A Second Industrial Revolution

Donald Trump is sounding more like he wants to smash NAFTA, as I recommend, instead of renegotiating it. So, what if a President Trump really did throw up a protective tariff sufficient to cause companies to bring their plants back to the USA? How many are we talking about? To think about this question, I have invented a new term:

The Exo-Economy
The exo-economy is that portion of the US industrial base which is located outside of our borders. You have probably seen estimates of 40,000-60,000 factories that have moved overseas. We can only guess because our government does not keep any official statistics. Nevertheless, if we used an estimate of 50,000 that would be 1,000 new factories for each state in the union.

If all of those factories came home, that would indeed constitute a revolution.

But that is only half of it. The free-trade era is decades old, and during that time, factories have been built in nations like Mexico, China, and Taiwan that were never in the USA to begin with. If you watch Shark Tank, then you know that it is pretty much impossible for an entrepreneur to get funding if they don’t have a “China strategy.” So, the vast bulk of new American manufacturing capacity has been sited overseas for many years now.

How many of these virgin exo-factories are there around the world? God only knows, however we can get an idea by looking at the size and growth of nations and companies whose economies have been constructed to export to the USA. I would like to see a professional economist study this issue and come up with an estimate. Personally, I think that a very large chunk of the emerging-markets “miracle” is comprised of plants that export nearly all of their output to the USA. Think Foxconn; their giant factories that produce phones and tablets for the USA were never here to begin with. A protective tariff would cause that production to relocate to the USA.

Nobody knows how big the exo-economy is, but there is no question that it is huge. We might have to double our estimate of incoming plants from 1,000 per state to 2,000. Of course, if we put up tariffs, other countries would retaliate with tariffs of their own and our exporters would lose business. However, I think the net effect would be enough new jobs to get all of our 43 million citizens on food stamps back to work.

This will be a project of Earth-shaking proportions. Consequently, we need to put a lot of thought into it. We need…

A Globalization End-of-Life Plan
Trump talks about a 35% tariff on Mexico, but that only makes sense if you want to single-out and punish Mexico. Such a tariff wouldn’t cause companies to come back to the USA; it would only cause them to go to Bangladesh, Vietnam, or Singapore. So, any protective tariff would need to be across the board; not designed to punish any one nation, but rather to rebuild the smoking-crater that we call the USA.

In order to give companies time to adjust, it might be a good idea to raise the tariff 10% per year with the first hike as soon as possible. While 10% might not prevent Ford from moving its small-car production to Mexico, it would let them know that the 35% was coming for sure.

Another approach would be to go industry-by-industry. Since the tidal-wave of demand for domestically-produced products would be so huge, we have to make sure that our existing industry could ramp-up swiftly. For example, if we put a tariff on shoes, how long would it be before domestic manufacturers could scale up? Years? Decades? That would be a terrible hardship on female citizens.

Of course, just because we put up a tariff doesn’t mean that products would stop coming in immediately. They would still come, if needed, but cost a little more. In most cases. In other cases, angry countries might just cut us off completely, and that could indeed be debilitating. Remember the dust-up we had with China a few years ago over rare-earth minerals? If Asian nations cut us off from technology, it might be a long time before you could get a new cell phone or laptop. And Mexico could turn the lights off in San Diego:

Mexican windmills export energy to San Diego.

Mexican windmills export energy to San Diego (story here).

Pollution Privilege
There are many more aspects that need to be studied beyond economics. After all, if Trump brought factories back to Detroit, and made it look like Ho Chi Minh City, would he be lauded or reviled?

Ho Chi Min City.

Trump wants to remove “un-needed” regulations on business, but I don’t think Americans will stand for going back to a toxic environment. We know for a fact that companies can manufacture products safely, cleanly, and profitably, so why tolerate anything less?

One of the big “free trade” perks for companies is what we might call the Pollution Privilege. So, not only do you make money on cheap labor, but you make additional profits by not having to worry about poisoning the peasants. This, of course, is a barbaric practice and should not be brought back here.

Retraining
Tim Cook says that Americans are too stupid to make things. Of course, if you send all the factories away, as companies like Apple have done, and then criticize the former workers for having rusty skills, may I suggest the possibility that you are a jackass? Of course the USA is blanketed with rusty-skilled workers. Republicans like Donald Trump tend to think of retraining as a form of welfare. But this should be one of the very first things that Trump does. Even low-tech production like sewing clothes requires a high level of skill. Putting a Nike factory in the hood, or the trailer park, will be like a UFO landing. The factories have been gone for so long that an entire generation has no idea what goes on there. I’ll bet there are lots of old-timers in Detroit who know how to build a carburetor, but even they would need to be retrained on fuel-injectors. We will need thousands of vocational academies, and no, people on food-stamps can’t afford to pay for retraining.

Military Alliances
How many countries tolerate a U.S. military presence only because we allow them a free hand to export to our domestic market? Probably quite a few, so we need to plan for the loss of such “allies.”

Monopolies
When imports undermine a domestic monopoly, that’s a good thing. But why don’t we just break up the monopolies ourselves? If we go back to making things ourselves, this is going to become a bigger issue. If Trump wants a legacy of creating jobs for the people, he would tarnish it by allowing monopolies to gouge people at the cash register.

Unions
In places like Mexico, union organizers are shot in the head and buried in shallow graves. That’s pretty much a requirement for becoming a U.S. trade partner. Trump is an anti-union guy, and started out preaching against the minimum wage. Recently, when speaking to crowds in Oho and Pennsylvania, two pro-union states, Trump told them (paraphrasing): “I will bring the factories back from Mexico, but I can’t promise that they will come here. They might go to other states.” So, he was urging Ohio and Pennsylvania to become “Right to Work” states, which really means “Get Rid of Unions” states. Is that a good strategy for winning the votes of mostly-Democratic union members? Maybe; maybe not. But he seems willing to bet the election on it.

The Gaping Hole in the U.S. Constitution
Re-Industrializing with lax environmental regulations, low pay, and harsh working conditions hardly seems worth the effort. Going back to the age-old struggle between unions and robber-barons is not inspiring. So, why don’t we try for something better? The word “capitalism” does not appear anywhere in the U.S. Constitution. Back then, we were an agrarian nation, not to mention a barbaric slave state. So, it is not surprising that the founding fathers had nothing to say on the subject of labor relations.

If we are going to embark upon a second revolution, why not see if we can’t achieve a grand bargain of labor relations and incorporate it as a constitutional amendment? At first glance, this sounds like tilting at windmills; an impossible task. But in reality, it might be very easy. After all, the Germans have already solved it. It wouldn’t take long to copy their Betriebsrat system. When it comes to industrial success, you can’t do much better than the German approach.

Not Just an Industrial Revolution
Not only will the Second Industrial Revolution be physically huge, it will also constitute a huge political revolution. If you are thinking: “We are the USA; we are a large, powerful sovereign nation, and we can adjust our trade policies as we see fit” then you just haven’t been paying attention. The policies that we have now were written by corporate lobbyists, and rubber-stamped by a bought-and-paid-for Congress & White House.

So, while the multi-national corporations that run this country, and the world, like to keep a low profile, that doesn’t mean that they are not there, and it doesn’t mean that they won’t fight back. Consequently, this isn’t just a second industrial revolution, but a second War of Independence.

The probability is very high that Trump will be Farage’d – or worse.

In other words, don’t be surprised if things turn ugly. Establishing sovereignty the first time wasn’t easy. It’s not likely to be easy the second time either.

Jobs or Jihadis? Trump has the Better Vision

Donald Trump’s popularity has surged among African-Americans recently (see the L.A. Times tracking poll). I think this is because his vision of the future is far superior to that of Hillz. Trump wants to bring the factories home and see to it that some of them go into black neighborhoods. Meanwhile, Bill Clinton wants to repopulate Detroit with Syrian refugees – possibly the dumbest political strategy in the history of American politics.

Advantage: Trump.

But can Hillz change her vision to something better? No, she cannot. She can’t promise to bring jobs to the hood because she, and Obama, are hardcore globalists. They are committed to letting the jobs go to wherever the “invisible hand” thinks best. And that means Bangladesh, not Baltimore.

The hard truth is that Hillz is the torch-bearer of a dying ideology: globalism. Her vision for Urban America is: “sorry, you’re S.O.L. The invisible hand has spoken.”

Consequently, Hillz has decided to decline battle on the jobs front, and instead concentrate on portraying Trump as a racist in order to keep the black vote in the fold. Will it work? Will black people give up the vision of a more prosperous future in exchange for the fleeting satisfaction of dispatching a “racist” candidate? I don’t know, but this is likely what will determine the election.

From Tax-and-Spend to Bribe-and-Spend

Look at this Lear Corp. maquiladora in Ciudad Juárez, just across the border from El Paso (lower-right quadrant):

It is one of dozens that the company has in Mexico, employing thousands of workers. They make car-interior parts like seats and visors. When Lear pays their Mexican workers, there are zero FICA taxes withheld from their checks. Zero dollars go to Washington, D.C. It all goes to Mexico City. And what about the company’s profits? Where do those go? Ireland? The Cayman Islands? I don’t know, but what I do know is that if this plant were located a half-mile north in Texas, there would be more money available for our bureaucrats to tax-and-spend.

But for some reason, they are not clamoring for the return of the former US tax-base now residing in Mexico, China, India, etc. Even as the federal deficit and debt balloon, and the “non-defense discretionary” part of the budget shrinks to only 13%, nobody in Washington makes a peep. Curious, no?

