Barack Obama Discloses His Strategy for Negotiating with the Chinese
And It’s Not a thing of beauty
By blackhedd Posted in China Trade Policy | Foreign Affairs | Negotiating | Obama — Comments (71) / Email this page » / Leave a comment »
I’m simply mad as a wet hen over this, ladies and gentlemen. I know that Erick and Moe have already posted on this remark from Obama:
"It's very hard to tell your banker that he's wrong," Obama said, after talking about the need to restore America's stance in the world, "And if we are running huge deficits and big national debts and we're borrowing money constantly from China, that gives us less leverage. It give us less leverage to talk about human rights, it also is giving us less leverage to talk about the uneven trading relationship that we have with China."
I’m biting my tongue! None of the words that spring readily to mind by way of describing this attitude are printable here. Obama has literally told the Chinese in quite so many words that he will defer to their strength, when negotiating critical issues regarding global economic competition.
Depending on how overvalued you think the yuan is, and how credible you think their official statistics are, China’s economy is still anywhere from one-fourth to one-half the size of ours. That gives us power in the relationship. But they have the growth, the initiative, and a rational foreign policy, which gives them power.
In such a case, you negotiate straight ahead, you trade strength for strength, and you fight dirty when necessary. As the Lord is my witness, the Chinese have fought dirty, continue to fight dirty, and have absolutely no compunction about fighting dirty in the future.
What you don’t do is say that you don’t want to tell them they’re wrong, and then enumerate the reasons why you shouldn’t.
Obama gains power by his calm elegance, and his air of relaxed authority. He’s starting the game holding great cards. So why on earth would he fold ahead of time? This is a blunder that he will never be able to get back.
Barack Obama Discloses His Strategy for Negotiating with the Chinese 71 Comments (0 topical, 71 editorial, 0 hidden) Post a comment »
We've have gone from having almost complete economic leverage over China to a situation where they can inflict terrible damage on our economy. To ignore that would be folly.
However, they need us, economically, just as much or more.
We have a "Mutually Assured Economic Destruction" status quo with the Chinese.
We don't have a free hand to apply leverage. Not like before.
The only damage they can inflict would come at a mutually assured destruction. Obama, and yourself, are simply not financially sophisticated enough to understand how it all works. When Obama says they own a lot of our debt, that comes in the form of U.S. Treasury bonds. The only way they can inflict a lot of damage on us is by dumping those bonds on the market wholesale, and in that case they would be hurt more than us. If they did that the value of those bonds would plummet making their investment plummet. Now, those bonds would eventually be bought back up and the value would eventually rise, however their trillion dollar investment would be halved.
Was it over when the Germans bombed Pearl Harbor
China might be hurt more than us,
but our threshold of pain is lower and we would fold our cards first.
Consider oil for example. If the U.S. government imposed a stiff tax on gasoline to discourage American demand for oil, and took other draconian conservation measures, we could drive down demand for oil to the point that Venezuela and Iran would be hurt badly. Their current anti-American regimes might even be toppled. Funding from Saudi Arabia to support radical Islamic propaganda would also be drastically reduced.
But we won't do it. Because we are too accustomed to the good life to make those kinds of sacrifices, even though we would be hurt less than our adversaries. Americans wouldn't part with gas-guzzling SUVs, even if they were told that this could help topple Chavez and the Iranian mullahs and the Saudi propagandists for radical Islam.
Authoritarian and totalitarian societies are accustomed to putting up with privations. So in a kind of "mutual economic warfare," they have more staying power. A society that is used to living in the lap of luxury, like America, cannot accept a significant decline in its standard of living--even if it is in the course of achieving a great strategic victory.
Yes, and this is why the Soviet Union won a glorious victory in the Cold War and is the world's dominant power today....
my point was that when someone says that China is our debtor what they mean is China holds onto our bonds. China would destroy its own economy by dumping those bonds on the market, and frankly soon enough after the price dropped it would come back, and thus, China doesn't really have much power in the relationship. The U.S. has never had even the slightest bit of trouble in securing buyers for its debt, and thus China
has no leverage in holding our debt.
