China Now Halting Shipments of Rare Earth Minerals To US 738
blackraven14250 writes with news that China, after putting at least a temporary stop to rare earth exports to Japan, is now doing the same with exports to the US; according to the linked article, this is in response to recent US promises to investigate certain Chinese trade practices.
The answer is more regulation (Score:3, Insightful)
Because we haven't outsourced enough to China already.
Not again... (Score:2, Insightful)
a trade war? good (Score:5, Insightful)
Nothing gets the American economy going like a good challenge..
Foreign companies invest in China. Then, China creates a Chinese alternative.. state-run.. state-subsidized.. copying the foreign model. Only.. China manipulates their currency for an export advantage. China keeps their middle class underpaid (while the government hordes money). And safety? Safety costs money.. Harming an American worker is more expensive than keeping him safe.. In China, harm a Chinese worker.. and replace him with one of the horde.
http://www.youtube.com/watch?v=U-LLsODnuHI [youtube.com]
As American consumers, we pay less for cheap plastic crap now.. at the expense of our jobs and quality..
And Walmart leads the way.. fastest from store shelves to landfills.
Re:Same old, same old (Score:0, Insightful)
..and Iran wants to push its own agenda too: islamification of the world.. a return to ignorance for the sake of power and cultural control. They're not blameless either.
Re:Woot for me (Score:1, Insightful)
if I were you, I'd hold onto them. apparently we'll run out of rare earth elements by 2017
http://news.slashdot.org/story/08/07/01/2331207/Supplies-of-Rare-Earth-Elements-Exhausted-By-2017 [slashdot.org]
or not. I'm still waiting for us to run out of all this oil we've run out of.
Hindsight is 20/20... (Score:3, Insightful)
kick them out (Score:2, Insightful)
Re:Not again... (Score:3, Insightful)
Not likely. Sure, they'll definitely feel it, but china exports to the whole world. They'll survive.
In the mean time, in the US, it's going to take some time to tool up to make much more expensive replacement widgets.
Re:Trade relations game theory (Score:3, Insightful)
Re:Easy solution (Score:5, Insightful)
Perhaps if you suggested a more limited or symbolic ban/tariff then it may work.
But seriously, everyone knows by now that China and American are stuck. Breaking out of the current relationship would fuck both of you up. And China has way more slack than the US does to fuck around and be an abusive boyfriend. And everyone saw that coming to.
Re:Way to prove their point! (Score:5, Insightful)
Re:Easy solution (Score:5, Insightful)
Close our markets to all of China's exports.
You don't have to close our markets, just impose a 10% to 20% across the board import tariff on all manufactured goods.
Actually, we should take away their MFN (most favored nation) trading status. They never deserved it in the first place.
Third parties? (Score:3, Insightful)
What to prevent a third party from buying these resources and then selling them to Japan or US?
Re:Same old, same old (Score:2, Insightful)
Trade restrictions are nothing new.. the reason us murrican's are screaming USA! USA! USA! and 'investigating chinese trade practices', is because China is a WTO member state which prevents them from doing things like this, and from us putting teriffs on all Chinese goods.
Personally I love that they are trying to play this card.. nothing could benefit the US lower and middle classes more than destroying the WTO.
Re:Wal-Mart should follow suit (Score:2, Insightful)
I bet the majority of the voting populous doesn't know what the word "majority" means (as clearly you do not either).
Re:Easy solution (Score:5, Insightful)
The US and the rest of the world can not be held hostage by economic terrorism from China.
Really, must everything the US doesn't like be called terrorism? China refusing to sell us every product we want may be many things, but terrorism it isn't.
Re:Easy solution (Score:3, Insightful)
And then where does the Federal Government borrow the money to rollover expiring treasuries, let along fund current spending?
Re:Trade relations game theory (Score:1, Insightful)
> What tactic do we think the Chinese government is currently employing?
I think the economic success has gone to some heads, high up. Their imagined leverage is far higher than their actual real life leverage. The speed of their escalation towards trade war (I mean the tariff kind, not the shooting kind) is as much of an indicator of poor snap decisions as the decisions themselves. China is more dependent on trade than anyone else right now; for them to trigger problems here right now is insane.
In the span of about a week, they're managing to piss off their ENTIRE rare earth market all at once. Ruining decades worth of work towards trying to convince everyone that the Chinese supply is cheap and reliable. Potentially triggering everyone else to restart their mines - with long term barriers to Chinese suppliers. A backfire in which, at the very least, China destroys decades of its own hard work.
I mean, damn. Even oil-producing nations don't have as much leverage as China is acting like it has here.
Re:The answer is more regulation (Score:2, Insightful)
Yes, it's great. It's absolutely wonderful. Anytime there's a nation of little brown people we want to blow up, we can do it! Bonus points if we sell them our old weapons first so we can talk about how it's "a dangerous world" and then we can use our new weapons on them! Anybody remember Iran-Contra? Though I guess having a really short memory is a mandatory requirement of being an American, otherwise your head would explode from all your national cognitive dissonance. So maybe you don't remember that.
