by Ian Fletcher
231 “Small Manufacturers Make The Case For An Across-the-Board ‘Surcharge’ On Imports,” Manufacturing & Technology News, July 24, 2006, p.11.
232 Paul Craig Roberts, “A Workforce Betrayed: Watching Greed Murder the Economy,” Manufacturing & Technology News, July 31, 2008.
233 Ibid.
234 Ibid.
235 Stephen S. Cohen and John Zysman, Manufacturing Matters: The Myth of the Post-Industrial Economy (New York: Basic Books, 1988) p. 8. Obviously, this should not be interpreted as implying that it is impossible to separate research and production functions, especially for routine production of products based on past innovation. But the fact remains that the arms-length approach is out-competed by a more integrated approach to research and production.
236 Richard Florida and Martin Kenney, The Breakthrough Illusion (New York: Basic Books, 1990), p. 8.
237 “SAIC scientist says U.S. needs a broad new system to commercialize technology,” Manufacturing & Technology News, March 17, 2006, p. 11.
238 Richard J. Elkus, Winner Take All (New York: Basic Books, 2008), p. 46.
239 Thomas Friedman, The World is Flat (New York: Picador, 2005), p. 269.
240 One rigorous scholarly critique of Thomas Friedman’s economic ideas, which do not stand up well to hard data, is Alan Rugman and Chang H. Oh, “Friedman’s Follies: Insights on the Globalization Debate,” Business and Politics, August 2008.
241 Arie Y. Lewin and Vinay Couto, Next Generation Offshoring: the Globalization of Innovation (Durham, NC: Fuqua School of Business, Duke University, 2007), p. 7.
242 Ibid. p. 19.
243 Ibid.
244 Jeffrey Immelt, “Letter to Shareholders,” General Electric, February 6, 2009.
245 Jim Irwin, “General Electric’s Immelt says manufacturing jobs should comprise 20 percent of U.S. employment,” Associated Press, June 26, 2009.
246 “HDTV Manufacturers,” HDTV Review Lab, http://www.hdtvreviewlab.com/hdtv-manufacturers.
247 Eamonn Fingleton, “Boeing, Boeing, Gone,” The American Conservative, January 31, 2005.
248 David Pritchard and Alan MacPherson, “Strategic Destruction of the North American and European Aircraft Industry: Implications of the System Integration Business Model,” Canada-United States Trade Center, State University of New York at Buffalo, January 2007.
249 Ibid., p. 6.
250 Speech by Noël Forgeard, CEO of Airbus, to the International Metalworkers Federation World Aero-space Conference in Toulouse, France, June 19, 2002.
251 Dominic Gates, “Boeing 787 Wing Flaw Extends Inside Plane,” The Seattle Times, July 30, 2009.
252 Every mass-produced American-made hybrid car uses technology under license (or some other agreement, like patent-sharing) in all or in part from either Toyota or Honda. There is some dispute as to how much of Ford’s cross-licensed technology originated at Ford; GM has an indigenous hybrid technology for buses only.
253 Jonathan G. Dorn, “Solar Cell Production Jumps 50 Percent in 2007,” Earth Policy Institute, December 27, 2007, http://www.earth-policy.org/datacenter/xls/indicator12_2007_3.xls.
254 Per Krogsgaard and Birger T. Madsen, “International Wind Energy Development: World Market Update 2009,” BTM Consult ApS, March 25, 2009.
255 Christian E. Weller and Holly Wheeler, “Our Nation’s Surprising Technology Trade Deficit,” Center for American Progress, March 2008, p. 3.
256 “U.S. Trade with China in Advanced Technology Products,” Census Bureau, http://www.census.gov/
foreign-trade/statistics/product/atp/2008/12/ctryatp/atp5700.html, accessed November 30, 2009.
257 “U.S.-China Trade Statistics and China's World Trade Statistics,” The U.S.-China Business Council, Table 5, http://www.uschina.org/statistics/tradetable.html.
258 “Export Analysis of China Toys Industry in 2009,” China Commodity City News, March 10, 2010.