I think that what we are seeing is a transition from FDR’s old-fashioned tax-and-spend model to a shiny, new bribe-and-spend model. In this new system, politicians get their discretionary budgets directly from billionaires. We have hard evidence that this is happening now that George Soros has been hacked. Can it be long before right-wing billionaires like Sheldon Adelson and the Koch Brothers are hacked too?

David Rockefeller designed his Washington Consensus as a massive wealth-transfer program from workers to billionaires. It worked. The world’s 2,473 billionaires now control $7.7 trillion of capital, which is equal to the GDP of Japan plus Germany. Thanks to “free trade,” tax flows that once went to Washington have been diverted into the coffers of multi-national corporations and billionaires who now use the cash to purchase government officials, and make policy. George Soros has flooded Europe and the USA with thousands of jihadis. Sheldon Adelson wants to fire a nuclear warning shot at Iran. Both left-wing and right-wing billionaires are literally insane.

That’s why we got rid of kings in the first place.

Bogus Mexican Trade Stats

During his meeting with Donald Trump, Mexican President Enrique Peña Nieto said:

“Our country buys more from the U.S. than Germany, Spain, France, Italy, Japan, and the U.K. together.”

While that is a true statistic, it is not an apples-to-apples comparison. The idea that trade with Mexico is a fabulous source of wealth for the USA is completely ridiculous.

Imagine a scenario of what actually happens: a million dollars worth of auto parts are “exported” from the USA to Mexico. The parts are assembled into a car, and then a million dollars worth of cars are “exported” from Mexico to the USA. And $2 million in “wealth” has been created.

On paper.

In reality, the whole thing is a giant machine to help multinational corporations eliminate their American workforces. Just as David Rockefeller intended when he architected the system decades ago.

Our trade with Mexico bears no resemblance whatsoever to our trade with countries like Italy. It’s a completely different animal. A very large chunk of the 43 million people that we have on food stamps are NAFTA victims. Getting them back to work will never happen without us abrogating NAFTA (as well as other “trade” agreements).

Will Trump Usher in the North American Union?

Last week, I pointed out the new “hemisphere” talking-point unleashed by Donald Trump when he was in Mexico. Well guess what? Arch-conservative Ann Coulter is now repeating it. In a column on Breitbart, Coulter wrote:

“But he [Trump] also brought up the serious issues of illegal immigration, a border wall, drug cartels, NAFTA and keeping manufacturing in our hemisphere.”

Since when is “keeping manufacturing in our hemisphere” a “serious issue” – or an issue at all?

Since Trump started raising money, that’s when.

amero

Will you, one day during the Trump administration, wake up to find that the USA has been dissolved into the North American Union (NAU)? And the dollars in your bank account converted into Ameros?

It’s starting to look that way.

Remember, without a Bretton-Woods type of system to manage exchange rates, perpetual currency-devaluations (to garner export-market share) will be the order of day. So, we should expect the Amero to be weaker than the dollar, and the North American Union to be one grand exercise in currency devaluation – just like the Germans did by converting the Deutsche Mark into the Euro.

A few months ago, Breitbart effused that the election was going to be a straight up-or-down vote on restoring US sovereignty. Well, it’s starting to look like no such thing. The Democrat is a globalist, and the Republican is now a hemispherist, which amounts to the same thing.

Trump is driven by self-aggrandizement. Getting him to sign-off on the NAU might be as simple as putting his face on the new currency.

What About the Ex-Consumer?

Back in the day, the globalists tried to convince us that exporting factory jobs would eventually lead to more home-office jobs here as companies expanded overseas. That, of course, was a lie, and not even Larry Kudlow tells it anymore because today, everybody knows that exporting jobs has led to mass poverty, burning cities, and The White Plague.

But the globalists won’t quit; there is just too much money to be made from carpetbagging the USA. So, what argument do they use now? Let’s take a look at what right-wing, globalist, National-Review contributor Tom Rogan had to say on the last episode of The McLaughlin Group (transcript here):

“…my support for free trade comes down on the notion that I genuinely believe…that free trade saves American families thousands of dollars a year because it allows, for example, a t-shirt to be made abroad at lower cost than it would be made here. So, that saves families money.”

This is the “Globalization is Good for Consumers” talking point. Interestingly, this exact same argument could be used to justify slavery. T-shirts are made of cotton, so if we could enslave the cotton-workers, we could reduce costs even more for consumers. How about it, Tom?

[Note to self: don’t give them any ideas!]

Globalists like to argue that the USA is a consumer economy, and that anything that raises consumer prices is automatically bad for the nation. And yes, if we discontinue the use of Asian slave children in the production of our sneakers and cell phones, their prices could be expected to rise.

But when we talk about consumers we should really say the remaining consumers because the victims of globalization are no longer full-fledged consumers. Suppose that the factory where you used to work was sent to Mexico, and instead of a paycheck, you now get $127 per month in food stamps. And you spend it on toothpaste and Ramen noodles at the Family Dollar. Are you really a consumer? No, you are now an ex-consumer.

