Russian Invasion of Ukraine Exposes Failed Premise of Globalization

March 23, 2022

Globalization was implemented in the wake of World War II, beginning with the signing of the Global Agreement on Tariffs and Trade in 1947, in an effort to prevent any more such wars in the future. Free trade, it was believed, would make all countries more interdependent on one another and would level out living standards by elevating them in poor countries. The world would become one big, happy country where no one nation could derive any benefit from attacking another. Clearly, at least in the form that has been practiced up to this point, it hasn’t worked. War has once again broken out, a war that could easily turn into World War III.

Trade between Ukraine and Russia isn’t the issue. The issue is the notion that rewarding your enemies with lucrative trade deals will make them your friends, and not just wealthier, more powerful enemies. It’s truly no different than businesses paying “protection” money to a local crime syndicate that’s running a protection racket. When has that not ended badly? You pay until they bleed you out of business.

That’s especially true of trade between the U.S. and China. Experts have been warning for years that China is no friend, and that our trade dollars – nearly $6 trillion paid to China since they were granted “Most Favored Nation” status in 2000 – have built them into a superpower that now threatens our very existence.

Now China and Russia – two superpowers made rich and powerful by our naive embrace of the globalist trade protection racket – have aligned themselves against us. Experts have for years been raising the alarm over what we were doing – surrendering the manufacturing sector of our economy to enrich our enemies and fund their military build-ups. Now the two of them are a match made in heaven, or in hell, to use a more appropriate metaphor: Russia has the resources and China has the manufacturing might. Who can stand against that?

Layer this failure – the misguided hope that cozying up to our enemies will make them our friends – on top of the other failures of globalist trade policy. Foremost is its failure to account for the role of population density in driving massive trade imbalances (see “note” below), turning loose badly overpopulated nations to prey on the markets and manufacturing jobs of those more reasonably populated and, in addition, enabling further population growth beyond sustainable levels.

Globalist free trade policies have created huge economic distortions and destabilizing imbalances around the world and, instead of turning enemies into friends, have enriched despotic dictatorships like Russia and China, building them into superpowers that now threaten the rest of the world. Globalism has back-fired, ensuring that this next world war will be far more lethal instead of preventing it.

Note: I’ve been sitting on the latest U.S. trade data since it was released earlier this month. The explosion in our trade deficit is accelerating at an astonishing pace. I found the data to be so disheartening that I’ve struggled to even post about it. I fear that there may be no hope for the U.S. to avoid economic ruin. Nevertheless, I’ll provide the data soon in one of my next posts. Also, look for posts about admitting refugees from Ukraine and the trade sanctions imposed on Russia.

China Reneges Badly on Phase 1 Trade Deal Commitments

February 9, 2022

In January of 2020, China signed a trade deal known as the “Phase 1” deal. They committed to increasing their imports of four classes of American-made goods during 2020 and 2021. Those four classes of goods were manufactured products, energy products, agriculture products, and overall goods. The deal used their purchase of those goods in 2017 as the baseline for their new quotas.

Prior to signing this agreement, the U.S. had levied 25% tariffs on half of all imports from China. The effect was dramatic. Imports from China fell from a record of $52.1 billion in October, 2018 to a pandemic-induced low of $19.8 billion in March, 2020, after which it leveled off just below $40 billion per month by mid-2021.

Under threat of having those tariffs extended to cover all of Chinese imports, China agreed to the “Phase 1” deal which delayed the implementation of those additional tariffs for two years in exchange for China’s agreement to significantly bolster their imports of American goods. The agreement was clear about the rewards for meeting the quotas, or the consequences for failure. Meet the quotas, and the U.S. would begin reducing the already-in-place tariffs. Fail, and the U.S. would extend the tariffs to cover all imports from China. China agreed to the quotas and to the terms of the deal and signed it.

The final verdict is in, with yesterday’s release of December’s trade data. Here is a table showing the 2017 baseline trade data, the quotas for 2020 and 2021, and the actual results: Click to access phase-1-china-trade-deal-goals-vs-results.pdf.

China reneged on the deal in spectacular fashion! They didn’t come even close to meeting a single quota for any of the four categories of goods in either year. By the end of last year, China was barely importing half of what they had agreed to do. Their imports of energy products were nearly 80% short. Clearly, they never had any intention of meeting their commitments. They had won the delay in tariffs that they wanted, and they were betting that, when the two years were up, whoever was president at the time wouldn’t have the gumption to enforce the agreement.

Now the question is, what will Biden do? It doesn’t look promising. Through most of his first year in office, he didn’t even acknowledge that the deal existed. As the end of 2021 drew near, his Trade Representative even hinted that they were considering dropping the tariffs altogether, clearly feeling pressure from globalist corporations and pro-globalism organizations like the U.S. Chamber of Commerce.