259 James Burke, “U.S. Investment in China Worsens Trade Deficit,” Economic Policy Institute, May 1, 2000, p. 2.
260 Robert E. Scott, “China Dominates U.S. Non-Oil Trade Deficit in 2009,” Economic Policy Institute, July 23, 2009. Data from U.S. International Trade Commission.
261 2009 figure through Q3. “Exports, Imports, and Balance of Advanced Technology Products by Technology Group and Selected Countries and Areas,” U.S. Census Bureau, http://www.census.gov/foreign-trade/Press-Release/current_press_release/exh16a.pdf
262 “Global Patterns of U.S. Merchandise Trade,” U.S. International Trade Administration, http://tse.export.gov/NTDChart.aspx?.
263 “2007 U.S. Exports of Aerospace Vehicles and Equipment,” U.S. Department of Commerce, http://www.trade.gov/wcm/groups/internet/@trade/@mas/@man/@aai/documents/web_content/aero_stat_expqtr.pdf and “2007 U.S. Imports of Aerospace Vehicles and Equipment,” http://www.trade.gov/wcm/groups/public/@trade/@mas/@man/@aai/documents/web_content/aero_stat_impqtr.pdf.
264 “Akio Morita, Co-Founder of Sony and Japanese Business Leader, Dies at 78,” The New York Times, October 4, 1999.
265 “International Trade (MEI): International Trade Exports,” Organization for Economic Cooperation and Development, 2009, http://stats.oecd.org.
266 Laura D’Andrea Tyson, Who’s Bashing Whom? Trade Conflict in High Technology Industries (Washington: Institute for International Economics, 1993), p. 100. See also William Greider, One World, Ready or Not (New York: Touchstone Press, 1997), p. 367. One good analysis of the way in which take-over pressure can drive management to sacrifice long-term interests in order to increase short-term profits is Jeremy Stein’s “Takeover Threats and Managerial Myopia,” Journal of Political Economy, February 1988.
267 James Jacobs, “The Diminished Role of Training and Education in Manufacturing and the Imperative for Change,” in Richard McCormack, ed., Manufacturing a Better Future for America (Washington: Alliance for American Manufacturing, 2009), p. 235.
268 William Greider, One World, Ready or Not (New York: Touchstone Press, 1997), p. 136.
269 David C. Mowery and Joanne Oxley, “Inward Technology Transfer and Competitiveness: the Role of National Innovation Systems,” p. 159.
270 Laura D’Andrea Tyson, Who’s Bashing Whom? (Washington: Institute for International Economics, 1993), p. 7.
271 “Nominal per capita GDP Tables,” World Economic Outlook Database, International Monetary Fund, http://imf.org/external/pubs/ft/weo/2008/02/weodata/weoselgr.aspx.
272 One detailed estimate, 43% (with slightly different objectives) of how far the dollar needs to fall is that of Goldman Sachs’s Jim O’Neill: “Features of a Dollar Decline,” in C. Fred Bergsten and John Williamson Dollar Overvaluation and the World Economy, (Washington: Institute for International Economics, 2003), p. 15.
273 Given that 82% of our consumption is produced domestically (2008 data), most of our consumption is unaffected by the value of the dollar. But if our international purchasing power falls by half, that would mean a 9% decline in American consumption, other things being equal.
274 Fabric suitcases: “Another U.S. Industry Gone,” Manufacturing & Technology News, November 16, 2007, p. 1. Epoxy cresol novolac resin: Eamonn Fingleton, “Statement Before the U.S.-China Economic and Security Review Commission,” April 21, 2005.
275 “U.S. International Transactions, by Area - Japan,” Bureau of Economic Analysis, http://www.bea.gov/international/bp_web/simple.cfm?anon=71&table_id=10&area_id=11.
276 “Trade in Goods (Imports, Exports and Trade Balance) with Japan,” U.S. Census Bureau, http://
www.census.gov/foreign-trade/balance/c5880.html. 2008 was the latest year for which complete data were available at press time; Japan’s surplus with the U.S. in the recession year of 2009 is projected to be $44 billion.