In aggregate, retailers can turn a profit by serving the massive ex-consumer segment of the market. But what if that were the entire economy? Would you still call the USA a consumer economy? No, of course not.

Globalization (which includes mass-immigration) also puts downward pressure on wages for remaining workers. So, are the low prices at Walmart really a windfall from globalization? Or are they a necessity to keep the business of the down-sizing middle class?

So, when you hear a globalist making this argument, ask him about the ex-consumers. And ask him if it is better to have a job in a t-shirt factory, or be on food stamps with the ability to buy a cheap t-shirt from China. And don’t be surprised when he opts for the latter, because that’s what carpetbaggers do. They burn the land and boil the sea just to make a buck.

Read more on this subject in my first book. Search down the page for the “Seductions of Slavery” section.

Trump Can’t “Fix” NAFTA

Imagine a widget factory that was in St. Louis before NAFTA. And now it is in Reynosa, Mexico just across the border from McAllen, Texas. The factory used to employ Americans at $20 per hour. Now it employs Mexicans at $1.25 per hour.

How does Donald Trump negotiate a better deal? Is this not a binary situation? Either the factory is in the USA, or it is in Mexico. Either St. Louis makes the widgets, or St. Louis burns.

No, NAFTA cannot be fixed; it can only be smashed.

So, what if we do smash it? What if we put tariffs on manufactured goods such that it is no longer profitable to locate factories in Mexico? There will be a mass exodus of factories back to the USA, a mad scramble to staff them, and a lot of poor people will be able to live in apartments instead of refrigerator boxes. So, that would be a good thing for the USA.

But Mexico will retaliate. They will absolutely put tariffs on American agricultural exports. Flyover country senators will storm the Oval Office, and Trump’s Secret Service detail will have to beat them back with batons. Those are the guys that Trump will have to negotiate with. And that may not be easy, or even possible. Those senators might be able to block everything that Trump tries to get through Congress.

Agriculture is a much smaller employer than manufacturing. So, if you want to create a lot of jobs, trading agricultural exports for factories is the way to do it. Probably the only way that we will ever be able to substantially reduce the 43 million people that we have on food stamps.

We need to do something dramatic and earth-shaking; not send Carl Icahn to Mexico City to negotiate. This has nothing to do with the Mexicans or the Chinese or the Indians. They are just the lucky recipients of the vast program of carpetbagging set into motion by David Rockefeller long ago.

What we should do is announce to the world that we have screwed up: Don’t take it personally; it’s us, not you. We have dug ourselves a giant hole, our cities are burning, and the only way dowse the flames is to institute an across-the-board tariff on imports of goods and services. A protective tariff that will be high enough to bring back our factories from Mexico and China, our call centers from Eastern Europe, and our IT shops from India.

There are about 3,000 maquiladoras employing 1 million Mexicans along the border. What if we moved all those plants to Texas? That would totally eliminate poverty in the state, right? Wrong. Texas has 3.7 million people on food stamps. The size of our poverty problem (not to mention the corresponding national debt) is GARGANTUAN. Anybody who tells you that there is another way out is living in a dream world.

Note: Mexico and Canada have a lot of oil. However, if we abrogated NAFTA, I suspect that they would still want us as a customer.

Note: Not all of the plants went to the maquiladora belt along the border. There are many more further south. For example, here is a GM plant in Silao:

This is a live map, so you can click the “+” to zoom in, etc. If you own a Chevy Silverado, it may have been built in Silao.

Ted Cruz Sings from the Rockefeller Hymn Book

During last night’s Republican presidential debate, Ted Cruz said: “Smoot-Hawley led to the Great Depression.” But if you look at the chart below, you will see that tariffs during the 1930s were not unusually high by historical standards:

Tariff Table

And I might add that tariffs were very high during the period between the Civil War and World War I when the USA grew into a superpower. And that was no accident. In fact, it was our plan. Tariffs were the centerpiece of the American School of Economics. This is historical fact. High-tariff America didn’t have 45 million people on food stamps like free-trading America does today.

Cruz also said: “…a tariff is a tax on you, the American people…” But that’s only half of the transaction. The tariff would bring some production back to the USA, people would get hired, start spending money again, and your business would have more revenue. Or, if you work for somebody else, their revenue would increase and you could ask for a raise.

Both of Cruz’s statements are straight out of the globalist book of talking points. I wouldn’t go out of my way to criticize him if he weren’t posing as an outsider. But the two quotes discussed here are 100% establishment.

It is painfully obvious that the “grand” experiment of free trade and mass-immigration conducted over the past 25 years has failed. These polices need to be reversed, and Ted Cruz is obviously not the man to do it.

A Glittering Jewel of Pure Evil

Nobel Prize winning economist Joe Stiglitz wrote in the New York Times that we have grossly miss-managed globalization. While I agree with almost everything he wrote, I want to point out that there was no miss-management involved.

