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Making News: Cited on Marketwatch.com and in The Epoch Times

24 Tuesday Mar 2020

Posted by Alan Tonelson in Making News

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CCP Virus, Chris Matthews, coronavirus, COVID 19, Defense Production Act, health security, healthcare products, Making News, manufacturing, Marketwatch.com, The Epoch Times, Trade, Trump, Wuhan virus

I’m pleased to report two new national media appearances.

This past Saturday, the 21st, Chris Matthews of Marketwatch.com quoted my views on the tremendous possibilities for reviving domestic U.S. manufacturing – including of  healthcare-related goods needed to fight the CCP Virus – that would be created for President Trump through full use of the Defense Production Act.  Here’s the link.

Click here, meanwhile, for a March 19 article from The Epoch Times in which I note the strong start in restoring healthcare security in manufacturing created by Mr. Trump’s America First trade policies.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

(What’s Left of) Our Economy: Thank Goodness Free Trade Zealots Didn’t Completely Destroy the U.S. Textiles Industry

24 Tuesday Mar 2020

Posted by Alan Tonelson in (What's Left of) Our Economy

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apparel, Apple, health security, healthcare products, manufacturing, NAFTA, National Council of Textile Organizations, NCTO, North American Free Trade Agreement, offshoring, textile, The Race to the Bottom, Trade, Trump, {What's Left of) Our Economy

The news media have been filled lately with encouraging stories like this one from the Financial Times – reporting that “US factories that usually mass produce hoodies and T-shirts are being retooled to make face masks as chief executives in the clothing industry try to alleviate shortages of equipment to combat coronavirus. A group of nine American apparel companies began producing the masks on Monday….”

Moreover, according to their main industry organization, companies like these and their domestic manufacturing plants “make a broad range of inputs and finished products used in an array of personal protective equipment (PPE) and medical nonwoven/textile supplies, including surgical gowns, face masks, antibacterial wipes, lab coats, blood pressure cuffs, cotton swabs and hazmat suits. These items are vital to the government’s effort to ramp up emergency production of these critical supplies.”

These actions are not only commendable and critically important nowadays. They’re also a major reminder that it’s fortunate in the extreme that there are still domestic textile and apparel industries with production in the United States – and that this sector has survived despite every effort made by pre-Trump Presidents and Congresses either to put them out of business and send them offshore.

Washington’s motivation? Nothing personal or political – just blind adherence to the bedrock economic principle of comparative advantage, which simply put holds that if other countries make certain products more efficiently than the United States (with or without subsidies, by the way), U.S. policy should simply permit the those stateside industries to wither and die, in full confidence that Americans will always be able to import whatever they need whenever they need it.

Geopolitics was at work, too.  Garment-making in particular is the kind of “starter” sector needed by developing countries to start down the road toward industrialization and therefore the broader economic progress they understandably covet. As a result, foreign policy makers viewed chunks of the U.S. industry as an ideal offering for winning and keeping allies in the Cold War competition with the Soviet Union.    

A labor-intensive sector like apparel was consigned to this fate decades ago. But a sector like textiles was treated similarly – even though it’s the kind of capital- and technology-intensive industry in which high-income, advanced economies like America’s are supposed to excel. Moreover, as countless textile executives with whom I’ve spoken over the years have emphasized, even though they (who make the fabrics and similar materials) differ significantly from the clothing makers (who essentially cut and sew the stuff together), their fates have been closely connected. For the apparel companies are prime customers for the textile producers (though far from the only ones, as you’ll realize if you’ve ever owned, e.g., a carpet), and foreign governments could be counted on to give their own textile sectors a leg up in sales by throwing up all manner of obstacles to U.S.-owned firms supplying overseas garment makers.

In fact, pre-Trump administrations continued to dismiss the textile industry long after its potential became clear for creating all sorts of high tech fabrics with breakthrough qualities like temperature and odor control and bio-monitoring capabilities.

It’s true that the companies could always follow what you might call the “Apple model” – after the electronics giant’s strategy of researching, engineering, and designing its products domestically, and sending the manufacturing overseas. But as I documented nearly two decades ago in my globalization book, The Race to the Bottom, once industries offshore production, many of these so-called white collar activities tend to follow – since there’s nothing like physical proximity to generate the kind of intensive, interactive collaboration between labs and shop floors often needed to spark innovation.

Moreover, as Americans are learning today, you can be the world’s innovation leader by leaps and bounds, but if you lack the domestic production facilities when emergencies arise, you may be standing at the end of the line for supplies of vital products.  In fact, as of late last week, no fewer than 38 countries had limited exports of healthcare-related goods.

