Ok, I understand the propensity to wish that all of the manufacturing jobs that we’ve lost to China could somehow, magically, be returned to the land between the oceans. I also wish all of the hair that fell out of my head from 1980 until yesterday would magically start growing again. Neither are going to happen.
China has spent inordinate amounts of money to drive its currency downward and, in doing so, has created domestic inflation and their own version of a housing bubble that is now, and will continue to weaken its competitiveness. And yes, China’s leaders, fearing unemployment, will value their currency at whatever pace they deem appropriate, despite the hoo-ha wafting out of Washington.
But we must face the fact that America is never going to get those labor-intensive, assembly line jobs back from China, regardless of what China does or does not do to it’s currency value. We need to stop fighting one another and start doing what is necessary to get more people working at high-value creative ideation and the distribution end of the supply chain. In the manufacturing end, we should focus on the economies-of-scale where one person can be productive, and well paid, by operating multiple machines. America still manufactures nearly as many “things” as China, we just do it with fewer and fewer people.
We should also consider offering China to invest its money supply in our toll bridges, toll roads, rail systems, etc., across the U.S., in PARTNERSHIP with U.S. companies. They could build them, operate them, and own them for a set number of years until they get their investment back, plus interest, then transfer ownership of them to the U.S. and let the U.S. maintain them. It may be the only way that we can afford to rebuild our infrastructure given the dire straits of the economy.
But the main thing we have to do is stop thinking that the middle class can be maintained by factory jobs alone. It is just not going to happen. We have what could be a thriving tourist-oriented nation, sea-to-shining-sea. Hotels, dining, and sporting events, promotions, recreational destinations, etc., are what we do best. Have you SEEN foreign films or a foreign “Broadway”? According to the U.S. Commerce Department, 801,000 Chinese tourists visted the country last year, adding $5 billion to our economy. We should double or triple that as quickly as possible, but for security reasons, visas are hard for Chinese to come by; but we could easily interject $115 billion into the highly unionized hotel, restaurant and gaming industries in conjunction with those tourists. Middle-class friendly unions.
America does not plan, we do not save, we over-consume, we don’t invest in our roads, bridges and other infrastructure projects, we don’t place enough focus on education, and we cannibalize each other based on an entertainment-intensive “news” industry that fuels political divisiveness.
Until we change ALL of these insanely short-sighted tendencies, we will NEVER have any leverage to deal with China from a position of strength.