Was it over when the Germans bombed Pearl Harbor
"The U.S. has never had even the slightest bit of trouble in securing buyers for its debt"
And we have been the world's default currency. The dollar was strong, and people were secure that currency devaluation would not gut the value of their investments.
Thanks to the foolish policies of those in Washington over the past seven years, none of that is quite true anymore. What with public and private debt, serial market bubbles, and negative personal savings rates, the dollar has deflated faster than a punctured balloon, and folks all around the globe are chipping away at the dollar's sole reserve currency status. Why hold US T bills when currency deflation alone puts your investment in negative territory versus zero return investments in virtually any other world currency?
If you think the Treasury and Wall Street don't worry that the rest of the world will dump our debt, you are just not paying attention. They know very well that there was a time when the British pound enjoyed reserve currency status, and they also remember the financial and political humiliating Britain underwent when that went away.
What Obama was doing was pointing out, for those who have their head in the sand, that the Republicans who are supposed to be economy and business friendly have really blown it during this administration, with consequences that may end up being politically humiliating as well as financially costly. It would be, as Blackhedd notes, a stupid negotiating position, but I'm not sure it is bad politics given that idiotic GOP policies have put the formerly GOP-loyal business class in play politically.
Obama is more worried about kissing China's arse rather than tackle our own financial situation w/ corrective action. Those are two distinctly separate things. Our problems exist no matter who holds our debt.
Ask not what I can do for my country, ask what my country can do for me. Washington Elected Elite
comparison this is, however I hold people's future lodging in my hands and that hasn't stopped most from speaking their minds to me. Just because I am securing someone's home doesn't mean they aren't going to tell me that I am screwing up if I am, and many times when I am not.
Obama was so insistent on pointing out that China holds many of our bonds that he made a totally fallacious comparison.
Was it over when the Germans bombed Pearl Harbor
If you were under economic stress and was sitting down with your banker to get the best possible terms you could get, would you be telling your banker that he treats his wife poorly in public?
Would that get you the best terms?
It sickens me the Chinese have this power. As I have stated before, I see them as the biggest threat to our way of life - bigger than Iran or radical Islam.
sophistication of U.S. debt. We didn't borrower anything from China. We issued bonds that China bought up in huge quantities. The terms weren't negotiated but rather determined by the market. The reason that China bought them up is because they felt they were good investments. The bonds and their treatment of the monks are mutually exclusive.
Was it over when the Germans bombed Pearl Harbor
The Japanese too. The Chinese are holding about $1.7 trillion in dollar reserves now, of which maybe $400 billion is Treasury bonds.
Even though they've stopped buying our bonds, they can't stop the inflow of dollars, not as long they want to keep selling stuff to us. They're kindof trapped that way.
You're right when you say that the market doesn't justify bond purchases. At 180-odd BPs over the two-year note, they're incredibly expensive.
What a disgusting terrifying comment by Obama. Someone should tell Obama, when you borrow 10,000 from your banker you are a debtor, borrow $10Billion and you are a PARTNER!
Ask not what I can do for my country, ask what my country can do for me. Washington Elected Elite
There is a difference between a bond and a mortgage. A mortgage involves a lein associated witha physical asset that the mortgage holder takes over. About the only things you can do if you hold a delinquent nation's bonds, is either
A) Militarily kick their tails until they pay up in the form of reparations.
B) Tell your neighbors and friends not to buy US Treasuries.
"I believe we must adjourn this meeting to some other place." - The last recorded words of Adam Smith.
aka - You take your chances.
True, China could dump massive holdings. But then what? What do they buy? This is the dilemma of an export-driven economy, as Japan found out in the 1980's. Their earnings were invested in (often imprudent) foreign ventures and domestic asset bubbles.
Ben Bernanke would buy them. He already said that early in 2007, when Wu Xiaoling (the deputy governor of the People's Bank of China) first said that she would start selling our bonds.
She did partially make good on her threat, however. China hasn't bought any of our long-dated debt in over six months.
We're talking about $400 billion or so in long coupon Treasuries, on most of which China is probably showing a fairly decent capital gain. The Fed could easily absorb that. If they made no attempt whatsoever to sterilize it, it would make their balance sheet about half again as large.