America doesn't punish her war criminals. Oh, no. She's much more sophisticated than that! She elects them. To high office. So their crimes become law. Then they are not crimes. Of course, they're still evil, but now they're not crimes so you can get back to your Brittney Spears and Eminem and whatever else it is that is so much more important to you than realizing what your government has become...
Re:Not again... (Score:4, Insightful)
Re:Already found them... location, location, locat (Score:5, Insightful)
Am I way off here or should we not be keeping these rights?
Can anyone enlighten me if I am missing something since IANAG.
Yes. You are way off. The mineral rights reside with the Afghan people and their government.
Re:Way to prove their point! (Score:5, Insightful)
Essentially what they are doing is what we we (as in West) have been doing to China and still doing to many other developing countries for about a century. We're still doing it in most agricultural products, dumping so that local farmers in Africa can't really compete unless they play ball.
The issue isn't protectionism. It's that this is really the first time that West actually got the taste of same medicine, and same arguments to back the medicine, as it was giving to developing countries for centuries. Chinese have watched what we did, learned, and simply copied our actions. And now, we're finding that in the raw, brutal, jungle-law "only strongest and most ruthless survives" style of globalisation we created, we may not be the only top dogs. And that realisation is so shocking to many of the elite, they're clearly in denial. Mostly because they simply believe in the system they created on religious level, and when the system is turned against them, they are unable to see the bigger picture. So we get the "oh noes, China is being protectionist" tears from top leaders. Never mind that we did the same thing for centuries, when China does it, it's deeply wrong. Not because system is deeply flawed, but because it's not the West that is the party in control.
It's not even that it's somehow irreplaceable. There is a centuries-worth of rare earths across both Northern American and Europe. It's just that we're so used to being the ones using globalisation as a hammer to beat the nail of competition into the ground, we are simply stumped as to what we are supposed to do when we become the nail that is getting hammered instead. A hundred years of being the hammer makes us a pretty bad nail.
Re:Woot for me (Score:3, Insightful)
No we'd run out of oil by 1980 and 1990.
Ha, Ha! (Score:4, Insightful)
Joke's on you, China!
We don't manufacture anything anymore!
Re:Already found them... location, location, locat (Score:3, Insightful)
The reasons for Afghanistan were not dubious. You're thinking of Iraq.
Re:Easy solution (Score:3, Insightful)
Trade disputes with the US don't just involve china. Go look up the softwood lumber dispute between Canada and the US for a prime of example of the US being a bunch of dicks. NAFTA and WTO sided with Canada and yet Canada STILL had to negotiate its way out of that dispute.
Re:Easy solution (Score:3, Insightful)
Re:Easy solution (Score:5, Insightful)
Do you have ANY idea what this would mean? It's not just the Walmarts of the world that deal with China.
I run a very small company - just a couple of geeks in a little office/warehouse. We do enough business for both of us to pay the rent and put food on the table, with the occasional mention in Make or hackaday as a side benefit. We take pride in doing as much of our work domestically as we can and sourcing locally whenever possible, but I can tell you we wouldn't last 3 months without trade with China.
Global supply chains are far too interconnected for something so drastic. When the economy tanked in 2008, despite the fact that we still had plenty of orders coming in we almost went under when we couldn't get the parts we needed. Even when *our* suppliers were OK, if one of *their* suppliers was in trouble we felt it.
People seem to have this weird idea that there's some sort of China, Inc. that just sits over there on the other side of the Pacific building plastic widgets to cram down our throats via Walmart. That's not how it works. China's far from blameless, but "close our markets to Chinese exports" is right up there with "nuke Baghdad" for brilliant foreign policy.
Re:Way to prove their point! (Score:1, Insightful)
even if we had said rare-earth minerals... the EPA wouldn't let us manufacture here anyhow. you can't compete when one country will do what ever it takes to get the business and the other oppressively taxes, hinders and punishes businesses because they make money and/or things. let alone a business that may make a mess in the process.
Re:Way to prove their point! (Score:5, Insightful)
It's hardly the first time. Every major manufacturing, farming, and mining economy in the world does this to some extent: the quesiton is how much, and whether nations follow their treaties about it. Look carefully at the history of OPEC to see where the "West got the taste of their own medicine", and at the history of gold trading and spice trading for the last several thousand years.
In this case I really doubt it (Score:5, Insightful)
Rare earths, despite the name, aren't. Go look it up, there are plenty of them, and the US has plenty to be had. They aren't mined much in the US because China is cheaper since they don't care about safety. Ok fine, but that doesn't mean they can't or won't be mined again in the US if there's a reason. China refuses to trade, the US just starts up production. Prices may rise some but that is ok, believe it or not a market can absorb that just fine (just look to the increase in gas, it wasn't without problems but it near tripled in the period of a few years and life goes on).
