Guest Post by Patrick J. Buchanan
Is America still a serious nation?
Consider. While U.S. elites were denouncing Donald Trump as unfit to serve for having compared Miss Universe 1996 to “Miss Piggy” of “The Muppets,” the World Trade Organization was validating the principal plank of his platform.
America’s allies are cheating and robbing her blind on trade.
According to the WTO, Britain, France, Spain, Germany and the EU pumped $22 billion in illegal subsidies into Airbus to swindle Boeing out of the sale of 375 commercial jets.
Subsidies to the A320 caused lost sales of 271 Boeing 737s, writes journalist Alan Boyle. Subsidies for planes in the twin-aisle market cost the sale of 50 Boeing 767s, 777s and 787s. And subsidies to the A380 cost Boeing the sale of 54 747s. These represent crippling losses for Boeing, a crown jewel of U.S. manufacturing and a critical component of our national defense.
Earlier, writes Boyle, the WTO ruled that, “without the subsidies, Airbus would not have existed … and there would be no Airbus aircraft on the market.”
In “The Great Betrayal” in 1998, I noted that in its first 25 years the socialist cartel called Airbus Industrie “sold 770 planes to 102 airlines but did not make a penny of profit.”
Richard Evans of British Aerospace explained: “Airbus is going to attack the Americans, including Boeing, until they bleed and scream.” And another executive said, “If Airbus has to give away planes, we will do it.”
When Europe’s taxpayers objected to the $26 billion in subsidies Airbus had gotten by 1990, German aerospace coordinator Erich Riedl was dismissive, “We don’t care about criticism from small-minded pencil-pushers.”
This is the voice of economic nationalism. Where is ours?
After this latest WTO ruling validating Boeing’s claims against Airbus, the Financial Times is babbling of the need for “free and fair” trade, warning against a trade war.
But is “trade war” not a fair description of what our NATO allies have been doing to us by subsidizing the cartel that helped bring down Lockheed and McDonnell-Douglas and now seeks to bring down Boeing?
Our companies built the planes that saved Europe in World War II and sheltered her in the Cold War. And Europe has been trying to kill those American companies.
Yet even as Europeans collude and cheat to capture America’s markets in passenger jets, Boeing itself, wrote Eamonn Fingleton in 2014, has been “consciously cooperating in its own demise.”
By Boeing’s own figures, writes Fingleton, in the building of its 787 Dreamliner, the world’s most advanced commercial jet, the “Japanese account for a stunning 35 percent of the 787’s overall manufacture, and that may be an underestimate.”
“Much of the rest of the plane is also made abroad … in Italy, Germany, South Korea, France, and the United Kingdom.”
The Dreamliner “flies on Mitsubishi wings. These are no ordinary wings: they constitute the first extensive use of carbon fiber in the wings of a full-size passenger plane. In the view of many experts, by outsourcing the wings Boeing has crossed a red line.”
Mitsubishi, recall, built the Zero, the premier fighter plane in the Pacific in the early years of World War II.
In a related matter, the U.S. merchandise trade deficit in July and August approached $60 billion each month, heading for a trade deficit in goods in 2016 of another $700 billion.
For an advanced economy like the United States, such deficits are milestones of national decline. We have been running them now for 40 years. But in the era of U.S. economic supremacy from 1870 to 1970, we always ran an annual trade surplus, selling far more abroad than Americans bought from abroad.
In the U.S. trade picture, even in the darkest of times, the brightest of categories has been commercial aircraft.
But to watch how we allow NATO allies we defend and protect getting away with decades of colluding and cheating, and then to watch Boeing transfer technology and outsource critical manufacturing to rivals like Japan, one must conclude that not only is the industrial decline of the United States inevitable, but America’s elites do not care.
As for our corporate chieftains, they seem accepting of what is coming when they are gone, so long as the salary increases, stock prices and options, severance packages, and profits remain high.
By increasingly relying upon foreign nations for our national needs, and by outsourcing production, we are outsourcing America’s future.
After Munich in 1938, Neville Chamberlain and Lord Halifax visited Italy to wean Mussolini away from Hitler. The Italian dictator observed his guests closely and remarked to his foreign minister:
“These men are not made of the same stuff as the Francis Drakes and the other magnificent adventurers who created the empire. These, after all, are the tired sons of a long line of rich men, and they will lose their empire.”
If the present regime is not replaced, something like that will be said of this generation of Americans.
As for “Miss Piggy” no one seems to want to mention that she had gained something like 60 pounds in a matter of months, something that isn’t really good for a beauty contest winner to be doing.
