The Big Oil Ticket
John McCain has paid lip service to being a “green” candidates, despite his numerous votes in that past against alternative energy. Now he’s given up the charade by picking Sarah Palin as his VP.
It’s crazy for the United States to be subsidizing oil and sending billions of dollars overseas for our energy. Of course we can’t solve this overnight with renewable energies, but investment in this area will spur economic development and over time will reduce our dependency on oil.
Tom Friedman takes on McCain:
I am not against a limited expansion of off-shore drilling now. But it is a complete sideshow. By constantly pounding into voters that his energy focus is to “drill, drill, drill,” McCain is diverting attention from what should be one of the central issues in this election: who has the better plan to promote massive innovation around clean power technologies and energy efficiency.
Why? Because renewable energy technologies — what I call “E.T.” — are going to constitute the next great global industry. They will rival and probably surpass “I.T.” — information technology. The country that spawns the most E.T. companies will enjoy more economic power, strategic advantage and rising standards of living. We need to make sure that is America. Big oil and OPEC want to make sure it is not.
Palin’s nomination for vice president and her desire to allow drilling in the Alaskan wilderness “reminded me of a lunch I had three and half years ago with one of the Russian trade attachés,” global trade consultant Edward Goldberg said to me. “After much wine, this gentleman told me that his country was very pleased that the Bush administration wanted to drill in the Alaskan wilderness. In his opinion, the amount of product one could actually derive from there was negligible in terms of needs. However, it signified that the Bush administration was not planning to do anything to create alternative energy, which of course would threaten the economic growth of Russia.”
Posted in: Conservatives, Energy Independence, President 2008, Republicans, Trade
Tags: Big Oil, energy, energy technologies, foreign oil, investment in energy technologies, John McCain, Sarah Palin, Tom Friedman
Slowdown in China’s factories
Costs of manuafacturing in China are going up, and that’s taking a big toll on some Chinese companies. The days of cheap labor and little regulation are going away.
Now many of China’s manufacturers—including Shan Hsing—are undergoing the kind of restructuring that tore through America’s heartland a generation ago. The U.S. housing market, which generated demand for everything from Chinese-made bedroom sets to bathroom fixtures, has plummeted. A new Chinese labor law that took effect on Jan. 1 has significantly raised costs in an already tight labor market. Soaring commodity and energy prices, as well as Beijing’s cancellation of preferential policies for exporters, have hammered manufacturers. The appreciation of the Chinese currency has shrunk already razor-thin margins, pushed thousands of manufacturers to the edge of bankruptcy, and threatened China’s role as the preeminent exporter of low-priced goods.
Hsu’s new factory, it turns out, is running at just 60% of capacity, and he predicts that half of China’s lighting factories—almost all based in Guangdong—will have to close their doors this year. “Shoe factories, clothing, toys, furniture, everyone is shutting down,” he says. Hsu’s not alone in his alarm. “We spent 20 years building up our industry from nothing to one of the biggest in the world,” says Philip Cheng, chairman of Strategic Sports, which produces half the global supply of motorcycle, bicycle, and snowboarding helmets out of 17 plants in the Pearl River Delta. “Now we are dying.” Cheng says he once earned 8% margins. His margins now? Almost zero.
Comprehensive statistics on shutdowns are hard to come by. But the Federation of Hong Kong Industries predicts that 10% of an estimated 60,000 to 70,000 Hong Kong-run factories in the Pearl River Delta will close this year. In the past 12 months, 150 factories making shoes or supplying shoemakers have closed in Dongguan, says the Asia Footwear Assn. More plants will disappear as demand slows: UBS (UBS) analyst Jonathan Anderson expects overall export growth of just 5% or less for China this year.
The costs of free trade
Newsweek has a disturbing story about the millions of Asian working who are working in slave-like servitude.