Yes, there would be a gigantic pulse of inflation. And guess who would take the hit from that?
Yup. China.
suppose China does its worst and dumps vast quantity of bonds. But if their timing isn't right, they could be hoisted upon their own petard. As bonds flood the market, prices fall and yields rise. China begins to incur capital losses on their sales.
Since they have launched the equivalent of a trade war, they must cope with the prospect of decreasing export sales to the US. Which could be in recession anyway, due to the higher interest rates ensuing from the Chinese bond dump, which drives down demand for Chinese exports.
So China must start living off part of its savings, and investing the rest. Where do they invest? Japan, home of the microscopic bond yield? EU/UK- maybe. But prices would rise with massive capital inflows, driving down yields and Chinese interest income.
They must also find new export markets. Protectionist-oriented Japan and EU? Fuhgheddaboudit!
The threat of an economic loss from selling bonds is viewed differently in China because they plan decades, even centuries ahead. This confidence is a result of having an (essentially) continuously Chinese nation for the last 5,000 years. From their vantage point, such a negative economic impact is short and recoverable (see Mao's catastrophic Great Leap Forward). The positive impact, of course, would be the weakening of a great economic and military rival.
Thus the trade-off is measured partly in time. The Chinese might set their economy back twenty years, but when all is said and done, they may be in a much better position to be the world's strongest and most influential nation.
"Austere, intolerant, well-armed, and blood-thirsty, in their own regions the Wahhabis are a distinct factor which must be taken into account" - Winston Churchill, 1921
Also, China has a great interest to build up the Middle Eastern and African consumer markets. Not only are these oil producing nations, they can also be significant future trading partners.
Call for greater China-GCC
ArabianBusiness.com, October 16, 2007Investment activity between China and the Gulf is more important than ever, due to the global credit crisis and increased protectionism by Western states, according to speakers at the China-Middle East Investment Forum, held in Dubai.
HE Dr Omar bin Sulaiman, governor of the Dubai International Financial Centre (DIFC), said that annual trade between the GCC states and China currently stood at around US$45 bn, but said that this figure was likely to increase once a free trade agreement was finalised between the states.
Abdulaziz Sager, chairman and founder, Gulf Research Centre, said that both regions were extremely liquid, with the GCC holding a cash surplus of $186 bn this year, and China's surplus at $238 bn.
"Austere, intolerant, well-armed, and blood-thirsty, in their own regions the Wahhabis are a distinct factor which must be taken into account" - Winston Churchill, 1921
but that's more for their oil resources.
But the Middle East is not a good market for their mass-produced consumer wares. The countries that have the oil generally have relatively small populations, limiting sales prospects. The exception is Iran, but Iran's domestic economy is kind of a mess regardless.
Africa is more interesting. But that's a subject that requires more research.
That's changing very, very rapidly.
Construction Boom in UAE and Saudi Arabia: Opportunities for Hong Kong
Hong Kong Trade Development Council, August 2, 2007
A construction boom is now underway in the Middle East, with over 2,100 projects either planned or underway in the Gulf region in 2006. These projects amounted to US$1 trillion, of which the UAE and Saudi Arabia made up 29% and 20%, respectively.
With 15-25% of the world's construction cranes in operation, Dubai will remain the "construction capital" of the Gulf. Yet Abu Dhabi is set to be "the next Dubai", while Jeddah is benefiting from Saudi Arabia's development of its western region.
Due to the construction boom, construction costs in the Gulf Cooperation Council (GCC) are estimated to have surged by more than 20% since 2003. The buoyant construction sector in the UAE and Saudi Arabia has whetted an astonishing appetite for building materials and related items, as well as relevant services providers and workers.
Though generally on sound financial footing, UAE and Saudi construction companies are looking for building materials that can offer greater variety, trendier design, as well as better value-for-money. In this regard, Hong Kong's construction-related products, such as doors and window frames, are well-regarded in the UAE and Saudi Arabia.
With more high-rises being built and planned, Dubai and Jeddah are places where Hong Kong's expertise and experience in high-rises can bear fruit. Extensive marine projects in Abu Dhabi, on the other hand, will offer abundant opportunities to Hong Kong construction companies to showcase their strengths in marine work.
