Skip to comments.Is The US Becoming A "Banana Republic"?
Posted on 03/19/2006 5:42:04 AM PST by B4Ranch
Are foreign countries and companies using the "Wal-Mart model" to undermine American industry?
US economic incentives and trade policies encourage foreign producers to invest in this country. While the nation may be experiencing short-term benefits from foreign investment, the long-term harm may far exceed expectations, as is the case when Wal-Mart has invested in some local communities.
Undermining American Industry
The result of these US economic incentive and trade policies seems to be dramatic erosion of American industry through predatory competition and utilization of cheap overseas suppliers, analogous to the displacement of many local merchants that sometimes follows the introduction of Wal-Mart into a local economy.
Predatorily Undercutting Domestic Industry
A year ago, the entire state of Vermont was added to the National Trust for Historic Preservation's list of America's 11 most endangered historic places. The reason for the add was an expansion plan for 7 new Wal-Mart 150,000 square foot retail stores into a state which itself has only 600,000 residents. The National Trust cited the following concerns:
Their findings suggest Wal-Mart is predatorily pricing out local businesses by providing cheaper prices to local consumers but ultimately eliminating local competition and taking profits and local skilled producers out of the local community. "Communities often welcome these large stores in the hope that they will bring economic benefits," but "too often, however, the stores bring hidden costs and cause significant economic and social harm," said the National Trust.
Foreign Investment That Destroys American Industry
In Ohio, Governor Taft led a trade mission to Japan and Taiwan in 2004 to bring foreign investment to that state. According to the Business Journal of Youngstown, Taft expects this to yield $154 Million in new foreign investment on top of $473 Million through previous trips and efforts. To date, Taft projected 1,395 new jobs have been added through these efforts.
What is the result? In Central Ohio, according the Greater Columbus Chamber of Commerce there are over 100 foreign industrial companies feeding the nearby Honda manufacturing facility and competing with other American-owned industry. The industrial job base in Central Ohio is nearly completely dependent on continued goodwill of these foreign employers. The majority of American-owned "industry" in Central Ohio is distribution and warehouse facilities to store and forward goods made by foreign companies or their US subsidiaries.
Central Ohio has no assurance from these foreign controlled industrial facilities that profits, knowledge gained, or taxes will stay in the area.
For example, Honda ships in volumes of components and parts from overseas and then exports soybeans back to Japan in those same containers in record amounts according to Forbes. A definition of "banana republic" includes a country importing a majority of finished goods and exporting mostly raw resources.
Where is the long-term value to America from having other countries supply and control our industry?
Foreign industry has effectively colonized Central Ohio and the Governor has led 6 "trade missions" to try and encourage this.
Today, General Motors has a market capitalization of almost $14 Billion. Toyota Motor Company has a market cap almost 10 times of that and has almost $20 Billion in cash and 1/4 of the debt of General Motors. Toyota could gain control of over 50% of General Motors for approximately 1/3 of the cash Toyota has in its bank account today. If we were in a military war, this would be considered an extremely vulnerable position.
Recognizing Our Losses
How much do we have to lose before we recognize that other countries, like Wal-Mart, have a plan to gain market share at the expense of our own industry; and all the while, we are not backfilling with new offsetting industry, new services, or any other means through which we will secure our future?
Bump to the top!
No, it is not. Most people who can afford better than what you get at Wal-Mart don't buy at Wal-Mart. The people who are buying Chinese junk are people who would have had to do without or save for a very long time to purchase things. Therefore, they are not "stealing" customers, they have created them.
I had absolutely no idea!
3600 Wal-Mart countries inside the United States?
We've been taken over by rogue nations.
We are now entering terminal stages of the de-industrialization of America. American strength was always related to its industrial might. That is now vanishing and what will follow as a result is almost predictable.
Did you read the article?
>>For example, Honda ships in volumes of components and parts from overseas and then exports soybeans back to Japan in those same containers in record amounts according to Forbes. A definition of "banana republic" includes a country importing a majority of finished goods and exporting mostly raw resources.<
The price to build America back up to what we once were will be very expensive. The lowest price isn't always the best buy.
Of course, whining like a little b-tch with the lefties against a successful corporation feels good, doesn't it?
Ayn Rand would have had a field day with the anti-Wal Mart crowd.
the long-term harm may far exceed expectations, as is the case when Wal-Mart has invested in some local communities."
