Tag Archives: China

On The Emergence Of China, Or, Zhou Knew This Was Coming

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After doing a bit of mountain hiking a few days back, I had a chance to get involved in a great afternoon conversation with the Alliance for American Manufacturing’s Mike Wessel, who also serves as a Commissioner with the U.S.-China Economic and Security Review Commission; the conversation was about how we’re doing when it comes to our relationship with China.

As it turns out, the two events went well together, because what I’m hearing from these guys is that we have a great big ol’ mountain to climb if we hope to get back to a level playing field in our interactions with this most important country.

There’s news to report across a variety of issues; that’s why today we’ll be talking about trade, human rights, cybersecurity, poverty and development, and the methods by which you can apply “soft power” to achieve hard results.

The entirely unanticipated result: all of this will reveal the naïveté of Ron Paul when it comes to foreign policy; we’ll discuss that at the end.  

The King of China’s daughter

So beautiful to see

With a face like yellow water

Left her nutmeg tree

–From the song “The King of China’s Daughter”, by Natalie Merchant

So let’s start with the background stuff: the U.S.-China Economic and Security Review Commission exists today because of the legislative wars surrounding China being granted Most Favored Nation status back in the day.

At the time, there were concerns about the way China does business on the international stage, and the Commission provides a follow-on monitoring program to examine questions regarding the Chinese human rights record, issues related to economics, cybersecurity issues, the intentions of the Chinese military, and lots more.

The Commission issues annual reports to Congress, and this year’s report has just been released.

Now normally I would present a point of view, followed by a counterpoint; today, we’ll do the opposite: there are folks I listen to out there, including Thomas P. M. Barnett, who would tell you that you are not going to be able to keep spending $900 billion a year on the defense budget if you can’t find an opponent worth $900 billion a year, and China looks like that kind of opponent, in a number of ways that Al Qaeda never could…even if, in Barnett’s opinion, China is a great big paper tiger.

Al Qaeda will never build aircraft carriers, or intercontinental ballistic missiles; they’ll never put to sea in submarines or build a stealth fighter, and they darn sure aren’t going to be mounting military operations in space or engaging in cyberwarfare.

And yet, if you’re a defense contractor, a General, or an Admiral, that’s where all the money is; naturally, if the money goes away, some of those Generals and Admirals are not going to have the chance to “graduate” from the military and become defense contractor representatives themselves.

Put it all together, and some would tell you that the biggest battle facing the Military/Industrial Complex today…is making sure we’re always nervously looking under our beds at night, just to be safe.

You should also know that our first Secretary of the Treasury, Alexander Hamilton, convinced his brand-spanking-new country to put in place a series of protective tariffs. The intent was to foster manufacturing in the then-agrarian United States; this was intended to create a climate favorable for non-farm businesses and to allow a far more disparate group of immigrants to come to the new Nation than what would have occurred if the only major business activities around the country were farming-related.

So with all that in mind, let’s talk China.

The U.S.-China Economic and Security Review Commission (the USCC) wants you to know that China is very much on a knifedge: the country is ruled by the Chinese Communist Party (the CCP) and the People’s Liberation Army (the PLA).

The USCC would tell you that the primary goal of the CCP and PLA leadership is to “protect their phony-baloney jobs” and the corruption that goes with ’em (thanks for the line, Mel Brooks), and that they have to do a few things to keep those jobs safe: they have to find a way to make 900 million near-peasants into a middle class, quickly, because the peasants have seen how the other 300 million live, to secure markets and resources China has to begin to project power around the world, by military or other means, and they have to make extra sure that nobody in China, except the CCP, gets the opportunity to take over the political conversation – in other words, ensure that the “Arab Spring” doesn’t become the “Jasmine Spring”.

There’s more: in a country without something like Social Security, China’s population will age faster than any in history, and many of the 900 million seem to want to move from the country to the city in numbers so large that they literally can’t build cities fast enough.

So how does the Chinese Government deal with all this?

What China has been doing is seeking internal “quietude” by growing the economy through manufacturing, and they have decided to choose certain industries as the linchpin of “valuing up” that growth, so that China’s low-tech manufacturing becomes more high-tech. (Think computers and telecommunications, space, alternative fuel vehicles, aviation, green energy technologies, that sort of thing.)

China has decided that virtually the only way a foreign company can do business in any of the “chosen” areas is to mandate technology transfers that allow Chinese companies to obtain the methods and tools needed to compete with the foreign supplier down the road. (This is officially against WTO rules; China disputes that assertion. The USCC says they now make these demands in subtle ways that are less “enforceable”.) Chinese buyers are told to give preference to “state-innovated” technologies.

China also uses their currency as a way of “preferencing” the local economy. The Renminbi (RMB) is, according to most observers, deliberately undervalued in order to make Chinese goods cheap overseas and imported goods expensive at home. Mike Wessel would tell you it’s about 40% undervalued, and that that “trade tax” (my term, not his) costs the US budget about $500 billion a year, with a similar impact on State budgets. Despite much USA pressure and some recent upward valuation (roughly 6% last year), it looks like China is not going to move much on the RMB anytime soon.

Wessel anticipates China will spend about $1.5 trillion on anti-poverty subsidies to quell unrest over the next 5 years; that would become a lot more difficult if a revaluation were to occur.

During the 1990s China began to move to a free-market model that emphasized the growth of privately-owned businesses; Wessel says today China is going back to promoting the State-Owned Enterprises (SOEs) to the detriment of a free market.