In fact, it was quite the opposite. The truth is that the global system was painstakingly constructed by legions of intelligent and competent corporate lawyers and lobbyists to the exact specifications laid down by the Great Architect, David Rockefeller.

The system was designed to monetize the middle class; to convert its wealth into trillions of corporate profits stashed away in the Cayman Islands, safely out of the reach of the IRS.

And it has done so rapidly, and with ruthless efficiency. It is a glittering jewel of pure evil revered by psychopathic oligarchs the world over.

Stiglitz also complains that:

“…the Trans-Pacific Partnership negotiations have been taking place in secret, forcing us to rely on leaked drafts to guess at the proposed provisions.”

Well of course! This has been the case for decades! Sure, the Constitution says that Congress has the power to negotiate trade treaties, but David Rockefeller drove a stake through that part of the Constitution long ago. Today, trade policy is made at a level above the Congress – the corporate level, and mere plebs like Stiglitz literally do not have a right to know what the corporate lawyers are doing in their meetings.

It is none of our business. The policy will be handed down to Congress for rubber-stamping, and that will be it, and we will like it or lump it.

If you want to reform globalization, it is critical that you realize what you are up against. It is not merely a matter of choosing the right economic- and trade policies. It is a matter of repossessing the legal power from the Deep State to make those policies at all.

Beijing’s Man at the Fed

Many people were startled when President Obama said that he favored Larry Summers to succeed Ben Bernanke a few weeks ago. Not only did Summers help to deregulate banking and cause the 2008 financial collapse, but he is also a totally incompetent financial manager having gambled away $1.8 billion when president of Harvard.

Common sense tells us that having a buffoon like Summers as chairman of the Federal Reserve Bank would be a recipe for disaster. So what’s President Obama’s problem? Does he want a disaster?

Maybe he does.

Obama also mentioned his desire for a strong dollar as part of his rationale for favoring Summers. Since when does Obama care about the dollar? And why does he think that’s the Fed’s responsibility and not the Treasury Department’s? Consider this chart of the CYB yuan ETF (click to enlarge):

CYB Chart

This ETF is at its highest level since its inception five years ago. So, the yuan has appreciated against the dollar during Bernanke’s QE campaign – and I don’t think that’s an accident. Remember that Beijing and their multinational allies fought hard against QE. Republican flunky propagandists like Larry Kudlow campaigned so vociferously against QE that I feared Bernanke would be assassinated. But Bernanke stood tall, and fired his cannons at the yuan/dollar currency peg enforced by Beijing that has been draining the USA of jobs for years.

To learn more about the mechanics of this, read my book. Suffice it to say that the stronger the yuan is, the more it costs Apple to purchase iPhones from Foxconn, and the harder it is for Beijing to steal factories from the USA.

In recent years, the Fed has been the only patriotic institution in Washington fighting against Beijing’s death-grip on our economy. And now that must stop because it is cutting into the profitability of the Oligarchy’s sweatshops. So, they are trying to seize control of the Fed. Larry Summers might end QE to strengthen the dollar – even if it involves plunging us into another recession.

And there is precedent for this: in 1979, David Rockefeller toyed with the idea of taking the chairmanship of the Fed. But he decided against it because he didn’t want to suffer the bad publicity from the “tough measures” he would have to institute to combat the so-called “wage push inflation” of the time. So, he sent a hatchet man instead: Paul Volcker, who promptly raised interest rate to the moon and inflicted a brutal depression on the USA. Volcker kept squeezing until their was a mutiny at the Fed and Volcker was kicked out. It’s a great story, so again, read my book. And remember that when it comes to corporate profits, the Oligarchy will stop at nothing – not even putting a dufus in charge of one of the most important institutions on earth.

Would Jesus Work at Walmart?

Imagine that Jesus is living in Arkansas, working as a carpenter. He commands $50 per hour for his high-quality work, and life is good. But then, the big home-building companies bribe enough Congressmen to drastically increase the number of work visas, and a wave of Mexican carpenters flood into the state.

The Mexicans are good carpenters, but they are willing to work for minimum wage because they have starving children back home. Jesus could compete on price, but he has a mortgage payment and three kids in college. No matter how hard or how long he works, he is doomed financially. Would Jesus turn the other cheek, and meekly put in an application at the local Walmart?

Well, if he did, Jesus would fit right in because many Walmart stores are practically evangelical churches already, complete with feet-washing rituals.

Edward Gibbon, author of The History of the Decline and Fall of the Roman Empire thought that the adoption of Christianity weakened the Roman Empire. (See the relevant passage here.) Other scholars dispute Gibbon’s assertion. However, when you look at the masses of believers toiling away for less-than-subsistence wages to further enrich the insanely wealthy Walton family, you have to wonder whether Gibbon was onto something.

This is why I say that we Americans are a conquered people – we have meekly and passively accepted our descent into servitude.