Then, a couple of days ago, this appeared:

U.S. officials said they would continue to press China to show “serious intent” to reach an agreement on their purchase commitments, but conceded the framework of the deal offered them little leverage to enforce the purchase commitments.

You’ve got to be kidding me! “… to reach an agreement on their purchase commitments?” They already agreed to meet these commitments! Now we need another agreement to comply with the agreement?!?! “Little leverage?” Read the damn agreement, Biden! It gives you the ultimate leverage; it tells you exactly what to do – what China had actually agreed would be fair – to slap 25% tariffs on ALL imports from China. This kind of weakness absolutely sickens me and it should sicken all Americans! Biden talks about how he supports American workers. This is his chance to prove it. Instead, he chooses to cower before the power of China and its pro-globalism lackeys.

BEA to begin tracking “trade in value added”

December 13, 2021

If you visit the web site for the “Bureau of Economic Analysis,” you’ll be greeted with an announcement that the Bureau will begin tracking “trade in value added,” which I find very interesting. Could this be the first step toward the U.S. imposing a “value added tax” – or “VAT” – on imports?

What is a “value added tax?” It’s a very complicated subject. It’s essentially a sales tax – one that would be levied by the federal government. Nearly every country in the world uses it to generate a substantial portion of their government’s revenue. The United States is one of the few, and most glaring, exceptions. When applied to imports, it essentially functions as a sort of tariff – but one that’s perfectly legal under the rules of the World Trade Organization.

Wikipedia has a very long article explaining the value added tax and it will leave your head spinning when you’ve finished it. What’s most important is the effect on trade. For that, zip right to the end of the article:

Many politicians and economists in the United States consider value-added taxation on US goods and VAT rebates for goods from other countries to be unfair practice. For example, the American Manufacturing Trade Action Coalition claims that any rebates or special taxes on imported goods should not be allowed by the rules of the World Trade Organisation. AMTAC claims that so-called “border tax disadvantage” is the greatest contributing factor to the $5.8 trillion US current account deficit for the decade of the 2000s, and estimated this disadvantage to US producers and service providers to be $518 billion in 2008 alone.

In other words, other countries use the VAT as a sort of tariff, which the WTO allows. The U.S. doesn’t, putting it at a huge trade disadvantage. So this announcement by the BEA that it will begin compiling “value added” data may be signaling that a move in that direction. In other words, the U.S. may finally have reached the conclusion that “if you can’t beat them, join them.” This would be an enormous development!

Some may protest that they don’t want to pay more sales tax – one to the federal government on top of what they already pay to their state. But if it were accompanied by a corresponding reduction in federal income tax, the only effect would be its role in leveling the trade playing field, at least to some extent (probably not enough to offset the the effect of population density disparities), bringing high-paying manufacturing jobs back to the U.S.

If the U.S. doesn’t have the guts to thumb its nose at the WTO and impose tariffs on imports (like Trump did with China), at least a VAT would be a smaller step in the right direction.

Trade Deficit Down as Exports Rise

December 11, 2021

In a rare bit of good news on trade, as announced by the Commerce Department this week, the overall trade deficit, led by exports of U.S.-manufactured goods, fell by $14.3 billion in October to $67.1 billion. Here’s the chart: The decline in the deficit was due to a big jump in exports, rising by $16.8 billion to $223.6 billion, shattering the previous record of $215 billion set in May of 2018. The jump in exports was more than enough to offset a $2.5 billion increase in imports, which set a new record of $290.8 billion, the fifth consecutive monthly record.

The best news, however, is that the decline in the trade deficit was led by a decline in the deficit in manufactured goods. Here’s the chart: Exports of U.S manufactured goods jumped by $10.3 billion to $125.5 billion, beating the previous record of $119.7 billion set only two months earlier. It was enough to offset an increase in imports of $1 billion to $207.4 billion – also a new record.

Clearly, the new records set by imports debunk the claim by some that the supply chain crisis is due in part to labor shortages caused by the pandemic at foreign manufacturers. That’s a ridiculous claim. We’ve been inundated with a flood of imports that has left warehouses stacked to the rafters.

The slowing increase in manufactured imports and the accelerating increase in manufactured exports is the best news in this report. It may be the early signs of a manufacturing revival in the U.S. and may also explain, at least in part, the “labor shortage” we’ve been witnessing. That, together with massive spending on infrastructure, have combined to attract workers to higher-paying jobs, leaving other industries that are dependent on cheap labor – like the restaurant industry (where over-building is also a likely factor) – unable to attract workers.

However, it remains difficult to draw any hard conclusion on any economic data until the dust from the pandemic and massive government stimulus spending begins to settle.

