Good Lordy, What a Banner Year 2018 was for China, Other Countries, and Corporate America

Trade goes out-of-whack as Corporate America searches for cheap labor & tax benefits.

Exports increase economic activity as measured by GDP; and imports do the opposite, they reduce GDP though they tend to increase corporate profits — or else why would Corporate America run its supply chains around the world? So a trade deficit is a net negative for the economy. And this is what we got today from the Commerce Department:

  • US trade deficit in goods jumped by 10.4%, or by $84 billion to $891 billion, after having jumped 7.5% in 2017 (to $552 billion). Worst trade deficit in goods ever.
  • US trade surplus in services improved by 5.9% or by $15 billion, to $270 billion, edging out the prior record of 2015.
  • US trade deficit in goods and services jumped 12.4%, or by $69 billion, to $621.0 billion, after it had already jumped by 10% in 2017. The worst trade deficit in goods and services since 2008.

Exports of goods and services rose by $149 billion to $2.5 trillion, as imports surged by $218 billion to $3.12 trillion. The chart shows the annual trade deficit in goods and services (red columns) versus the deficit in goods only (black line):

The Goods Deficit

Exports of goods increased by $118 billion in 2018, to $1.67 trillion. One third of this increase was the $39-billion increase in exports of crude oil and petroleum products.

Imports of goods rose by $202 billion to $2.56 trillion. The largest categories of imports:

  • Capital goods (computers, electrical equipment, etc. but not automotive): +8.2% to $693 billion
  • Industrial supplies and materials (including crude oil): +13% to $576 billion
  • Consumer goods, except automotive: +7.6% to $647 billion
  • Automotive vehicles and components: +4% to $372 billion
  • Food, feeds, and beverages: +7%, to $147 billion

A special word about “pharmaceutical preparations,” the legal kind: imports surged 21% to $134 billion. This is now the largest sub-category of Consumer Goods – because more and more of your prescription drugs are made in other countries. In 2016, pharma products blew past cellphones, currently the second largest category, stagnating at around $108 billion.

Below are the 14 countries with which the US has the largest trade deficits in goods (services not included). I put China and Hong Kong together since a lot of merchandise is transshipped and/or invoiced via Hong Kong. I included the EU (purple bar) for memo purposes, though it is not a country and though some member states are also included in the chart:

Some special words about the countries with which the US has the largest goods trade deficits:

  • China and Hong Kong: the deficit soared 13.5%, or by $45 billion, to a phenomenal $388 billion, after having jumped 7% in 2017. Imports rose by $33 billion, and exports actually dropped by $13 billion.
  • Mexico: the deficit increased by $10.5 billion, as imports and exports surged by 10.2% and 9.1% respectively.
  • Germany: the deficit remained about flat.
  • Japan: the deficit declined a smidgen, by $3 billion.

The opaque nature of trade dealings – transshipments, trade invoicing, tax issues, etc. – along with issues of ports of entry, etc., can produce peculiar results. For instance, the US had a trade surplus of $25 billion with the Netherlands and of $14 billion with Belgium, and not because the end-users of US products are in the Netherlands and Belgium. And the US had a huge trade deficit of $47 billion with tiny Ireland (up from $38 billion in 2017) where many US companies shelter part of their profits from US taxes.

The chart below shows US imports (red) and exports (black), in order of the trade deficit:

Here are the ratios of imports to exports by top country. A value of “1” means that trade is balanced, with imports equaling exports. A value of “3.5” means that US imports from the country are 3.5 times the size of US exports to that country:

  • China/Hong Kong: 3.5
  • Germany: 2.2
  • Japan: 1.9
  • Mexico: 1.5
  • Canada: 1.1 (trade in goods is almost balanced).

This indicates that the US has a booming bilateral trade in goods with Canada that is almost balanced. If services are included, the trade relationship is balanced.

It also shows that Corporate America has routed its supply chain so deeply into China that by now 3.5 times as many goods are imported from China to the US than are exported from the US to China.

Corporate America is largely responsible for the trade deficit. No one forces companies to run their supply chains through China and around the world. Incentives in the US tax code and cheap labor overseas make it very profitable.

While the systems in China, Japan, and Germany coddle their local exporters, and impede imports, the US system does the opposite: It coddles US importers, and they range across the spectrum, from Walmart and GM to Apple and Pfizer. And these importers ruthlessly take advantage of what the system offers them.

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  102 comments for “Good Lordy, What a Banner Year 2018 was for China, Other Countries, and Corporate America

  1. Rowen
    Mar 6, 2019 at 3:09 pm

    I wonder if the recyclables that we send to China to get processed gets counted as an export then as an import?

    In any event, with its boycott of recyclable refuse, China has effectively shut down the recycling chain in the United States

    • Harrold
      Mar 6, 2019 at 3:19 pm

      The Free Market will solve that dilemma.

      We will just dump the plastic into the ocean.

    • Mar 6, 2019 at 3:29 pm

      Rowen,

      These figures are in dollars. Recyclables, such as cardboard, paper, and plastics, weigh a lot (tonnage) but have little dollar value. So they don’t really matter that much in terms of dollars and trade balance — though they matter hugely at municipalities that are now stuck with them.

      • Rowen
        Mar 6, 2019 at 3:47 pm

        Thanks wolf.

        I realized that recyclables are bulk low dollar volume that won’t make a dent in the trade deficit. I just find it fascinating where China’s footprint unexpectedly shows up. Like how China owns the largest pork processor in the world. yummm, bacon.

    • rivereddy
      Mar 6, 2019 at 8:50 pm

      “…and imports do the opposite, they reduce GDP…”
      This is a common misinterpretation of the sectoral equation: GDP = Consumption + Investment + Government + (Exports – Imports). Imports are subtracted because they are implicitly included in spending for the other sectors. If imports enhance productivity beyond there cost, they may increase GDP.

      • Mar 7, 2019 at 12:21 am

        “If imports enhance productivity beyond there cost, they may increase GDP.”

        Two things:

        1. That assumes that the US cannot produce those items and is confronted with a choice of either doing without them or importing them. For the US, that’s a false choice for most items.

        2. It might work that way for microchips, automation equipment, etc. that you cannot produce in the US (why did Tesla import its assembly robots?). But it doesn’t work at all for consumer products, cars, building materials, and a million other things that are used and consumed without adding anything to productivity.

        • yngso
          Mar 7, 2019 at 5:12 am

          The monster automation of the next decades will change that dynamic radically. The cheap labour advantage overseas will disappear.
          Forget about trade wars. Just like the Green Revolution is happening with no need for a Greeen New Deal, automation is changing the world.
          Shortening supply lines will be vital. The value add will happen at home. and prices be nice and low for consumers.
          Someone pointed out that production of goods benefits many more people than sevice production does, with all that’s needed to make a product.

