire study population was comprised of students at Columbia University. I recently came across another study, the results of which were published in the American Economic Review in 2010, which is much more thorough, much more academically rigorous, and is based on a much larger sample. It appears to have yielded very similar results. (See American Economic Review 2010, 100:1, pages 130–163 http://www.aeaweb.org/articles.php?doi=10.1257/aer.100.1.130 )
Here, paraphrased slightly, are the essential elements of their findings:
As I mentioned earlier, this study is pretty thorough, and it appears to me to be completely sound from an academic perspective; I invite the reader to click the hyperlink and take a look. I think most of these findings are pretty intuitive, and the rest made pretty good sense to me when I reflected on them. Do you find any of them surprising?
What do you think?