Now China could wind up in a much worse situation, if they keep the game up and people aren't willing to trade. Their economy is heavily based on foreign trade and lacking that it could have a nasty downturn, which could cause massive unrest. The government's problems/abuses are largely overlooked because of the massive quality of life improvements going on. If those stop, could go bad for them.
Also there's the fact that despite the hype you see on /. the US DOES in fact build things, it turns out more manufactured goods than any other nation (though China is on track to surpass it in 2020 or so). More to the point, America builds a lot of high tech and important shit. Computer processors, heavy machinery, airplanes, etc. In the event of a trade freeze, China would probably find itself on the worse end of it. Cheap consumer goods are nice, but hardly necessary and that is a large amount of what China builds (and many of those goods are simply assembled of foreign parts to foreign specs). Heavy equipment and computer chips are a little more important to continued progress.
Now in the case of war, the US could unquestionably wage war against China if they felt dumb enough. However China cannot against the US. There is a massive ocean in the way and China has no blue water navy. They cannot project the force necessary, and cannot deal with the US intelligence abilities (like recon satellites and IUSS). They could load up container ships with massive amounts of soldiers and tanks, which they have in abundance, all of which would rest at the bottom of the ocean shortly after sailing.
So I don't find war over this a very realistic scenario. Not a good idea still, but not likely to result in war.
Re:Not again... (Score:4, Insightful)
Re:US needs China more then China needs US (Score:5, Insightful)
Considering that the US needs China to buy its public debt,
China doesn't have to buy US debt. Especially if commodities start trading in something other than US dollars. After all, why the hell would you support the dollar today? The interest rate sucks, the US government is spending more than ever before, and the US economy (which has been in the tank for a while now) continues to struggle. Plus add this to the fact that US banks have no idea who they have loaned money to - no, there are far wiser places to put your money today than US treasury notes. In fact, almost anywhere BUT US T-bills will get you a better return.
The US is in for a very, very rude awakening in my opinion. Gross incompetence has been demonstrated on both a government, military and economic level. I'm just glad I don't live there.
Re:Way to prove their point! (Score:5, Insightful)
This is america bitch.
We'll build a fucking nailgun.
In what factory, you jingoist ignorant fuck?!
Thanks for perfectly illustrating why we are in this situation. "This is America!" is a meaningless phrase. You didn't do shit when they busted the unions. You didn't do shit when the easier jobs were shipped over there. You didn't do shit while the Congress continued to cut taxes for corporations so they could sell us out. You just sat there, with that smug look on your face, saying "Yeah boy! This is America! We believe in the Market, not in that damn Government interference. Why pay more for TV set? That's stupid, when we can all just put it on a credit card for half the price."
Do me a fucking solid favor. Go find the largest object you can imagine shoving up your ass, and then sit on it. Because it's a good primer on what the next thirty years is going to be like for you.
Re:Way to prove their point! (Score:5, Insightful)
For all you complainers ....... (Score:2, Insightful)
Why in the hell is the US shipping dated, dead, or unwanted computers and electronics to 3rd world slums, when we should be mineral harvesting?
It was obvious a decade ago that China, amongst other countries, was going to cut off the mineral export. How is this a surprise to anyone? That they actually decded to do it?
Re:a trade war? good (Score:5, Insightful)
Ultimately, American consumers caused this problem.
No.
Look at corporate profits and income for the top 1% of income earners from 1980 to the present. See how both of those numbers skyrocketed? Yes, the top 1% of income tripled from 1980 to 2006 when adjusted for inflation. See how the middle class stopped growing, and barely kept pace with inflation?
Now go look at the data for Germany. See how their strong unions kept their manufacturing sector competitive, and how they remain competitive with China for raw exports, and blow them out of the water on a per capita basis? All while having a stellar environmental record?
The business community dismantled unions and regulations, the government allowed the wealthy to change the rules to enrich themselves and destroy the middle class, all while telling us we were being liberated by the market. Well, guess what: the market apparently decided to sell all of our debt and manufacturing capacity and raw materials processing to China, and send the check to a few thousand already wealthy douchebags. It seems some needs were "peculiarly attended to" and others were forgotten. Ain't that a bitch.
(And yeah, some of us saw it coming. [slashdot.org])
It cannot be very difficult to determine who have been the contrivers of this whole mercantile system; not the consumers, we may believe, whose interest has been entirely neglected; but the producers, whose interests has been so carefully attended to; and among this later class our merchants and manufactures have been by far the principal architects. In the mercantile regulations, which have been taken notice of in this chapter, the interest of our manufacturers has been most peculiarly attended to; and the interest, not so much of the consumers, as that of some other sets of producers, has been sacrificed to it.
Adam Smith, Wealth of Nations
Book IV, Chapter VIII, pg.721
Re:Way to prove their point! (Score:2, Insightful)
Will this finally wake up America? (Score:3, Insightful)
For decades, America has been enriching its enemies and opponents by voracious consumption of oil, offshoring of jobs, insatiable appetite for foreign-made, cheap goods and China has capitalized ( communized? ) on the USoA's stupidity and gamed the system with its currency policies. And, now this?
