EconomyUSA: China: China's contribution to de-industrializing America via currency manipulataion

Why "Free" Trade Hurts America   

by Thomas Heffner on September 24, 2010 - 2:31pm

The sell-off of American companies is greatly rewarded by those doing the selling. Given record low capital gains taxes and other incentives, CEO’s and shareholders of major companies stand to gain more from the one-time bonus of selling their company at a massive premium to a foreign purchaser than from continuing to run them on a salary basis.  Canada has had a long history of China grabbing up firms here on the stockmarket and outr+t buys in private deals.  This rapidizing trend holds here especially true in the extractive and raw materials industries. (I add that China has a huge spy operation here, especially industrial and financial spying. -- EconoMix)

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• China
 
• Free Trade
 
• Germany
 
• Japan
 
• NAFTA
 
• Publisher's Note
 
• Unemployment
• WTO

• Read more
 
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You want to read more of this analysis by Thomas Heffner. Not being sure the "Read more" invite will work to get you beyond the teaser to the main article, I will give the link to it.

Also, not being sure Heffner's article, and the webs+t on which it appears, is payola-financed by the home-groan auto industry (as I suspect), I must point out that the only examples cited by the author are auto industry-related.  Still, I don't want to commit the genetic fallacy to the effect that because so funded the webs+t has nothing to offer, nothing common-gracious, as Herman Bavinck so carefully tawt us.  This applies to both sides of the polarization between Libertarians vs Anti-FreeTraders.  If you have a thawt on this matter, please do let me know.

To be fair to Heff, tho sparse in examples, his wordsmithing in the article does mention in passing other industries besides autos -- retailing (especially textiles, by the way my favorit voracious-capital investment house is recommending cotton stocks, commodities), electronics, freit and shipping, marketing, advertizing, law, and banking -- "all tied directly to American consumption of foreign goods."

On the other side of free trade, encouraging foreign manufacturers to produce in the US creates a big defeat for us. For example, Ohio and Indiana competed to get a new Honda auto factory. Indiana succeeded. They gave Honda an $81 million enticement gift and other intangibles. Honda said they would put up a $500 million facility to produce 200,000 cars per year. They did put up a facility, cost unknown. And 23,000 Americans applied for 2,000 jobs. Two thousand Americans are now turning out 200,000 Honda cars per year in Indiana which translates to one American supplying the labor to turn out 100 cars per year. One American can earn on average about $50,000 per year to turn out $2,000,000 worth of cars (Average car sale $20,000 x 100 cars = $2,000,000). This may be a simplification, but the American labor cost is approximately 3 percent. Almost nothing is made in that factory.

Some 2,000 of us benefit handsomely, while the remainder of our American 300+ million do not -- oh yeah, the consumers (and their families) who buy these 200,000 Hondas presumably have some satisfaction in their auto consumption.  Are the vehicles all green? -- that woud at least help the enviro some, yes?


Further, the prospect looms of China making green cars for export to the USA, reaping huge rewards, employing a workforce under the whip of the Communist "union," underselling American auto products and even underselling Honda's USA-assembled cars.

-- EconoMix