Some of the world’s leading computer makers don’t want you to know about Local Technic Industry. It’s a typical Malaysian company, one of many small makers of the cast-aluminum bodies for hard-disk drives used in just about every name-brand machine on the market. But that’s precisely the problem: it’s a typical Malaysian company. About 60 percent of Local Technic’s 160 employees are from outside Malaysia—and a company executive says he pities those guest workers. “They have been fooled hook, line and sinker,” he says, asking not to be named because others in the business wouldn’t like his talking to the press. “They have been taken for a ride.” It’s not Local Technic’s fault, he insists: sleazy labor brokers outside the country tricked the workers into paying huge placement fees for jobs that yield a net income close to zero. “They say they were promised 3,000 ringgits [$950] a month,” the manager says. “How can we pay that? If we did, we would be bankrupt in no time.”
So why don’t those foreign employees just quit? Because they can’t, even if they find out they’ve been cheated by the very brokers who brought them there. Malaysian law requires guest workers to sign multiple-year contracts and surrender their passports to their employers. Those who run away but stay in Malaysia are automatically classed as illegal aliens, subject to arrest, imprisonment and caning before being expelled from the country. “Passport, company take,” says a Bangladeshi who has worked at Local Technic. (Like other workers in this story, he fears possible reprisals if he is named.) “They say, ‘You come to this company, must work for this company and cannot work other place.’ They say, ‘If you work [for] someone else, the police will catch you’.” He paid a broker in Bangladesh $3,600 to get him a job at Local Technic. When he arrived, he says, he learned he was making $114 a month after deductions for room, board and taxes. The math is simple: minus the broker’s fee, his net monthly pay is $14. If he never spends a penny on himself, three years of labor will earn him a grand total of $504.
Free trade is absolutely necessary to the global economy, but we need to start getting serious about labor and environmental standards. Putting an end to this type of forced labor would be an obvious place to start.
Russ Feingold slams John Edwards
He has a point:
The one that is the most problematic is (John) Edwards, who voted for the Patriot Act, campaigns against it. Voted for No Child Left Behind, campaigns against it. Voted for the China trade deal, campaigns against it. Voted for the Iraq war … He uses my voting record exactly as his platform, even though he had the opposite voting record.
When you had the opportunity to vote a certain way in the Senate and you didn’t, and obviously there are times when you make a mistake, the notion that you sort of vote one way when you’re playing the game in Washington and another way when you’re running for president, there’s some of that going on.
Posted in: Civil Liberties, Democrats, Education, Iraq War, Liberals, President 2008, Trade
Tags: Civil Liberties, Democrats, Education, Iraq War, Liberals, President 2008, Trade
Steve Forbes blasts Bush’s weak dollar policy
Steve Forbes has been saying this for years. The Bush administration’s failure to aggressively support the dollar has created serious economic problems.
The dumbest, most destructive economic policy of the Bush Administration has been its weak-dollar position–letting the dollar slide in value against the euro, the yen, the pound and gold. The repeatedly disproved theory in operation here is that cheapening your currency will improve your trade balance and that an improved trade balance makes your economy stronger and wealthier. Put aside the meaninglessness of the trade balance as a measure of economic health or sickness–the U.S., after all, has had a trade deficit with the rest of the world for 350 years out of the last 400. A weak-currency policy has disastrous economic and political consequences–most immediately, our tumultuous equity markets.
The entire article is worth reading. He even acknowledges that Clinton deserves credit for his strong-dollar policy.
Krauthammer ridicules the European strategy on Iraq
Krauthammer is pointing out the obvious – the European plan to negotiate their way out of the Iranian nuclear crisis has been a failure. He also points out that Iran has most of the leverage with their threat to cut off their oil supply if attacked or if sanctions are approved.
Unfortunately, he doesn’t offer any solutions or a clear alternative. Furthermore, he can’t bring himself to criticize the Bush administration, which has gone along with this policy even though they would have preferred a push for sanctions.
Also, Krauthammer will not address the possibility that Bush’s disastrous policies in Iraq have completely undermined any chance of taking on Iran. Krauthammer loves to cite Lybia as evidence that the Iraq war has had a positive effect on other regimes in the Middle East, yet he says nothing about the current maniac running Iran. Did our policies in Iraq have any effect on the elections that brought him to power? Again, only positive effects are open for discussion aong supporters of the war.
Krauthammer is often very persuasive, but he loses credibility by consistently offering rough analysis on the Europeans or the opponents of the war, yet he seems incapable of aiming that same critical fire at this administration.