Jon Christian Ryter -- As The Economy Goes, so Goes The Nation

AS THE ECONOMY GOES, SO GOES THE NATION

By Jon Christian Ryter

January 9, 2005

NewsWithViews.com

American factory workers�union labor�rightfully grumble about the damning impact that NAFTA (the North American Free Trade Agreement) has had on the American labor force, yet they continue to buy revolving door American-branded goods that are being created by former U.S. companies that relocated to the third world in order to utilize cheap, non-union labor in Mexico or Canada, or in the new westernized industrial centers in Pakistan or communist China.

As the Chinese become more proficient in creating cheap but expensive-looking slave-labor products ranging from PCs, TV sets and DvD players to cheap trinkets to be sold at the check-out counters of Wal-Mart and 7-Eleven, China has amassed a trade surplus equaled only by the United States at the end of World War II when America not only fed the world but clothed it as well. With America's trade deficit running at close to 6% of GDP, warning flags began signaling real trouble for the dollar over a year ago, but the U.S. Federal Reserve publicly ignored the danger signs as the global economy began heating up to a rosy glow. To the one-worlders in the European Union and Asia, life had become a cabaret.

The once all-powerful United States�the mightiest of the mighty, economically and militarily�had not only become a debtor nation, it was now forced to import most of the products that American ingenuity and American labor had invented five decades ago. American factories, controlled by transnational industrialists and businessmen who viewed American labor as too expensive and demanding, and its government as mandating too many costly regulations that it could no longer afford, were now relocating all over the world in order to more properly utilize the human capital of the world by creating tomorrow's consumers in nations with current product saturation levels of 25% to 30% instead of 99%.

Because NAFTA allowed them to do it, America's Fortune 1000 companies are spreading their wealth around the globe and bringing prosperity to those who, for decades, hated America for its prosperity and the American consumers for their greed. By continuing to purchase the goods created by those who now have their former jobs, the American consumer is supporting the demise of the American economy.

Insult was added to injury three days before Thanksgiving when China made international headlines by telling the United States to put its economic house in order. Li Ruogu, the deputy governor of the People's Bank of China, warned the United States to get its house in order and not to blame its trading partners�specifically China�for its economic woes after the he Bush Administration suggested that China needed to revalue its currency.

Li told the Asia-Pacific Economic Summit that an appreciation of the Chinese currency would not solve the economic problems of the United States nor, he said, does China attempt to leverage other nations whenever it has a problem.

In Europe, largely because of the war in Iraq, one in five European Union shoppers have boycotted American made goods since the invasions of Afghanistan and Iraq. A survey conducted throughout the EU one week after the US election indicated that 20% of the European citizens decided not to buy the most iconic American products�those they feel are most closely associated with ""images of America." And nothing is more iconic in America than Ford, Chevy and mom's apple pie. More than any other recognizable American product that is sold overseas, foreign car buyers avoided the iconic American brands. So, unfortunately, have American consumers here at home.

Although Chrysler (which merged with German-owned Daimler-Benz AG in 1998), is still thought of as an American brand in Europe, EU members think of Daimler-Chrysler as a European product since Europeans earn their incomes in Daimler-Benz factories. Of the Big Three in the United States, only Chrysler showed sales gains for 2004 even though auto sales in the United States grew by 200,000 units�16.9 million units, up from 16.7 units in 2003. That amounted to a 7.7% increase in sales volume over the previous year. While that sounds good on the surface, it does not bode well for America's blue chip automobile industry�and job security for auto workers�here at home.

Ford Motor Company�which is about as American as apple pie�posted a 4.5% drop in sales. General Motors experienced a 1.3% decline in units sold. The tragedy is that, in the United States, Japanese auto maker Nissan experienced a 24.1% sales gain. Toyota had a sales gain of 10.4%; BMW, 7%; Hyundai, 4.6%; Honda, 3.3% and Mazda, 1.9%. Toyota's plus numbers in the United States came almost exclusively from its June, 2004 roll-out of the Scion. The company sold 99,200 units of the new SUV to American consumers.

