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Richmans' Trade and Taxes Blog
Sidney Sherman traces start of America's decline to giving away our manufacturing to Asia
In today's American Thinker, Sidney Sherman traces America's decline (The Looting of America). He starts with our willingness to give away our manufacturing to Asia. Here is a selection:
Phase 1: Manufacturing 1990-2000
Well before the Clinton era, in 1991, I remember an acquaintance telling me that California would no longer be a manufacturing power, that its future was as an import-export center. I laughed it off at the time, but within five years, I was startled by this acquaintance's prophecy. Locally, entire business parks became ghost towns. Machine shops, PC board fabrication, painting companies, and a host of other small enterprises that supported larger manufacturing operations vanished from the landscape.
As the Clinton years dragged on, we became numb to the looting. As it became grander and bolder, we watched entire factories pack up and move. We heard the "giant suckin' sound." However, it wasn't coming from the south, but from across the Pacific. By the end of the '90s, we were just beginning to realize that we couldn't buy anything that wasn't made in China. Welcome to the "global economy."
As we document in our book, starting in 1996, Asian governments began to dramatically increase their dollar reserves. The inflow of foreign government money caused the dollar to rise to an artificial level which caused trade deficits and the loss of American market share and industry.
Some Asian governments built up their dollar reserves in order to protect themselves from currency crises. The Federal Reserve should have responded by building up our reserves of their currencies at the same time, but did not.
Other Asian governments, including China, built up their reserves in order to steal our industries and we let them do so, never once insisting on balanced trade. To this day, we let them do so!
Comment by JTR, 3/28/2010:
Some of the rest of the article is pretty extreme in its claims and predictions. We are facing the last free election in the USA?!? This claim is almost certainly inaccurate.
Comment by MV, 3/30/2010:
Reading about current and past US economics is similar to reading about a terrible industrial accident... What do America's leaders need to happen before they act on Fair Trade (or) Illegal Immigration (or) ending one or more of our 3 wars (Bosinia, Iraq, Afghanistan).
Is 65 years after WWII too soon to bring the troops home from Japan and Germany? What about N. Korea?
Economist -Federico Pareto, discovered 20% of the people own 80% of the wealth. Until US trade policy becomes a problem for our golden 20%, there is no problem so big that it can not be ignored.
American's might read up on Russian history. The peasants knew a thing or two about phoney crony Capitans of industry.....The Russians have a phrase.... "Who is to blame? Where is the money? What should be done?" Let's start with the answers to these questions, and then we can move forward.
Journal of Economic Literature:
Atlantic Economic Journal: