Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
This book is more than a year old but it is not out-of-date. Peter Navarro and Greg Autry may be accused of China bashing but as they write, “It’s not China bashing if it’s true”. And they have their facts right. Peter is a professor of economics and public policy at the University of California at Irvine and Greg Autry is an economist for the American Jobs Alliance and the Coalition for a Prosperous America. They accuse China of every trade sin from marketing defective products, employing tariff and non-tariff barriers and export subsidies, engaging in currency manipulation, attempting to monopolize rare earths, stealing American technology, and engaging in cyber sabotage. This has cost millions of American jobs and diminished American economic and military power. Both parties are guilty of paying too little attention. And the American press and politicians are accused not only of turning a blind eye but justifying doing nothing by embracing free trade as an ideology.
If you have not been following our relations with China carefully this past decade, this book is MUST READING.
They quote Paul Krugman, “China has become a major financial and trade power. But it doesn’t act like other big economies. Instead, it follows a mercantilist policy, keeping its trade surplus artificially high. And in today’s depressed world, that policy is, to put it bluntly, predatory.”
The authors amass the facts to back this up.
The describe some of China’s internal problems and China’s foreign policy: its moves in Africa, its investments abroad and in the U.S. The reader who has not been following the news about China will have his eyes opened to its domestic and foreign policy and its cold war against the U.S. They expect, if we don’t balance our budget soon, it will become a hot war. If we delay long enough, China will win and we won’t even have the will to fight.
The authors argue that China’s trade policies are politically motivated, an attempt to weaken us as an industrial power and establish China as the world’s leading industrial and military power. They criticize liberal pologists and free trade Republicans. They propose a number of political actions, some that we can take ourselves and some requiring international action. We believe that there is no need to involve other nations. In fact, globalization is unrealistic and our international policies are weakening us.
As our readers know,we’ve written extensivelly about the trade deficit and we’ve recommended employing a variable tariff, which we invented and call a “scaled tariff”. It varies with the size of the deficit with a single country, increasing as the trade deficit increases and decreasing as trade is brought into balance. Employing it to counter China will bring trade into balance and restore our industrial power.
They quote Barack Obama, “I absolutely believe that China’s peaceful rise is good for the world, and it’s good for America.” This is a flight from reality. The authors, and I join them, consider our policies toward China to be based on fantasy. As the title of the book asserts, if China succeeds as it appears to be doing, the U.S. will disappear as a great power. They point to China’s ambitions in space and they quote China’s leaders. “All power flows from the barrel of a gun”-Mao Zedong. Only a great industrial power, as the authors point out, can make those guns. It was the number of our tanks and airplanes, not their superiority, that won WWII for us. If U.S. does not restore our industrial power, our children’s future will be bleak indeed.
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