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October 20, 2010
The Smell Is Old And Bushy

If you click through to the NYTimes to read the article referenced in the last post, take an additional minute to read this opinion piece as well.

“There is oil in the Middle East; there is rare earth in China,” declared Deng Xiaoping, the architect of China’s economic transformation, in 1992. Indeed, China has about a third of the world’s rare earth deposits. This relative abundance, combined with low extraction and processing costs — reflecting both low wages and weak environmental standards — allowed China’s producers to undercut the U.S. industry.

You really have to wonder why nobody raised an alarm while this was happening, if only on national security grounds. But policy makers simply stood by as the U.S. rare earth industry shut down. In at least one case, in 2003 — a time when, if you believed the Bush administration, considerations of national security governed every aspect of U.S. policy — the Chinese literally packed up all the equipment in a U.S. production facility and shipped it to China.

My guess? Corporate pressure. I think Cheap Labor Republicans allowed the production of critical high-tech components to be outsourced to China--not exactly our BFF in the arena of national security--so their corporations could, in turn, buy the aforementioned high-tech components more cheaply than they could buy American-made products.

National security be damned--we could save a quarter each on those things!

National security only matters to that kind of mind when it can be used to weaken labor. If the USofA goes under, these big multinational corporations can just shrug, restructure (def: cut about 25% of their workforce and pay upper level management huge bonuses), and keep selling to the rest of the world.

Posted by AnneZook at 02:17 PM | Comments (0)
Do You Belive In the Confidence Fairy?

Forced into the move because they're currently working with a 'coalition' government, albeit one led by the Conservatives, who have a slight vote edge, the U.K. is about to test the neo-con theory that massive government cutbacks stimulate economic growth.

Eliminating nearly half a million jobs is just the start of the plan. People in public housing (the already poor) are going to have to pay more to keep a roof over their heads. Less money for the army that operates in the full light of day but, amid cutbacks almost everywhere else, more money for shadows-of-the-night covert intelligence agencies.*

From economist Joseph E. Stiglitz:

The confidence fairy that the austerity advocates claim will appear almost never does, partly because the downturns mean that deficit reductions are always smaller than was hoped.”

This is true. Unfortunately, you can't make people believe in reality. The Right is always quick to insist that something else--media bias or a liberal plot or an unlucky alignment of Jupiter and Mars--prevented austerity from producing plenty.

The NYTimes does a reasonable job of letting the Left and the Right each put forth their theory, without contradiction, early in the story. Later, the details start to come clear.

Britain has about six million public sector jobs, about one fifth of all jobs in the economy, according to the Office for National Statistics. But it was not clear what the impact of shedding 490,000 of them — about 8 percent of the total — would have on unemployment.

We all know that the right wing believes in the Confidence Fairy.

I guess only time will tell if the Confidence Fairy is willing to return the favor.


* Bit of 'tude there, sorry.

Posted by AnneZook at 01:51 PM | Comments (0)