U.S. Stimulus Has Created A Boom In China

Maybe maximizing corporate profits isn't all that matters. Maybe national security and resilience matter, too, and if they do, then reshoring critical supply chains should be a higher priority than Corporate America's (mostly tax-free) profits.

As America's trade deficit explodes higher and the costs of offshoring supply chains mount, the apologists for globalization are out in full force, attempting to shout down reality with their usual specious claims about how amazingly wunnerful globalization has been for America.

Allow me to tote up the real-world cost savings:

  • Cost of cheap ill-fitting jeans dropped $10.
  • Cost of low-quality TV that will only last a few years dropped $50.
  • Cost of healthcare, annual increase: $3,000 per household
  • Cost of rent, annual increase: $1,200 per household
  • Cost of child care, annual increase: $1,300 per household
  • Cost of college tuition and room and board, annual increase: $1,500 per household

So while domestic costs rose $6,000 annually due to predatory cartels, over-regulation, taxes, etc., we saved $60 by offshoring supply chains. Excuse me for being underwhelmed by the wonderfulness of offshoring jobs and supply chains.

Yes, the benefits of free trade, blah-blah-blah, I get it; but there is no such thing as free trade, there are only versions of managed trade, the vast majority of which are beneficial to corporations and elites on both sides of the trade.

Trade is always about maximizing profits. That's the only reason to bother with trade, though there are geopolitical considerations as well. The U.S. opened its vast markets to Western Europe and Japan and the Asian Tigers in the Cold War to strengthen their economies, as a means of suppressing the appeal of Communism in their domestic politics.

This mercantilist strategy worked well, ushering in rapid growth in West Germany, Japan, and other allied nations, but the problem is those economies never transitioned out of being mercantilist, export-dependent economies. The U.S. has remained the dumping ground for the world's surplus production since the early 1950s.

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Disclosures: None.

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