Many Walmart workers even love their servitude, fancying themselves to be Jesus-like. However, according Reza Aslan’s new book Zealot: The Life and Times of Jesus of Nazareth, Jesus was actually crucified for being a revolutionary. So, maybe Jesus wouldn’t knuckle under to the Walton family after all.

Read more abut the economic role of evangelical Christianity in To Serve God and Wal-Mart: The Making of Christian Free Enterprise by Bethany Moreton. Here is a quote:

“For the emerging Wal-Mart constituency, faith in God and faith in the market grew in tandem, aided by…an organized, corporate-funded grassroots movement for Christian free enterprise. Ultimately, they helped shape American-led globalization itself.”

Indeed, using Christianity to control the masses goes all the way back to the founding of our nation. In George Washington: The Founding Father, historian Paul Johnson writes (page 10) about our first president:

“He was never indifferent to Christianity – quite the contrary: he saw it as an essential element of social control and good government – but his intellect and emotions inclined him more to…freemasonry…”

So, from the get-go, our leaders viewed Christianity as a means to control the masses. The more things change, the more they stay the same. Fascinating subject, no?

Detroit vs. Havana

On Friday, CNBC reporter Michelle Cuckoo-Cabeza reported from Cuba. Right after the report in the video below, Joe Kernen commented about how foolish Cuba was to not embrace globalization. I’m no defender of communism, and I’m sure that Cuba’s economy leaves a lot to be desired, but I can’t help but wonder how a city like Havana stacks up against that shining pillar of globalization: Detroit.

Do Havana residents have to carry rape whistles to fend off packs of wild dogs like they do in Detroit? Do tourists go to Havana to gawk at the ruins like they do Detroit? Are large chunks of Havana being systematically dismantled and returned to woodlands like Detroit?

And what about crime? Which city is more dangerous, Havana or Chicago, a.k.a. Chiraq? I would really like to see a well-researched comparison.

How is possible that Joe Kernen is oblivious to the wide swaths of America’s once-great industrial cities that have been devastated by globalization? Easy: that’s his job.

Why Didn’t “They” Listen to Bernanke?

Two-and-half years ago, Ben Bernanke gave what I call his “Historic China Speech” where he got in the faces of the mercantilist blood-suckers that pass for our trading partners. And after brilliantly laying bare the fundamental problem with our foreign trade relationships? What happened next? Crickets, that’s what. Nothing was done.

Now, if you want to understand why “they” did nothing, you will have to read my book. The short answer is that nations like China are merely vehicles for “them” to carpetbag the USA.

I might also add that since the speech, about 2.5 million legal immigrants have been brought into the USA. Did anybody ask Bernanke if the economy could create jobs for them? Nope.

Bernanke is charged with achieving full employment for American workers. And yet, he has zero power over the tidal wave of jobs leaving the country, or the tidal wave of new workers coming in. So, if he is powerless, why shouldn’t he start to “taper” and circle the wagons around his balance sheet? After all, the fix is in, and this might be as good as it gets. Bernanke has done all he can do. Now it is up to “them” to explain exactly how their carpetbagging is good for America.

Note: This also debunks the conspiracy theories of the libertarian/anarchist “Fed Stalker” crowd led by “Tyler Durden” and Ron Paul. As globalization has grown, the Fed’s power over the economy has declined in proportion. The idea that the Federal Reserve Bank is the root cause of all that is wrong with the nation couldn’t be more absurd. After all, if you send a man’s job to China, he can’t buy a house no matter how low Ben Bernanke takes mortgage rates. The Fed is responsible for the plumbing of the banking system. Aside from that, it barely matters any more.

The Potemkin Economy

HuffPo has some photos here of the Potemkin village that they are creating in Ireland for the G8 Summit. I’m not aware of any such false-front projects here in the USA, but we do have our own Potemkin-type activities.

In some areas, shops are not allowed to use what might be called “crime shutters” at night because it makes the neighborhood look too crime-y:

crime-shutters

During “urban” events, some cities force shops to stay open when they would rather close-up for the duration of the event. Maybe if we pretend that there is no such thing as flash-robbing, it will just go away…

But the most outrageous Potemkin activity is the phoney “re-shoring” news story. All throughout 2012 the news media was full of giddy in-sourcing stories about all the factories coming back from China. That was total BS.

Of course, this is all just putting lipstick on the globalization pig. Ultimately, there is no substitute for reversing our offshoring and mass-immigration policies. You don’t need to paint smiley faces on people who have good jobs.

The Cupcake Superpower

If you watch ABC’s Shark Tank you may have noticed that a lot of the start-up companies on the show make food products. I have a theory about that. See if you can guess what it is.

mark cuban cupcake

Mark Cuban eats a cupcake on ABC’s Shark Tank.

More clues can be found in this pro-NAFTA propaganda piece: “Middle-class Mexicans snap up more products ‘Made in USA’

What are the Mexicans snapping up? I have made bold the products in these quotes from the story:

“…marbled slabs of steak from Greeley, cans of pinto beans from Holyoke and sacks of russet potatoes out of Monte Vista.”

“In a Costco store in the suburbs at the edge of Mexico City, shoppers browse shelves loaded with pallets of Kirkland vitamins, value packs of Nature Valley granola bars and sacks of Cape Cod kettle-cooked potato chips.”

“The biggest growth came in modern retail chains, filled with U.S. products, that are challenging, for better or worse, the traditional mom-and-pop stores doling out soda, eggs and tortillas.”

“At Costco, even the walls in the butcher aisle boast the USDA Premium and USDA Choice labels, in English.”

“In Mexico’s Costco stores, staples such as tortilla chips and chipotle salsa are trucked in from factories in California and Texas that produce for both sides of the border.”

“The Mexican consumer is less focused on price and more focused on freshness,” said Sonia Denham, a senior sales manager for California organic produce giant Earthbound Farms, which supplies Costco stores in Mexico and the United States.”

“Jim Walstrom, chief executive of Motely, Minn.-based Morey’s Seafood International, said his company’s relationship with Costco has opened doors to a vast market of 114 million Mexicans who will increasingly serve items such as Pacific salmon and mahi-mahi to their families.”

Almost every product mentioned was a food product. And what do we buy from Mexico?

“…televisions, cellphones, computers and passenger vehicles.”

Well sell Mexico potato chips, and they sell us electronics and cars! Can you imagine?

Perhaps one day Mitt Romney will figure out how to import cupcakes from his sweatshops in China and put American bakers out of business. But until then, food products are one of the last refuges from globalization for American entrepreneurs.

But that is little solace as we revert back to being an agricultural nation. And it is ironic that that is exactly what the British Empire had planned for their American colonies 250 years ago. Here’s Adam Smith trying to talk the colonists into remaining country bumpkins (Wealth of Nations, page 299):

“Were the Americans, either by combination, or by any other sort of violence, to stop the importation of European manufactures, and, by thus giving a monopoly to such of their own countrymen as could manufacture the like goods, divert any considerable part of their capital into this employment, they would retard, instead of accelerating, the further increase in the value of their annual produce, and would obstruct, instead of promoting, the progress of their country towards real wealth and greatness.”

Either Smith was a buffoon, or an intelligence agent acting on behalf of the British Empire trying to keep America down. Luckily, our forefathers didn’t listen. They threw up tariffs, and launched an industrial revolution of their own. Today, that is all being undone, as we race down the path to being the Cupcake Superpower.

It’s All Your Fault

Thomas L. Friedman’s job at the New York Times is to make you feel like being kicked out of the middle class is your fault. From this column:

“…median incomes are falling, inequality is rising and high unemployment remains persistent. How to adapt? It will require more individual initiative.”

See? It’s your fault for being lazy. It’s got nothing to do with the globalization- and mass-immigration policies that Friedman pushes.

The Left acts like “tax cuts for the rich” are the only driver of inequality. And that’s what I call The Big Lie of the Left. By championing off-shoring and mass-immigration, the Left is equally culpable along with the Right for the pulverization of the middle class.

Warren Buffett Sucks the Blood of Minnesota

Last week, IBM announced that it is moving manufacturing jobs from its huge Rochester, Minnesota facility to Guadalajara, Mexico. Industry analysts think about 2,500-3,000 jobs will be lost. IBM didn’t say how much they will pay their new factory workers in Mexico, but if they pay anywhere near the prevailing rate, it will be far lower than what they have been paying in Minnesota.

Profits will surge, of course, and a nice chunk of those dividends will be paid out to America’s jolly old grandpa, Warren Buffett, who is a large shareholder. Buffett is famous for “not understanding technology” but he seems to understand carpetbagging technology just fine.

The facility which made servers, and hardware to run big-data and cloud systems, is one mile long, and about half the size of the Pentagon. How long before it is shuttered?

Read more in: Warren Buffett’s Plan to Destroy America.

Shark Tank Tones Down Anti-Americanism

If you have never seen ABC’s Shark Tank show, here is what it is: entrepreneurs come on and pitch their business propositions to the “sharks” – five investors, the most famous of which is Mark Cuban. If the sharks like a business, they negotiate a deal with the entrepreneur.

When I first started watching this show, I was jarred by how the sharks insisted that production be done in China. Of course, I knew that sort of thing was going on, that venture capitalists had been asking entrepreneurs about their “China strategy” for many years now. But to see it on TV made it more real.

So, if a patriotic American came on the show and said that she wanted to manufacture her product in the USA, the sharks would not invest, and would make a lot of negative remarks about how being patriotic is “closed minded,” foolish, etc.

One such patriotic American was Donny McCall, who insisted on manufacturing his Invis-A-Rack product for pickup trucks in the USA. The sharks wanted nothing to do with him. That was on February 24, 2012 (episode #2 of season #3).