So it’s pretty appalling to see how successful pre-Trump U.S. leaders were in stripping the nation of these capabilities. Federal Reserve statistics tell us that inflation-adjusted production of textiles in the United States has sunk by just over half since January, 1994 – when the North American Free Trade Agreement (NAFTA) went into effect and officially ushered in a long offshoring-happy phase of U.S. trade policy. And if you think that’s terrible (which it is), it’s a performance that positively shines when compared to apparel (and leather goods) production. That’s down more than 86 percent during this period.

Interestingly, just two years before NAFTA’s advent, a pair of vocalists, Fontella Bass and Bobby McLure, released a song titled “You’ll Miss Me (When I’m Gone).” What a near-tragedy that shortsighted American trade policymakers didn’t realize how thoroughly this message can apply to major industries. What a blessing that the nation’s remaining textile and apparel makers chose to hang on. And thank goodness that the nation has a President today who clearly recognizes the imperative of Making it in America not only in textiles and apparel, but across the manufacturing spectrum. 

P.S. Full disclosure: For nearly two decades, funders of my work at the U.S. Business and Industry Council included a major domestic textile company. At the same time, the firm suddenly and unceremoniously dumped the organization in 2009 (and not for lack of resources). So my warm and fuzzy feelings toward the sector are limited.

 

Our So-Called Foreign Policy: Globalists Remain as Clueless as Ever on the CCP Virus

23 Monday Mar 2020

Posted by Alan Tonelson in Our So-Called Foreign Policy

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America First, Catch 22, CCP Virus, Clinton administration, coronavirus, COVID 19, globalism, health security, healthcare products, Joseph Heller, Madeleine Albright, Our So-Called Foreign Policy, pandemics, TIME, Wuhan virus

The current CCP (for Chinese Communist Party) Virus outbreak has intensified a broad debate about America’s grand strategy in world affairs.

Specifically, supporters of an America First-type strategy (including, to some extent, President Trump) believe that the key to current and future anti-pandemic success, and overall national success, is building up national capabilities – like restoring lost production capacity in healthcare goods like pharmaceuticals and medical devices (think “ventilators”).

Pushing back is a school of thought now called “globalism” – a handy shorthand for backers of pre-Trump U.S. foreign policies who have long insisted that the nation’s best bet for adequate levels of security and freedom and prosperity is strengthening mechanisms of international cooperation. Not that the globalists completely neglected the need for national self-sufficiency, especially in terms of purely military products, or national sovereignty. But they clearly sought to “bend the curve” of American national security and foreign economic policy toward buttressing global capacities instead of national capacities. My evidence? The very healthcare goods shortages America is facing today.

As RealityChek regulars know, I’m squarely in the America First camp. And my confidence in this strategy has just been immeasurably bolstered by having read Madeleine Albright’s new essay in TIME defending the focus on cooperation.

I’m this confident not simply because Albright has long been one of the dimmest bulbs in the globalists’ ranks – despite having served as Secretary of State (during the Clinton administration). As I’ve previously noted, she never seemed to have learned the definition of “deterrence.” Instead, I’m mainly confident because her own new post (unwittingly) explains why it’s globalism that – in her words – reflects “childish” beliefs.

To oversimplify a little, the America First strategy doesn’t softpedal cooperative efforts because it’s selfish or mean or any of those human character traits that so commonly (yet so misleadingly) are used to characterize approaches to world affairs and the motives underlying them. Instead, its emphases stem from the assumption that American leaders can’t count anytime soon on the rest of the world adopting the kind of cooperative ethos needed to transition to globalism safely, and that as a result self-reliance is the only realistic choice available.

It’s also important to note that support for the America First strategy doesn’t require believing that all of most or even any other countries can rely on their own devices as well. Rather, it requires understanding how distinctively capable of self-reliance the United States has always been – and how much more self-reliant it can become.

Albright regurgitates the standard globalist points about how the main foreign dangers to the United States, including pandemics

“do not respect boundaries. They include rogue governments, terrorists, cyber warriors, the uncontrolled spread of advanced weapons, multinational criminal networks and environmental catastrophe. These perils cannot be defeated by any country acting alone, and any country would be foolish to try.”

Yet here’s what she also observes about the current state of world affairs:

>”[T]he largest and most powerful national governments are not prioritizing the improvement of our capacity for international cooperation.”

>”Hyper-nationalist leaders across the globe seem determined to ignore the awareness of interdependence that was—in the last century—drummed into our minds at a nearly unbearable cost.”

>”In the past two decades, jingoism has returned and spread in the manner of a contagious disease. Instead of highlighting the need for global teamwork, the doctrine of “every nation for itself” has taken hold on matters involving oil prices, trade, refugees, climate change, the regulation of communications technology and more.”

>“Look around: where are the leaders who will remind us of our mutual obligations and shared fate? In Moscow? Beijing? London? Rome? Paris? New Delhi? Ankara?”

>”[A] huge gap has opened between what the international community needs and the patchy, underfunded, under-energized reality now in place. The size of this gap represents a failure on the part of leaders on every continent….”

