Category Archives: Chinese

The Chinese Finger Trap

Remember the Chinese finger traps? Those bamboo tubes that you would stick your finger in one end, then the other end. And when you tried to pull out the “trap” closed on your fingers. The harder you pulled, the tighter the trap. You can still get those things at Amazon. Made in China, of course.

https://en.wikipedia.org/wiki/Chinese_finger_trap

Seems to me as though Mr Trump, in his dealings with China, has fallen prey to this old Chinese trick. Like the 4 year old pulling frantically to get loose, Mr Trump has stuck his tiny fingers of “tariffs” into the Chinese trap of “retaliation”.

There is an old saying : “When your only tool is a hammer, everything looks like a nail”. It seems as though Mr Trump has only one tool in his arsenal. Tariffs. And when tariffs don’t work, pull harder. More tariffs. Harder. More tariffs.

As in his dealings with China, Mr Trump just announced more tariffs with our second most important trading partner, Mexico. Unless they somehow stop immigration he will ratchet up tariffs. Keep in mind that about 40% of Mexico imports are actually dependent on US parts sent to Mexico for final assembly.  Tariffs will impact negatively on US industries .

Back to China. China has a long history of hardship and conflict with the West. The communists took over precisely because of the failure of the nationalist government to deal with foreigners. China is the “Middle Kingdom”. The two characters in the written Chinese language stand for those two words. China has always seen itself as the center of the universe.  Americans are tribal , but compared to Chinese ethnocentrism, Americans are downright globalists. The Chinese will not submit to humiliation. Never.

So, China can and will survive any hardships. After all, the leadership of China does not need to worry about elections. They can dictate  and absorb any economic downturn.

US trade with China accounts for about 13% of China’s trade with the rest of the world. A big chunk. But over the last 20 years China has been expanding markets to the rest of the world. Today, China has a higher percentage of trade with Australia than it does with the US. More trade with the EU. More trade, by far, with the rest of Asia. More trade with Africa and Latin America. In fact, China has focused on Africa and Latin America and has rapidly expanded into those markets. China can withstand a 13% trade hit. Can the US withstand a 16% hit on the other side?

So, Trump’s tariffs will not work. He is caught in the Chinese finger trap with no way out. He just pulls harder and harder.

Trump will not take advice. But on this one, he should. He should find a 5 year old. Because, as any 5 year old can tell you, getting out of the Chinese finger trap is easy. Just give in a little bit. Loosen the grip. Stop pulling so hard. Relax.

You would think the world’s greatest “deal maker” would know by now. Or maybe Trump never played with a Chinese finger trap. Or maybe he got stuck and could not extricate himself.  Perhaps he had to be cut out of the trap by his daddy? At any rate, he is stuck now with no way out.

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Filed under Chinese, economics, Economy, Foreign policy, Free Trade, NAFTA, Politics, Trump, United States

Happy Labor Day. Now Get back to Work.

Wages in the US are at a 40 year low when compared to investor profits.  And average workers today make less than workers 40 years ago adjusted for inflation. The capitalist revolution has largely succeeded. Convincing workers that they are indeed undeserving of a decent wage.

So, let’s celebrate Labor Day.

The labor of the slaves was responsible for the southern economy. Free labor, of people stolen from their homes in Africa,  was the driving force behind the plantation system that south fought so hard to maintain. It is hard to fail when you have free labor at your disposal. Easy to build a “good life” for the master and his household. So, the economy of the south was built on free labor. Happy labor Day

The labor of the “white slaves”, the indentured servants, was hardly different. Indentured labor was slavery of a different sort. English and Irish “peasants” or “criminals” stolen from their homeland. Some by force, others by the force of the English law. Taken to America where they labored for 7 or 11 or more years to pay off debts. And to pay for their own passage to slavery. Many died before their indenture was over. No recourse to the law. Happy Labor Day.

The labor of the Chinese came next. Railroad builders of the great transcontinental rail system. Stolen from their homes in China or “shanghaied” from the ports of China. Sold by their families into indenture. They built the railroads and for many the rail sidings were their graves. Mass graves when the work was done and they were no longer welcome. Happy Labor Day.

The labor movement of the early 20th century saw a massive number of workers seeking to unite. The US government called it treason. Any strikes for better wages were met with government and company violence. Workers were required to live and pay rent to their employer. To buy everything at the “company store” Were paid in scrip rather than dollars. Any organizer was labeled a “communist” or a “traitor”. Eugene Debs,when he became too powerful, found himself behind bars. Happy Labor Day.

The post -WW2 labor union boom. Wages increased. Working conditions became safer. benefits were seen as an integral part of the labor contract. And as union wages increased, the wages of non-union workers went up as well due to the upward pressure of job mobility. And corporations thrived . Millions were made. And workers could buy homes and save for the future. Then came the Reagan years and  the worker became evil. A parasite on the “job creators”. Mr Reagan’s first act (after ripping the solar panels from the White House roof) was to bust the traffic controllers union. The trend was set. Government was once more the enemy of labor. Union busting was the goal of government. Happy Labor Day.

The Mexican and Guatemalan and Honduran immigrant labor. Doing jobs no US citizen will do. For low wages. No benefits. No protection from the boss if he decides not to pay. Picking grapes. Washing dishes. Busing tables. Doing construction. Weeding lettuce. Cheap labor. And in return they are blamed for wanting to work. For doing jobs that US citizens refuse to do. they keep food cheap and profits high. Happy Labor Day.

Happy Labor Day. Remember the slaves, the Chinese, the white slaves, the wobblies, the unionists, the immigrant. All of whom have made America what it is. No matter how much “capital” is invested, nothing happens without labor. Nothing gets built. No one gets arrested. No computers are programmed. No one is taught. No garbage gets picked up. No potholes get filled. No electric lines get repaired. No one is cured. No packages are delivered. No food is grown.

Happy Labor Day. Now get back to work.

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Filed under Chinese, Debs, immigrants, slavery, United States