Supply Chain Chaos Fueled by Overpopulation

October 18, 2021

We’ve all seen the empty shelves in our stores and have had to adapt and substitute as everyday items that we’ve long taken for granted are suddenly out-of-stock. And we’ve heard the stories and seen the pictures of massive back-ups at our ports – shipping containers stacked high and dozens of cargo ships anchored off-shore, waiting to be unloaded. The global supply chain is in chaos. The Covid pandemic is taking the blame because the globalists who created the global supply chain don’t want you to understand the real issues.

The global supply chain is a “system” and, like any system, requires controls to keep it stable. The more variables there are in a system, the more difficult it is to control. Take your car, for example. Maximizing your fuel mileage requires a computer that adjusts the fuel-to-air ratio to any given combination of conditions – air temperature, engine temperature, octane rating of the fuel, throttle position, oxygen level in the exhaust, and so on. When your car is first started, all of these variables are in such a state of flux that it’s impossible to control in such a way that minimizes your fuel consumption. So your car runs in “open loop” mode until the variables settle down. Only then does it go into “closed loop” mode where the computer (using that “chip” you hear so much about that is in short supply because of the global supply chain chaos) can actually fine tune the fuel injectors and spark timing. Any disruption in any variable that’s out-of-range will cause the computer to throw up its hands and default back to open loop mode and your “check engine” light comes on.

That’s just your car. Now think of more complex systems. Think of nuclear power plants, for example. Maintaining precise control is absolutely critical. Loss of control can result in a core melt-down which isn’t just a matter of life and death, it’s an existential threat to everyone and everything within a huge radius. Everything has to work perfectly. Sometimes it doesn’t. A weather event, a power failure, a failed cooling pump, a crack in a pipe, a failed valve and pretty soon you have a Three Mile Island, a Chernobyl or a Fukushima.

Complex systems that experience loss-of-control can deteriorate until they experience a catastrophic failure. Control algorithms can be developed to reduce the risks to an infinitesimal level, but the risks can never be completely eliminated. So there must also be plans in place to mitigate the destruction and clean up the mess.

With all that said, let’s now look at supply chains. You’re a company that needs a widget. You go to a widget manufacturer down the road. “Sure, I can supply you with your widgets. Tell me how many you want and when you need them. Here’s your price.” Pretty simple. Not a global supply chain, though. There’s nothing simple about that. In fact, there may be nothing more complex. The variables are almost infinite. Your manufacturer may be in China, and has a whole supply chain of his own to manage just to make your part. Then there’s obtaining a shipping container, transporting it to a port in China, obtaining and loading a cargo ship, traversing a stormy ocean, dealing with customs, unloading at the port on the west coast, loading your container onto a truck and, after your container has made its way from one distribution center to another, with multiple carriers involved, it’s supposed to make its way to your door just in time – just as you’ve used the very last widget from the previous shipment.

A failure anywhere along the line can throw your whole supply chain out-of-control. So why would you set up such an elaborate supply chain? Sure, the labor may be cheaper at your manufacturer in China, but all of that around-the-world shipping doesn’t come cheap. The fact is, it isn’t cheaper. So why don’t you just get your widget from a local source? Because there isn’t any. There used to be, but they were driven out-of-business by the global supply chain. Wait, you say. That doesn’t make any sense. If the supplier in China isn’t cheaper, then how did they drive the local supplier out of business? They did it by selling at a loss. Why would they do that? Because the purpose of globalism isn’t to reduce the costs for American companies. The purpose is to establish an economy in third world countries, like China, where they have four times as many consumers as the U.S., and turn them into U.S.-style consumers. That way, sales volumes and profits for global corporations grow four times as fast as they would have if they focused only on the American market.

Look at these charts, updated through August, the latest month for which trade data is available:, The first is a chart of our overall trade deficit. It’s a perfect representation of the state of our supply chain. Stable until the onset of the pandemic, it’s now out-of-control. If this were a chart of a nuclear power plant’s reactor core temperature, rising as fast as the trade deficit is rising, you’d be in a state of panic if you were an operator at that plant, and lights in the control room would be flashing red. The 2nd chart is more narrowly focused on our deficit in manufactured goods. It, too, is out-of-control, though in recent months it’s begun to show signs of stabilizing. Are trade policy changes enacted under Trump – the USMCA agreement with Mexico and Canada and the tariffs on Chinese imports – showing signs of having the desired effect of boosting domestic production? Or are we seeing signs that companies are awakening to the follies of the global supply chain? It’s too early to tell.