This has been bad for our own industrial strategy, such as it is, which assumed we would be selling China lots of high-tech goods, even as they sold us cheap goods. That has not worked out; in fact, China is now the largest market for cars and cell phones, among other products…and those products are not being manufactured in the USA.

It’s reported that the theft of intellectual property is the normal way business is done in China; as an example Wessel notes that something like 80% of the software on Chinese corporate computers is stolen.

We are told that the PLA is looking to create an “area of influence” that extends from the South China Sea to space; to this end the first Chinese aircraft carrier is being readied for service, a stealth fighter is in development, antiship missile systems are being upgraded, and a “counterspace” capability has been demonstrated. (The idea is that Chinese satellites explode near other satellites, thus disabling them. The USA and Russia seem to have similar capabilities.)

Chinese military doctrine, Wessel tells us, advocates shutting down the “network-centric” model of US military operations; it is believed that a significant campaign of computer-based intrusions and attacks on the USA have already taken place, including two events that took place at Department of Defense-operated satellite-control facilities that seem to have been external attacks.

Wessel anticipates that a war with China would begin with China attempting to disable various USA computer networks and infrastructure; the resulting confusion would be used to China’s advantage.

Beyond that, Wessel worries that we’re buying so much of our telecommunications and computing infrastructure from China that we may be vulnerable to being spied upon by our own laptops; he cited two examples of this problem: a computer sale to the State Department that involved Lenovo laptops and classified data, and a sale of network equipment by Huawei to Sprint that might have allowed classified computer traffic to be compromised.

Chinese spying, Wessel would tell you, is widespread and not limited to government: trade secrets are up for grabs in a big way, and even the US Patent and Trademark Office had to upgrade its security after it discovered patent applications were being snatched out of the system and appearing as Chinese products, with Chinese patents, before the applications could even be acted upon in the USA.

Wessel also wants you to understand that China uses “soft power” to advance its interests: there are lots of “hosted” opportunities to study in China, former military officers of various nations, including the USA, are recruited as “representatives”, and there are lots of “get to know us” opportunities that have been created around the world; all of this is intended to “sell” China in ways we do not.

And with all that said, let’s talk about Ron Paul.

Paul’s attitude toward China seems to be that we should allow free, unimpeded trade, and that the currency manipulations about which many complain would not exist if we went back to a gold standard. Paul stated in 2001 that:

Concern about our negative trade balance with the Chinese is irrelevant. Balance of payments are always in balance. For every dollar we spend in China those dollars must come back to America. Maybe not buying American goods, as some would like, but they do come back and they serve to finance our current account deficit.

Free trade, it should be argued, is beneficial even when done unilaterally, providing a benefit to our consumers.

If I’ve been paying attention during the recent Republican debates, this is still what Paul believes about China, and here are a couple of thoughts about how he’s got it entirely wrong:

Paul may not like it, but Hamilton succeeded when he used tariffs to jump-start a manufacturing economy in this country, and not having free trade is working pretty well for China as well. Unfortunately, it’s working very badly for us.

On the one hand, Wal-Mart and all the others who import less-expensive products from China have done a great job of masking the fact that incomes have been either stagnant or declining for about 99% of us, but Wessel would say that’s been at the cost of sending millions upon millions of jobs to a country that is working hard on every level to ensure we can never again compete as a manufacturing nation – and while we thought we would make up that difference with our high-tech advantages, theft and spying and a devalued currency and “partnerships with benefits” and protectionist “state-innovation” rules have made sure we don’t.

A gold standard won’t fix this, and simply advocating that we allow China unfettered access to USA markets while they rob us blind seems a bit like suggesting everyone leave their houses unlocked so that the market can more efficiently decide which ones are the best for burglars.  

So we’ve covered a lot of ground today, and let’s wrap this thing up with a summary of where Commissioner Wessel says we’ve been:

We have a competitor in China who will do more or less anything to keep its current political leadership in power, even as that leadership is forever worried that 900 million of its citizens will discover that you can overthrow a government.

The PLA is busy as well, with the South China Sea and everything above being the “area of influence”; computer warfare seems to be the next phase.

“Soft power” is also being applied; we have former military officers and Chinese language students and lots of other folks either hearing or telling China’s story all over the world and we don’t do a good job of answering back.

All the while, the CCP is working hard to create a higher-tech Chinese economy, by hook or by crook, and that’s putting the future of our own economy at risk, not to mention the operations of our government.

We, as a people, seem to be unaware of all of this, and that plays out in the form of ignorance in our politicians, with Ron Paul being a recent prominent example.

So now it’s up to you to figure out what all this means: is this really a substantial threat that we have to defend against (and there’s lots of evidence to suggest it is), or is this an effort to find a way to keep spending that $900 billion every year?

My take: Wessel’s not a defense lobbyist, even as he is trying to promote manufacturing in the USA, and there is a lot of evidence to support his thinking; with all that in mind I’m more inclined to believe he’s sending a warning we better pay attention to than he is seeing Commies under the bed.

Nonetheless, there are lots of folks who would like to keep stackin’ that big cheddar, at your expense, and even as we think very hard about China, we better also keep in mind that Northup Grumman could be just as dangerous.

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Green Makes Green ($): How Sustainability Creates Jobs

The #1 argument by corporations and politicians who oppose reducing pollution, fighting climate change and moving America to a cleaner, greener, more sustainable future is that doing so will cost the country jobs and hurt the economy. In fact, since many corporations and politicians claim to believe that climate change is a serious issue that must be dealt with (eventually), the “sustainability = job killer” argument is essentially the only one they have.