In recent episodes, I had noticed that the show had toned down its anti-American rhetoric, and I thought: “aha, just like Walmart and Apple paying lip service to creating jobs in the USA.” Then on February 15, 2013 (episode #16 of season #4), Shark Tank did an update on Donny McCall, who is now manufacturing his product in Iowa. It’s too early to tell if the product will be a success or not.

So, the moral of the story is that the sharks were wrong, right? Not so fast. Keep in mind that nothing has changed. The deck is still stacked in favor of China. The yuan is still pegged to the dollar, there are no protective tariffs to encourage domestic manufacturing, etc.

Even worse, if Invis-A-Rack is a success, Mr. McCall might soon have a Chinese man knocking on his door, offering to buy him out, or face having his product knocked-off, and made in China for a fraction of the cost. That happens. A Chinese man will literally knock on your door, and he will bring with him a sample of the product so that you can see that he is not joking and that the quality is comparable.

Or a large retailer will help a competitor set up in China. American retailers have a long history of undermining domestic manufacturing companies. Or maybe one of the sharks will go into business against McCall.

This, by the way, is the reason why bringing in “magical” immigrant entrepreneurs to create jobs for us knucklehead Americans has not worked, and will not ever work. It doesn’t matter who you are because when you go to raise investment capital, you will be asked the same question that the sharks asked McCall: “What is your China strategy?”

So, the moral of the story is: don’t hate the player, hate the game. But also, we should hate the architects of the game such as David Rockefeller, and Walmart, which campaigned hard for NAFTA, etc. We should also hate the players that uphold the game, and seek to perpetuate it.

If all of your competitors are undercutting you by manufacturing in China, by all means, move your plant to China and compete with them. But your political position should support policies that re-stack the deck in the USA’s favor so that you can one day bring your factory home.

And one last thing about Shark Tank: in the intro to the show, they describe shark Robert Herjavec as “the son of an immigrant factory worker.” They don’t say “mere factory worker” but it still rubs me the wrong way. As if his father was a liability because he was a blue-collar worker. It strikes me as condescending, and even insulting to a man whom I’m sure worked very hard to give his son every advantage within his power to give.

The big story is the trend where more-and-more companies and politicians are feeling the need to pay lip-service to creating jobs in the USA, because that is most-certainly not our policy today. Maybe one day this trend will turn into an actual policy shift, though I suspect that companies like Walmart are just trying to ride out the storm until the American people are distracted by something else, and patriotism is killed off for good.

The Carpetbagging of Detroit

Michigan Governor Rick Snyder declared a fiscal emergency in Detroit today paving the way for the city government to be taken over by the state. As this is discussed in the coming weeks, you will hear a lot of talk about how Detroit’s auto plants went south. And that is certainly true, but some of those plants went north to Canada.

In the Auto Pact of 1965, factories were sent across the Detroit River to Windsor and southern Ontario. Here is a map of Detroit/Windsor where you can see the Detroit River (click to enlarge):

Detroit River

What was the point of sending plants a few miles across the river? Greed of course. Corporate profits. Wages were lower in Canada at the time, and the welfare of Detroit was simply not an issue to the multinationals that run the global economy. And like I say in my book, Dark Arts of the American Oligarchy, “globalization” is just a euphemism for the carpetbagging of America. Detroit is “gone with the wind” just like the Old South. The difference is that Detroit didn’t deserve to be razed to the ground.

China-WTO Meme Spreading

A long time ago, I added the chart below to my food-stamps page, along with this paragraph:

“When China was admitted to the World Trade Organization in 2001, tariffs were lowered, and it became very profitable for American companies to relocate production to China’s sweatshops. Millions of American jobs were lost, and those former workers have piled up on the food-stamp rolls.”

Click chart to enlarge:
Food-Stamps-China

During the presidential campaign, when food-stamps were an issue, my food-stamps page got a good amount of traffic: 285,000 page views for the year. And I gave permission to other bloggers to publish my chart, which some of them did.

So, I’m taking at least partial credit for what I’m calling the China-WTO meme, which is that the economic back of the USA was broken on December 11, 2001. In case you haven’t noticed, it’s been nothing but economic/financial chaos since then.

And the meme is spreading. You can see it at the 14 minute mark of the video below when John McLaughlin gives “The Bummest Rap of the Year Award” to Bill Clinton:

“Okay, the bummest rap: The rap recited by Bill Clinton to a throng of Democratic Convention delegates that the Republican Party’s policies are responsible for the global economic crisis. Experts say the cause of the ongoing crisis is trade imbalances created by then-President Clinton about 20 years ago when he granted China most-favored-nation trading status and when he — and then negotiated World Trade Organization membership for China.”

However, China’s WTO status did not become official until after Republican George W. Bush was sworn into office. Bush was all for China joining the club, so while Clinton negotiated the deal, Bush permitted it to sail through. While Clinton did NAFTA and WTO, he couldn’t have done it without help from Gingrich and Bush. Destroying America is a bipartisan project.