The global supply chain is in a state of “melt-down.” The crisis is more likely to get worse than improve. Thousands of businesses are responding by increasing orders in reaction to their empty shelves and are scrambling to find new suppliers. A few major retailers are bypassing the shipping companies by chartering their own ships. All of this will add to the chaos. However, perhaps the biggest factor working against regaining control of the supply chain is the fact that the main purpose of the global supply chain isn’t supplying us with goods at all. The real purpose of the global supply chain is to tilt the balance in favor of the “developing world” in the global war for employment. The economies of badly-overpopulated nations need to be propped up with manufacturing-for-export in order to employ their bloated labor forces and maintain political stability. As the supply chain chaos begins to unravel that grand plan, nations and global organizations like the UN, the IMF the World Bank and others will begin to react in ways that aren’t necessarily productive toward restoring stability to the supply chain. It’s impossible to predict the effect on such a complicated, out-of-control system.

As proof that powerful global forces are at work shoving the “global supply chain” model down our throats, consider this. We’re subjected to a daily drumbeat of warnings of an existential threat posed by carbon emissions. So dire is the threat that our energy industry must be converted to wind and solar and our auto industry must become all-electric, they say. Beyond that, elaborate plans are underway to “capture” CO2 from the atmosphere and from smoke stacks and to store it in underground caverns, in tanks, or anywhere they can hide it. Yet, you never hear anyone utter a single peep about the fact that the vast fleet of ships plying the oceans as part of the global supply chain consume five billion barrels of oil per year – not gallons – barrels. Those are emissions that could be completely eliminated by returning the world to a domestic supply chain.

Nor do you hear a single peep about the role of out-of-control population growth. No one bothers to even ask the question, “What will we gain if we reduce per capita oil consumption and carbon emissions by 50% if we double the population?” Globalists don’t want you to think that far. They deceive you into believing that the existential threat of climate change can be controlled by elaborate plans for reshaping our entire economy, and by throwing around oxymoronic terms like “sustainable development” so that you won’t begin to ask about simple, cheap fixes like returning to domestic supply chains and stabilizing the population. Those simple, cheap fixes would pose a threat to what they’re really concerned about – big profits available from developing third world countries and never-ending population growth. They think we’re all idiots.


As an aside, I went to a home improvement big box store this week to purchase a shop light to replace one that I use throughout my basement and garage for lighting. To my dismay, I discovered that all such lighting has been converted to LED. You can still get flourescent bulbs for your existing light fixtures, but new flourescent fixtures are no longer available. This particular store used to stock at least 20 of these basic shop lights because, as you can imagine, there was a constant demand for them. But they didn’t have any of the basic 4-foot, two bulb shop lights available in the new LED design. I went home to search online for stores in the area might have them in stock. Not a single store in the whole metropolitan area had a single one in stock! Supposedly, I can get one within a couple of weeks if I order.

Doing some research into these new LED light fixtures, I made another interesting discovery. Every single LED light bulb, regardless of its configuration, uses a “chip” to make it work. Think about that. Just converting lighting to make it more efficient requires an additional billions of “chips” per year (which will add to our landfills), and now we can’t get enough chips to build cars. The entire world has gone mad.

Biden admin makes first acknowledgment of “Phase 1” deal as China’s compliance deteriorates further

October 12, 2021

In January, 2020, China signed an agreement with the U.S. – the “Phase 1” agreement – to boost its imports of American goods. They agreed to specific goals for four classes of goods – manufactured goods, energy products (like oil, gas and coal), agricultural goods and total goods. The agreement set specific goals for 2020, followed by higher goals for 2021. They also agreed that, if they failed to meet those goals, the U.S. would impose 25% tariffs on the remaining half of Chinese goods exported to the U.S. (The Trump administration had previously imposed a 25% tariff on all Chinese imports. The Chinese agreed to the Phase 1 deal in exchange for a delay of tariffs on the remainder of their products.)

Earlier this month, the Commerce Department released the trade data for the month of August. China’s imports of Amercan goods fell to their lowest level since February. Their imports of total goods dropped to $11.3 billion. By this time in the agreement, they should be importing $24.5 billion per month. Year-to-date, they’ve imported barely half of what they agreed to import. In fact, they’re barely exceeding the 2017 level that was used as the baseline for the agreement.

Their imports of manufactured goods have been flat at about 60% of what they agreed to import. Their worst performance has been their imports of energy products – only 20% of what they agreed to import in 2021. Surprising, given that China is currently in the midst of an energy shortage. Their imports of agricultural goods are less than half of what they promised – again, surprising given the challenges of feeding such a badly-overpopulated nation.

Through all of this, the Biden administration has remained silent, never once even acknowledging the existence of the Phase 1 deal, one of the signature accomplishments of the Trump administration. Until earlier this month, that is. Last week, U.S. Trade Representative Katherine Tai called out China’s failure to comply with the deal and said that Washington must enforce the deal. See this article:

The opening paragraph in the article reads:

“Top U.S. trade negotiator Katherine Tai on Monday pledged to exclude some Chinese imports from tariffs imposed by former President Donald Trump while pressing Beijing in “frank” talks over its failure to keep promises made in Trump’s trade deal and end harmful industrial policies.

