Tariffs on China Do Not Solve Lack of U.S. Competitiveness, by Tom Luongo

Maybe China does some things better than the US. From Tom Luongo at tomluongo.me:

I’ve been making arguments for months that Donald Trump’s trade war with China is the height of stupidity. While Trump has the power to do what he’s been doing — sanctioning actors and applying tariffs — some power is best left not used.

The simple fact is that America is uncompetitive. This is at a deep and structural level. It’s at an education level. And this is something Trump’s trade team and his adherents refuse to admit.

When it comes to manufacturing and assembly, U.S. workers are not worth the money they are paid. Period.

Don’t take my word for it. Take Tim Cook’s. In an eye-opening interview from the end of 2017 Cook explains the basic problem with the U.S.

And China has an abundance of skilled labor unseen elsewhere, says Cook:
“The products we do require really advanced tooling, and the precision that you have to have, the tooling and working with the materials that we do are state of the art. And the tooling skill is very deep here. In the US you could have a meeting of tooling engineers and I’m not sure we could fill the room. In China you could fill multiple football fields.”

Cook credits China’s vast supply of highly skilled vocational talent:

“The vocational expertise is very very deep here, and I give the education system a lot of credit for continuing to push on that even when others were de-emphasizing vocational. Now I think many countries in the world have woke up and said this is a key thing and we’ve got to correct that. China called that right from the beginning.”

Is this Tim Cook talking or Mike Rowe?

Rowe argues all the time that “we don’t value work, anymore.” VoTech schools struggle. Thousands of solid, honest jobs go unfilled. Kids are sold on the idea of college as the only path to a good job and a stable future.

And that is simply not true. The reason it is no longer true is because of the simple adage of Ron Paul’s, “When you subsidize something, you get more of it.”

We have diverted so much money and capital to education that we have cheapened its value in the labor market while encouraging two generations of kids to go heavily into debt to chase some dream of fame or fortune that had an ever-shrinking probability of ever coming true.

$100,000 for a Women’s Studies degree will not train you to run a production line. It won’t get your air-conditioner fixed. And it won’t prepare you to take responsibility for your wasted time and energy.

We hear this all the time. “Job Openings are at record levels” and they are according to the BLS.

But the flip side is that wage growth has been stagnant. And it is only just now approaching something close to sustainable. This speaks to a labor market completely out of phase with the needs of the society. You can laud Trump for fixing some of this, certainly, but it’s not going to fix the underlying structural problem of malinvestment.

This is not China’s fault. This is our fault. It’s our fault for diverting trillions upon trillions to uneconomic and wasteful projects and staggering amounts of bureaucracy to administer them over the past two generations.

It’s our fault that a cultural malaise of self-indulgence begun by the Baby Boomers has had the downstream effects of growing nihilism among their children and grandchildren who face a lifetime of debt slavery and poor mate-choice selections.

It’s our fault that we fueled an empire with cheap debt and cheaper attitudes towards life and are now angry that many Americans don’t have a viable future as the wealth of the nation was sucked up into the ruling class and its quislings.

Don’t worry, China’s headed down the same road we are on, they just are just getting hitting the on-ramp while we’re heading for the unfinished overpass.

But blaming China for this loss of expertise in things we used to be great at is the wrong approach to solving the underlying problem. We have to address the way money flows through this society. We have to admit that central planning doesn’t work.

I laugh when I hear commenters on my YouTube videos or on Zerohedge in response to my articles complain about the ‘dirty ChiComs stealing our tech’ and all the rest of the insanely stupid, xenophobic talking points spoon-fed to these oh-so-original thinkers by the very banksters and oligarchs they think they’re fighting.

They are no better than the special snowflakes on the left screaming about ‘white privilege’ and ‘the patriarchy.’ It’s all just a reflection of a society unwilling to look itself in the mirror and realize that we’ve met the enemy and he is us.

All things come in cycles. We grew so rich rebuilding the world after World War II that we thought we could have not only guns and butter but that we were entitled to it because we were the instrument of goodness in a blighted planet.

I get what animates Trump to do what he’s doing. But it’s not going to work.

You can’t take back by force that which was freely given away. You have to work for it. You have to earn it. It doesn’t matter if you were screwed over by your government and employer. That’s not China’s fault.

China’s earned its wealth. Has some of that money that came in over the past thirty years been malinvested? Absolutely.

But listen to Tim Cook and listen hard. Most of its hasn’t. All I ever hear about is the ghost cities and the highways to nowhere. The trillions in shadow banking debt and the imminent (since 2012, btw) housing collapse.

And yet, that is all simply projection for the crumbling infrastructure, hollowed out rural towns, and yawning funding deficits that all this debt created here at home.

If you want to fix America. Fix America. But don’t punish the Chinese while we’re at it. To fix America will require access to that market in a web of mutually beneficial trade with them not shutting us out of it.

Tim Cook understands this. Trump’s rampage against China will hurt Apple in ways that won’t be reversible. If you think Trump will stop with his blacklisting Huawei you aren’t paying attention.

And no matter what happens, he won’t pay the price. We will. Because for all of the money we over-invested in education the one thing we didn’t do was teach the basics of economics, knock-on effects and the opportunity costs of putting faith in the hands of the most venal people on the planet, politicians.


 

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