As for the trade issue, he is the only politician since we became enamored of NAFTA that seems willing to discuss it in any realistic manner aimed at benefiting American workers and American financial conditions first instead of putting us in second place.
I normally like Buchanan’s writing but this one is all over the place. The whole Boeing v. Airbus thing is completely valid but I think he misses the point. If the EU wants to prop up a state run aerospace company, fine, but tariff the shit out of those planes when they want to sell them into the US market. Look around, there are plenty of Airbus flying for US owned airlines.
While I think it does make national security sense to have an aerospace industry, including civilian aircraft mfr’s, the whole trade issue Trump beats on I don’t believe is focused on $300M planes. I’m more concerned about all the shit that fills the Wal-Marts of our nation that once upon a time was made here in the USA. We’ve outsourced all our light manufacturing in an effort to have cheap stuff. Bring that back. Sure, a toaster might cost $50 instead of $20, but I expect it’ll last longer and my purchase will provide for a family in the USA, not China. That’s what I want.
Hey, everyone ………… GUESS WHAT HAPPENS TOMORROW, Oct. 1, 2016
People are calling it a game changer. SHOWTIME, baby. Seriously.
I’ll give you one hint. It has to do with China.
Now, guess!!! Or, google your ass off.
Do you think it will really cause an impact STucky? How important do you think the SDR basket really is?
Maggie wins!!!
I don’t know Maggie. You tell me. I don’t necessarily enjoy/follow this kind of stuff.
But, the writer below believes it’s a big deal.
Maggie,
I doubt the SDR thing will have any important effect immediately, but over the longer run it will be a game changer for most nations, particularly the US, and control their currencies to the extent it will end up with a world currency effectively replacing all sovereign national currencies.
I imagine that world currency will be electronic and establish de facto control of every individual person on earth by a central ruling authority independent of national governments.
Ready for ‘Showtime’: China Becoming Center of Global Financial Activity
The China-led “Belt and Road” project is superior to TTIP (Trans-Atlantic Trade and Investment Partnership) as a global economic cooperation project, Tom McGregor, Commentator and Editor at CNTV told Sputnik, adding that TTIP is actually about Big Business seizing control of US-EU trade.
China has transformed into the world’s second largest economy and the world’s largest trading nation with the Chinese currency, remninbi (RMB), ready for “showtime,” Tom McGregor, Commentator and Editor at CNTV (China Network Television), emphasized in his interview with Sputnik.
On October 1, 2016 the International Monetary Fund (IMF)’s Special Drawing Rights (SDR) basket will be officially expanded to include the yuan (renminbi, RMB).
SDRs are regarded as “safe reserve assets,” McGregor noted, adding that Central Banks rely on such currencies to safeguard financial stability.
Why the EU Benefits From Inclusion of the Yuan in IMF’s SDR Basket
The journalist called attention to the fact that Beijing’s journey to obtain SDR for the RMB was no walk in the park. China had to meet certain requirements, which included a strong exports market and “free-usable” currency.
To ensure the RMB could be accepted by the IMF, the People’s Bank of China (PBOC) has recently made proper adjustments.
Why did the IMF support China’s renminbi internationalization project and the inclusion of the yuan in the SDR basket? Is it possible to say that the European financial elite are seeking to diminish the US dollar’s influence?
“A freely-convertible yuan makes it much easier for those doing business with Chinese companies to have more convenient access to China’s currency. Previously, all international trades had to be converted via US dollars, but that brings added costs to traders and investors, who may come from different countries, and do not have easy access to US dollars,” McGregor explained.
“The EU benefits as well with the inclusion of China’s yuan in the IMF’s SDR currency basket. Instead of buying up US dollars to arrange business deals with Chinese companies, European companies can more easily switch to the Chinese yuan. Meanwhile, China is developing a new international bank-wire system that no longer uses SWIFT (Society for Worldwide Interbank Financial Telecommunication) and developing a new technology called CIPS,” he told Sputnik.
Indeed, back in October 2015, Beijing launched the CIPS — the China International Payments System — as an alternative to the Western SWIFT payment system.
McGregor underscored that China’s cross-border international payment system allows businesses operating in Asia and Europe to wire RMB funds to bank accounts in China. Previously such transactions were only carried out via off-shore bank accounts — primarily in London and Hong Kong — through SWIFT.
China’s ‘Free Trade Status’
Along with the internationalization of the yuan, China is seeking “free trade status” in the World Trade Organization (WTO), which will forbid foreign powers from imposing high anti-dumping tariffs on Chinese imports.
China became a member of the WTO in December 2001. In accordance with China’s WTO Accession Protocol, the country is due to be granted “free market status” no later than December 2016, McGregor remarked.
Is there any possibility that the US leadership or ASEAN nations will throw a wrench in the works?
“Washington and EU leaders want to prevent China from gaining “free market status,” but their efforts will cause more harm than good, since the IMF, WTO and World Bank (WB) can impose tough penalties on countries that refuse to recognize China’s ‘free market status,’ starting in 2017. The US and EU are engaging in bluffs, hoping Beijing will back down and act more subservient to them, but instead the strategy will backfire, since China won’t buckle under and would call their bluffs. There will be no more “Red Lines” threats after Obama departs from the White House early next year,” McGregor told Sputnik.
On the other hand, “the ASEAN economy is enjoying a stage of rapid expansionand their governments are becoming more pragmatic,” the journalist pointed out.
“China’s manufacturing industry is facing more challenges and Chinese factories are looking to move to Southeast Asian countries on account of lower labor and operational costs. Countries in ASEAN are eager to engage in more economic cooperation, as well as cross-border trade and investments with China, so they have no real motive to ‘throw a wrench in the works,’ when it comes to playing games on China’s ‘free market status’,” the CNTV editor elaborated.
Rothschilds, Other Private Bankers Expanding Operations in China
Many prominent European private investors are strengthening their ties with China. For instance, La Compagnie Financiere Edmond de Rothschild (LCFR) started operations in Shanghai in 2006. Does it mean that Asia is steadily becoming the center of global financial activity?
“It’s inevitable that more European financial institutions will expand operations into China, especially Shanghai, which seeks to become the next ‘New York of Asia’ and a financial capital powerhouse. Shanghai stands poised to rise to greater heights. It’s a coastal city, near South Korea, Japan and the ASEAN countries,” McGregor answered.
“Look to see Hong Kong dwindle in influence as an Asian global financial hub; Shanghai will benefit as more bankers and financiers leave Hong Kong and search for greener pastures in Asia, such as in the cities of Shanghai, Singapore and even Jakarta. Most major multinational European banks have already opened up branches either in Shanghai or elsewhere in China. Those who have not arrived will come sooner or later, because to ignore China would not be to their financial benefit,” he stressed.
Why ‘One Belt, One Road’ Project is Superior to TTIP
Much in the same vein, many Western governments jumped on the China-led AIIB’s (Asian Infrastructure Investment Bank) bandwagon last year.
Why did EU member states rush to join the AIIB regardless of Washington’s vocal displeasure?
“Why look a gift horse in the mouth? The AIIB is a gift for EU member states, since most liquid funds originate from China. To say no would be like saying no to a gift from a friend or family member,” the CNTV editor underscored.
“The AIIB is the finance mechanism for funding major infrastructure projects connected with China’s ‘One Belt, One Road’ initiative. To build a massive infrastructure, you need more companies involved to build roads, airports, energy and transport hubs. European companies can offer their expertise and machinery for the construction of infrastructure projects. By signing on to AIIB, EU member states can share in win-win benefits,” he highlighted.
Do EU member states see China’s New Silk Road initiative as an alternative to the controversial TTIP (Transatlantic Trade and Investment Partnership) project being championed by the US?
“The ‘Belt and Road’ is superior to TTIP (Trans-Atlantic Trade and Investment Partnership) as a global economic cooperation project,” McGregor stressed.
“In the ‘Belt and Road,’ a country can say, “yes or no” when deciding to build a new infrastructure project in their country with China’s help. If they say yes, the country will get more infrastructure, such as roads and bridges. If they say “no” that’s fine, because that would mean more available cash funding for another country to use for their ‘Belt & Road’ projects,” he explained.
“The TTIP is not about building more roads, it’s about Big Business seizing control of all cross-border trade between the US and EU nations. The TTIP enforces very strict trade rules that could lead to more bankruptcies of small companies and exporters,” the CNTV editor emphasized.
https://sputniknews.com/politics/20160922/1045600356/china-center-global-finance.html
SDR: A whole bunch of fiat currency backed by 5% gold!
Ya…. that should work real good………
What’s missing here is that it is US companies that are outsourcing manufacturing, engineering, and telecommunications (call centers) to low wage regions…It is US companies that write laws, lobby government, bribe politicians, and hide money overseas…It is not the government doing this, this is US corporations supporting candidates who will do what they tell them to.
From Hillary’s pay to play bullshit, to Trump’s “I’ve given money to all these politicians”…The people think they have a choice. Go ahead and try to buy a TV, a pair of sneakers, or a toaster make in America….
The people have no choice, just the illusion of choice…