    • yngso
      Mar 7, 2019 at 4:52 am

      There’s a lot of thinking and some initiatives going on in that space. Breakdown of the old doesn’t mean disaster.

    • Mar 7, 2019 at 10:26 am

      “Data in Thomson Reuters Eikon shows U.S. crude shipments to China went from nothing before 2016 to a record 400,000 barrels per day (bpd) in January, worth almost $1 billion. Additionally, half a million tonnes of U.S. liquefied natural gas (LNG) worth almost $300 million, headed to China from the U.S. in January.”
      Subtract that from total exports and there is your US manufacturing trade deficit.

  2. qt
    Mar 6, 2019 at 3:11 pm

    Don’t worry we have a 1 million surplus with Vietnam :-)

  3. raxadian
    Mar 6, 2019 at 3:12 pm

    So America continues to be the deficit king, why is this good, if it’s good at all?

    • C
      Mar 6, 2019 at 6:28 pm

      So you can get cheap junk through Amazon! Duh! :p

    • JZ
      Mar 6, 2019 at 6:51 pm

      I am NOT an economist but here is why US run deficit. US wants the world to use $ to trade, like buying oil. Where do the world get $? US has to run deficit, consuming other country’s production and send them $. They use the $ to expand their growth by pervading oil and US technology.
      IF US does NOT run deficit, the world will be starved of $. They will stop doing trade and business. How to solve? They will seek other currencies to do trade and US does NOT want THAT to happen.

      • Nik
        Mar 6, 2019 at 8:58 pm

        JZ…you are confusing the Petro-Dollar and balance of payment monies. Need to be careful…got Saddam Hussein and Muammar Gaddafi…in a bit of trouble…lololol

      • Esl
        Mar 7, 2019 at 3:07 am

        Doesn’t Germany and eurozone run a surplus?

    • max
      Mar 6, 2019 at 7:01 pm

      The Trade Deficit Isn’t the Boogeyman BY JOHN MAULDIN

      President Trump seems to think the country with a trade deficit automatically “loses” to the one with a surplus.

      First, simply using the word “deficit” in conjunction with trade sounds bad to the vast majority of people. We all know that a deficit in our personal finances, meaning we spend more than we make, is bad. And so we equate that kind of deficit with the concept of a trade deficit. It makes a great political theme and wonderful demagoguery. Trade deficits and populism have gone together for centuries.

      https://www.mauldineconomics.com/frontlinethoughts/the-trade-deficit-isnt-the-boogeyman

    • yngso
      Mar 7, 2019 at 5:18 am

      Who said it’s good? It’s good only as long as USDs and USTs are. Wait a sec, foreigners are buying less of the latter, and have even started to avoid the USD. Things are getting steadily less good for the US of A.

  4. Paulo
    Mar 6, 2019 at 3:30 pm

    regarding statement: “This indicates that the US has a booming bilateral trade in goods with Canada that is almost balanced. If services are included, the trade relationship is balanced.”

    Yeah, and Trump still imposed tariffs on our steel and aluminum last year, and 27% on softwood.

    With friends like this, who needs………

    I noticed the new YMCA trade agreement is still languishing in Congress and may not ever be ratified to replace NAFTA. All this fooforah for a few measley votes. This “winning” in trade and foreign relations is absolutely stunning.

    Good article and stats, thank you.

    • Mar 6, 2019 at 5:54 pm

      Hey Paulo, ask the Canadian dairy lobby how they’ve been keeping US competition out, or at least down to a minimum, via quotas and tariffs. Has worked like a charm for years. It has always been the case that countries protect some industries. Canada is not innocent in this regard.

      • MCH
        Mar 6, 2019 at 6:37 pm

        Scarily, if there is any real seriousness about economic justice, then taxing the wealthy is not exactly the right way to go. It would be a matter of treating the symptoms, but not the root cause.

        All of this “coddling of exporters” and their enablers ought to be looked at seriously. But good luck getting anyone to seriously call out a company like Apple for its role in offshoring, the Elephants would call it natural capitalism, and the Donkeys would not want to offend one of their biggest financial supporters.

        Obviously Apple is an easy target, but there are tons of other offenders, one only need to look at the state of the telco equipment maker to see how things has turned out. To a point where western democracies has to resort to non-commercial reasons to block out companies like Huawei and ZTE.

      • Ed
        Mar 6, 2019 at 7:20 pm

        What really matters about dairy is not the dollar amount for the U.S., which is not really significant, but the fact that Wisconsin is a swing state.

      • Paulo
        Mar 6, 2019 at 7:49 pm

        Actually Wolf, you are incorrect. Yes, Canada does protect its Dairy Industry, but mostly does this by supply side management ensuring the consumer pays for the farmer’s sustainable income. In the US, taxation subsidies promote excess production and drives down the prices. There is a trade imbalance in dairy, but it is the the US favour at 5:1.

        There is also this from Forbes: “It was never the intent of Congress to create a new class of millionaires through federal farm subsidies. Yet, the subsidies continue to flow. Last year alone, a very fortunate 400 entities, including farmers, corporations, and agri-businesses, harvested between $1 million and $9.9 million each in federal farm subsidies.”

        and:

        “In Wisconsin, Secretary Ryan’s home state, the deficit in 2016 was US$10.07 cwt; that is a loss for every pound of milk produced.

        In New York State it cost US$16.34 cwt more to produce milk than it returned at the farm gate in 2016.

        In its simplest terms, exporting below fully absorbed cost is dumping.”
        https://ipolitics.ca/2018/04/26/shining-a-light-on-u-s-dairy-hypocrisy/

        From the LA Times:

        Despite any tariffs, Canada remains the second-biggest foreign market for U.S. dairy products — it bought $792 million in U.S. cheese, milk protein isolates, butter, whey and other milk derivatives last year, according to the U.S. Dairy Export Council.

        Canada exported much less — $149 million — to the U.S., according to the Canadian government. (There is ample dispute over how much of that southward traffic consists of dairy products made from U.S. ingredients.)

        For those keeping score — and that would certainly include Canadian dairy farmers — that’s roughly a 5:1 trade imbalance in favor of the U.S.

        And: Sarah Lloyd and Nels Nelson, who tend 350 dairy cows on a 400-hectare property northwest of Madison, say their view is that Trump’s got it all wrong.

        Blaming Canada for restricting market access to ultra-filtered milk is missing the real issue facing Wisconsin farmers, they said.

        “Suddenly, everyone was pointing the finger at Canada, but that’s not really what’s going on. We have overproduction here in Wisconsin, and we really need to address that here at home,” said Lloyd.

        Small farms, especially, she said, are getting squeezed out, and no one’s doing anything about it.