Already I smell rat – the “free trade” rat that has infested Democratic and Republican administrations alike for decades and has absolutely ruined the manufacturing sector of America’s economy. Tai pledges to “exclude some Chinese imports from tariffs imposed by Trump” and wants to engage in “frank” talks. You’ve got to be kidding me. The Chinese themselves agreed to the deal. They agreed that they deserved to be punished with more tariffs if they didn’t comply. Instead, Tai wants to actually reward them by removing the tariffs already in place and then engage in mealy-mouthed talks – the same tactic that has left China rolling in the aisles with laughter each time such talks have ended, in disbelief at how stupid and weak American trade negotiators are.

This absolutely makes me sick. If you ask me, failure to enforce this trade deal should be an impeachable offense.

Existential Threats

September 21, 2021

“Existential threat.” It’s a term that gets thrown around a lot these days. What is an existential threat? It’s something that threatens your very existence. Someone who wants to murder you is an existential threat to you. You will stop at nothing to stop that person because your life depends on it. Another nation that wants to overthrow our own nation and make it their subject is an existential threat. Our nation’s continued survival depends on stopping that other nation, just as we had to do in World War II to stop Japan and Germany. Every citizen took part in mustering everything we had to fight them.

So, when you hear that term used today, you would expect an all-out effort to combat the threat. Consider China. Over the past 2-3 decades, China has used trade to its advantage to put it on a path to becoming the world’s most dominant economy, making us utterly dependent on them for virtually everything while draining the wealth from our own economy through their massive trade surplus. And, using those trade dollars, they’ve engaged in a massive military build-up and have begun bullying other nations in that part of the world. Belatedly, our own leaders now consider China to be the biggest existential threat that we may face in the world.

To counter that threat, Biden just cut a deal with Australia and Great Britain to provide Australia with eight new nuclear-powered submarines. That’s about $24 billion worth of naval power. If we’re willing to go to that extent, wouldn’t you think that we’d jump at the chance to put an end to China’s ambitions for a teeny, tiny fraction of that cost? Trump, Biden’s predecessor, left him with the perfect tool to do exactly that when he cornered them into agreeing to the “Phase 1” trade deal in January of 2020. Take major steps toward reducing their trade surplus with the U.S., or have a 25% tariff slapped on the remaining half of their exports to the U.S., just like Trump had already done to the other half. That was the deal.

China agreed to it but, not surprisingly, they never intended to comply, believing that we would never enforce it, just like we had demonstrated for decades that we never enforce any trade deals. A year and a half into that two year trade deal, China has reneged on every aspect of it. They agreed to very specific goals for imports of American agriculture products, energy products, manufactured products and total goods. Through July, the most recent month for which trade data has been released by the Commerce Department, China is $74 billion short of its goal for manufactured goods, $43 billion short of its goal for energy products, $25 billion short of its goal for agriculture products, and a whopping $134 billion short of its goal for total goods.

When Trump slapped the 25% tariffs on half of all Chinese imports (something Biden has wisely left in place), it put a real hurt on China. Their total exports to the U.S. have fallen by – guess how much? – 25%, falling $108 billion in 2020 from their record amount of $418 billion in 2018.

China has thumbed its nose at the U.S. on this deal. What has Biden done in response? Absolutely nothing. In fact, not one time has he ever even acknowledged that the Phase 1 deal even exists. I don’t get it. The U.S. is desperate to counter China’s growing influence, willing to spend many billions of dollars to do it, yet the Biden administration won’t take advantage of this powerful tool – the one China fears the most – and, in relative terms, it wouldn’t cost a damn dime to implement. Why? It’s difficult to come to any other conclusion than Biden doesn’t want to give any credit to Trump. We’re faced with an existential threat, and Biden won’t lift a finger for political reasons.

Another example is global warming. Just today, Biden addressed the UN and emphasized the need to take more drastic action to blunt this threat to the very existence of our planet. On Sunday, when questioned by Margaret Brennan on Face the Nation about his claim that the Democrats’ infrastructure bill should be $6 trillion instead of $3.5 trillion, Bernie Sanders replied by asking “How much would we be willing to spend to save the planet?” It’s a good question, actually. If the earth could become uninhabitable, then we should stop at nothing to prevent it, no matter how great or small the cost and no matter how complex or simple the solution.

Global warming (or climate change, if you prefer) is caused by human activity which generates greenhouse gases like CO2 and methane to name a couple, which trap heat in the atmosphere. It was never a problem until, during the last couple of centuries, the human population exploded, doubling over and over again while clearing forests to develop cities and fueling an improved standard of living with fossil fuels. Greenhouse gas emissions grew beyond the planet’s ability to absorb them. The problem is total emissions, which is the product of per capita emissions multiplied by the size of the human population.