And it’s a lie — scaremongering from dirty energy companies so they can keep polluting at current levels, protect their unsustainable energy monopoly and maximize their short-term profits. They claim that responsibly cleaning up their own poisonous mess — instead of “socializing” the cost of dealing with it by spewing it into the air or dumping it in our oceans and streams — will force them to raise energy rates. This is a way to blackmail small businesses into defending the status quo and joining their efforts to kill any legislation that promotes efforts to reduce pollution or invest in sustainable energy. But the dirty energy companies are simply fighting to be the last of the dinosaurs, forestalling the inevitable day when they join the fossils that created their fortunes.

The green economy isn’t some untested theory or pie-in-the-sky fantasy — it’s already here, and its kicking butt. So here are some links that show why reducing pollution and embracing sustainable energy and green technology will create jobs and give our economy the boost it needs.

If you think the green economy won’t create jobs, you might want to tell those dirty hippies at the multinational bank HSBC, who found this in a 2009 report:

Global revenues from climate-related businesses such as energy efficiency rose by 75 percent in 2008 to $530 billion and could exceed $2 trillion by 2020, HSBC Global Research estimated on Friday.

In the 2006 Stern Review on the economics of climate change, climate-related revenues were forecast to climb to $500 billion by 2050.

“We can see that this seemingly huge figure has already been surpassed well ahead of time as more and more businesses adapt their business model,” said Joaquim de Lima, global head of quant research for equities at HSBC.

You also might want to tell the Chinese. A January New York Times article found that China’s decision to become the leader in producing solar panels, wind turbines and other renewable energy technologies is paying off:

Renewable energy industries [in China] are adding jobs rapidly, reaching 1.12 million in 2008 and climbing by 100,000 a year, according to the government-backed Chinese Renewable Energy Industries Association.

The Pew Charitable Trusts released a report finding that, despite “a lack of sustained government support”, America’s clean energy economy grew two and a half times faster than overall jobs from 1998 to 2007.

Pew found that jobs in the clean energy economy grew at a national rate of 9.1 percent, while traditional jobs grew by only 3.7 percent between 1998 and 2007.  There was a similar pattern at the state level, where job growth in the clean energy economy outperformed overall job growth in 38 states and the District of Columbia during the same period.

A group of economists at Economics for Equity & Environment released a study this week that found that reducing emissions, becoming energy independent through clean energy and embracing the green economy would generate net job growth. The study goes on to debunk many of the myths that say reducing emissions and investing in the green economy would hurt the larger economy. A study by the Union of Concerned Scientists came to the same conclusions about the green economy generating job growth, as did a recent study conducted by UC Berkeley that examined the effects that implementing the Global Warming Solutions Act (AB 32) would have on California’s economy.

But the clean, green gravy train is leaving the station, and if America isn’t careful, we could miss it. Michael Northrop tells us that “the clean energy gold rush” has already begun. However, due to a lack of policies to provide a stable marketplace for green tech investment, we’re letting that $2 trillion slip through our fingers:  

Even with growing unemployment, America seems incapable of recognizing a golden opportunity. With no goal or effective policy framework, not only are we shipping oil dollars to the Middle East, we are watching our solar, wind, and other renewable energy dollars begin flowing to Asia. (snip)

Without the economic security of guaranteed purchase contracts, companies will keep relocating overseas. Evergreen Solar, an up-and-coming solar manufacturer in Massachusetts, recently disclosed all of its manufacturing will be based in China.

So don’t let yourself or anyone else be fooled by the dirty energy industry’s lies. They want our heads in the tar sands because relying on fossil fuels makes them money, regardless of what it does to the environment, your health or anything else. And they’re not the only ones. As Thomas Friedman wrote in a NYTimes op-ed this week:  

Indeed, I suspect China is quietly laughing at us right now. And Iran, Russia, Venezuela and the whole OPEC gang are high-fiving each other. Nothing better serves their interests than to see Americans becoming confused about climate change, and, therefore, less inclined to move toward clean-tech and, therefore, more certain to remain addicted to oil.

On Stimulating The Future, Or, “It’s The Ytterbium, Stupid!”

We’re diving deep into “geek world” today with a story that combines economic hardball, the periodic table of the elements, and a barely noticed provision of the Defense Authorization Act that seeks to break a monopoly which today gives China near-absolute control over the materials that make cell phones, electric cars, wind turbines, and pretty much every other tool of modern life possible.

If we successfully break the monopoly, we’ll be able to create millions of new manufacturing jobs in this country-and if we don’t, somebody else owns the 21st Century.

Ironically, the global warming we’re trying to fight with new green technologies might be an ally in our efforts to make those very same green technologies happen.

There’s a revolution in industrial processing going on, rare earths are at the center of it all…and in today’s story, the revolution will be televised.

“Everything in the Universe comes out of nothing.

Nothing-the nameless is the beginning…”

–Lao Tzu, Tao Te Ching, Chapter One

(Translated by Man-Ho Kwok, Martin Palmer and Jay Ramsay)

So what are rare earths?

Rare earths are materials that are, as it turns out, not always especially rare; nonetheless, they all have properties that are quite rare, indeed. You’ll find them hanging out in their own special section of the Periodic Table of the Elements, kept well isolated from all the others.

For example, your television and computer monitor rely upon the element europium, which makes the color red appear on your screen. There is nothing else known to exist that can be used for the same purpose. Therefore, the ability to make TVs and computer monitors is entirely dependant on access to this material.

Cerium is the most effective agent available for polishing glass, and if it wasn’t for cerium, your eyeglasses-and everything else in the world with a lens-would be a lot tougher to produce…and they would be lenses of lower quality, to boot.