Wake up, America!!! It's time to get back to the business of making and building things yourselves. Mr Obama, sometimes you have to unsheath the Iron Fist; it can't always be the velvet glove.
Block all Chinese imports, eject the Chinese ambassador and announce a free trade agreement with Taiwan, Japan, Singapore and Australia. And take some of that damnable corporate and farming welfare money and pour it into materials research so that you have alternatives or reasonable substitutes for the lanthanides ( or maybe just invent some really cool materials ).
But...... don't wait. ACT IMMEDIATELY. Screw the governing by committee. Just fucking make it so!!
Re:Way to prove their point! (Score:5, Insightful)
This is america bitch.
"This is America!" is a meaningless phrase. You didn't do shit when they busted the unions. You didn't do shit when the easier jobs were shipped over there. You didn't do shit while the Congress continued to cut taxes for corporations so they could sell us out. You just sat there, with that smug look on your face, saying "Yeah boy! This is America! We believe in the Market, not in that damn Government interference. Why pay more for TV set? That's stupid, when we can all just put it on a credit card for half the price."
Best. Post. Ever.
Re:Not again... (Score:3, Insightful)
Actually, we waited until all the economies in Europe were devastated, stepped in to ensure that the remaining conquering force couldn't establish a single European currency, then implemented the greenback as global currency to gain all the economic clout (that has been utterly squandered in the past two decades) that goes with such a position.
Re:In this case I really doubt it (Score:5, Insightful)
There is a massive ocean in the way and China has no blue water navy.
Which is exactly why China is working on a blue water navy.
They cannot project the force necessary, and cannot deal with the US intelligence abilities (like recon satellites and IUSS).
What do you think the satellite kill was for that China performed?
It's almost as if the Chinese leadership is aware of what its deficiencies are, and has long-term plans to remedy them. And yet, I hear the same comments about China I heard about Japan in the 70s and early 80s: they just copy, they don't innovate, and have a mediocre directed economy. And then they ate our lunch. I expect the same to happen with China. They will eat our lunch, because we're only looking at where they are, not where they're going.
You don't get it.. (Score:3, Insightful)
I think that is very simplistic.
The Chinese governement has about $860 Billion of US debt, if they were to dump 10% of tomorrow, it would destroy the US economy. For less than 10% US defense budget, the Chinese can cause millions to lose their jobs.
The Chinese economy is much more self-sufficient than the US Economy. Chinese people may suffer but they know how to live with that. US citizens won't know what to do without Walmart, their Apple iPhone, etc. The Chinese don't need our IP, patents, copyrights, and trademarks; they can infringe all of them, but the the children in the US will go mad without their $.02 trinket in their "Happy Meal" and 80% of their parents will demand that the US Congress do something about it.
The US no longer has idea of what it means to be self-sufficient, nor does it have any strength of character to get there. Most of the participates in the discussions are stupid, arrogant, self-rightheous, ignorant, hypocritical, naive and/or self-centered.
Turning food into energy (AMD causing hunger) ,fixing the mess and paying for it.
Blocking energy efficient transportion (rail vs. air, Gore should get off his GD plane).
Blocking wind (Kennedy may he rest in hell)
Worrying about birds or Caribou
Sending thousands to die in the Middle East for oil (don't suggest for a moment that there is ANY moral issue here.. where was the US in Africa, Burma, etc)
Yet spending $1,000 B per year on the credit card of future generations instead of just "sucking it up"
The answer for the US could/should be quite easy.
US Government says that the tax on imported energy will increase by 15%/year for the next 10 years. (US citizens and companies, plan appropriately)
Birds, snail darters, carabou, etc are NOT more important than human life or the ecoomical growth of the US. (IE. there is no moral / ethical issue of using carabou carass for energy)
Any country that is part of or provides legal recognition to any cartel or host their meetings (OPEC, deBeers) will immediately lose US MFN status (what is Free Trade if there is a cartel).
Somewhere in the US there WILL be a nuclear waste dump, (Nevada.. shut the F* up. You only have 2 Senators and 1 congressman, and no one that lives there, was born there. If no one wants to move there anymore, in a country of 300M, who cares. It is cheaper to move everyone out the state (3000K) than to continue the insanity of making New Orleans (500K) a viable place to live. Give them all 1K ($3B) and tell them to move out or shutup.
While addressing Energy, the US that will go after the next set of key threats to the US economy and self sufficiency.. (Rare Earth, Happy meal toys, etc)
Good grief, the US problems are internal US problems. Lack of ethicals, morals, self responsibilty and pruduce. The US lost its ability be a Economical Superpower when it can't make 80% of the goods that are consumes and no one needs the US version of its production when it can make them theirselves (medicine, records and movies). The US military is totally dependent on components produced in Asia. The US has lost much of its abilty to produce many critical military components san imports.
The US no longer is in control of its economy (and has a by product, its long term military capabilities), and whence lost it independence.