But what if we didn’t have to spend trillions of dollars (maybe quadrillions?) to wean the world off of fossil fuels in favor of renewable sources like solar and wind? What if greenhouse gas emissions could be reduced for free? It can be done. It was demonstrated by the Covid pandemic when most people stayed home during the early weeks of the spread of the disease. Amazingly, the air cleared all over the world and the concentration of CO2 in the atmosphere dropped for the first time in many decades, something that all of the thousands of wind turbines and millions of solar panels had yet been able to achieve. When so many people hunkered down, it simulated what the world would be like with a smaller population.

It wouldn’t cost a thing and could be done more quickly than the decades-long or century-long timelines we’ve heard for cutting greenhouse gas emissions by X percent that scientists say needs to be achieved, though there’s little agreement on what “X” is. It can be done ethically, without resorting to Draconian measures. Birth rates can be influenced by something as simple as tax policy, and immigration can be cut. Reducing the population would not only solve global warming but virtually every other environmental threat along with it.

Yet no one utters a word to suggest reducing the population. In fact, the powers that be want it to continue to grow. The Paris Climate Accord pulls no punches in admitting that its real mission is not to stop global warming, but to reduce it to a manageable level so that “sustainable development” can continue. It’s not the planet they’re worried about. It’s “Sustainable development” – an oxymoron designed to fool you into believing that there really is such a thing – that you don’t need to worry about the environment because they’ve got everything under control.

In fact, the whole environmental movement has devolved into a scam meant to lull you into believing that everything is under control so that you won’t think about the situation so hard that you stumble upon the real problem – that it’s impossible to continue growing our population in a finite world. It’s a lesson that you learned as a child when you watched all the baby guppies die in your aquarium simply because there were too many for that little ecosystem to support. But that lesson has been tamped down by the purveyors of “sustainable development,” by the environmental proclamations of global corporations who are desperate to prop up growth in sales volume with population growth, and by politicians who tighten their grip on power by growing their electorate.

We are, in fact, facing existential threats, but the supporters of free trade and economic growth (code for population growth) would rather continue to profit from unsustainable policies in the short run, the future for our children be damned. They’d rather continue to trade with communist dictators today. Who cares if our children one day live under them? They’d rather have you believe that the recycle you put out on the curb for collection isn’t really going into a landfill, that your water-efficient appliance is actually saving you water, that your electric utility’s wind turbines and small solar panel farms are anything more than a drop in the bucket relative to the problem. Worst of all, the economists want you to believe that mankind is clever enough to overcome all obstacles to growth. I can think of two obstacles that we have yet to demonstrate we can overcome – stupidity and hubris.

Pro-China Lobby Groups Lying in their Quest to End Tariffs on Chinese Imports

August 7, 2021

Let me begin with a question. The U.S. Chamber of Commerce is an agency of the U.S. Department of Commerce whose mission it is to aid U.S. businesses. True or false?

If you answered “true” to this question, as most people would, you’re dead wrong. The U.S. Chamber of Commerce is a lobbyist organization that promotes business interests and is funded by its member businesses – from the smallest of local businesses to global corporations. Naturally, the interests of those businesses that provide the lion’s share of their funding – global corporations – take precedence over all others. And they’re not above speaking out of both sides of their mouth in promoting those interests.

The subject of trade is a good example. Check out this “policy priorities“page from their web site. Click on the “Internation Trade, Investment and Regulatory Policy” link. Scroll down about half-way to the section on “International Trade, Investment and Regulatory Policy.” The third bullet item reads:

“Press for a China policy that seeks improved access to the Chinese market, advances structural reforms in China and tariff relief through new negotiations …”

Now, see the links to “Go Deeper” articles in the right-hand margin of the page. There you’ll find two conflicting articles. One is titled: “Two Big Wins for U.S. Trade: Completion of USMCA and the Phase 1 deal with China mean big things to American business.” The other, just above it, is titled “They’re Still There: Tariffs Weigh Heavily on U.S. Economy.”

Those tariffs on China – 25% on half of all Chinese imports – were the only thing that brought China to the negotiating table – and the threat of imposing them on the rest of all Chinese imports was the only thing that forced them to agree to big increases in their purchase of American products as part of the Phase 1 trade deal.

You can’t have it both ways. Either the Phase 1 deal was good for American business or it wasn’t. You can’t argue that it is and then complain that the very heart of the deal – the tariffs – is bad for American business. Yet, that’s exactly what the U.S. Chamber of Commerce does. To placate their small, local business members, they praise the deal. But, in the interest of big, global corporations, they complain that it’s a bad deal and what it terminated.