Erbium lasers work better than carbon dioxide (CO2) lasers for facial surgery, and its unique ability to emit and amplify light under optical excitation makes it essential (and, at the moment, irreplaceable) when producing either fiber optic cable for transmitting data or the optoelectronic “building blocks” of the next-generation data storage systems that will eventually replace every hard drive and memory chip on the planet today.

And what is the rare earth application with which you are probably the most familiar?


As it turns out, if you mix the rare earth element neodymium with iron and boron, you get what is by far the most powerful magnetic material available-and it’s easily fabricated into lots of useful shapes.

These magnets have found their way into the headphones and speakers you listen to, the hard drive in your computer, your DVD player, every power everything in your car (they’re used in electric motors), and, eventually, into the electric motors that are likely to be actually propelling your car.

(Driving a Prius or some other hybrid vehicle? You’re driving around with about a kilo of neodymium under the hood, a number that’s soon expected to double.)

Of course, I could be wrong.

The rare earth application you’re most familiar with might be…batteries.

The nickel metal hydride battery (NiMH) has been the rechargeable battery of choice for about a decade now, turning up in everything from your cell phone to your camera to hand tools. This type of battery can be fabricated using several chemical formulations; the key here is that either cerium or another rare earth element, lanthanum, are essential to whatever formulation is chosen. Other rare earths are used as additives to make these batteries work better in high-temperature applications.

(Just for the record, that hybrid or “all-battery” vehicle you’re driving has at least 25 pounds of lanthanum on board.)

“New and improved” in rechargeable battery circles means lithium ion batteries; they also require lanthanum (although europium, yttrium, and protactinium are being considered as experimental additives).

These materials are also critically important if you’re in the business of building missiles or rockets or military communications systems-or civilian communications systems, for that matter.

So why is all of this such a big deal?

It’s a big deal because there is, shall we say…a bit of a supply problem.

“There is oil in the Middle East; there is rare earth in China….”

Deng Xiaoping, 1992

You may recall that europium is the only thing that can make the color red on a TV set, and from the 1960s until the 1980s the only place in the world that was producing any rare earth element (REE) in any quantity was Molycorp’s Mountain Pass mine, in California’s Mojave Desert.

All of that changed in the 1990s as China decided to “…[i]mprove the development and applications of rare earth, and change the resource advantage into economic superiority”, to quote Chairman Jiang Zemin. Since that time China has worked to expand ore production at its two major deposits as well as to expand the associated refining and fabrication industries that actually turn raw metals into finished products.

China was able to do this primarily because of two big cost advantages: cheap labor and access to REE as a byproduct of other mining activities (which basically means that if your copper mine’s ore also contains trace elements of REE, you do it cheaper than digging for just the REE). REE, we should mention, do not readily “gather” in large and easily mined “veins”, unlike other minerals, making mining more difficult.

Because of environmental problems at the Mountain Pass operation and price competition from the Chinese, there has been no US mining for REE since 2002, and today, more than 95% of the world’s REE production is based in China.

And all of a sudden, the Chinese might not have any spare REE for the rest of us.

What’s happened is that all those companies moving to China to do fabrication of REE material are raising the local demand, and it’s now being suggested that exports of REE from China could soon end. (A quick example: lanthanum and neodymium demand and supply were equal in 2008; this means supply will have to increase before lots of new hybrid or battery-only cars can hit the road.)

Some are suggesting there may be additional motives on the part of the Chinese Government, but I was unable to substantiate those rumors.

(The complete supply picture is a bit more complex; this because scrapping today’s consumer products for tomorrow’s REE is also an option, but at some currently unknown cost and efficiency.)

So that was the bad news; here’s the (potential) good news, located about 850 pages deep in a conference report that finalized the Legislative Branch’s work on the 2010 National Defense Authorization Act:

“…Report on rare earth materials in the defense supply chain (sec. 843)

The House bill contained a provision (sec. 828) that would require a report on the usage of rare earth materials in the supply chain of the Department of Defense.

The Senate amendment contained a similar provision (sec. 837).

The House recedes with an amendment combining the requirements of the two provisions…”

Of course, we better do more than just write a report, as all too often “write a report” is actually just another way of saying “ignore problem for now”-especially if, as the not enacted Rare Earth Supply-Chain Technology And Resources Transformation (RESTART) Act Of 2009, said:

“China’s ability-and willingness-to export REE’s is eroding due to its growing domestic demand, its enforcement of environmental law on current producers, and its mandate to consolidate the industry by decreasing its number of mining permits. The Chinese government’s draft rare earths plan for 2009 to 2015 proposes an immediate ban on the export of dysprosium, terbium, thulium, lutetium and yttrium, the “heavy” REE and a restriction on the exports of all the other, light, rare earth metals to a level well below that of Japan’s 2008 demand alone.”

Another source of good news: we have friends who also have access to REE, including Canada, Iceland, and in what has to be a “silver lining, dark cloud” moment, Greenland, who is just about a month away from gaining control over its natural resources from Denmark and assessing what, for the moment, appears to be the world’s largest known find of REE on the country’s southwest coast.

(This good news is, of course, balanced against the fact that access to the site will be much, much, easier…thanks to global warming.)

Of course, access to ore isn’t enough, and whatever supply is located, we’ll still need the ancillary capabilities that we lack today to refine and fabricate these metals into the American-made products we want to produce over the course of the next several decades.

So how’s that for a tale of geekiness?

The entire world that we know today-and the one we want for the future-depends on a small batch of odd metals, 95% of which currently come from China, who appears to be leveraging that advantage in a way that is not just an economic threat, but a National Security threat as well.