The Chinese may only be doing field practices with their Rare Element threat, but the US has no appropriate response, either now or in the next 20 years.
The US is starting to feel the pull into the Beijing orbit. and it has no thrusters to match the long term force. Scotty will not help.
Re:Lithium? (Score:3, Insightful)
You're wrong, on multiple accounts.
First off, charging a 22kWh car battery via photovoltaic is akin to filling the hoover dam with a drinking straw. It's can't be done. Check your physics.
Second, you charge the car from the grid, via a plug. Cars, on average, park 22 hours a day, and drive 2 hours a day. And it enables the smart grid operator (which is what Better Place is) to buy 100% renewable (essentially pick up as many long-term contracts for solar and/or wind as they need, taking the power whenever it's available, day or night, for the life of the turbine/solar farm), and save us burning coal.
You might say "It's expensive! Why would they?", but it actually makes perfect sense.
We consume miles, irrespective of how many gallons or Kilowatts it ends up. They sell miles. And if you look closely at what it costs them to sell you and me a mile, it's 5 parts lithium battery (which is they provide), and 1 part electricity. Buying more expensive "clean" electricity doesn't put a dent in their business model.
If all this is very new to you and you're asking what planet I just descended from, I suggest you go to Youtube, and see Shai Agassi present talks to anyone from the US congress, to Microsoft tech forums, TED, Berkeley think tanks, etc.
He raised 700Mil$ in the middle of a financial crisis, he's got 6 countries on the map with an A-Z model for country-wide EV adoption (from the right tax incentives, to supply of hundreds of thousands of electric cars already in production, to convincing every municipality and council to put charge spots and swap stations.
He's legit. Hawaii is on the map as well, and the US coasts are likely to follow in the not too distant future.
If anyone wants to Karma-whore, feel free to go get some YouTube links.
Re:Way to prove their point! (Score:3, Insightful)
Thanks for perfectly illustrating why we are in this situation. "This is America!" is a meaningless phrase. You didn't do shit when they busted the unions. You didn't do shit when the easier jobs were shipped over there. You didn't do shit while the Congress continued to cut taxes for corporations so they could sell us out. You just sat there, with that smug look on your face, saying "Yeah boy! This is America! We believe in the Market, not in that damn Government interference. Why pay more for TV set? That's stupid, when we can all just put it on a credit card for half the price."
And how does your whiny little rant help? Half the things you mention actually helped US keep manufacturing. For example, busting the unions, shipping out the easier jobs, and cutting corporate taxes. The problem fundamentally is that the US is much more expensive than China for manufacturing. Some of that premium is just because we're a wealthier country (especially per capita and in property values) and want a cleaner environment and safer working conditions and some of it is nonsense like the Social Security pyramid scam (that's 15% added to the cost of every US worker right there, folks) or NIMBYism (anti-industry hysteria which doesn't take into account the actual potential harm of a potential industrial operation).
Re:Woot for me (Score:5, Insightful)
Well, the US should, as a response, stop shipments of garbage abroad.
Start processing electric junk at home to recycle rare earth and precious metals.
Re:Way to prove their point! (Score:5, Insightful)
We tried letting business do anything without restriction, then around 1900 decided there's a better way. China will do the same or they won't have anyone left healthy enough to work. Do you seriously not see the barrel we're racing to the bottom of?
Re:The whole thing pisses me off (Score:4, Insightful)
And they also seem to be committed to keeping their currency artificially undervalued, thereby holding the exchange rate down.
This just makes the US more and more dependent because every day that goes by, the politicians in their complacency think "oh, business as usual" and calmly forget that China is HOLDING it down. The truth of the matter is that America is being mis-managed. Allowing said mis-management to continue, intentionally or no, does not make America stronger it makes it weaker. But now America has banks and other corporations that know they are "too big to fail", and suddenly there are no consequences to mis-management anymore because Uncle Sam will always be there to print some more dollar bills. Or so they think.
I live outside the US and I am seeing first hand what is happening to exchange rates. The dollar is plummeting (because no one believes in its value anymore). This is really hurting exporters because they can't pay their workers. I can imagine that at one point something will have to give and the price of your bananas or whatever will have to go up. That means inflation for you - which the US government will try to hide, but so many cards are already missing from the US house of cards that it's not going to take much to cause another panic. May's flash crash was a beautiful example of how close we still are to the cliff edge.
Re:Way to prove their point! (Score:3, Insightful)
He's complaining about China, not the US. There's just no way to compete with somebody who will destroy himself just to beat you.
Re:The answer is more regulation (Score:3, Insightful)
Re:kick them out (Score:5, Insightful)
Comment removed (Score:4, Insightful)
Re:kick them out (Score:5, Insightful)
The US does exactly the same thing in the agriculture sector.
So I entirely agree, so long the US gets kicked out as well.
Re:Woot for me (Score:4, Insightful)
Well, the US should, as a response, stop shipments of garbage abroad. Start processing electric junk at home to recycle rare earth and precious metals.
Better yet, stop making deals with the Devil in the first place. Maybe then we won't keep getting burned.
Re:Way to prove their point! (Score:4, Insightful)
Being protectionist is not the same as being nationalist, you're confusing the two. As you said, free trade is not the panacea for everything and sometimes protectionist measures are needed in order to correct imbalance or distortions in the market. If a trading partner is artificially deflating prices, then protectionist measures are called for. If they are exporting sub-standard products or ones with high external (ie. social or environmental) costs, then protectionist measures are called for. Anything related to international trade that the market itself cannot manage basically called for some sort of measure to restrict it and control it; it is self-delusional to think otherwise.
Re:Way to prove their point! (Score:5, Insightful)
2) Wow, that was easy.
3) By the way... We have less stuff now. But we have more wildlife. It was a tradeoff, but I'd support making it.
Re:Way to prove their point! (Score:3, Insightful)
China's kind of like the neighbor kid that knocks on my door and offers to mow the lawn for $20. It's not that I can't mow myself, but when it's so cheap to pay someone else why do it myself? If he ever didn't show up for a couple weeks I'd just do it myself, but as long as he's offering I'll keep paying him.
Yes, we have plenty of reserves but China has 97% of the market. That means they can lower the price of their exports to the point it is not economical for the US to operate a mine.
To continue with the lawnmower analogy, if the kid stops showing up, you have to decide if it's worth investing $300 for a lawnmower, some gas and oil, etc. Then, just when you're mind is made up to get it, the kid shows up and offers to mow your lawn for $15 so you don't invest in that lawnmower after all. A few weeks later, he's back to charging you $20, and showing up whenever he wants to. By price manipulation, he can keep you dependent on him indefinitely.
Nobody would invest in a mine (or lawnmower) in those circumstances. We'd have to create a government program (gasp - socialism!) to operate a mine for national security reasons.
Re:Way to prove their point! (Score:3, Insightful)
"the U.S. holds rare earth ore reserves of up to 13 million metric tons. By contrast, the entire world produced just 124,000 metric tons in 2009". That means we have roughly 104 years worth of rare earth ore reserves, I think we'll be just fine.
Exponential growth curves do not work that way.
Successful troll is successful (Score:3, Insightful)
Unions are like any other special interest group in this country, they never know when to quit. They cut off workers at the knees, imposing unreasonable dues and ridiculous work requirements. They are a true, government enforced dictatorship. Everywhere they go jobs are lost. Welcome to America, the country that used to have manufacturing jobs - thanks to the unions. GM, for example, has to add $3,000 for each vehicle they sell, just to pay insane union pensions. Do unions care that GM can't sell cars because of this? No. Is it ever suggested that maybe worker wages should go down so the company can stay in business? No.
Intelligent people don't join unions. This is because intelligent people don't fall for the sucker-dream of unbiased advocates who are "on my side". We happen to be our own advocates, thank you very much. As long as we don't live in a dictatorship that requires people to buy things then union advocates will be powerless to help. A union can force a company to pay an employee a certain rate, but it cannot force the market to pay the company.
Re:Way to prove their point! (Score:4, Insightful)
Well, I'm all for the middle ground, but where it apparently lies depends on where you're standing.
The US corporate income tax rate is AMONG the highest in the world. Fortunately, large companies at least don't pay anything near that. Some of the largest, most complex and profitable companies manage to avoid paying taxes altogether.
Here's another way of looking at it. Who contributes more taxes, individuals or corporations? If you answered "individuals", you are right. So right there you can see that the de facto corporate tax rates are lower than individual tax rates, despite being high in theory.
Now for extra credit, which of the following figures represents the gross amount of the corporate income tax paid in America as a fraction of the gross paid by individuals like you or me?
(1) 90%
(2) 75%
(3) 50%
(4) 25%
(5) 10%
Re:Sigh... Yes the US can compete in manufacturing (Score:3, Insightful)
China can huff and puff all they want but they can't afford a trade war with the US which is by a wide margin their largest trading partner and buyer of those products.
There is no trade war, there is only theater. this is a means of inflating the price of rare earth elements just as war in the mideast is a way of inflating the price of oil, then everyone selling oil benefits. The US and China are deep in one another's pockets and this is all just handwaving and distraction. Neither nation can operate as it has been without the other.
Re:Way to prove their point! (Score:3, Insightful)
If your company is actually paying 35% in taxes, you need to fire your accountants.
Re:Way to prove their point! (Score:3, Insightful)
Exactly. It's not that the US can't manufacture things any more - if you look, we're actually still the number one producer of manufactured goods in the world. We just haven't grown as fast as China has. It's that it doesn't make economic sense for us to make everything right now. If the supply with China dries up, suddenly it'll make sense again, and factories will start springing up all over the place. There is capital here to do it, there just hasn't been a reason to allocate it to those industries.
Can it get moving in six months? No. But industry movements are rarely measured in months, and it can definitely get done in a few years.
http://www.theglobalist.com/StoryId.aspx?StoryId=4763 [theglobalist.com]
Re:Way to prove their point! (Score:2, Insightful)
True, lets get rid of:
Child labor laws
the weekend
safety practices
OHSA
consumer protection agencies. Making products safe hurts profits.
The EPA hurts US competitiveness, who gives a shit about clean water/air.
Roads. It is SOCIALISM I tell you to have roads owned by the government. They should be owned by private businesses who can charge what they want and ban anyone they don't like from using them.
Fire departments. They shouldn't have to put out fires unless paid.
EMS. No insurance card, no response in an emergency. This is the Libertarian way.
Police. Why should police bother catching crooks? This is just a cost center. Perhaps it should be like the cartoon in Heavy Metal where if one needs an investigation for a crime, they pay for it?
It would be great for businesses to have Americans back living in shit like the Gilded Age while a few in the UAE live like kings. However for the rest of the 99% of the population, life would suck. But, apparently this is what libertarians and teabaggers want. They want to stand outside their box in the street (as their house was condemned because a business wanted a 7-11 on that spot) and breath the fresh smelling fumes of mine tailings and coal exhaust fumes wafting from the nearby factories which can compete unhindered by any pollution laws. Then later in the day, around 12:00 PM, the kids come home from the coal mines for a couple hours of sleep.
Teabaggers can have that sort of life. Most anyone who actually has had an education past the fifth grade would rather have weekends, 40-60 hour work weeks, and the ability to go to a nearby park without worrying if there is enough pocket change for admission. Breathing in clean air and drinking water free of lead and cadminum also are nice luxuries too.
Re:Way to prove their point! (Score:5, Insightful)
Sure. The EPA does a good (if sometimes possibly a little extreme) job of protecting our air and water. I think that's fantastic and wonderful! But the result is that we turn around and buy stuff from horrible polluting factories overseas that have people working in unsafe conditions, etc, but who can, by virtue of destroying their own people and environment, make stuff much more cheaply than we can.
What we need is to have protective tariffs on imports from such, so that the price of building clean factories does not render them totally unprofitable. Same deal with human rights abuses abroad. If the abuses are making their exports cheaper, then we either need to allow the same sort of abuses here so we can compete, or artificially raise the prices of the imports so we can compete without abusing our people.
You simply can't have one without the other.
Bad analogy: The Ivy League mostly plays itself in football. If Ivy League teams with tough academic requirements on their athletes were to try to play against the Ohio States and Texases of the country, they would get creamed, and everyone would say "haha, why are you losing?". So they mostly only play other teams with similar academic requirements. If they could, I'm sure that they'd love to play against Oregon, but with the restriction that only Oregon's players that met Ivy League academic standards would be allowed on the field. Obviously they can't do this. As a sovereign nation that can lay down rules for what goes in and out of the country, we can do this.
Re:Way to prove their point! (Score:5, Insightful)
Of course you can compete, by levying tariffs on the guy who is using destructive business practices.
We could restart all of America's manufacturing facilities if our trade policies were just a little more isolationist -- which would be in line with how foreign countries treat our goods.
Re:Woot for me (Score:4, Insightful)
The west in general isn't going to get "smarter". The west in general have always had to slink on their bellies and make deals with the devil to keep their standard of life going as it is. There are two big differences here. The first is that the US isn't calling the shots (so it all feels weirdly familiar, yet totally foreign). The second is that no one can militarily push China around. Before the US could point guns at a (generally) middle eastern oil state and grimace while paying slightly higher prices. The process wasn't pleasant, but it worked out for both parties. China has its own (sovereign) resources. In the end this isn't going to be pleasant, not by a long shot.
Uncle Steau -- Now gets why BBC news always portrays China as the once and future king, it hurts less that way.
Re:Way to prove their point! (Score:4, Insightful)
I have always believed that Nixon's opening of trade with China was a massive mistake. We basically turned a communist nation, theoretically a non-belligerent enemy, into a superpower. We handed sensitive technology to a communist country which has never stated that it won't engage in hostilities with the United States. Indeed, they have recently been developing some advanced military technologies which are frankly disturbing, and I can't help but think that they got a leg up in this by the uncontrolled flow of technology to factories in China.
In the short term manufacturing goods in that part of the world has allowed the common man (and the uncommon woman) to afford nice, shiny things which would have been completely unthinkable to previous generations, but we're now seeing the downside to this dance with the devil.
Re:Way to prove their point! (Score:3, Insightful)
"the unions" - I love how this is where people go right away. Yes some unions have over-reached no one will deny that. But funny how no one points fingers at the big fucking huge corporations and their management who are making money hand over fist by using what amounts to near-slave labor overseas.
Let me tell you this - if you abolished every union in the US, every single regulation, and cut taxes to ZERO we still would not be able to compete with the labor costs over there. They have people that work 60 hours a week for as little as 300 a month in some Asian countries. Hell 300 dollars a month in the US would not even get you a room in most inner city ghettos.