It’s true that Albright seeks to pin the blame on “a vacuum at the top that only the United States can fill.” But is claim is not only loony, but clueless. For this kind of leadership obviously requires the kind of superior material power and wealth that, in a world lacking common rules because common values are missing, have always been essential to influence behavior abroad. And relative American power in all fields except actual weapons and military equipment (though not in the materials, parts, and components needed to build them) has always been dismissed by the globalists as a pipe dream.

In one of the dark comedy classic novel Catch 22‘s numerous stunningly insightful exchanges, Yossarian, the main character who’s trying to have himself declared crazy and therefore unfit for combat or any kind of military service, tells one of his superior officers, “From now on I’m thinking only of me.” As author Joseph Heller continues:

“Major Danby replied indulgently with a superior smile: ‘But, Yossarian, suppose everyone felt that way.’ 

“‘Then,” said Yossarian, ‘I’d certainly be a damned fool to feel any other way, wouldn’t I?’”

That’s obviously disastrous advice for Americans today – and inexcusably so, since the nation unmistakably has built up a network of shared values that marks it as a genuine community, and consequently a political unit that makes cooperation both necessary and possible to begin with. When it comes to the (undeniably anarchic) “international community” – not nearly so much.

Which is why until Madeleine Albright and other globalists acknowledge this situation, and the policy imperatives flowing logically therefrom, you’d need to be a damned fool to take them seriously as well.

Making News: Podcast of Now On-Line of National Radio Appearance on the CCP Virus & U.S. Manufacturing

20 Friday Mar 2020

Posted by Alan Tonelson in Uncategorized

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Tags

CCP Virus, Gordon G. Chang, health security, healthcare products, Making News, manufacturing, supply chains, The John Batchelor Show, Wuhan virus

Sorry this is a little later than usual, but if you click on this link, you’ll be able to listen to the podcast of my Wednesday night appearance on John Batchelor’s nationally syndicated radio show describing U.S. manufacturing’s response to the CCP (for Chinese Commnist Party) Virus crisis.

The segment, co-hosted by Gordon G. Chang, dealt both with the gaps exposed by the crisis in America’s healthcare products supply chains (discussed in detail here and here on RealityChek), and with domestic industry’s potential to reshore this production and re-jigger their stateside factories to deal with the surge in demand for pharmaceuticals, their chemical building blocks, medical devices, and surgical instruments and supplies.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Blogs I Follow

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(What’s Left Of) Our Economy

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Our So-Called Foreign Policy

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Im-Politic

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Signs of the Apocalypse

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The Brighter Side

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Those Stubborn Facts

  • (What's Left of) Our Economy
  • Following Up
  • Glad I Didn't Say That!
  • Golden Oldies
  • Guest Posts
  • Housekeeping
  • Housekeeping
  • Im-Politic
  • In the News
  • Making News
  • Our So-Called Foreign Policy
  • The Snide World of Sports
  • Those Stubborn Facts
  • Uncategorized

The Snide World of Sports

  • (What's Left of) Our Economy
  • Following Up
  • Glad I Didn't Say That!
  • Golden Oldies
  • Guest Posts
  • Housekeeping
  • Housekeeping
  • Im-Politic
  • In the News
  • Making News
  • Our So-Called Foreign Policy
  • The Snide World of Sports
  • Those Stubborn Facts
  • Uncategorized

Guest Posts

  • (What's Left of) Our Economy
  • Following Up
  • Glad I Didn't Say That!
  • Golden Oldies
  • Guest Posts
  • Housekeeping
  • Housekeeping
  • Im-Politic
  • In the News
  • Making News
  • Our So-Called Foreign Policy
  • The Snide World of Sports
  • Those Stubborn Facts
  • Uncategorized

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Current Thoughts on Trade

Terence P. Stewart

Protecting U.S. Workers

Marc to Market

So Much Nonsense Out There, So Little Time....

Alastair Winter

Chief Economist at Daniel Stewart & Co - Trying to make sense of Global Markets, Macroeconomics & Politics

Smaulgld

Real Estate + Economics + Gold + Silver

Reclaim the American Dream

So Much Nonsense Out There, So Little Time....

Mickey Kaus

Kausfiles

David Stockman's Contra Corner

Washington Decoded

So Much Nonsense Out There, So Little Time....

Upon Closer inspection

Keep America At Work

Sober Look

So Much Nonsense Out There, So Little Time....

Credit Writedowns

Finance, Economics and Markets

GubbmintCheese

So Much Nonsense Out There, So Little Time....

VoxEU.org: Recent Articles

So Much Nonsense Out There, So Little Time....

Michael Pettis' CHINA FINANCIAL MARKETS

New Economic Populist

So Much Nonsense Out There, So Little Time....

George Magnus

So Much Nonsense Out There, So Little Time....

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