We have the potential to fix the problem, if we are so inclined, but we better get to it, and quickly, as our clock seems to be running a bit short.

And we need to do more than just dig holes in the ground. We need to establish an entire production chain-otherwise we’ll be mining ore that we’ll be shipping to…China…which is what we’re trying to avoid in the first place.

You know, a green economy is one thing…but a green economy that trades Big Oil for Big Battery is quite another-and if you’re just trading one “resource master” for a different one, what’s the point?  

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Labor Violations, Bogus Standards in WalMarts Chinese Supplier Factories – via China Labor Watch

In a new investigation from the China Labor Watch (CLW), “Wal-Mart’s Road to Sustainability: Paved with False Promises?”, the CLW reports on the Wal-Mart’s extreme exploitation of foreign factory workers – amongst many other egregious acts they’ve detailed.  

The CLW has found, as a result of investigations from April to June of this year, that violations at one of Wal-Mart’s suppliers, the Huasheng Packaging Factory, include:

• Elaborate system to cheat Wal-Mart audits.

• Some workers make only $0.51/hour, 60% of the minimum wage.

• Poor working conditions: workers inhale large amounts of paper particles and other debris.

• Twelve workers live together in cramped dorms

• Workers not paid overtime wages.

• During busy period, workday is 11 hours or 77 hours per week, and overtime is mandatory

Please help us by taking action and voicing your concern about Wal-Mart, and please continue reading for more from CLW’s press release.

This is merely the latest, and one of the most grievous, examples of Wal-Mart saying one thing and doing another, in their long running anti-labor track record.  Americans cannot continue to support the world’s largest retailer while it remains in support of some of the world’s worst labor standards.

CLW has also written a letter (pdf) to Wal-Mart CEO Mike Duke, and you can read their full report here (pdf).  

CLW also reports that recent violations at another facility, the Hantai Shoe Factory – who they began investigating in July of 2008, also include:

• Overtime only paid up to Wal-Mart’s limits. When overtime surpasses the limit, extra wages are not paid until the following month.

• Workers forced to lie to Wal-Mart inspectors.

• 5 hours overtime daily. If workers request not to work overtime once, they will be denied any overtime for a month.

• Disguised layoffs to avoid paying severance payments to workers. Workers are abused by management or switched to undesirable jobs until they quit voluntarily.

The CLW’s press release goes on to conclude:

“These issues represent only a portion of the problems CLW has discovered in these two factories. In nearly 10 years of investigating Wal-Mart’s Chinese supply chain, CLW has identified these same violations at the majority of Wal-Mart’s suppliers. In terms of labor violations, Hantai is one of Wal-Mart’s better factories and Huasheng is one of its worse, yet no where are Wal-Mart’s standards actually met.

As the world’s largest retailer, Wal-Mart has the ability and responsibility to implement higher standards. CLW Executive Director, Li Qiang, stated, “Wal-Mart’s Social Responsibility standards are merely a public relations gimmick and have not actually been implemented; they are a cost-free way to improve public perceptions of Wal-Mart.”

Although Chinese workers lack recourse against abuses suffered in Wal-Mart’s supply chain, the world can condemn Wal-Mart’s unethical behavior.

The China-U.S. Economic and Strategic Dialogue, which opened in Washington today, will focus on economic, environmental and security cooperation. CLW calls on senior officials of both governments to encourage multinational companies to improve labor conditions in their supply chains and promote effective implementation of China ‘s Labor Contract Law.”

Who Pissed In Dana Rohrabacher’s Corn Flakes?

Dana Rohrabacher has been out front in yipping about the need for the President to rhetorically confront Iran, a stupid idea given our history in the region, and the opposite of what actual Iranian dissidents and experts like Shirin Ebadi, Trita Parsi and Akbar Ganji suggest.  As OC Progressive notes, he is undermining the protests and demonstrations by giving credence to the complaint of the ruling regime that foreign interests are intervening in their election.  By saber-rattling, like in the passage of a resolution in support of the protests and then wielding it as a club to criticize the President for not being belligerent enough, you just play into the hands of the regime.  And Rohrabacher and his colleagues never had this kind of commitment to human rights when it involved the systematic, needless torture of detainees at Guantanamo and Abu Ghraib.  In fact, Rohrabacher called those cruel, inhumane and degrading tactics fraternity hazing pranks – when Dick Cheney orders them.  When the Iranians or North Koreans order them, it’s a whole different ballgame.

But I have to step back and admire – and kind of marvel – at Rohrabacher’s comments yesterday about the Uighurs, a group of 18 Muslims held at Guantanamo for seven years without charges, despite having been proven to commit no acts of terrorism or crimes of any kind.  Several were released to Bermuda this week, amidst clamoring by many conservatives, in particular Newt Gingrich.  But Rohrabacher smacked the former House Speaker down pretty hard on this point, decrying him for raising needless fears.  It’s idiosyncratic, of course, because it’s Rohrabacher, and it mostly constitutes a conspiracy theory about the Chinese government.  But embedded in the madness are some true statements about Republican fearmongering and overhyping of threats.

ROHRABACHER: And also, right off the bat, I’d like to express my deep appreciation to the leader in Bermuda – it’s Premier Brown – for his courage to do what is morally right in this situation. He’s demonstrated, I think, the best of democracy. That’s what leadership is all about: being willing to take such tough stands. I’m sorry that our own leadership here at home, and even in my own party, seems lacking at this moment. […]

Much to my dismay, some pundits in the Republican party have fallen for this bait and are lumping the Uighurs in with Islamic extremists. The Bush administration did not help matters. It held Uighurs in Guantanamo as terrorists, and they did this, I believe, to appease the Chinese government in a pathetic attempt to gain its support at the beginning of the war against Iraq, and also to ensure China’s continued purchase of U.S. treasuries. Many, if not all, the negative allegations against the Uighurs, can be traced by to Communist Chinese intelligence, whose purpose is to snuff out a legitimate independence movement that challenges the Communist party bosses in Beijing.