        “It’s not fair, and it doesn’t help us to use this kind of a red herring of Canada because we need to solve our problem.”
        How about some supply management?

        One suggestion from these farmers? Look north, where you might find a solution in the Canadian system of managing the supply of milk.”

        (CBC Article)

        Plus, it wouldn’t have anything to do with politics and re-election, would it? :-)

        • yngso
          Mar 7, 2019 at 5:41 am

          Nothing is more stupid than farm subsidies. You can get the produce much cheaper from abroad and save a ton of tax $, win-win for consumers and tax payers. Build massive wind farms on the prarie and power the new automated factories.

        • Saltcreep
          Mar 7, 2019 at 6:26 am

          yngso, I don’t agree with that. I think it is extremely important to be self sufficient in food. Any country that needs to import the basic necessities to support the lives of its citizens is not really an independent entity, and is a ticking time bomb. Not being able to independently feed your own population is simply a disaster waiting to happen one not so merry day when circumstances change, and the imports become sanctioned or too expensive, and difficult to obtain in sufficient quantities.

      • raxadian
        Mar 6, 2019 at 10:52 pm

        Don’t remind me, that has ruined many cartoons when they moved production to Canada abd then had to have all voice actors be Canadian.

      • Prairies
        Mar 6, 2019 at 11:36 pm

        You can point at dairy and Canada can point at tobacco. Every time Canada does something it is horrendous, but USA does it and crickets. The double standard is ridiculous with a trade partner of this size being this close to even.

        Keeping pointing out pebbles while standing on a $20 trillion mountain of debt. That will fix it.

      • yngso
        Mar 7, 2019 at 5:24 am

        It’s not about innocence, but what you can get away with with any excuse like national security and emergency.

    • nick kelly
      Mar 6, 2019 at 8:28 pm

      Dairy gonna bite us every time Paulo.
      So why don’t we deal with it? Reduce the tariff to 50 % instead of, I believe, 200%?

      Because Quebec has half the Canadian quota for industrial milk.

      And our Feds don’t want to annoy Quebec.

  5. Petunia
    Mar 6, 2019 at 4:01 pm

    Corporations that offshore to China are participating in their own liquidations. You can use the recent Payless Shoe bankruptcy as an example. Why can’t Payless sell cheap shoes, made in China, in an economy full of broke people who need shoes. It’s because China sells better and cheaper shoes directly to the downtrodden, who now feel no loyalty to the brands that made them redundant. There are more categories of goods you can add to this list and a bunch of them are luxury goods.

    • MD
      Mar 6, 2019 at 4:10 pm

      I’ve always thought that there could be great business assisting stockholders in North America/Western Europe in outsourcing their companies’ boards to low-wage economies – after all, the world is full of highly-educated, multi-lingual professionals who can be hired for the fraction of, say, a US national – and it makes eminent sense for the most expensive employees to be the first in line for the outsourcing process, after all.

      Would also be doing social good in reducing the yawning wealth and income gap; another benefit.

      What’s good for the goose…

      • MCH
        Mar 6, 2019 at 8:52 pm

        That’s good sarcasm there, MD. Not to mention a great idea.

        So, the first person that should be outsourced is the CEO, and then to be followed quickly by upper management. By definition, they are always the most expensive employees. Right? Technically, they don’t even add real value to the company because they aren’t engineering, producing, or servicing.

        That would be hilarious. Apple should replace Tim Cook with someone from China, and Boeing the same with Denis Milenburg, and so on. It would certainly help reduce the income gap. Heck, it might help Apple gain further market share in Apple. We keep the expensive head count in China and thereby have a low cost of living benefit too. Heck, they could be paid China CEO wage and live the high life there.

      • Esl
        Mar 7, 2019 at 3:17 am

        @MCH @MD

        https://techcrunch.com/2018/03/05/shortly-even-the-ceo-will-be-outsourced-to-an-online-labor-marketplace/amp/

        http://www.outsourceceo.com

        “We understand that your company may be concerned that off-shoring the CEO could impact performance. That’s why we have a Two-for-One Plan. For the same salary you pay one American CEO, you can get a CEO in Europe and one in Asia. By having an executive on each side of the globe, you get uninterrupted service, corporate management around the clock. Instead of putting your back office in Bangalore, you put your front office in Berlin and Tokyo.”

        https://www.alternet.org/2004/04/outsource_the_ceos/amp/

    • Lance Manly
      Mar 6, 2019 at 4:22 pm

      >Why can’t Payless sell cheap shoes, made in China

      Because PE firms stripped them of their money

      https://wolfstreet.com/2019/02/15/payless-shoesource-goes-for-plan-b-largest-liquidation-by-retail-stores-in-the-us-2nd-bankruptcy/

    • MCH
      Mar 6, 2019 at 7:31 pm

      Petunia,

      The history is replete with such examples. Just look at the telco market. Anyone remember Nortel, or Lucent? Or their cheesy innovation commercials in the 90s? Mostly, these companies have been subsumed or liquidated.

      But that won’t stop our current corporate darlings. Because of… markets and cheap labor. 20 years ago, Nortel and Lucent was like Apple today or I guess a few years ago. Utterly dominant in the telco equipment market, and Huawei was this crappy third tier supplier. Fast forward to today, the former no longer exists, and Huawei is the dominant. You can look at the same with smartphone market in China as few as five years ago, Apple was dominant in terms of profits and sales. Huawei was a shitty also ran, today, not so much. (One could attribute this to the same corporate mentality, thanks leader Tim, meet the new generation of CEOs in the US, pretty much same as the old generation)

      • Petunia
        Mar 6, 2019 at 9:50 pm

        I worked for a telephony consulting firm back in the 80’s. The teleco’s were the most bloated, inefficient, and overpaid workforce I have ever seen. They sat on the wireless technology for decades because they didn’t want to give up the wired gravy train. You know how that worked out.

        As for Tim, I feel for him, maybe he’s a good manager, but he is no Elon Musk. Maybe they should be talking.

        • MCH
          Mar 7, 2019 at 2:02 am

          I don’t feel one bit bad for Leader Tim, he is reaping the things he has helped to sow. He complains in 2014 that there aren’t enough skilled manufacturing engineers or whatever if was to fill a football field, hence his need to go to China. Yet he conveniently forgets to mention that in the early 2000s when he spearheaded the move to China, the manufacturing capability was still in the US, but it just wasn’t cheap and he had to pad Steve’s profit margins.

          But he is made it alright, I would rather feel sorry for those who has to clean up after his mess and the people who works for an Apple to a lesser extent, and to a larger extent the contract employees who work for the place.