"Austere, intolerant, well-armed, and blood-thirsty, in their own regions the Wahhabis are a distinct factor which must be taken into account" - Winston Churchill, 1921
but they can not REPLACE the US market.
China is very dependent on relatively low added value basic manufacturing.
Sure, they have lots of talented people who work in more sophisticated occupations, but they have millions and millions and millions of people who don't.
That's why they can't just shrug off loss of access to US markets.
China is on the same development path as was Japan. Currently they can duplicate Western tech with the same functions and reliability but at less expense. But it's only a matter of time before they begin to offer knock-offs with key improvements - beginning their ascent to become creators of innovation as well as mass manufacturers.
And they do not need to replace the US market. They only need to offset the difference of diminished US sales (plus room for growth) from new markets. That's not as hard as you might think. The GCC has more money than they know what to do with. The building boom grows the middle class and their discretionary income from all of the construction, and later, office jobs. Dubai is an eye-opening example of what is to come:
"Austere, intolerant, well-armed, and blood-thirsty, in their own regions the Wahhabis are a distinct factor which must be taken into account" - Winston Churchill, 1921
Isn't 20 years his standard to react against things he knows are fundamentally wrong?
we'll have the dough for 3.0 in no time.
... could it be that with his extensive experience and knowledge this is the correct way to negotiate --- give in early while there is still time?
John
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Why would God invent something like whiskey? To keep the Irish from ruling the world of course
As you can tell, I'm reacting a tad negatively to this latest sunburst of Obamite wisdon.
In finance, borrowers have enormous leverage if the lenders can't seize their assets for reasons economic, political or military.
Ask the French, who saw their loans to Czarist Russia go poof after the Bolsheviks took over. Ask the WWI Allies, whose reparation payments went poof when Germany's hyperinflation vaporized them.
Hell, ask the airlines. During the communal bankruptcy period of 2002-2004, the threat of lenders seizing airplanes and other assets was substantially eliminated because there was no other place to put them, the whole industry being in the tank.
When sovereign risk is involved, nothing says IOU (at my discretion) than having the most powerful military in the world, the largest economy in the world and being China's most critical export market.
Ah, now that's the question now isn't it?
To you and me, who want to be Americans exercising our God-given liberties, it is a terrible blunder. But if you want to have a system just like theirs, where the government tells you where you can live, what you can eat, and what job you'll have in the future, isn't it better to surrender early and often?
Every time Senator Obama opens his mouth and says something bizarre, we learn a bit more about the fetid intellectual waters in which he swims.
There has been this intellectual miasma floating around for several years along the lines of, the U.S. isn't going to be the world's top/dominant power forever, and we need to act now as if that's imminent so that people will be nicer to us as we collapse. (Remember Howard Dean, M.D., babbling about that back in 2004?)
A follow-on to that is that the big rising star of the future is China.
It's telling that Senator Obama seems to be buying into this line of "reasoning" (sic), since this doublet actually originated as strategic "thinking" (sic) among the EUniks.
Two or three years ago, "mainstream" (sic) EU thinking was that the U.S. is doomed, and that China will soon be the dominant world power. This was as much a wish as anything else, since the EU has been thinking of itself for some time as a disembodied aristocratic brain in search of an appropriate plebeian body to take over. So, the thinking went, the EU and China will form the ideal partnership to run the world as the U.S. sinks into irrelevance.
Funny, as that thinking has long gone past the boards among the EUniks. China just looks too ugly to cozy up to. Someone had better plug in Senator Obama and have him download the update.
But we seem to be circling back to 2004 on this count. When Senator Kerry cited those (still unnamed) European leaders he claimed were telling him that they were rooting for him, he failed completely to grasp what was really going on - that the EUnik leaders saw him as a relatively effective way of installing an EU puppet regime in the White House.
Until this year, the EUniks were all rooting for Hillary. But with turning of 2007 to 2008, they've changed horses and are barmy for Barack.
It's the same game. The EUniks see a "President Obama" as another chance to install an EU puppet regime in the White House.
Obama is right,
you do not Flip-the-Bird to your banker !!