As further evidence, check out this article: Here’s the key excerpts:

“Nearly three dozen of the nation’s most influential business groups — representing retailers, chip makers, farmers and others — are calling on the Biden administration to restart negotiations with China and cut tariffs on imports, saying they are a drag on the U.S. economy.”

“In a Thursday letter to U.S. Trade Representative Katherine Tai and Treasury Secretary Janet Yellen, the business groups contend that Beijing had met “important benchmarks and commitments” in the agreement, including opening markets to U.S. financial institutions and reducing some regulatory barriers to U.S. agricultural exports to China.”

“The trade groups include some of Washington’s most influential big business associations, including the U.S. Chamber of Commerce …”

The claim that China has met its commitments and therefore qualifies to have the tariffs dropped is a flat-out lie. The Phase 1 deal set very specific goals for Chinese imports of American products. Meet those goals and the existing tariffs could be dropped. Fail to meet them and the tariffs would be extended to cover all Chinese imports. That’s the deal, stated in very clear terms. So far, through June, the most recent month for which trade data is available, China has failed to meet a single commitment.

In 2020, China fell short of its commitment for purchases of total U.S. goods by 33.5% or $62 billion. They fell short of their goal for the purchase of energy products by 64%. Among the four categories of goods for which specific goals were set – manufactured goods, energy goods, agricultural goods and total goods – they met the goal for agricultural goods only during the last three months of 2020, but fell far short for the year. Four categories of products. Twelve months in the year. That’s 48 opportunities to demonstrate a willingness to meet their commitments. They failed 45 out of those 48 times. In fact, for the year, they barely exceeded the 2017 baseline of the deal. In the all-important category of manufactured goods, they actually imported less than the 2017 baseline.

Six months into 2021, their performance is even worse. Their imports of total goods are 46% below their commitment. Their imports of energy products is 78% below. Even their imports of agriculture products, the category where they at least met the goal for the last three months of 2020, have collapsed in 2021, falling short of their commitment by 46% and even falling short of the 2017 baseline by $10 billion.

China hasn’t met their commitments, as the U.S. Chamber of Commerce claims. It’s failed abysmally. Contrary to the Chamber’s claim that China has earned the elimination of tariffs on its products, it has blatantly thumbed its nose at the Phase 1 deal, believing (and rightly, so far) that the U.S. will continue its long-demonstrated practice of failing to enforce trade deals.

President Biden, don’t listen to these globalist lobbying organizations. They’re lying to you. It’s time – past time, actually – to declare China a failure and to enforce the Phase 1 trade deal by extending the 25% tariffs to all Chinese imports. Fail to act and the U.S. will continue to be the laughing stock at the trade table for all other countries for years to come. That’s certainly not in America’s interests.

Biden Tackles Minor Corporate Abuses While Ignoring the Biggest and Most Obvious

July 11, 2021

As reported in this Reuters article, Biden has signed an executive order that tackles many corporate abuses in an effort to help American consumers. Good for him. Many of these actions have been long overdue. But he has completely ignored the one “corporate abuse” that dwarfs all others in terms of its impact on American workers. I’m talking about the trade deficit and the practice of off-shoring millions of manufacturing jobs.

To his credit, while ignoring the abuses that Biden addressed with this executive order, Trump is the only president since World War II who took the trade deficit seriously and took concrete steps to address it.

You may wonder why I focus so much attention on the trade deficit since the purpose of my book, Five Short Blasts, and the purpose of this blog, is to raise awareness of the economic consequences of overpopulation – namely, that falling per capita consumption as over-crowding worsens must inevitably drive up unemployment and poverty. And poverty kills. Ultimately, if nothing else gets us first, it will prove to be mankind’s undoing.

It’s really not that hard to understand once you understand that increasing over-crowding as the population continues to grow inevitably drives down per capita consumption and, along with it, the need for labor. People living in crowded conditions live in ever-smaller dwellings. They own little furniture and appliances because there’s no room for them. They own less clothing because of a lack of closet space. They don’t have yards and gardens, so they don’t need tools to maintain them. They don’t own cars because roads are choked with traffic and there’s no place to park. So they don’t have garages. They don’t participate in sports because there’s nowhere left to play them. They don’t engage in recreational boating because launch and dock space is all taken.

You get the idea. But what does this have to do with trade? Consider a country with a reasonable population density. Let’s say there’s 100 million people in this country. Their lifestyle resembles that of the U.S. Now suppose that they engage in free trade with another nation that is far smaller – say one tenth the size – but also has 100 million people. It’s ten times as crowded and people live in conditions like those described in the previous paragraph. For that reason, their consumption is only half that of the first country.

Through free trade, these two countries, though each is still a sovereign state with borders, behave economically as one country. The work of manufacturing the products that their combined population needs is spread evenly across the work force, but the consumption of those products isn’t. Consumption in the 2nd country remains low because of their over-crowding. The end result is that the first country has lost 25% of their manufacturing jobs and has lost even more in terms of market share. In essence, the first country has been forced to pay the price for the 2nd country’s overpopulation.