      • Lion
        Mar 7, 2019 at 12:22 am

        The last two cellphones (unlocked) that I use were purchased from Hong Kong. The latest, a Xiaomi MI8, has worked very well since it was acquired. Cost was about $350. Performance about equal to a Samsung S9+. Both use same Chip. I don’t want to debate cellphone performance, but do want to make the point that The Chinese are producing for the rest of the world, phones that are about half the cost of the “traditional” flagship phones from the current major players. I see some writings on the Wall for both Samsung and Apple.

        • yngso
          Mar 7, 2019 at 5:50 am

          …and then they raise prices in a weakening market. Their stupid hubris is astounding!

  6. MD
    Mar 6, 2019 at 4:05 pm

    A trade deficit with those global economic industrial powerhouses Thailand and Italy…

    How embarrassing.

    Still, they have nowhere near the numbers of tattoo parlors the USA has, so that at least regains some pride and global prestige.

    • Saltcreep
      Mar 7, 2019 at 6:36 am

      Italy actually has a pretty large manufacturing sector, MD. Only second to Germany in Europe, I believe. I think just about all of our kitchen and bathroom appliances are made in Italy, for example…

      • Saltcreep
        Mar 7, 2019 at 6:39 am

        By the way, to avoid any misunderstanding, that’s supposed to be ‘our’ as in ‘our house’, not necessarily overall in the population…

    • HowNow
      Mar 7, 2019 at 8:49 am

      I’m with you on that, MD. Populists rail against the system, yet too often are, as they would say, as dumb as a box of rocks.

      And, the idea that we are somehow “innocent” or that Trump is the first recent President to impose tariffs, check the “Harmonized Schedule of Tariffs” which has been in use since, Jan. 1, 1989. https://www.usitc.gov/tata/hts/index.htm

    • Mean Chicken
      Mar 7, 2019 at 10:17 am

      Quite right, perhaps weed sales will compensate the opportunity and revenue costs. At least we don’t dispose of plastic refuse by dumping it in the ocean yet, or do we?

  7. Auld Kodjer
    Mar 6, 2019 at 4:13 pm

    Wolf, it would be good to break up the -$388bn into “corporate America supply chain” and “finished Chinese goods exported to the US by Chinese companies.

    It would be good to understand how much the Donald should focus on beating up the Chinese in his “trade war” versus beat up those US corporates to rebalance the unsustainable trade deficit.

    • Mar 6, 2019 at 4:41 pm

      How many times have you bought something directly from a Chinese company? Alibaba maybe? Walmart is not a Chinese company. GM is not yet a Chinese company. Apple isn’t either. Nor are pharma companies (India is the hot bet for pharma imports). You buy a house from a US builder, and it uses Chinese drywall, Chinese tile, Chinese fixtures, Chinese flooring, Chinese appliances, etc. that the builder bought from American or Chinese suppliers because the lower price allows the builder to increase his margin…. But you buy the house from a US company.

      • Auld Kodjer
        Mar 6, 2019 at 5:34 pm

        You’re absolutely correct as always, when you bundle retail distribution with a imported finished good. But that is an onion worth peeling.

        Using the building example: While irrelevant to the US, we note that near 40% of the inner-city high rise developments in Sydney and Melbourne are by Chinese companies, typically using a combination of permanent and temporary visa Chinese labour, and sourcing many building materials (excluding concrete of course) directly from China. The result is towering infernos in waiting, but that is for another discussion.

        Ultimately I fail (and fail and fail again) to understand who mostly deserves Donald’s stick. Is it “Walmart – the great workforce abuser”, or is it “Gina – the great currency manipulator”. “Both” is an acceptable answer.

        • Ed
          Mar 6, 2019 at 7:23 pm

          It’s American companies which fire people in the U.S. and replace them with cheaper labor overseas.

          Long-term, it’s the Chinese Gov’t, which demands technology and manufacturing process transfers in order to allow U.S. companies to sell there.

          In both of these cases, CEO’s and other execs in U.S. companies are boosting their stock prices, likely to their company’s long-term detriment. Shareholders are fully supportive of this. The ideology in the U.S. insists that only shareholders, who own the company, are real stakeholders. This is not true in the E.U., for better or worse, depending on your view of nationalism / patriotism / profit.

        • Jessy S
          Mar 7, 2019 at 3:36 am

          Ed, here is a Cliffnotes version of what has happened.

          Basically the globalists have been killing our economy by slowly chocking it out of existence. It started with LBJ’s failed Great Society which basically created the welfare system as we know it today.

          At the same time, WalMart was beginning its national expansion in the southeastern United States with the game plan of cutting prices in order to squeeze out the small guys. During Richard Nixon’s term he managed to open up China to the rest of the world with his 1972 visit.

          In the 1980s, hostile takeovers were encouraged and led to the Bush Senior led Savings and Loan scandal as well as Iran-Contra under Reagan. Once Bush Senior was boss, companies slowly started to outsource jobs to China. But this accelerated under President Clinton as Congress bestowed upon the nation “Most favored Nation” trading status.

          That trading status allowed companies to send their jobs to China with WalMart being part of the cause because they needed to cut costs to the bone. You just can’t have employees making $14.75 an hour to create bikes for the public. It is cheaper for somebody to make a bike in China for 75 cents a day and $5.00 shipping to the States.

          At the same time, President Clinton managed to sell our nation’s secrets to China in exchange for 1996 Campaign dollars. Granted that is another story, but it amounts to how powerful China is today.

          In any case, the Fed, led by Alan Greenspan, engineered a takeover boom, that never really ended. This enabled companies to gobble up others for the express purpose of eliminating competition. This includes leveraged buyouts. I should also mention that the Greenspan era Fed also managed to get President Clinton elected in the first place.

          Also during Clinton’s administration, NAFTA was passed which basically engineered an illegal alien boom in the country while allowing jobs to flow to Mexico and Canada in addition to China. At the same time Jeff Bezos supposedly founded Amazon.com in his house though there are rumors that the CIA created and runs the company with Bezos as the front man.

          Under the Bush Junior administration, leveraged buyouts accelerated while Amazon started to tighten its grip on America. The financial crisis of 2008 then managed to elect Barack Obama to the White House, and he created the Affordable Care Act for health care, which is anything but affordable. Hillary Clinton was supposed to finish the job, but we all know what happened next.

      • Keeper Hill
        Mar 7, 2019 at 2:01 pm

        I sure as hell hope it doesn’t have Chinese dry wall. Or wood floors from China….or….get the picture. It’s not been beneficial for this country in the least. Poor quality and dangerous to boot. No thanks.