See my comment about "Do Not Make China Mad" about how our currency was going to start falling fast as predicted by several experts last summer.
We are see oil prices sky rocket while the rest of the world is seeing prices only moderately increase.
I keep hearing all this BS about how a dropping dollar is good for the USA, tell me that in 6-18 months when gasoline is $5 a gallon, interest rates will start to go up dramatically and this country is still in a recession.
But if we are nice then maybe China will still prop up our economy by loaning us more money so we can continue to shop at Walmart and buy more Chinese goods.
I haven't seen a treasury auction fail yet since they stopped.
"I believe we must adjourn this meeting to some other place." - The last recorded words of Adam Smith.
to the sophistication of the debt marketplace. By loaning us money, what you mean is that China bought up a whole bunch of U.S. treasury bonds that were sold on the open market. That is how they so called loaned us money. If you want to be a creditor to the U.S. government you can go ahead and buy up some bonds as well, and you will find yourself in the same position as China. The main reason that China bought up so many of our bonds is because they thought those bonds would be a good investment. Trying to dump them on the market would wind up mostly destroying them not us. Eventually those bonds would be bought up and after a while the price would come back, however their own investment would be destroyed.
Was it over when the Germans bombed Pearl Harbor
I also don't blame any of the pro Chinese trade enthusiasts of the last 30 years.
It seemed like such a good idea at the time:
*Let's open our store shelves to China and in a matter of time, China's One Billion Customers will open their growing wallets to us.
*Democracy will follow trade as they get a taste for the American way.
*We will then become partners in defending freedom around the world.
But when a plan isn't working, it's time to revise. The current Chinese gov't is the enemy of freedom everywhere. Their continued attempts at espionage(with many probable successes) proves they are a direct threat to our homeland.
Time to invade? Unlikely. We had better see the current Chinese gov't as the threat that it is, and consider our response carefully.
Trade isn't merely a tool of creating democracy but rather a tool of opening up markets to companies. China is a massive market and it creates a massive opportunity for countless American companies. Anyone that thought that free trade would lead to democracy was being far too idealistic. Anyone that thought free trade would expand our markets was correct.
Was it over when the Germans bombed Pearl Harbor
Take the Blackberry for example. The Chinese are loving it as much as we are and Research In Motion is making a fortune, for now.
But what is even bigger in China, and quickly replacing the foreign product, is the Chinese' very own stolen-technology little device they affectionately call "The Redberry".
In other words, the Chinese trade with us, see our technology, and then improve on it. Yes, you just hit on another benefit of free trade, and I am sure there are dozens of examples of Chinese products that American companies see and improve upon, but your point is lost on me.
Was it over when the Germans bombed Pearl Harbor
the chinese often do not pay any royalties for systems and other things they steal. Not exactly the best mannered trading partners. And our government wont do anything about it.
"Nothing works like freedom, Nothing succeeds like liberty"
Kyle
Sorry, I had only implied that when I wrote that the Chinese 'Redberry' used "stolen technology".
If the Chinese become any better at "improving upon foreign technologies", we won't have much to trade with them.
I was having lunch with a manufacturer not so long back. We discussed a new product he could, at some expense, develop and market to a niche market. He said, no way, because as soon as he developed it and built the market, it would get counterfeited from China and the profit would go out of it.
Our relationship with China is not a mutually healthy one. If the free trade were working that well for us, they would be sending dollars back here to buy stuff (other than taking ownership of our leading companies), not to park it short term in debt.
That's not to say that free trade is bad. In general,free trade generates wealth all the way around. It is to say that the real world and academic theory often vary in ways that matter, and that is definitely the case when trading with China.
Top risk in China? Intellectual property theft
Gloria Gonzalez, Financial Week, August 13, 2007Foreign companies expanding into China face a boundless and potentially costly risk—the theft of their intellectual property. China is widely considered to be the most problematic country in the world with regard to violating intellectual property rights. Among U.S. trading partners, China was the No. 1 source of counterfeit products seized at U.S. borders, accounting for 81% of the total value of seized products, according to the U.S. Customs and Border Protection agency.