What long term harm? New roads, housing demands, increased business from trucking, cement plants, construction etc etc. is HARM? Every town I've seen a wal mart go up in, has brought along with it their major competators, bigger safeways etc. And last I looked, wal mart is 100% American owned. Before Wal-mart, many of these towns were near ghost towns because these stagnant mom and pop stores A) only employed one or 2 people, B) paid mininum wage C) forced people to drive to the nearest city to find good they didn't carry. D) didn't bring any business in from other surrounding small communities. These Union communists just don't give up their walmart attack, do they. The Union places, such as COSTCO, buy their cheap crap from China as well. Walmart also sells plenty of AMERICAN made products, MORE that those others stores.
"Can't let the happen, we're Luddites..."
There sure are a lot of them at FR lately. "America was built of our strong industry!" Blah blah blah.
A nation of auto workers.
America was built on COMMERCE. The industrial revolution is over, and only boomed because of war. It COST us more than it made us.
Future industry will never be labor intensive as it was, those factories have died out for good reason, they can't compete. Those that refuse to automate or can't because of UNIONS, die as they deserve to.
They are plenty of labor jobs around, the problem is Americans don't want to work at them. Try finding a crew to build houses. Try find construction workers. These places HAVE to use immigrant workers because Americans don't want those jobs. Americans expect to piddle around in collage for a good 5-7 years, taking philosophy courses, then expect to be given a job as Co. of a large corporation.
Our unemployment rate is low, and our economy is doing well compared to every other around the world. We've been hearing this chicken little doom and gloom ever since Bush took office. Sorry RATS, it's just not going to happen no matter how many times to keep telling yourself the sky is falling.
I agree. The collapse of our economy and our way of life is near. (Without massive wars to try to preserve our economic empire.)
Quick! seal off the borders, batten down the hatches! Let's live in a closed society to "protect our industry (and union wages)".
That's when our economy will fail and our way of life will dissapear.
We need to fight wars alright, to maintain our freedom and the worlds, to prevent a totalitarian idiology from creeping in our nation and the free worlds.
There will be no need to fight that war if you want to just seal off the borders and trade within them. But then, you may as well jump in your time machine and go back to live in the USSR.
What good would that do they all buy the same crap from the same place when is the last time you saw made in America?
It seems to me that the totalitarian idiology is that of the Neocons. All true Republicans and Libertarians are offended as hell that Bush claims to represent them. They love war.
Most likely. But she would also have a problem with big business using the mechanism of the State to 'grease the wheels'--think 'Orren Boyle','Hank Reardon',OPIC, and tax incentives for investing overseas.
I do not think that banana republics export financial services electronically. Nor, do I think that they have negotiated lucrative deals like the Bush admin has to sell power plants and water treatment plants in exchange for toys and call center jobs. Bush is shifting some things such as soybeans home for alternative energy. Also, I just read that he has proposed massive fish farms in the seas to shift the biggest item (after oil) in current accounts back stateside. Funny, imbalance isn't really about manufacturing, at all.
"It is more than we presently have and can only be accomplished, sadly, in decades."
Correct. Undoing the deterioration will take considerable time. But a couple things you forgot:
5. The withdrawal from GATT/NAFTA/CAFTA/WTO that will give us maximum flexibility.
6. The implementation of tariffs on a gradually increasing scale that'll start companies that have moved overseas to use the considerable profits they're earning now to reinvest back in the United States before they become too high. They'd rather earn some profits than no profits and they'd prepare for it. That in turn will increase the demands for steel etc...so the massive steel mills that "are a thing of the past" might return out of sheer demand. Especially if imported steel is made more expensive.
"As far as massive steel mills of the past, I believe are in the past. The micro-mills are more efficient at that same production. We must use technology to our advantage and stop being a passenger on the trip."
Micro-mills are not used, and will never be (they lack the capacity another reason they're called micro-mills), for large ship-building components such as keels, heavy armor plate, and other very large and thick steel items. One thing we need is the rejuevenation of ship-building through setting a mandatory retirement age on warships and auxillary vessels (and possibly even civilian vessels). Part of our independence from oil goal should be the phase out of conventionally-powered Navy ships for nuclear-powered ones.
2. When I opened the copy of Road to Serfdom last week.
3. Whenever I buy cheese, detergent, cereal, and even fish.
4. The "Korean" car I drive has half of its components sourced from GE and GM.
It goes on and on...
What is so important about physical goods that the brain dead can manufacture. We still have the number one consumer economy in the world, low unemployment, highest standard of living for a nation over 5 Million, etc.
We are doing quite well. I really don't give a sh-t if the GI Joe with Kung Fu grip is not made in the USA. Neither do most consumers.
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