No patriot, especially no Republican who considers themselves a Reagan Republican, should fall for this manipulation, which has us do the bidding of a dictatorship in Beijing.

In the hall of shame, of course, is our former speaker, Newt Gingrich. His positioning on this should be of no surprise – and is of no surprise – to those of who, during Newt’s leadership, were dismayed by his active support for Clinton-era trade policies with Communist China.

Video here.

Would that Rohrabacher would listen to his own words when saber-rattling against Iran.  That moment of clarity – all right, about 1/3 of a moment – ought to be repeated.

CA-04: Lies, Dick Cheney and McClintock’s Hypocrisy–Help Charlie Fight Back

(Charlie’s coming back after this with a vengeance. – promoted by David Dayen)


As you know, Charlie Brown just released his energy plan —a pragmatic, “all of the above” strategy that calls for more domestic oil supply, a new energy economy that creates thousands of new jobs, and an end to the practice of spending taxpayer dollars on Middle-East oil.

Hundreds of people from across the political spectrum have signed our petition to put Charlie’s plan into action.

In response, Tom McClintock did what career politicians do…

He pandered to the oil interests who have bankrolled his political career (Tom has taken $155K from Big Oil in the last 10 years alone), and in full disregard of the facts, he told the biggest lie he could think of.  


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To be fair, Tom got help from Vice President Dick Cheney —the man whose energy policies have been great for oil companies, but awful for American families—driving gas prices from a once manageable $1.46, to nearly $5 a gallon.  So how much do McClintock & Cheney have in common?  Judge for yourself.

“Oil is being drilled right now 60 miles off the coast of Florida. But we’re not doing it. The Chinese are, in cooperation with the Cuban government.”–VP Dick Cheney, 06/11/08.

Cheney then retracted the fabrication the day after he issued it:  “It is our understanding that no Chinese firm is drilling there.”–06/12/08  

Two months later, McClintock repeated the lie:  “The vast oil fields off the coast of Florida…are now being drained by the Chinese Government drilling in Cuban waters.”–8/10/08

Like Dick “imminent threat/last throes” Cheney, Tom McClintock has a credibility problem —and not just on energy.   Then again, career politicians often say just about anything to score cheap partisan points.  By contrast, career military officers like Charlie know that misstatements and distortions don’t solve problems-they are part of the problem.  

McClintock’s ridiculous assertions aside, America is finally having a serious dialogue about our energy future. Consequently, gas prices are falling, but the difference between that drop being temporary, and much bigger and more permanent, rests on our willingness to elect leaders committed to taking action and doing whatever it takes to change how we power our nation.  That’s what makes your support for Charlie Brown so critical.

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Every day we are learning more and more about Tom McClintock.  

We know he is continuing to raise money so he can run for Board of Equalization or Lt. Governor in 2010 —all while he’s running for Congress in a district that is over 400 miles from his home.  


We also know he’s already sending out letters attacking Charlie’s patriotism, but focusing much more on Nancy Pelosi–from which we can only surmise that he should be carpetbagging over to San Francisco, not the 4 th District.  

But that’s not all.

California still doesn’t have a state budget and hundreds of thousands of hard working people are being laid off or paid at minimum wage.  Longtime obstructionist Tom McClintock hasn’t voted for a budget in more than 20 years, but he’s still getting paid a full salary with tax free per diems.

That’s not only hypocritical, it’s just plain wrong.  Results matter.  That’s why Charlie’s stand is that politicians who can’t produce budgets on time and in balance shouldn’t get paid–period.

Help Charlie send Tom McClintock packing once and for all.

You know Charlie.  You know he means what he says and says what he means.  You know that he is a man of action who leads by example and puts his money where his mouth is.

That’s what this campaign is about, and it’s the higher standard of leadership we need in Washington to get our country back on track.

We are less than 85 days from an historic election—and your continued support will make all the difference down the stretch.  

Thanks again for all you do.


Todd Stenhouse

Campaign Manager

P.S.  From policy distortions, to sleazy fundraising letters attacking Charlie’s patriotism, Tom McClintock has gone negative with his desperate job search. Please help us ensure that Charlie has the resources to fight back and win this election—Contribute Today!  

P.P.S  And if you aren’t doing anything on Saturday, please come out and join us for our fourth district-wide day of action. Click Here to Sign Up!

CA-04: McClintock – “China’s Drinking Our Milkshake!”

Since he doesn’t have any ideas of his own, and he can barely locate California’s 4th District on a map, Tom McClintock has decided to pick up on the “Drill Now” movement coming from the deepest bastions of economic royalist and faux populist conservatism.  His first ad of the 2008 election is a radio spot which shakes his finger at Congress for ignoring all that delicious oil under everyone’s house that must be delivered immediately to Exxon.

“Liberals like Nancy Pelosi and Charlie Brown want to continue supporting federal laws that prevents us from tapping America’s vast oil resources. That’s how we got into this mess – and why gasoline prices are now breaking our family budgets,” McClintock says at the beginning of the one-minute spot.