By trading freely with the 2nd country, the first country has immediately taken on the economic traits of a country twice as populated – something it would have taken decades to happen through the course of normal population growth. Worsening unemployment and poverty are the inescapable consequences of free trade with overpopulated nations. This is why my concern for the economic consequences of overpopulation has driven me to put such heavy emphasis on trade.

With all of that as a backdrop, what has Biden done to address our massive trade deficit – now an annual one trillion dollars in trade in manufactured goods? Absolutely nothing. Oh, he’s paid some lip service to wanting to help American workers and has encouraged us to “buy American.” But he’s done nothing about our trade policy and hasn’t spoken a word about our trade deficit.

As reported this past week by the Commerce Department, our trade deficit in May continued to hover at a near-record level of $71.2 billion, the 2nd worst reading ever since setting a record of $75 billion in March. In fact, in his first four full months in office for which trade data is available – February through May of this year – Biden owns the four worst monthly trade deficits ever recorded.

Our largest trade deficit is with China. Thanks to Trump’s enactment of 25% tariffs on half of all Chinese imports, however, that deficit isn’t nearly what it once was. Our annual deficit with China peaked at $418 billion in 2018. Thanks to Trump’s tariffs, that fell to $344 billion in 2019, and fell again in 2020 to $310 billion. So far this year, it’s on track to remain at that level.

Trump left Biden the perfect tool to build on that progress. In January, 2020, he got China to sign the “Phase 1” trade deal which held at bay his threat to extend his tariffs to all Chinese imports in exchange for China’s agreement to dramatically increase their imports of American goods. What’s happened? China is failing miserably in its commitments and, not only has Biden done nothing to enforce the agreement, he hasn’t even acknowledged that the Phase 1 trade deal even exists. So far, through May, China is 39% behind its commitment on manufactured products, 43% short of its goal for agricultural products, and is a whopping 78% short of it goal for energy products. They’re barely exceeding their imports in 2017 which formed the baseline for the agreement.

So far, the Biden administration makes a good show of supporting American workers but, on this most critical issue – the one that would help us the most – all we hear from the White Houe is …….. the sound of crickets.

No One’s at the Wheel

May 13, 2021

As reported last week by the Commerce Department, the United States’ trade deficit in goods soared to a new monthly record in March of $91.6 billion – an annualized deficit of $1.1 trillion – led by a near-record deficit of $88.7 billion in manufactured goods. Here’s a chart of that deficit in manufactured goods dating back to 2010 when the monthly deficit was only $37 billion, an increase of 140 % in eleven years.

In 2010, the goods deficit with China accounted for half of our total goods deficit. In March of this year, that was down to 30%. Since October of 2018, the goods deficit with China has fallen by 36%. During that same time frame, the goods deficit with the rest of the world has skyrocketed by 580%. Think about that. A 580% increase with the rest of the world vs. a 36% decline in the goods deficit with China! That’s absolutely astounding!

That disparity in trade results in only 2-1/2 years demonstrates the power of tariffs in shaping global trade. The 25% tariff that Trump slapped on half of all Chinese imports in 2018 was a shot to the head – a bullet right between the eyes – for China’s ambitions to dominate global trade. Say what you will about Trump, but he was the first president since World War II to defy the free trade advocates and the World Trade Organization to enact such a bold tariff program. His only mistake was not extending the tariffs to a number of other overpopulated nations that feed on America’s economy to support their bloated labor forces.

But at least he left Biden with a powerful tool to slash the goods deficit with China even further – a proven tool that could be extended to other countries to finally restore a balance of trade. I’m talking about the “Phase 1” trade deal that Trump struck with China – a deal that would have forced them to dramatically step up their imports of American goods, or face the consequence of having that 25% tariff extended to all Chinese imports. The results were predictable. (In fact, I predicted China’s failure from the moment the deal was signed). They ended 2020 by falling short of their mututally-agreed goal by $62 billion, a full one third short of their goal. Through the first quarter of 2021, they’re on track to fall short of their 2021 goal by $127 billion.

So what has Biden done? Nothing. While expressing a desire to help American manufacturing, he’s been dead silent on the subject of our trade deficit and has never even mentioned the trade deal with China which they continue to blatantly ignore. The dashboard of America’s economy has a huge, glowing red gauge right in the middle that monitors our trade performance. The problem is that, like that Tesla in Texas that sheered in half against a tree as it rounded a curve, there’s no one at the wheel. Biden’s asleep in the passenger seat, oblivious to what’s happening in global trade and the devastation to our manufacturing economy. We’re approaching that curve and all we hear is snoring.