277 Ibid.
278 In the 1971 words of Treasury Secretary George Shultz, “We can change exchange rates until hell freezes over, and we still won’t get anything in return.” Gabor Steingart, The War for Wealth: The True Story of Globalization, or Wh
y the Flat World is Broken (New York: McGraw-Hill, 2008), p. 71.
279 Clyde V. Prestowitz, Jr., Trading Places: How We Are Giving Our Future to Japan and How to Reclaim It (New York: Basic Books, 1993), p. 61.
280 One good analysis of the import-excluding effects of the Japanese keiretsus is that of Robert Z. Lawrence, “Efficient or Exclusionist? The Import Behavior of Japanese Corporate Groups,” Brookings Institution, 1991.
281 “U.S. Automakers Endorse Japan Currency Manipulation Act, Applaud Stabenow Legislation to Force Action Against Japanese Currency Misalignment,” Auto Channel, March 28, 2007.
282 Although China’s currency has technically been floating since June 2005, it is managed by China’s government in order not to appreciate too much against the currencies of China’s export markets.
283 Brad Setser and Arpana Pandey, “China’s $1.7 Trillion Bet: China’s External Portfolio and Dollar Re-serves,” Council on Foreign Relations, January 2009.
284 “Chinese Currency Manipulation Fact Sheet April 2005,” China Currency Coalition, http://www.chinacurrencycoalition.org/pdfs/0405_factsheet.pdf.
285 For a list of various estimates, see Peter Navarro, “Benchmarking the Advantages Foreign Nations Pro-vide Their Manufacturers” in Richard McCormack, ed., Manufacturing a Better Future for America (Washington: Alliance for American Manufacturing), p. 127. Also see “Chinese Currency Manipulation Fact Sheet April 2005,” China Currency Coalition, http://www.chinacurrencycoalition.org/pdfs/
0405_factsheet.pdf, p. 1.
286 For an analysis of the various bills, see Vivian Jones, “Trade Remedy Legislation: Applying Countervailing Action to Nonmarket Economy Countries,” Congressional Research Service, January 31, 2008.
287 Bunning-Stabenow: HR 2378, S 1027.
288 Benedicte Vibe Christensen, “Switzerland’s Role as an International Financial Center,” International Monetary Fund, 1986, p. 21.
289 The yuan peg also generates other problems, such as negative real interest rates and the resulting stock-market speculation caused by capital avoiding the low real returns on deposit accounts.
290 About two percent, per oral statement of David A. Hartquist on behalf of the China Currency Coalition, Senate Task Force on Manufacturing, October 26, 2007, http://www.chinacurrencycoalition.org/pdfs/STF_Manf/STF_Manf_oral_report.pdf, slide 2.
291 “Treasury Official Says China Currency Change Won’t Impact Imports,” Manufacturing & Technology News, October 31, 2007, p. 10.
292 Peter Navarro, “Report of the China Price Project,” Merage School of Business, University of California at Irvine, p. 17.
293 This means the state-organized centralizing of specific industries in specific regions, as Detroit is a center for automobiles.
294 Peter Navarro, “Benchmarking the Advantages Foreign Nations Provide Their Manufacturers” in Richard McCormack, ed., Manufacturing a Better Future for America (Washington: Alliance for American Manufacturing), p. 109.
295 U.S. House of Representatives, Committee on Energy and Commerce, Subcommittee on Oversight and Investigations, Unfair Foreign Trade Practices: Barriers to U.S. Exports, 99th Cong., 2nd sess., May 1986, Committee Print 99-BB, p. 2.
296 “China’s economic policies violate the spirit and letter of World Trade Organization membership requirements,” according to “2007 Report to Congress,” U.S.-China Economic and Security Review Com-mission (Washington: U.S. Government Printing Office, 2007), p. 3.
297 Trade balance: “U.S. Trade in Goods and Services - Balance of Payments (BOP) Basis,” U.S. Census Bureau, http://www.census.gov/foreign-trade/statistics/historical/gands.pdf.
Recessions: “U.S. Business Cycle Expansions and Contractions,” National Bureau of Economic Research, December 2008, http://www.nber.org/cycles.html.
298 See, for example, Bill McKibben, Deep Economy: The Wealth of Communities and the Durable Future (New York: Henry Holt and Co., 2007), p. 12.
299 This doesn’t mean that a reasonable bias in favor of things like locally-produced food is wrong.
300 Jagdish Bhagwati, “Optimal Intervention to Achieve Non-Economic Objectives,” The Review of Economic Studies, January 1969.
301 The term for making cultural choices on non-cultural grounds is “philistinism.”
302 Gail Billington, “Malaysian Prime Minister: ‘We Had to Decide Things For Ourselves’,” Executive Intelligence Review, February 19, 1999.
303 Estimate by Prof. Michael Porter of Harvard Business School, as reported in “Porter: Unfair Trade Plays a role in Declining U.S. Competitiveness,” Manufacturing & Technology News, June 30, 2008, p. 7.
304 “Competitiveness Index: Where America Stands,” Council on Competitiveness, 2007, p. 77.
305 For an extended discussion of this issue, see Robert Reich, Supercapitalism (New York, Alfred A. Knopf, 2007), p. 213.
306 The 2007 figure is 0.8%; author calculation from “Annual Report 2007,” Fairtrade Labeling Organizations International, p. 11 and World Food and Agriculture Organization, http://faostat.fao.org/site/567/DesktopDefault.aspx?PageID=567#ancor. There are a few encouraging signs, like Nestlé’s recent announcement that it will henceforth make Kit-Kat bars sold in Europe out of fairly traded chocolate.
307 For core employees at major corporations that have the financial wherewithal to avoid doing so. Different rules apply elsewhere, e.g., in small businesses and low-tier supplier companies.
308 Clyde V. Prestowitz, Jr., Trading Places: How We Are Giving Our Future to Japan and How to Reclaim It (New York: Basic Books, 1993), p. 61.
309 James Bovard, The Fair Trade Fraud (New York: Palgrave Macmillan, 1992), p. 172.
310 “Key Elements of the AFL-CIO’s 301 Petition Regarding Violation of Workers’ Rights in China,” AFL-CIO, http://www.aflcio.org/issues/jobseconomy/globaleconomy/upload/china_keyelements.pdf.
311 Testimony of Harry Wu, Executive Director, Laogai Research Foundation, before U.S.-China Economic and Security Review Commission, June 19, 2008.
312 James O’Toole, “State Looks Like Prime Territory for Clinton,” Pittsburgh Post-Gazette, March 9, 2008.
313 “GDP (per capita) (1970) by country,” Economy Statistics, http://www.nationmaster.com/red/graph/eco_gdp_percap-economy-gdp-per capita&date=1970.
314 This is also true of such problems as increasing income inequality in the U.S. The nations of Western Europe, for example, have experienced far less economic polarization in the last 30 years than we have.
315 Stephen Tokarick, “Quantifying the Impact of Trade on Wages: the Role of Nontraded Goods,” International Monetary Fund, 2002, p. 14.
316 If, of course, we count returns on capital paid to individuals as “wages,” and make appropriate adjustment for returns paid outside the country and other conflating factors.
317 This is true to a first approximation if we ignore various complicated effects involving linkages between traded and nontraded industries.
318 A good summary of other factors countervailing cheap foreign labor appears in Phillip Blackerby, “We’re Moving Overseas! Are We Making a Big Mistake?” Blackerby Associates, 2003, http://www.blackerbyassoc.com/Overseas.html.
319 2008 figure; “Trade with Japan: 2007,” U.S. Bureau of the Census, http://www.census.gov/foreign-trade/balance/c5880.html.
320 2008 figure; “Trade with European Union,” U.S. Bureau of the Census, http://www.census.gov/foreign-trade/balance/c0003.html.