  8. IdahoPotato
    Mar 6, 2019 at 4:43 pm

    Drugs and Medicine Exports by Country

    Germany: US$54.2 billion (15.9% of total drugs and medicines exports)
    Switzerland: $41.3 billion (12.1%)
    Belgium: $27 billion (7.9%)
    France: $24.9 billion (7.3%)
    United States: $21.6 billion (6.3%)
    United Kingdom: $21.1 billion (6.2%)
    Italy: $18.6 billion (5.4%)
    Ireland: $17.5 billion (5.1%)

    I’m long European and Indian pharma companies. The latter have a strong presence in the generics market.

    • Mar 6, 2019 at 4:49 pm

      This is where trade designations get in trouble: Ireland happens to be where some large US pharma companies moved their headquarters to, including Pfeizer (via “reverse inversions”) and they’re routing invoicing through Ireland to dodge US taxes, but the drugs aren’t necessarily made in Ireland. They may be made in India.

      I alluded to this in the article. This is a huge problem in terms of trade data. Hong Kong is a similar deal, but it’s easy to combine Hong Kong and China. But who do you combine Ireland with? This is what Ireland does for other countries as well.

      • MCH
        Mar 6, 2019 at 9:01 pm

        Nah, Pfizer failed with that tax inversion deal due to too much negative press. Although others, Allergan for example, had succeeded. But hey, you also forgot to mention Allergan’s attempt to assign patent rights to an Indian tribe so that their patents would continue to be protected. I think that’s still winding its way through court or something, this happened a year or two ago.

        But all of this is fair, remember, the US consumers subsidizes the rest of the world in terms of profits and R&D expenses. Without the US consumer, there would be no profit motives. Who wants to cure diseases in Africa, or cheap ass Europe and Japan with their single payer negotiated systems. Does anyone really want to eek out just a few marginal dollars of profit while always looking over their shoulders at the generics and biosimilar that are just waiting for the patent cliff?

        It’s hilarious that of all the people who are yammering about changing the rules, the one who comes closest to doing it is Trump. Except, he is getting the usual push backs.

    • Ed
      Mar 6, 2019 at 7:32 pm

      As I see it, the sole danger to a basket of pharma stocks is that Congress will finally react to the American consumer’s unhappiness at paying 2x much of the rest of the world. (Individual stocks have high risk depending on their particular drug pipelines but baskets like you describe take that away)

      If you’re betting that’s a long way off, which I figure you are — since this danger is no secret — I suppose I have to agree that’s probably a pretty good bet. Ha, ha.

      • IdahoPotato
        Mar 6, 2019 at 7:46 pm

        The margins are outrageous. Even with a 50% price cut, pharma companies will be very profitable.

        • MCH
          Mar 7, 2019 at 2:14 am

          Question, have you seen the failures in the biotech, pharma world? For every Celgene or Biogen, there are hundreds of names that flop on the stock market, or worse, never even make it out of the gate. You haven’t heard of them usually because they never got big enough to even get mentioned. They die a quiet, ignominious death.

          The fact is that every drug company knows the first drug they get approved, they are on the clock to make as much money as possible to support the next drug before the patent cliff runs them over and they die. Even Companies that have successfully gotten approval. have died for the lack of commercial success. Look up
          Dendreon.

          So, while everyone is busy decrying that industry, try to remember that it takes a lot to get any kind of commercial success in the pharma world. Just look at all the failures in developing an effective Alzheimer’s drug and you get the idea why drugs start costing so much.

          It takes a whole ton of money to support things through the approval process, do you see the government ponying up the cash to get these approved. Oh sure, government funded fundamental research, but no one in the government will fund the approval process. And if they ever did, heaven help the poor guys who have rare genetic diseases.

  9. Chris Garbor
    Mar 6, 2019 at 4:47 pm

    2018: Peak China. Historians years from now will write about how China peaked in 2018 just before their debt and housing bubble implosions, which will be before 750,000,000 ChiCom workers will be replaced by robots within the next 20 years.

    Too bad China’s Yuan isn’t the reserve currency for the world or they could print their way out of this mess.

  10. Bobber
    Mar 6, 2019 at 5:10 pm

    We should be careful before we label a company a “US company”. Just because a company is incorporated in the US doesn’t mean it has any substance in the US or is good for the US. A lot of so-called US companies don’t manufacture their products in the US, and they don’t report material profit or pay material taxes in the US. Many of them are leeches, here to suck the wealth and intellectual property out of our US population while employing every scam in the book to avoid US tax. Several big technology companies are a good examples of this.

    To give these companies influence in US political decisions is just plain stupid – like a sheep inviting the fox over for dinner.

    • WES
      Mar 6, 2019 at 5:42 pm

      Since companies are legally “people” maybe that is why the wolves of Wall Street are all mad at the Donald for not inviting them to dine with the US sheep!

      The Donald knows he is negotiating with the wolves of Wall Street not the Chinese.

      The USMC trade deal was all about negotiating with the wolves of Wall Street not Mexico not Canada.

      May the wolves of Wall Street enjoy leaner times!

    • Petunia
      Mar 6, 2019 at 6:35 pm

      For me GM is already a non US company. After getting bailed out by the US taxpayer, they hightailed it to China at the expense of US labor and consumers.

      Thousands of GM workers were recently fired in Detroit while the company expands into Mexico and China. The dirty little secret is that the auto unions are now big stockholders of the big 3 and their interests are no longer aligned with their members. The unions’ interests are aligned with the other stockholders.

      • PaulJ
        Mar 7, 2019 at 12:03 am

        Spot on Petunia. Like downunder, our unions align with China’s future, not Australia.

        • Mch
          Mar 7, 2019 at 2:16 am

          Woohoo, workers of the world… unite!!!

  11. GP
    Mar 6, 2019 at 5:14 pm

    For an entirely different perspective on trade deficits (by a very famous Nobel laureate Prof of economics): https://www.youtube.com/watch?v=QXkX4POxA0g

    Looking forward to your points of view on if and why Prof Milton Friedman was wrong.

  12. Bankers
    Mar 6, 2019 at 5:26 pm

    The deficit due to petroleum net imports had shrunk to around 70bn in 2017 from 320bn in 2007 but non petroleum merchandise deficit increased by 230bn (Markit).

    I don’t have the figures, but net petroleum imports are lower still last year I think, so it is a bit of a mixed picture … the US replaced a large amount of oil imports/dependency… with other imports. Going to have to hope the US oil supply is maintained as the deficit and oil prices will otherwise normally increase, and the economy slow.

    How much petroleum does the US hope to extract over the coming years, and are the figures reliable ? I’ll look it up to get an idea but maybe someone here has an informed view… the projections are notoriously opaque.

    • Bankers
      Mar 7, 2019 at 8:32 am

      Well the msm estimates are for a slight further increase in oil production from here over a few years, then a slow decline over decades. Opponents point out that well limits and depletion might be faster. I am sure some authorities somewhere have a more precise model, the same story of guessing is playing out over reserves of other countries. Dutch disease

      https://en.m.wikipedia.org/wiki/Dutch_disease

      is a concept to keep in mind, the strong dollar is evidence of that direction and would help explain the trade deficit. What is funny is that in a sense over the last decades the US has managed to export something ( services, tech, consumer model, military hardware, dollars themselves even? ) to something of a similar effect on domestic manufactured production.

    • yngso
      Mar 7, 2019 at 9:30 am

      Art Berman…

  13. Mike
    Mar 6, 2019 at 5:51 pm

    So we got into a trade war with the only thing we actually produce, agriculture, and rewarded all the corporations that make crap in China with tax breaks so they could buy their own stock back. Winning?

    • IdahoPotato
      Mar 6, 2019 at 5:57 pm

      Spot on.

    • Maximus Minimus
      Mar 6, 2019 at 7:18 pm

      From my limited experience, first they offshored low end products, while producing the high end onshore, but this was a moving scale as the Chinese copied and caught up. In the process, they killed the supply chain, too. It can only come back at high cost. Hence the tax break was a giveway for more buybacks. If only there were 1/10 as many industrialist as there are imperial warriors in the gov.

    • Escher
      Mar 6, 2019 at 7:39 pm

      Two thumbs up for this comment.
      In my (very humble) opinion, the strength of US manufacturing is overstated. Barring weaponry, aerospace, refined petroleum products and semiconductors (Intel, Micron) I can’t think of any other manufacturing sector of significance where the US is a major exporter.

      • Stan6565
        Mar 7, 2019 at 3:38 pm

        Aerospace is on its way out as well.

        Read up on Boeing and Aerobus giving away their (taxpayer subsidised) technology to the CPC, in return for access to Gina’s markets.

        Which then didn’t happen due to, ummm, administrative challenges. Or something like that.

        How do you say “dumb” in Mandarin

    • Jessy S
      Mar 7, 2019 at 3:56 am

      Actually stock buybacks predate the Trump Administration by at least a couple of decades.

  14. Maximus Minimus
    Mar 6, 2019 at 6:19 pm

    If Switzerland had the population of China, it would have a trade surplus with US of 3,172 billion, and it is among the highest wage countries. Does it mean that the US corporations are not very good at exporting jobs to low wage countries?

    • Ed
      Mar 6, 2019 at 7:38 pm

      Switzerland makes high value products. Finance, pharma, high-end manufacturing. That helps. I suspect, too, that there’s more social resistance to sending jobs away. There certainly is in Germany, where shareholders, workers, execs, and even the town government are considered stake holders.

      • Maximus Minimus
        Mar 6, 2019 at 10:57 pm

        They unscrupulously exploit the Made in Switzerland label which I can personally attest to.

        • Esl
          Mar 7, 2019 at 3:44 am

          @maximus minimus

          They are also very big on controlling immigration, far more than Germany (in fact they are having issues with their EU agreements and neighbours now due to desire for immigration control.

      • Cynic
        Mar 7, 2019 at 4:28 am

        Of course the employee stakeholders have to reasonable.

        Someone who ran a major global company, until a few years ago, told me that it was straightforward, almost a pleasure, dealing with the German unions, but the aggressive (and dim) British union reps were almost impossible to talk to, let alone negotiate.

        A very reasonable and decent man he sounded exasperated recalling them.

        These are of course, primarily cultural as well as institutional differences.

        It is surely one reason why SME’s more or less died in Britain.

        • Maximus Minimus
          Mar 7, 2019 at 11:38 am

          Maintaining responsible industrial policy requires contribution from all stakeholders, and that is only possible by opting out of Anglo-American neo-liberal economic model. For example, if Siemens wanted to maintain more production in Germany, it would necessarily result in lower profits, and consequently would become target for LBO by some vulture funds. Unfortunately, as Kuka demonstrates orthodoxy, and not brain are the norm in the castle.

    • yngso
      Mar 7, 2019 at 9:39 am

      Wages are high in Germany, but Germany is one of the biggest exporters, becuse their goods are high quality ones the world needs.

      • Stan6565
        Mar 7, 2019 at 3:48 pm

        German technology is best in the world, I think.

        Apart from commendable German technological prowess, work habits and general quest for perfection, this is also very likely due to “free money”, ie. underpinned by not having to spend 1$ on defence in the last 70 years, or indeed having another 300mil. EU citizens locked in as non voluntary consumers, or currency supporters.

  15. Endeavor
    Mar 6, 2019 at 6:52 pm

    Petunia is right. Day of reckoning is at hand. The American peasantry is increasingly tapped out. But corporate America and it’s headquarters Wall Street will not stop until this place dries up and blows away. Here in Michigan the new gov is proposing a 45 cent a gallon increase with the already fifth highest state gas taxes in the country. While the 3 auto companies are selling mostly gas guzzlers built elsewhere. Oh, also while paying same companies cash subsidies that they refuse to disclose the amounts.

  16. Unamused
    Mar 6, 2019 at 7:34 pm

    As you know, major industries are becoming increasingly globalised and denationalized. It is misleading to refer to a US auto industry, insofar as assembly can be anywhere, parts can be anywhere, and HQ can be anywhere, and nationality can be arbitrary and a matter of convenience.

    There are many examples of this denationalization. And there are some exceptions, like the Canadian dairy industry and the German chemical industry, but those become fewer every year.

    Such corporations arbitrage governments in ways analogous to the way they arbitrage labor, playing different countries off one another for best advantage, as US cities are played off each other for tax giveaways. Not only does this make it harder for countries to tax corporations and to regulate them, but it also reduces their sovereignty by empowering corporations that can have their way with them.

    This is quite by design, going back decades, and the trend toward superiority of corporations over governments is increasing, extending the practice of operating countries as little more than banana republics, where the government’s job is relegated to that of controlling its population so supranational corporations can exploit them.

    Naturally the prey won’t like the coming global corporate totalitarianism, but the predators aren’t interested in their opinions.

    I can’t wait to commence with the I-told-ya-sos. It’s going to be ugly.

    • Paulo
      Mar 6, 2019 at 8:17 pm

      Has it ever been different, Unamused? I think back to how NA was really explored and settled. Sure, you have Plymoth Rock(s), but that pales in comparison to the NW Company and Hudsons Bay Company spreading their tentacles westward. Corporate rape and pillage with the workforce virtual piece-work slaves, all controlled by thrifty Scots who worked directly to Royalty who were granted the trade charters. All backed up by military force.

      There’s always the opium wars. “Some of the American opium smugglers included the great-grandfather of US President Franklin D. Roosevelt and ancestors of US Secretary of State John Forbes Kerry.[10]”

      There was a brief respite of corporate domination with the unionization of industry after WW2, but that has been systematically dismantled in the USA, and unions demonized to boot.

      My son works in the Alberta oil patch for a company whose employees are represented by Unifor. He is very well paid with full benefits, pension funds, etc. But more than that there is a negotiated employment process including fair evaluations, seniority, rights of re-hire if lay offs occur, etc. He was going to take a similar job working directly for an Oil Major with a $2,000/month boost in salary. I advised him not to on the experience of my lifetime friend, Pat. When Pat’s major pulp company employer was sold, the new buyers did not recognize the money paid into the company pension plan by management employees. My friend was a shift steam engineer, and ran a large power plant. He lost out on 34 years of pension contributions.

      These giant companies don’t give a GD about their employees and never have. They operate like a feeding squid with a PR department and paid-for politicians.

      • Unamused
        Mar 6, 2019 at 9:43 pm

        =>Has it ever been different, Unamused?

        It is true that throughout human history the accumulation of wealth has largely been a function of the control of labour, whether as slaves, serfs, soldiers, or employees.

        What makes it different now are logistical range, political techniques, mass communication techniques, and technologies of control. The worst characteristics of Orwellian and Huxleyan dystopias are already entrenched and continue to evolve by become more deceptive, manipulative, disempowering, and oppressive, and there is no light at the end of this tunnel.

        More of the same, maybe, but the tools are far more sophisticated.

        • GuiriCateto
          Mar 7, 2019 at 8:46 am

          This is so. The evolution and cross-merging of ideologies and political concepts are utterly confusing and beyond deciphering to the average Paco who is still trying to relate them through a much simpler order that was. They want population burn out, is virtual reality one flew over cuckoo’s nest.

        • HowNow
          Mar 7, 2019 at 8:56 am

          I’ll drink to that! (and get a tattoo while I’m at it)

  17. Denise Hartman
    Mar 6, 2019 at 8:26 pm

    We all know the party is ending. The Boomer’s are retiring in mass and the economic downdraft is just begining. I look at my immediate family. My husband retires July 1, my BIL retired January 1 and my younger sister’s mid 50’s IT husband was permanently laid off three years ago. Our taxes paid dropped by 3/4 and our discretionary income will be down by $3k per month. Our children are struggling to save for a downpayment on a home and think about the cost of children as they paydown student loans. From a demographic/economic point of view it’s looking like 1966-1981 to me. There does not seem like much trickle down in our future. According to Larry Swedroe, 3% is the new 4%.

  18. roddy6667
    Mar 6, 2019 at 9:05 pm

    ” No one forces companies to run their supply chains through China and around the world. ” No, but to make money they must lower costs. Corporate America has stopped making money the old fashioned way. They don’t sell things for more than it cost them to make. They make a profit by borrowing money for almost free and buying back their stock.
    If American manufacturers made thing in America, the products would cost so much that almost nobody would buy them. The companies would go bankrupt in short order.

    Ever since VisiCalc and other spread sheets, companies can change the numbers and see how planned changes would affect price and profit. It’s not pretty.
    To move jobs back to the US, not just wages have to be changed. There are taxes, regulatory expenses, infrastructure cost and upkeep, heat and electricity, insurance, health care, and a dozen other expenses to raise. The resulting effect on the sales price needed to make a small profit would make a product too expensive to be affordable in most of America.
    The horse is gone. Don’t bother to close the door.

    • Unamused
      Mar 6, 2019 at 9:50 pm

      =>If American manufacturers made thing in America, the products would cost so much that almost nobody would buy them. The companies would go bankrupt in short order.

      Which implies that your solution is for US workers to race Chinese and Malaysian workers to the bottom so US companies will be ‘more competitive’. And that’s cheap-labor corporatist hooey. Shame on you.

      • bungee
        Mar 6, 2019 at 11:11 pm

        Its not all hooey. It just is what it is. Its one side of the argument and it has its points. Just as protecting an industry and its workers is one side with its pros/cons. Both contain the kernal of their own undoing.
        This site seems to have a healthy balance of conservative/liberal republican/democrat commentors. But does anyone on either side really believe deficits (trade or budget) are going to DECREASE once ‘their gal/guy’ gets in? I’ve taken a lot of consolation in viewing inflation as the solution rather than the problem, because it looks to be inevitable.
        Large corporations have no shame. so shame should not be part of the discussion for solutions or understanding of the problem.

        • Setarcos
          Mar 7, 2019 at 12:35 am

          Bungee, Great post.

          It is now commonly known that humans consistently have a very inflated opinion of their own capabilities …and at the same time, we simply project our very significant internal flaws onto others. Very few have the guts to consider the real impact of their choices on the results.

          Nature presents an incredibly efficient, albeit unemotional, economic system …and the only animal capable of screwing that up is? Interestingly, the one who thinks. So what is the solution to our problems? More thinking!! …thinking done by smart people like us (not the other “ side”!! And how is this working out for us after a few thousand years?

          Unless we can ackowledge what a mess we can be as individuals, and work on that, we have scant chance of being able to correct any of the other messes we might see.

        • Bobber
          Mar 7, 2019 at 10:50 am

          The solution is to enforce balanced trade through tariffs. Imports of any country should equal its exports. This type of balanced trade ensures that each country’s wealth and living standards remain intact. Trump has the right ideas on trade, but he may not implement them. Let’s see.

          When a country’s imports exceed its exports on a long-term basis, as in the US, the country’s wealth is transferred to other countries. These may seem OK from a world view, but the world’s political and social systems are not equipped to deal with this. There are no safety nets for displaced workers, and the global corporations give nothing back to countries for what they’ve taken.

      • roddy6667
        Mar 6, 2019 at 11:58 pm

        So your solution is for the companies to move back to America and pay the workers the same as they get in Mexico and China? What is your proposal?

        • Bankers
          Mar 7, 2019 at 9:04 am

          Roddy, it is a question of distribution and human tendency to take the most profitable option (time, cost, effort). “Everyone” likes others to do the hard work while they get paid to lord it. This creates certain weakness if a whole country takes that route, e.g. via productive labour loss – but anyone is free to set the system limits ( e.g. geographically) as they think best ( hint – they tend to go for more immediate reward). If you return to smaller national economy then all the values reset to find a new balance – say prices go up but increased involved labour is earning the result and buying own produce with that. It shifts financial power to domestic labour. But people don’t want to be told to go work in factories either, having that done for them suits just fine…while they can afford it :-/ .

  19. Quadra
    Mar 7, 2019 at 1:33 am

    Excellent comments.
    So system is broken. New needed.
    How about free food to all produced by Local farmers with focus on sustainability and organic with smart water use?
    Free medicine and focus on centrally negotiated prices.
    Then Housing for the ones in need.
    Cant be done, who will pay for it? We just need to Change the paradigm and think new. Technology helps and in the future the robots will do most of the work, and we have to stop buying the cheapest product globally and end this silly race of over consumption, by making some of the basic produkts free we can perhaps limit the race to the bottom.
    If basic needs are covered we humans can work on inventions, improvements and social interaction.

    • Stephan in LA
      Mar 7, 2019 at 2:26 am

      Brilliant! I totally support you in your ideas :-)

      Changing the paradigm is a good start. Changing the value system. Also holding elected officials responsible and paying attention to what they’re doing. People really have a lot more power than they think to make changes to the world.

      Also, I think something like forcing cities and states to divest from those villainous banks and forming public banks to reinvest in communities would be a good idea. Look up “Divest LA” for inspiration.

      • yngso
        Mar 7, 2019 at 11:58 am

        Sure, but this is a slow evolution and a transition into a new reality. It’s not something AOC can decide and implement in a few years. The transition process will be very difficult bcause too many people still live in the 20th Century mentally and try to keep the old structures alive. A few generations from now however, life will be much better than it is now.

    • Setarcos
      Mar 7, 2019 at 8:51 am

      Self esteem cannot be bought ….or given away for free. It must be earned. Without self esteem, we can have plenty of food and medicine and still be very hungry and sick.

    • yngso
      Mar 7, 2019 at 11:49 am

      Yes, the 4th Industria Revolution will be the portal into the scifi age when work and so much more will be completely different.

  20. Harvey Cotton
    Mar 7, 2019 at 2:45 am

    So if an American-based multinational pays a fake license fee to its offshore office that might have a phone and a fax machine, but is the technical headquarters in a country like Ireland or Bermuda, is this counted as trade in services?

  21. Ishkabibble
    Mar 7, 2019 at 10:33 am

    Good article, Wolf.
    ..
    Imagination is the key to solving the present fatally flawed whatever-you-want-to-call-it “arrangement”.
    ..
    Imagine first that every human being outside of US borders suddenly ceases to exist.
    ..
    Imagine that the present system in the US in which the vast majority of wealth and large-scale capital equipment is owned by a microscopic percentage of human beings REMAINS THE SAME.
    ..
    Imagine that both “labor” and “management” can organize, as they supposedly can in our present “democracy”, but now, because nobody is alive outside of US borders, the owners of large-scale capital equipment no longer have the option to move their capital equipment to other places on the planet where there are desperately poor people who are “willing” to work for food, water and a place to sleep on the factory floor.
    ..
    Imagine that US evironmental, labor, etc. regulations apply EVERYWHERE.
    ..
    Just exactly HOW are “Americans” going to “go it alone” when America’s presently-designed economy needs immigrants (of a certain “economic type”) each and every year from now to eternity?
    ..
    WHO is going to buy all of the “excess” natural resources, oil, farm products, manufactured goods, etc. that a small percentage of working Americans can very efficiently produce, but can no longer “export”? NOBODY.
    ..
    To have available the relatively small amount of warm-weather items that America now imports, Americans will venture forth to those places, AS AMERICANS, and produce and send those products “back home”. Naturally, those American workers working on other parts of the globe will be paid a wage that also applies to the rest of the American “labor market” and, again, the American regulatory framework will also apply to those workers and facilities and places of production, as well as America’s social benefits.
    ..
    ALL of the work that is now done in America by “temporary foreign workers” and other temporary workers who harvest crops, put roofs on houses, cook food in restaurants, take care of the elderly in nursing homes, etc. will have to be done by Americans who will be paid by other Americans.
    ..
    Automobiles, trucks, TVs, toilet tissue, etc. will now have to be produced by Americans, for Americans. Absolutely any thing and any service that Americans need/desire will have to be produced by Americans and, yet again, Americans will have to pay these other Americans to do that — enough payment so that these hard-working Americans will make enough “profit” to “save” enough money to be able to “retire” when they inevitably become physically decrepit.
    ..
    WHO is going to play the role of “enemy” that is necessary to maintain the need for the present military industrial complex? NOBODY. How are all the people employed in that MIC going to be employed after the disappearance of those “threats to national security”?
    ..
    How much is the above arrangement — again, an arrangement in which only Americans inhabit the planet, and in which the vast majority of wealth and large-scale capital equipment is owned by a truly microscopic percentage of the population of American for their own astronomical profit — going to “cost” Americans? Will Americans be able to “afford” that system, that arrangement?
    ..
    NO, they won’t!
    ..
    When I recently asked my brother in law why the Canadian government finds it necessary to import vehicles, TVs, etc. from other countries, his reply was that “if they were produced by Canadians in Canada, they would be too expensive”. (This coming from a man who hired a temporary foreign worker to give additional care to his elderly mother who was ALREADY living in a nursing home).
    ..
    So now to my point. Just as it is for the vast majority Americans now in our multi-national globalized world, Americans living in a America-only world could NOT “afford” what they need and want under the present economic arrangement in which the vast majority of wealth and large-scale capital equipment is owned/controlled by a microscopic percentage of population for their own astronomical profit.
    ..
    THIS is why under the present economic system desperate slave labor is needed to provide what Americans need.
    ..
    THIS is why Americans (or Canadians, etc.) can not afford to have enough children to maintain the present population and immigrants of a certain economic status have to be imported into America (or Canada, etc.) each and every year from now to eternity.
    ..
    THIS is why “trade agreements” such as NAFTA between international corporations are needed to exploit the most desperate people on the planet for the greater benefit of a much smaller percentage of the population.
    ..
    Again, what Americans desperately need is an economic system in which ALL AMERICANS, not just a microscopic percentage, own/control large capital equipment COLLECTIVELY, and collectively provide the LABOR (by “divvying up” the necessary labor among ALL citizens) to operate that large-scale capital equipment.
    ..
    By providing their labor to run THEIR capital equipment, farm THEIR land, take care of THEIR sick and elderly, etc., ALL Americans will have EARNED the right to comsume all of the goods and services produced by THIER large-scale captial equipment. In other words, ALL Americans get to “profit” from the large-scale capital equipment, not just a tiny percentage of Americans.

  22. Lion
    Mar 7, 2019 at 12:39 pm

    Fortunate I grew up in the 50’s / early 60’s. Had music from Sam Cook, Brenda Lee, Dion, Buddy Holly, the list could go on. No cellphones, just a dime to call home if I needed too. Had friends I talked with face to face. Needed to save for things cause credit wasn’t so easy to get. So many more choices are available today, but at what costs ? If you’re totally indebted to others, are you really free ? Seems like for too many in this country, its become similar to a company town. The Gov being the company.

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