In 2005, the value of copyrighted material alone that was pirated in China exceeded $23 billion, according to testimony by Chris Israel, U.S. coordinator for international intellectual property enforcement. Despite the enforcement actions, intellectual property theft remains prevalent in China, mainly because government officials in different regions do not all place a high priority on enforcement of existing laws, observers say.
"Austere, intolerant, well-armed, and blood-thirsty, in their own regions the Wahhabis are a distinct factor which must be taken into account" - Winston Churchill, 1921
We need to crack down and enforce IP protection at national and international levels against offending countries. However, many companies basically give up their IP to get products produced cheaper overseas. Companies that want to protect IP should be contracting mulitple firms for various components so all the information isn't in one spot. As I understand, the Chinese CCC is basically a government ruse to steal IP.
Ask not what I can do for my country, ask what my country can do for me. Washington Elected Elite
So you're bothered by Obama saying that our negotiating position with China is weak.
Was anybody equally bothered when Bush traveled to the Middle East recently and literally begged OPEC to produce more oil? (They turned him down, of course.) He had no clout whatsoever because they know America is addicted to oil.
I'm not a fan of Obama, but admitting what a bad bargaining position we're in is the first step toward correcting that situation. In a democratic country, the leadership can't do that by itself without leveling with the people and asking them to make the necessary sacrifices.
I remember Reagan, in 1980, being EXTREMELY reluctant to negotiate with the Soviets from a position of strategic inferiority. He insisted on a military buildup first.
It sounds like Obama feels the same way about China--don't negotiate till you can have better cards in your hand.
I only wish he would understand the same thing is true about Iran. Thanks to Bush's blundering, America is in a VERY weak bargaining position with Iran. Obama wants to negotiate with Iran but doesn't realize that we have almost nothing left to offer the Iranians except to cave in to all their demands. We have no sticks left, just that one carrot.
First, OPEC's dominance of oil goes back to before Bush was born and thus Bush was merely playing the hand he was dealt, unless you expected him to transform our economy from oil dependent to alternative energy in eight years. Second, our position against Iran hasn't been weakened. The key is to win in Iraq and then it is strengthened. Third, the only reason that Obama says that he doesn't want to condemn China is so that he can point out that China owns our bonds. This has nothing to do with negotiating through strength and weakness, but rather rank partisanship. Obama doesn't understand strength and weakness in negotiation.
Was it over when the Germans bombed Pearl Harbor
your memory of the Reagan position on arms control is a lot different than that of... history.
The first START proposal was presented by United States' President Ronald Reagan in Geneva on 29 June 1982. Reagan proposed a dramatic reduction in strategic forces in two phases, which he referred to as SALT III at the time.
The fact is that the Obama's statement reveal him to be an economic asshat.
We have the Chinese goods. Not only do we have their goods but their economy is totally dependent on us continuing to buy those goods. With the cash we spend on their goods they buy US debt. So we get the goods. We keep the cash. They rely on the jobs we create for them. They get our debt which is not redeemable upon demand.
How this makes them powerful escapes me.
"A man does what he can and endures what he must."
...to inform the Chinese that he considered his own negotiating position weak. That's an amateur mistake. If he becomes President, he'll be sitting across from the table from from them someday.
At that point, they'll know that his calm elegance and relaxed authority do not add up to confidence, because he just telegraphed that to them.
And to your other point, about identifying our weaknesses as the first step to resolving them: the weakness he identified is our fiscal deficit. But he's already proposed huge new government spending programs.
If he intends to increase government spending and increase taxes at the same time, so as to reduce our fiscal deficit, then he's going to have to print money to do it. And monetary inflation is just as bad as deficit spending.
Obscenities fly out of mine.
Great post, keep this up. I'm off to shop at Wal-Mart. :-)
You may not be interested in war, but war is interested in you.
What it boils down to is when you stop creating real value, it's a matter of time until you will be in decline. Oil producing countries have real value in oil which others want. China has cheaper labor which leads to cheaper goods that people want.
The US must continually retrain and reinvent itself to provide HIGHER value products and services that other countries need. There is no amount of politics or financial hocus pocus that will get around this fact.
Being competitive, innovative to create real value is the only way.
The question is, which candidate has better policies in order to achieve this?
Ask not what I can do for my country, ask what my country can do for me. Washington Elected Elite
And this is exactly where Obama is weak. Raising the capital gains tax, which is pretty much the first policy position he announced, is not going to generate more US investment or creativity.
Yes that right Obama is Right, when you borrow $1.3-Trillion from your banker, you don't spit in face.
Instead you shine his shoes when you go back every month for another $22-Billion so you can fill your Walmart & Target aisles and keep millions of store clerks working.
Thanks to Bush Sr., Clinton & Bush Jr., we now have a communist country owning a nice chunk of America. With millions of USA manufacturing jobs shipped to China so that you can get cheap products at Walmart. You better start liking to kissing that red butt!!!
Here is a great example of how one USA Invention and Industry has been destroyed by George Bush and the USA free traders with China.
Now after wire hangers had dropped to 4-cents a piece (due to China Steel export subsidies), with the competition destroyed (only one USA company is left in 2008) and George Bush refusing to impose Tariffs in 2002-2003 the price has shot up to 10 cents each in 2008.
U.S. hanger factories are hanging it up!
Americans will always need hangers, but may not be making them much longer. Fortune's David Whitford reports on the last days of a low-tech factory.
http://money.cnn.com/magazines/fortune/fortune_archive/2007/03/05/840128...
I can remember when people were saying exactly the same thing about Japan.
"Nothing works like freedom, Nothing succeeds like liberty"
Kyle
There has been no elaboration, corroboration or anything else. He has one BHO talking point that he throws at the wall and tries to make stick.
"I believe we must adjourn this meeting to some other place." - The last recorded words of Adam Smith.
Have you ever thought how Blu-ray HD players beat out the much cheaper HD-DVD players?
Japan as America's other major banker is seeing its USA investments payoff nicely.
Just go and research how many companies Japan-Sony owns in the USA and how much of the entertainment market they control and therefore, how they can now manipulate the markets here to assure their product wins out even though it costs 2-3 times the price.
the cheaper VHS beating the better, more expensive Beta? For that matter, how do you account for the Nintendo/Atari competition for the video game market?
For that matter, are you contending that HD-DVD wasn't mostly Japanese?
"A man does what he can and endures what he must."
The cheaper VHS beat the Betamax thru pure economics and because Sony did not control a large chunk of the USA Entertainment Industry in the 1970s and 1980s as they do now.
Sony learned there lessons well, unfortunately for Toshiba it does not have the same market power and control of the Movie Industry in the USA as Sony now does.
So market manipulation now trumps pure capitalism and let the consumer choose.
If they could, a two year battle with Toshiba would not have been required. Sony emerged as the winner of a competition.
And the game is not up yet. Because video-on-demand is emerging as a significant competitor for disk-based HDVD.
See:
http://www.baltimoresun.com/technology/bal-bz.pl.himowitz21feb21,0,50947...
If you don't think Sony's position in the content creation part of the market played a key - perhaps the ultimate - strategic role, you need to go think again.
Their opponents found partners, such as Microsoft, that helped make a game of it, but Sony's control of its fairly massive share of the upstream media market was a very important strategic move. Give credit where credit is due.
I'd love to know the full story behind the latest round of the format wars, like what really prompted Netflix and Wal-Mart to discontinue HD-DVD? My guess is that there was quite a bit of unreported, backroom deal making.
"Austere, intolerant, well-armed, and blood-thirsty, in their own regions the Wahhabis are a distinct factor which must be taken into account" - Winston Churchill, 1921
license Macrovision to be installed on their systems and VHS would. In turn, that meant the movie companies wouldn't license their products for Betamax anymore, so VHS won. It had nothing to do with economics of production for the machines themselves, which as I recall, cost about the same at the time.
keep our markets open to their exports, they don't spit in ours either.
The aircraft carriers help, too.
"The most dangerous form in which oppression can overshadow a community is that of popular sway" -James Fenimore Cooper
Whenever I evaluate a statement by a candidate I always try to think of how it'll play with the self-described independents. I mean of course I'm going to interpret it as another example of Obama wanting to run and hide from all the bullies. Now don't get me wrong, I do think he means to run and hide from the bullies :)
I don't take issue necessarily with Obama giving voice to what is patently obvious. I don't believe that China holds all the cards economically, but there's no question that when intermingled like this they can effect us as we can effect them, so awareness of that should be present when we decide on the magnitude of our response vis-a-vis anything.