The global free marketers and the moronic, short-sighted conservative and libertarians among you who support them will be what kills the US not any union or liberal group.
Re:Way to prove their point! --- But what now? (Score:2, Insightful)
You sir, hit the proverbial nail on the head. The real issue is the industrial base going out from the US, and lots of other western countries. I can hardly find any product without a "made in china" stamped on it.
The million yuan question is, can the world recover from this? Or have we been all conquered by the China already?
Re:Woot for me (Score:4, Insightful)
I don't rate China's nuclear strike capability very highly. The devices are (relatively) crude, old, and inaccurate. Plus I rate the American ability to interdict them very, very highly. US strike aircraft are very stealthy and highly precise, and their target location and identification capabilities are top notch. The days of "hide-a SCUD" from Gulf War 1 taught our American cousins a number of very valuable lessons.
I'd be willing to bet that in the case of open war between the US and China that China would lose all nuclear strike capability in minutes.
There are other factors though that I think act as serious disincentives to full-on warfare:
1. It would be a massive, one-sided slaughter, with Chinese casualties being simply horrible to contemplate - and we aren't in the days of rampant xenophobia where you could paint the enemy as some sort of sub-human "yellow peril" and justify that sort of death toll. I think that Western society simply won't stomach pictures and video of Chinese soldiers and civilians killed en masse;
2. The costs of fielding a modern army are astronomical. The wars in Iraq and Afghanistan barely count as sub-theatres in a WW2 context, and yet the amount of money and resources required to sustain them is simply staggering. Committing the entire power of the modern US military to full scale warfare in China would probably be the single most expensive thing ever attempted in human history;
3. China is so inexorably linked to the US in an economic sense that open war with China would collapse the US civilian economy. So few consumer goods are actually manufactured in the US - and the common practice is just-in-time delivery, rather than massive warehousing - that stopping the flow of sea containers from China would see every Wal-Mart in the US empty within a month. This would touch the American voter far more seriously than WW2 rationing ever did - and I think modern generations are far less willing to accept that sort of hardship.
That's not to say that these forces that tend to reduce the probability of war could not be overcome. China has a HUGE economic lever to use on the US. If they use it hard enough, they can create the kind of conditions that would allow the US population to start thinking in xenophobic terms which would then open the doors to full-scale military retribution. It is entirely possible to go down this road should both parties prove sufficiently intransigent. But my assessment that the probability that this would ever happen is very low.
DG
Re:War proofing (Score:3, Insightful)
Sure, but not just rare-earths - how about technology manufacture in general?
The US won WWII because it could turn out ships faster than the Japanese and Germans could sink them. I'd question whether that would be the case today. In many ways the US is in the position that the Japanese and Germans started WWII in - far ahead of the competition in fielded forces, but without sufficient industrial base to sustain a war after the complete loss of all existing equipment.
If you want to know who will win a six-month war you count how many planes each side has. If you want to know who will win a 5-year war you ignore that entirely and look at how many factories each side can operate.
Re:Way to prove their point! (Score:3, Insightful)
using German, Japanese, and I bet even a few Chinese machines. And if there are any semi-conductors in this gun, I doubt they're coming in from Detroit, Pittsburg, or even off a domestic Intel campus.
Don't look now, but your fig leaf is shrinking.
Re:Way to prove their point! (Score:3, Insightful)
Here are your choices:
1. The current globalization scenario of unfettered trade outward from America but with limited imports into other countries. The whole world gets rich, but America gets less so, and eventually Americans are equalized down to the world standards of lower income, fewer workers' rights and less safety.
2. Measured isolationism, with tariffs in line with how other countries treat our goods. The whole world gets less rich than it could, but Americans retain their standards of living and records for worker safety and environmental protection.
To me, this seems like a no-brainer.
Globalization is a force that in time will equalize every country. That makes it 'good for the world', but bad for America, since we currently enjoy the top position. We should try to the third world to our standards; it is dangerous and unethical to give up our standards and adopt theirs in the name of a bit more marginal profit.
Re:Way to prove their point! (Score:3, Insightful)
You know, people say things like this, but the facts are simple: The tax rates on everything you claim as profits ARE taxed at 35% for any C Corporation in the USA. You can only do so much to avoid them. Most corporations are not multi-billion, and those that are avoid BY MOVING SOME OPERATIONS OVERSEAS. That is the catch.
You can accelerate SOME depreciation, but not all. You can defer some profits, but not most. Take a look at the actual SEC filings for public companies and see for yourself.
No one is saying 35% of gross, we are talking about profits. As a side note, if you start a corporation and have multiple years of losing money, you will lose your corporate status via the IRS and have it declared as a "hobby", meaning NOTHING will be tax deductible. Again, it is easy to talk about "anyone can avoid taxes", but as someone who has owned a few companies, I can say with confidence that you can only do so much without risking fines/jail/etc. from the IRS.
Re:Not again... (Score:3, Insightful)
Re:Way to prove their point! (Score:3, Insightful)