Overall, Asian auto makers increased their share of the American car, truck and SUV market to 34.6%. American-branded motor vehicle sales (you know, the big ticket sales that actually recycle dollars into the American economy) now represent only 58.6% of the cars purchased by American consumers. In terms of job creation and job loss in the United States, the American consumers who purchased a new Toyota, Nissan, Hyundai, Honda, Mazda, BMW, Mercedes-Benz, Audi, Infiniti, Jaguar, or any other foreign-built, foreign-owned motor vehicle this year contributed to the loss of jobs in America this year�not just auto industry jobs, but related manufacturing jobs and service sector jobs. Forty-one percent of the American consumer dollars spent on cars this year, fed the GNP and created jobs in Japan, Korea or the European Union.

The American people simply don't get it. Even after watching America's textile industry die due to Asian textile imports, they don't get it. Even after watching the American steel industry die because American steel mills could not compete with Canadian and Asian steel mills, they don't get it. Even as the American coal industry was crushed by impossible-to-meet environmental standards and costly bureaucratic regulations, and American energy plants now buy anthracite coal from Indonesia because the largest anthracite coal deposits in the United States (that contain almost a fourth of the known anthracite coal reserves in the world) are now under a meaningless National Park that consumes 1/7th of the State of Utah, the American people still don't get it. Our allies and trading partners are slowly killing the goose that lays the gold eggs.

And even though our politicians continue to assure us that America is still the greatest economic power on Earth, and that the booming industrial growth taking place in China (a sevenfold increase between 1978 and 1999), that now exceeds $1.1 trillion per year is actually insignificantly minuscule equating it with California's economy, and suggesting the trade imbalance that has caused the erosion of the American dollar is actually good for business. To confirm their theory, they point out that US factory orders for durable goods are growing at the fastest pace in four months. However, this growth is not due to increased sales�or even anticipated demand�for domestic consumer products. It is largely fueled by a demand for "war-related" products, high tech computers and commercial aircraft that will be sold to our "former" enemies where the "commercial" products will be modified as machines of war.

The American consumer is being lulled by globalist rhetoric. There is no equitable reciprocal trade quid pro quo between the United States and its European and Asian trading partners�unless it is the export of jobs from America in exchange for American-branded goods made in Taiwan, Korea or mainland China. Granted, agricultural exports from the billion dollar corporate agri-giants in the grain belt are up�as are the sale of fertilizers (which are used in explosives as well as for increasing crop yields) and farming equipment. So is the sale of both commercial and military aircraft and plane parts. And, so is the sale of high tech industrial computers. As we sell super computers to our former enemies, they reciprocate by selling us low-end consumer personal computers that become obsolete a week after they are booted up.

But if there is an industrial bellwether that the American consumer needs to heed, it is the auto industry because it is reflective of America's buying habits. What we learned at the end of 2004 was that the American people have gleefully surrendered 40% of the auto market to foreign corporations. What they will discover if they look closely, that 40% abrogation of market share will be pretty much universal, and will cross product lines�and national borders.

Since we have stopped buying 40% of the products made in America because they are cheaper when built with slave labor in third world countries and totalitarian nations who recognize human capital only as a sweat equity asset of the State, why should we be surprised when those companies close their doors in the United States and relocate in third world countries where government do not impose costly regulations on them, and labor is cheap and plentiful? And why should any of us be surprised when the companies we work for are forced to cut benefits and jobs in order to remain competitive? Or, close their doors when they cannot?

Think about that during the next Hyundai commercial you see on your new Japanese, Korean, or Chinese-built plasma television set. So what if that new Ford Tempo or Taurus costs $2,000 more than the advertised Hyundai, Toyota or Nissan. Buy it. Invest in America. Why? Because, in the long run, the job you save will be yours. Take that one to the bank while you still have a bank account�and a job.