It's clear his purpose in saying it was to play up economic fear as well as the idea that our current administration has made us left safe by granting some measure of economic leverage to other countries of questionable integrity. As far as political tactics go, it's not a terrible piece of work.
The statement does leave him open for conservatives to patch this statement together with his statements about talking to Iran, about reinvading Iraq "if" Al Qaeda comes back, etc., and paint him as weak/clueless on foreign policy. So the net gain/loss is a little hard to discern.
I should say that I do agree with the sentiment that, whatever his angle is internal to the primary, I don't like the signal he sends to China, or anyone else. I mean, putting aside the issue of oversimplifying the concept of economic leverage, there's a time and a place for candor about things like this. My personal opinion is that his deficit lies in the perception that he is weak; he'd have been better off not saying anything or saying hey China has room for improvement and I intend to let them know that rather than saying well gee I would talk tough but they own us. Regardless of his personal feelings on the subject.
This is where the Bush mind-control comes in; he just couldn't resist taking a shot at Bush. Whether deserved or not, it's dumb to take the shot if you take off part of your own foot with it.
that stupid statements like this from Teflonobama just won't stick. These concepts are far too complex for most Americans to comprehend. Issues of international trade & economics and their impact on politics will be lost on just about everyone. They'd rather watch American Idol.
BHO knows exactly what he's doing - he makes comments that sound high and mighty and feel-good to the uneducated masses. He knows that no one will call him on it because the subject matter is too esoteric for most to even know that he's wrong. And by the time he gets in office, once the Dems have put more butts in seats in Congress, he can pull this radical left stuff off and no one will be the wiser.
The Unofficial RedState FAQ
“You are not only responsible for what you say, but also for what you do not say. ” - Martin Luther
I agree. I am growing concerned that we are rapidly approaching the tipping point of populism where we are getting so content and aren't willing to do the work and vetting. Dumb it down sound bytes is all people get these days outside of people at RedState.
"If it doesn't fit, you must acquit." That's what the entire OJ case boiled down to. Something easy for the dense flighty population to grasp easily with no effort of actually thinking.
Conservatives need to reinvent their marketing and utilize what is resonating w/ the people. Make it easy and rewarding for the population to pursue conservatism. More often than not our "marketing" message about conservatism is "It's bad tasting medicine but it's for your own good." That isn't going to cut it anymore because our population increasingly does not have that work ethic as we become more of an entitlement demographic.
Ask not what I can do for my country, ask what my country can do for me. Washington Elected Elite
We've talked here about GOP PR before. I hope I'll be pleasantly surprised by the campaign strategy and messaging once the real campaign begins, but I haven't seen it yet. The "it's bad tasting medicine..." approach was tried before, and McGovern got his butt kicked. I fear that it's going to take a profoundly painful event to convince the sheeple that drastic measures are going to be needed to fix the entitlement problem.
The Unofficial RedState FAQ
“You are not only responsible for what you say, but also for what you do not say. ” - Martin Luther
Obama has a peculiar approach to the battle to come.
If his plan is to rally the American public to make a stand against the Chinese government, he has plan that rarely works.
He is taunting us into realizing just how weak our position currently is. We don't want to hear it. The better approach would be to flatter us into imagining ourselves as already strong enough to face down our totalitarian enemy.
But Obama is not the president. He's just a guest lecturer on foreign affairs, at this point.
The truly interesting strategy will come from President Bush. Will he boycott the Games and announce his intentions soon, or just develop a nasty August cold? How much of a stand will he take? If he doesn't express more than he is now, then I'd say his inactions are mimicking the weakness expressed in Obama's words.
This isn't going to end well--in the short term. No matter the official reactions of governments worldwide, I think consumers have reached a tipping point. We are disgusted with the Chinese gov't and will make as many non-Chinese-made purchases as we can. Actually reducing our trade dollars(by even 10%) will wake up, or topple, the current repressive gov't of China.