“America has nearly a trillion barrels of recoverable oil-more than three times that of Saudi Arabia-that Democrats like Nancy Pelosi and Charlie Brown won’t even let us touch. In fact, more than 94 percent of our territory remains off-limits because of this foolish prohibition. If we want to change this policy, we’ve got to change this Congress,” McClintock says.

94%!  For instance, that park by your house doesn’t have ONE oil derrick in it.  And who knows what’s under the floorboards in your den?  94%, sucka MC’s!

Now, McClintock is buying in to the discredited notion that China is stealing all the oil off the Florida coast.

“Meanwhile, the vast oil fields off the coast of Florida that American law prevents Americans from developing are now being drained by the Chinese government drilling in Cuban waters,” McClintock wrote in a column for the Auburn Journal, pointed out to us by the campaign of his Dem opponent Charlie Brown.

“And still Nancy Pelosi and her supporters in Congress continue to block the development of these vast American oil reserves.”

Don’t you idiots see it?  The Chinese are stealing our purity of essence and draining our precious bodily fluids!

None of this is true, by the way.  Even the Prince of Darkness Dick Cheney, who’s in Southern California today in case you were wondering why you heard that death rattle this morning, had to acknowledge that the Cina-Cuba drilling myth was a lie.  

But without lies, where would McClintock be?  (um, running for the Board of Equalization?)

One Effect Of Money’s Influence On Policies

Dave Johnson, Speak Out California

A new briefing paper from the Economic Policy Institute titled The China Trade Toll [PDF document] says that since China entered the World Trade Organization in 2001 our China trade policy “has had a devastating effect on U.S. workers and the domestic economy.”  

The report shows that since 2001 California has lost 325,800 jobs (55,400 of these just in the last year) to China due to these policies.  And since 2001 2.3 million jobs were lost nationally.  According to the report even those workers able to find new jobs saw their wages drop an average of $8,146 per year.   (These figures are only for jobs and income lost to China and do not include jobs and income lost to other countries.)

And, of course, this effect is not limited to the workers who lost their job.  This also has an effect on works’ ability to ask for raises and imporvements in working conditions.  From the report,

It is also critical to recognize that the indirect impact of trade on other workers is significant as well. Trade with less-developed countries has reduced the bargaining power of all workers in the U.S. economy who resemble the import-displaced in terms of education, credentials, and skills. Annual earnings for all workers without a four year college degree are roughly $1,400 lower today because of this competition…

Specific industries were affected more than others by our massive trade deficit with China.  Computer and electronic product manufacturers were hit hardest, losing an eliminated 561,000 jobs in this period.  Jobs lost to the deficit tended to be better-paying ones,

More than two-thirds of the jobs displaced by China trade deficits were in manufacturing, which tends to employ a higher-than-average share of workers with a high school degree or less (43.7% of workers displaced) and to provide those workers with good wages and benefits. More than half (55.6%) of the jobs displaced came from the top half of the U.S. wage distribution, and among this group a disproportionate share came from the top 10th of all U.S. wage earners. African Americans (230,000 jobs lost), Hispanics (339,000), and other ethnic groups (219,000) all suffered from the loss of jobs such as these that pay substantially more and offer better benefits than jobs in other industries.

Here is what is going on.  First, China “pegs” its currency to the dollar instead of letting it follow market rates as the dollar does.  So the dollar’s decline does not make it cost less to manufacture here, which would bring manufacturing jobs to the U.S.  Next, China doesn’t allow workers to organize labor unions.  So their workers are not really benefiting from all of this.  Wages there are kept low, and prices grow ever higher due to the currency manipulation of “pegging” to the dollar.  And finally, China imposes barriers on imported goods.  So while they manufacture and sell to the rest of the world, they keep their own people from buying things made elsewhere.

As a result China exported $323 billion in goods to the U.S. in 2007, and purchased only $61 billion in goods from the U.S.  

The report concludes,

The growing U.S. trade deficit with China has displaced huge numbers of jobs in the United States and has been a prime contributor to the crisis in manufacturing employment over the past six years. Moreover, the United States is piling up foreign debt, losing export capacity, and facing a more fragile macroeconomic environment.

And, the report points out that this isn’t particularly in the long-term interests of the Chinese people, either,

Is America’s loss China’s gain? The answer is most certainly no. China has become dependent on the U.S. consumer market for employment generation, has suppressed the purchasing power of its own middle class with a weak currency, and, most importantly, has held hundreds of billions of hard currency reserves in low-yielding, risky assets instead of investing them in public goods that could benefit Chinese households. Its vast purchases of foreign exchange reserves have stimulated the overheating of its domestic economy, and inflation in China has accelerated rapidly in the past year. Its repression of labor rights has suppressed wages, thereby artificially subsidizing exports.

Of course trade is good, when it is a two way street.  If trade is fair, it benefits everyone involved.  But this report shows that what the people who run American corporations call “free” trade is hurting our economy more than it is helping.  Now that several years of these policies have passed we can measure the results, and the results have not been good for the American people.  

Because of our country’s trade policies with China 325,800 jobs have been lost in California.  Meanwhile China is allowed to manipulate their currency, prevent unions, and set up barriers that keep their people from buying goods we make here.  

What this has meant is big corporations can get out of paying American workers a fair wage because they can get away with paying Chinese workers hardly anything, while a very few people at the top of the American and Chinese food chains pocket the difference entirely for themselves. If you consider the huge amounts that some of these individuals are pocking from this scheme  — some receiving hundreds of millions of dollars each yeararen’t we at least benefiting from the taxes they pay?  Unfortunately no, because of the tax policies of California and national Republican: low taxes for the rich, higher taxes for the rest of us, and borrowing to cover the resulting deficits.  Here in California the Republicans are even blocking an effort to ask the super-rich to pay the same sales taxes that the rest of us pay on everything we buy when they buy yachts and private planes.  But no, they don’t even have to pay that tax.  

The result of these tax policies is that while we lose jobs,and the remaining workers get pay cuts, we also lose out on government services like schools, fire protection, police, roads, mass transit and everything else our government does for us.  And that’s not all.  Because of these tax policies the state and national governments are borrowing huge amounts, and we have to pay that back with interest.

All of this — the China trade policies, the tax policies, the massive borrowing — come from the influence that money buys in our political system.  The minute someone is able to use some money to gain an advantage, of course they use that to get even more money, which lets them buy an even bigger advantage, and the cycle continues.

You can easily see the effects of the money with the massive ad campaigns around California’s elections and ballot initiatives — and the resulting budget gridlock as a few corporate-connected Republicans block every effort to ask the rich and connected to pay their share.

We are in a stranglehold situation.  A very few wealthy people are exporting our jobs and pocketing the money they would have paid as wages and benefits.  They are not even paying taxes on the ill-gotten gains, which forces our state and national governments to borrow.  And they are getting away with it because they are able to use some of that money to further influence our political system.  

Here’s the thing.  They’re not even using their own money to purchase this influence.  Since they have control of the resources of large corporations, they are using the money from those corporations to fund the system of influence, which directs much larger amounts of cash back to themselves.

I think the way to stop this is to prevent any use of corporate money for anything other than operating the corporation. I’ll share some ideas on that in later posts.  

Click through to Speak Out California — Please leave a comment with your thoughts.

Gavin Newsom on the Environment, Marriage Equality, and China

Gavin NewsomYesterday, I sat down for a discussion with San Francisco Mayor Gavin Newsom to discuss his take on some of the issues that he’s dealing with right now.  You can hear the discussion right now on BlogTalkRadio, or you can download the podcast on iTunes. We have an array of technology here at Calitics.

We talked about several subjects, but began with a discussion of hybrids and the environment. The Mayor was recently named the “Greenest Mayor in the World.” (Um, that’s kind of lofty. I suspect we could talk to some European Mayors about that.) He certainly understands many of the issues related to alternative energy, but there is much work to be done here in SF so that we continue to be a leader on the environment.

We shifted to the Torch Relay and the fact that China has the Olympics. He acknowledges that it wasn’t perfect, but I’m not so sure that I really believe that it was a “real-time” decision. Surely there was planning before the day for the route to be transitioned to Van Ness. He said that he was trying to protect the First Amendment rights of everybody at the relay. I’m not sure how this could have better been handled, though. Would the planned route have been successful? I really can’t say.

As to China’s human rights record and getting the Olympics, the Mayor argues that those in glass houses shouldn’t cast stones.  In other words, America has its problems, Gitmo, wiretapping, Iraq, etc. To which, I didn’t have much to say.

On Marriage, he called the governor “consistently inconsistent” with his flip-flopping. And finally, on the budget, Newsom argues that he has insufficient flexibility to do much in the area of raising revenue. So, he’s raising parking fines, and other “hidden taxes.” The Bay Guardian argues that Newsom cuts too deep. It is obvious that the cuts will draw blood. I’d love to see the revenue sources that allow us to balance our budget. I’d love to see additional revenue at the local level, but that’s easier said than done.

Live Photos from the SF Torch Relay/Protest

Check Bob Brigham’s photos from the torch relay and the associated protests over the flip.

UPDATE (by Dave): The phalanx of security around this torch relay is ridiculous.  You probably can’t even see the runners unless you’re in a helicopter.  Mayor Newsom truncated the relay from 8 miles to 3 just a few hours before the parade started.  Not sure why he should have bothered at all.  Hundreds of security forces forming a human chain – must be proud, eh, San Francisco?

UPDATE (by Dave): A friend emails:

i just stood out on embarcadero for over an hour while the cops told us “it’s coming, it’s coming right along here.”  meanwhile the torch was already headed at its ponderous pace down van ness.  fucking pissed.

Yes, the route apparently keeps changing.  Apparently the protesters got fairly close to the relay a couple minutes ago, halting it for a short while.  It’s kind of a cat-and-mouse game right now.

UPDATE (by Dave): The torch is not headed anywhere near Justin Herman Plaza, that’s pretty clear.  It’s around Crissy Field right now, headed west toward the GG Bridge.  And I guess there’s an amphibious vehicle out in front of the relay runners.  That torch may be getting wet.

UPDATE (by Dave): Another, better feed here.  Willie Brown was supposed to be a TORCH BEARER for this thing?  It looks like they’re headed to the bridge.

UPDATE (by Dave): AP: “Closing ceremony for torch relay will take place at an undisclosed location.”  Will Dick Cheney be lighting the torch with his eyes, then?

It’s a good thing that the people of San Francisco were honored with the ability to have this ceremony hidden from them.

UPDATE (by Brian): Christine Pelosi has a good post at HuffPo:

For all the big talk of putting on a show, all that free speech obviously overwhelmed the authorities. Instead of braving a peaceful gauntlet of freedom fighters, the torch was secreted away to an alternate route. Encased by police and barricaded by a SWAT team, the torch movement was barely visible to a TV crowd. And what is the ironic takeaway as we await the rescheduled, secluded “closing” ceremonies? The protesters did not extinguish the Olympic flame today — the authorities did.

Supervisor Chris Daly

Stopping a Bus:







Look at all the media punked by the closing ceremonies beyond moved:


Luke Thomas: