Guest Post by Willis Eschenbach
The countries of the West are slowly destroying their manufacturing, mining, and fossil fuel producing industries by way of well-meaning but ultimately destructive “environmental” regulations. I put “environmental” in quotes because many of the regulations have much more to do with the green fantasies of the wokerati than to do with the environment.
At the heart of the problem is the fact that most developing countries have little to no environmental regulations. So when e.g. smog regulations cause German factories to close and relocate to say Nigeria, the smog in Germany decreases but the global smog increases.
But since it can’t be seen from Germany, the Germans get to feel all noble and pat themselves on the back about the clean German air.
And when so-called “greens” prevent the opening of new cobalt mines in the US, it means that children in the Congo are sentenced to virtual slavery to build our windmills and electric vehicles … but hey, the greens say, you can’t see the kids from my house …
I hadn’t thought about it, but the same is true about the Biden Crime Family’s insane war on US oil and gas production. In this regard, there’s an interesting study from the Institute for Energy Research entitled The Environmental Quality Index. From the release:
The contradictions of this approach are most apparent in the case of the United States, the largest producer of both oil and natural gas in the world. Reductions or limitations on domestic U.S. oil production must be made up elsewhere in the remaining major oil producing countries, which have far lower environmental standards than the U.S. This paper seeks to quantify that environmental gap by creating an environmental quality score, weighted by production, for oil and gas production in countries around the world using the well-known Environmental Performance Index (EPI) produced by Yale University. The results show that purely as a matter of environmental protection, replacing U.S. domestic production with foreign supply would be an overwhelmingly negative tradeoff.
The major points highlighted by this analysis are:
- For the 20 largest oil-producing countries outside the United States, the average EPI environmental score, weighted by liquid fuels production, is 39. When compared to the U.S. EPI score of 51.1, it means the average barrel of non-U.S. petroleum is produced in a country with an environmental score that is 23.6% lower than that of the U.S.
For the 20 largest non-U.S. natural gas producers, the average EPI environmental score weighted by production is only 38.6. So compared to the 51.1 EPI score of the U.S., the average billion cubic feet of natural gas is produced in a country with an environmental score that is 24.5% lower than that of the U.S.
The United States, the world’s largest producer of both oil and natural gas, is only outranked on environmental quality by 3 of the top 20 oil producers and 3 of the top gas producers. None of those countries produce even one-quarter of the volumes of oil or natural gas coming from the U.S. Indeed, all oil production from countries scoring higher on environmental quality amounts to only 35.7% of U.S. production, and that from gas-producing countries is only 33.4% of U.S. production. The sheer size of U.S. production combined with its excellent environmental standards means that U.S. production disproportionately reduces the environmental harms of oil and gas production on a global scale.
Sadly, these days the liberals, Democrats, and “greens” are all into the feelz, and they run from the ugly facts listed above like vampires running from garlic …
My very best regards to everyone,
Same Old Same Old: When you comment, please quote the exact words you are discussing. This lets us all know just who and what you are responding to. Thanks.
The racism and hatred for humanity at the core of the Marxist climate religion is always hidden from the public! Those proselytizing for Climastrology can get fabulously wealthy by squeezing the poor of every nation; their numpty believers can neither see, nor hear, any wrong!
The easily brainwashed stand with their lords and masters, and rejoice in the warm, gentle rain despite its distinct odor and yellow color!
Yes, and I experienced that this morning, i.e., that they can neither see nor hear any wrong. Of course this makes sense when you sense of worth comes from having “only the right opinions”. Oscar Wilde would have a field day with the wokery going on today.
Oscar Wilde would be cancelled or there would never have been an Oscar Wilde.
Willis, I would dispute one word in your first sentence. That is “well-meaning.” I don’t think that most environmentalists are well-meaning. They just want to impose their world-view on all of us.
Well-meaning in their bad and wrong belief.
The minions are well-meaning. They don’t know what they’re doing.
Their “Grus” are just mean and using them and the whole “GAGW/Climate Change” as a lever to power, wealth and authority.
To them “The End Justifies the Means” is their moral code.
The minions are simply ‘useful idiots’.
Useful Idiots or Good Cargo (as in Cargo Cult) as in Good Germans…. go along to get along, or, in the modern family: take a knee, beg, “donate”.
“CAGW/Climate Change” as a lever to power, wealth and authority.”
CAGW is not about science or engineering — it’s 99% politics and 1% science.
The climate change leaders know that, and obviously do not care about the environment with their typically HUGE carbon footprints (multiple huge homes and p[rivate jets)
Their useful idiot followers have been convinced they are trying to save the planet. Climate change is their secular religion.
Humans have the need for a religion. it seems. I’m a long trime atheist so I don’t understand that need. Maybe my “religion” is refuting and insulting leftists?
Conventional religions do some good, but the climate change religion does not. That religion started as an anti-air pollution religion in the 1970s. I was in Pasadena, CA in the 1970s for a Rise Bowl parade and the smog was awful. But that religion strayed to a hatred of CO2 which has nothing to do with air pollution. The real science of harm from air pollution became the junk science of imaginary harm from CO2..
Due Diligence: I advocate for much high CO2 levels to improve the growth of C3 plants (90% of 300,000 species) which will support more life for our planet. People who are anti-CO2 are anti-life.
“Humans have the need for a religion. it seems.”
People need hope for the future. Religion gives them that.
A coming climate crisis is hope for the future?
It evidently is for those who believe in the crisis.
Out of sight, out of mind. Under modern Progressivism, it’s always up to someone else to make the real sacrifices.
Hypocrites never look in the mirror.
It’s not just outsourcing pollution, its outsourcing prosperity particularly for working class hourly workers in manufacturing. But it doesn’t stop there. California’s environmental laws and fees has made it more difficult for agriculture. California no longer makes base materials. The only industrial manufacturing that can survive is high margin work. Lower income people who operate the fossil fuel powered machinery pay carbon taxes and low carbon fuel fees to get work done and the homes they rent are heated with expensive electricity because more well-off homeowners get retail price for the rooftop solar they generate.
But perhaps the greatest danger is that green energy will not support industrial production, its just too expensive and unreliable. Additionally, its impossible to be a military power if you aren’t an industrial power. I suspect China understands this very well so will insist that the west goes fully green before it embraces it (if indeed it ever does).
“its outsourcing (hurts) prosperity particularly for working class hourly workers in manufacturing”
That cost is offset by the benefits of cheaper products imported from China
I know that is a tough economic concept to follow.
We get Chinese goods at relatively low prices. Chinese people and companies get “dollar bills” that lose purchasing power every year. If the Chinese don’t buy enough US made products, then they will invest their spare dollars in the US: such as buying US Treasury bonds or US assets They do not stuff their excess dollars under a mattress.
The result is the US global balance of payments is always in balance. “The balance of payments includes both the current account and capital account. The current account includes a nation’s net trade in goods and services. The sum of all transactions recorded in the balance of payments must be zero, as long as the capital account is defined broadly. The reason is that every credit appearing in the current account has a corresponding debit in the capital account, and vice-versa.”
SOURCE OF QUOTES:
Balance of Payments in Global Transactions: Why Does It Matter? (investopedia.com)
Manufactured goods are cheaper but is housing, education, healthcare, defense spending? Last I checked it’s not. YOu make a great economy for the keyboard class but blue collar workers become the delivery crew for products made in Asia but at half the wage they got making it here. And those Corp execs who made a killing with off shoring suddenly find their IP has been hijacked and all they do is manage a brand. This is not a healthy place to be.
Richard, I agree with your analysis of the balance of payments. US consumers have benefited greatly from China producing goods cheaply and investing their surplus dollars in the US. In effect, China voluntarily enslaved their poor to provide stuff for Westerners. On rare occasion the goods are even of adequate quality. Is it a gift or bait?
You have to ask why would Chinese elite do this? A hopeful answer would be that elite Chinese just want to get rich and don’t bother themselves with how that impacts their fellow countrymen. A more likely answer is that it’s a temporary strategy to deplete America’s industrial base. (Or a bit of both)
A generation after the manufacturing plants close and those who knew how to do things are either too old or dead, you can’t just throw up a factory and start building sophisticated products employing the former staff of McDonald’s and Buffalo Wild Wings. A competent workforce takes many years to develop and requires a continuous pipeline of apprentices learning from the old masters.
Coincidence or not? Dementia Joe is simultaneously depleting the strategic oil reserve and stockpiles of weapons. The Biden Crime Family is still not on trial.
Chines communism was failing to lift many people out of poverty. So they adopted capitalism for some industries allowing private profits and economic growth has boomed. They became more competitive versus the rest of the world.
Of course Chinese businesses ignored environmental concerns and there are too many dishonest businessmen there, but the economic system change has helped take a lot of Chinese people out of poverty.
… It would be a miracle if Jumpin’ Joe Bidet ever did anything to make the US more prosperous. His focus is on making his family more prosperous. Lucky us.
“too many dishonest businessmen there”
Compared to where. At least in China, when the Party (CCP) catches up to a dishonest businessman, that man is soon dead or imprisoned.
In the US, the federal government has repeatedly bailed out industries, mostly FINANCIAL industries, that ran the economy into the ground, with NO accountability for those who skimmed billions off the top.
Of course the question is who determines the definition of dishonest. In China is it he who fails to bribe the proper CCP members?
“too many dishonest businessmen there”
Compared to where.
Compared to the US
— Polluting air, water and land & trying to hide it
— Substandard ingredients in products
— Falsifying accounting numbers
— Excess employees in state industries to satisfy Communist leadership
— Building empty apartment buildings to stimulate GDP growth
We have had our Enron, but fraud is more common in China. It’s true the punishment is more severe.
Fraud is led by the government “management” economic data, such as the Real GDP growth rate, which often does not match related data, such as electricity usage. … Their Covid response was ridiculous too.
Just to say I hope people everywhere read this, Willis. I am sending the link to all I can think of.
Just to say I hope people everywhere read this,
That would require the so-called mainstream media. And as you well know, that’s not going to happen
Through arbitrage, crook, and credit.
My childhood was stolen by the Boy Scouts. While I was busy learning stuff while earning useless merit badges, I could have been protesting to make my parents proud instead.
Did you forget the sarc tag?
My Eagle got bonked by a windmill.
House cats k!ll more eagles than windmills do. Oh wait maybe those were sparrows, but birds are birds! And anyway isn’t it obvious that we have to despoil the wilderness and deplete the raptor population in order to save the wilderness and the raptor population?
The Forest Service has a good start on it by shooting cows from helicopters in New Mexico — and leaving the meat to rot. If that were done by licensed hunters they would be subject to a large fine.
Good sarcasm requires no sarc tag; I never use them.
Dave Fair 24, 2023 5:53 pm
The problem with your theory is best expressed by Poe’s Law, viz:
Sorry, Willis. I don’t pander to the lowest common denominator of the Internet. If someone misinterprets my sarcasm on WUWT & etc., I’m happy to explain myself. Anybody that has read my various postings ought not to be confused how I view Leftist and CliSciFi profiteers of all stripes.
That old adage is from Al Gore’s Book of Intenet Etiquette.
Al’s book also included Rule 3b, which states that online arguments must be allowed to continue until one side compares the other side to H i t l e r.
Rule 2a states that misspelling a commenters name or moniker as an insult is considered to be rude. For example, using “Al Bore”, or “Al “the climate blimp” Gore” would be rude. Also “Jumpin’ Joe Bidet” and Kamala “the word salad queen” Harris. I violate that rule constantly, Willis Einstein.
This comment is serious, not sarcasm.
Does that mean that Nostradamus was being was being rude (rule 2) when he referred to Hitler as Hister?
Poe’s Law or D’oh’s Law?
The stupid will always be with us.
My sarcasm, with no sarc tag, is only recognized as sarcasm 48.9% of the time, and often makes people go berserk with down votes. I have decided to end such posts in the future with the statement: “This post is serious, not sarcasm”.
Well, Richard, I can detect your sarcasm 63.4% of the time so my sarco-meter is better than the average. But I don’t go with down-votes out of consideration of your obviously sensitive nature.
a new tag is needed for that, like /real
What if I said that my comment was sarcasm and you missed it? 😎
I don’t always use sarc tags. Sometimes I use ” 😎 ” instead.
But Willis is right. Sometimes, while I might remember seeing a commenter’s name before, I don’t always remember where they’re coming from and the sarcastic comment is so close to what a Greta or a Griff or a Simon might say that I’m not sure.
And I’m not a new reader.
It doesn’t hurt to throw one in when the joke isn’t obvious to anybody.
Sarcasm is best served steaming.
Totally unnecessary, IMHO.
A veritable parade of pride… less the lions, lionesses, and [unPlanned] cubs curiously, inequitably excluded under an albinophobic banner.
My small manufacturing business requires bronze castings. All foundries in California have closed or moved out of state.
We will soon have to move also.
Better sooner rather than later.
One of the hosts of “Shark Tank”, an investment tv program, said last night that Calfornia was uninvestable along with Massachusetts, New York and New Jersey. He said many businesses in these States are moving to more business- friendly States like Texas and Florida.
The radical Democrats are turning their States into places where crime and homelessness thrives and businesses die.
The radical Democrats are completely out of touch with reality and are ruining the places they control.
BUT they still win elections in the US, so they are not, actually, out of touch with the reality of 50% + 1 of the population, you know, those whose livelihoods is supported by free money from federal and local governments, after having been stolen from the productive of the nation.
BTW: Today is the anniversary of the the 16th amendment, the Income Tax, being declared as ratified. You know, that which allows the federal government to extort money from the productive at the end of a gun.
Along with direct election of senators, that marked the beginning of the end of the US. The only hope now is the Fair Tax along with the elimination of the income tax, and all associated records that the Democrats use to slime their opponents.
Then the elimination of the Federal Reserve.
Democrats win elections in the US for 2 reasons. #1, by far, is a corrupt and bias media at most levels emphasizing a Democrat agenda. #2 is younger people are convinced they cannot affect policy by their votes so then vote on emotion. Abortion is the classic example. They may not ever want an abortion, but the Dems have convinced too many young people that they are the only ones who can be counted on to keep it legal. Tax policy is well down the list of most voters, as is anything approaching sanity on the economy, the environment or basic freedoms. Too many Americans have taken our freedoms for granted and it may take a major crisis to shock them back to reality. The Biden Admin keeps temping fate with chaotic foreign and domestic policies and it’s only a matter of time before some catastrophic event happens on his watch. Odds are it will happen before we get rid of the old fool.
Perfection—Enemy of the Good
My plan for how my newborn will win the Boston Marathon this year
I saw that interview excerpt and it was the highlight of the Tucker carlson show.
Keven O’Leary of Shark Tank was the guy
I watched a Shark tank show once — seemed like people promoting a lot of junk. We already own too much junk, thanks to the wife, a collector of everything we don’t really need.
You (and I) just don’t understand our need Richard.
My wife has a huge candle collection. During a recent blackout not one candle was in the house. They were all stored in the garage. If our house ever catches on fire it will really be something.
She also collects rocks and shells for her garden, place mats, things made of wicker, dishes, pillows and flower pots. That’s all I can think of. I collect compact discs and audio equipment — there’s no room for anything else. We have had many garage sales but somehow the amount of stuff just increases to fill any empty spaces.
Aha! I see the whole problem now:
First one must decrease the spaces. Only then will possessions decrease. I was told many moons ago that one should move every 5 years. This assumes the winnowing process will be employed.
I seem to recall that the last domestic lead smelting operation closed some time ago.
Its very striking, isn’t it, that the greens after reproaching the Western countries with having exported their emissions, then do not take the logical next step, which is to propose banning the imported goods which now are carrying all those exported emissions.
You see it in the UK as a for instance: the aim was to ban the steel grade coal mine in Cumbria, but not to ban imports of steel making coal.
Whereas if they were so interested in reducing global emissions, they’d be trying to ban buying carbon-loaded goods from anywhere.
Michel, please stop making suggestion about the Greens next logical step and so on.
For “greens” there are no ” logical” steps. There is no logic at all, or they wouldn’t be “greens.”
Logic is Kryptinite to “greens;” it would induce a fatal bout of cognitive dissonance.
In the 1970s the greens were logical about air pollution. Since the 1980s they started considering CO2 to be air pollution, so they are logical about nothing.
That was funny, a Green being cognitive so as to have cognitive dissonance!
I thought that the reason “Leftists” were called that was because they tended to populate the left-hand side of the bell curve.
The EU carbon border adjustment tariffs come to mind.
How about Australia that mines lots of coal and exports most of it?
Coal in Australia – Wikipedia
Keep it in the ground. Then watch for the Chinese warships.
The Climate Alarmists (and others) plan on impoverishing the vast majority of consumers, so they can’t afford the imported goods. The ‘middle classes’ are being ground down by the millstones of inflation, flat productivity, and taxation. With the U.S. national debt at $33.5 Trillion and climbing rapidly, the fresh new dollars fabricated through the Federal Reserve + Treasury, every dollar saved or earned becomes worth less and less.
“#WhoMadeMyClothesThe #WhoMadeMyClothes hashtag was launched in 2013 by Fashion Revolution co-founders, Carry Somers and Orsola de Castro. Celebrities including Emma Watson, Kelly Slater, and Fernanda Paes Leme used the hashtag on Twitter to support the issue.
The movement also utilized YouTube to spread awareness. To promote the hashtag in 2015, Fashion Revolution released a video titled “The 2 Euro T-Shirt – A Social Experiment”. The video showed a vending machine selling T-shirts for 2 Euros. When people went to purchase the shirt, a video played describing the working conditions in which the shirt was made. By the end, people chose to donate to the cause of increasing supply chain transparency instead of buying the T-shirt. The video has over 7.9 million views. Their 2018 campaign film uploaded on April 22, 2018, was awarded the Best Green Fashion Film award at the Fashion Film Festival Milano and has over 54,000 views to date.”
Where are those people now?
Have they gone the way of the “Save the Whales!” people?
Labor and environmental arbitrage schemes use redistributive change solutions to sustain the viability of social justice and secular lucre in the wake of progressive prices and capital depletion. Take a knee, beg, “donate”.
I knew about the mining and manufacturing. Had not thought about US O&G production. Good point, WE.
Well said Willis, I don’t understand how the climate alarmist continue to get away with the nonsense they are spreading.
Lies and bribes, Bob.
They claim to want all oil and gas left undisturbed underground.
Repetition of a prediction of climate doom since the1970s, repeated by the mass media and politicians. If the Germans could be convinced that German Jews were evil in the 1930s, then why couldn’t many people be convinced that CO2 is evil, and a climate crisis is coming?
“At the heart of the problem is the fact that most developing countries have little to no environmental regulations. So when e.g. smog regulations cause German factories to close and relocate to say Nigeria, the smog in Germany decreases but the global smog increases”
I don’t think it is really as direct as that. We have free enterprise so any regulation or action will be subverted by enterprise. So if a company finds regulation prevents it from conducting its business in one country then it is free to move to another. An example of this sort of thing is the embargoes of oil put on Russia by Germany and others. Now India buys oil from Russia and sells it to Germany at a profit!
I want to say that I’m regularly impressed with the amount of effort you put into backing up your arguments, so I’m surprised and disturbed by this one.
You say “… many of the regulations have much more to do with the green fantasies of the wokerati than to do with the environment.”
While this statement is vague enough to conceivably be true, it seems rather to be a devious argument for no regulations, which doesn’t follow logically. Can you point us to a comprehensive list and analysis of these unnecessary and counterproductive regulations and the magnitude of their impact on our economy. Better yet, can you direct us to list of regulations that you find salutory?
My perception is that here in North America we have not been able to deal with the poisons our industries have added to the environment, and we continue to add more. And that remark is no more vague than yours.
I agree we must not dismantle our industrial or agricultural base, if only because we can’t rely on the global distribution system for our survival,and especially not if we’re going to survive a resurgence of the ice age. But poisoning the water, air,and soil we need to survive is not a reasonable trade-off.
Let me start by making a clear distinction between real pollution (heavy metals, smog, and the like) and imaginary pollution (CO2, methane, and GHGs).
I do not think that taking the CO2 in the atmosphere from 0.04% to 0.05% poses the slightest danger to humans or the environment. So any and all CO2 regulations “have much more to do with the green fantasies of the wokerati than to do with the environment”. And the most damaging regs have to do with CO2. Heavy manufacturing of almost any type emits CO2 and outsourcing that is hugely destructive to your country’s economy.
Next, we have the “renewable mandates” that require a certain percentage of power to come from renewable sources. Again, all this does is make energy more expensive, and leads states like California to simply import fossil power from other states.
Then we have the Dutch farmers being shut down because of the methane and CO2 produced by farming operations. This can only increase the amount of imported food, and again simply outsources the emissions. And although the emissions are not dangerous … shutting down your farming certainly is.
Moving on to the industrial non-GHG emissions you are concerned about, yes, we do need to reduce them. But simply passing regulations, as the article above shows, doesn’t reduce emissions—it merely moves them out of the country.
Me, I’m a big fan of tariffs. Using them in conjunction with domestic regulations seems to me to be the only way to reduce dangerous emissions.
My best to you,
Re: “renewable mandates”, not only do they make energy more expensive, they mandate the use of products – wind turbines, solar panels, and batteries – that are far more environmentally destructive than using fossil fuels when you consider their full life cycle as made very clear by Mark Mills. Not only that, but wind and solar are 100% dependent on fossil fuels from cradle to grave since they can’t reliably produce enough energy to power the machinery used to reproduce themselves.
Tariffs increase the price of imported goods. They also get countered by foreign tariffs on US exports. The net result is negative on free trade. Tariffs are a tax. If you think taxes increase prosperity, then you are wrong.
Willis’ comment is a little ambiguous—he’s a big fan of tariffs—is that on all imported goods just because they are imported, or was he talking about how a country can clamp down on real pollution without driving industry out?
I interpreted his comment as a remedy for the problem he was describing. Namely that you end up with more pollution if you regulate domestically and industry shifts overseas.
Unless you deny market access under the unfair advantage of not complying with our anti-pollution regulations, it’s predictable that industry will shift. It’s ultimately the demand the determines how much will be produced. If the price to the consumer is the same or lower from domestic suppliers, there is no incentive to offshore production.
As a big fan of free markets, I am not a big fan of tariffs. They are paid by consumers. However, in this case, it is right and just that the consumers pay the full cost of producing the product that they demand. No one else should pay. No one else should suffer the consequences of goods being produced for the consumer in a polluting process.
As a practical matter, though, how do we set the tariffs that Willis advocates? It could not be based on what laws or regulations a country has on the books. China has laws against intellectual property theft. I imagine that Ukraine has laws against bribing Big Guys by hiring their degenerate sons. It would have to be based on a subjective assessment of the enforced level of pollution abatement. That sounds like an impractical approach.
Richard Greene February 25, 2023 12:15 am
If you think buying cheap stuff from overseas increases prosperity, then you are wrong. Here’s an example.
Farmers in Mexico can produce much cheaper vegetables than farmers in the US. Cheaper labor, fewer regulations, etc. So suppose we decide to buy all our produce from Mexico.
Let’s examine the situation after a year. The Mexican farmers now have billions of our dollars, so the Mexican farmers are much wealthier. The dollars circulate in the Mexican towns, increasing their prosperity. And because the dollars don’t disappear, at the end of the year, Mexico is billions of dollars richer.
But in the US, the reverse occurs. Yes, we have cheap tomatoes, but our farmers are out of business. And the money the farmers would have made is not circulating in the towns. So the US is not only billions of dollars poorer, but one main form of producing wealth, growing it, has been kneecapped.
In fact, at the end of the year, all the US has to show for the money spent is a big pile of vegan excrement …
You seem to think that tariffs are taxes. In fact, they are a wall to keep us from destroying our own economy by moving our farms, factories, and fisheries out of the country.
I discuss these questions in the series of posts linked below. “Free trade” is a trap.
My best to you,
Why Free Trade Isn’t
I lived for eight years in the Solomon Islands, 1985 to 1991 and 2007 to 2009. The Solomons are a nation of about three hundred islands just south of the Equator. The only thing most Americans have heard of there is Guadalcanal, because it is an island that was the site of World War II battles.…
I used to be a strong proponent of free trade, until I real “How Rich Countries Got Rich … And Why Poor Countries Stay Poor” by Erik Reinert. His exposition is a tour-de-force, covering the actual history of trade, tariffs, and how England, France, and Germany used them to become wealthy. It’s not a cheap…
How Rich Countries Got Rich
I’ve mentioned before what I see as the most important economic analysis for our times. This is “How Rich Countries Got Rich . . . and Why Poor Countries Stay Poor” by Eric Reinert. $11.99 on Kindle, used copies from $2.21. A few days ago I did an analysis of an earlier work which raised…
Who Benefits From Free Trade?
Simple question, but it has a two-part answer. IF it is free trade between roughly equal economies with similar labor costs, everyone benefits. That’s just more competition. Free trade in most goods with say England would in general be a net plus. However, IF the trade is between an industrialized and an unindustrialized economy, the only…
Trade War? Bring It On!
Lots of folks are hyperventilating about the possibility of a trade war with China. I see this as a result of wide-spread misunderstandings about the economics of trade between countries. So let me start from the basics. There are three and only three ways to create wealth. What is wealth? It is the stuff that…
Great comment, WE. Irrefutably True in spades.
That makes both of you wrong
Willis, ultimately what happens to those dollars Mexico receives? Whether directly from Mexico or circulated around the world those dollars must come back to the U.S. as investments in its economy (a greatly simplified description, but true). Those dollars might not be invested in growing tomatoes, but they will benefit the economy; it is not a zero-sum game as protectionists assume. And as Mexico becomes richer, its labor will costs rise.
Lost in the protectionist game is the value of competitive pressures to grow tomatoes in the U.S. more efficiently and less labor intensively; the economy grows and fewer people have to engage in back-breaking work. This Thread, however, is no place to discuss the pros and cons of free market capitalism.
Dave, anything can happen to the dollars Mexico receives. But there’s no economic law that says they “must come back to the U.S as investments in its economy”. They might go to China to buy cheap goods. They might simply stay and circulate in the Mexican economy.
You don’t seem to understand the problem—at the end of the year they have billions of dollars and we have traded them for a pile of valueless human excrement … and whether the dollars come back or not, that’s still a very bad trade.
As to the “competitive pressures to grow tomatoes in the US more efficiently”, sorry, not possible. Until Mexican wages and Mexican taxes and Mexican labor regulations and Mexican environmental laws are equal to the US, there is no hope of underbidding them.
I STRONGLY recommend that you read “How Rich Countries Got Rich … And Why Poor Countries Stay Poor” before you say much more. You may disagree with it, but at least you will be familiar with the very strong counter-arguments to your claims.
Or you could just read the series of my posts that I linked to above.
I read your posts, Willis. With all due respect, this Tread is not the place to argue protectionist trade policies.
Huh? This post is about nothing but cross-border trade, where industries (and their emissions) are moved to other countries and their products are then brought back to the home country. Trade policies are central to that process.
“They (US dollars in Mexico) might go to China to buy cheap goods. They might simply stay and circulate in the Mexican economy.”f
Staying in Mexico would be a dream come true!
We get Mexican products and they get pieces of paper (IOUs) that they never use to claim US goods, US services, US financial assets, or US real assets?
We get Mexican tomatoes we want
They get US IOU’s in return
How could that possibly hurt the US economy?
Answer: It can’t
Your point goes to the worst poison of protectionism which is special interests lobbying for ever higher tariffs on the goods they produce in order to allow them to avoid the need to innovate. After that runs its course, and artificially high prices significantly depress demand and thus limit profits, the next poison to be introduced is subsidies—robbing everyone even if they don’t partake of the product.
This sort of deformation of the market leads to absurdities like farm subsidies for sugar (cover your ears Peta!)
I mention sugar as a segue to the other point not acknowledged by the protectionists, comparative advantage. It makes more sense to manufacture a good which you have the necessary expertise and materials to produce than to inefficiently allocate your resources to the production of a good that some other country can produce for less overall cost.
As I have already conceded, there are legitimate concerns about completely unregulated trade, but there are also unrecognized harms caused by protectionist tariffs and excessive government regulation.
Stick to science Willie E.
We get imported goods we voluntarily want to buy at lower prices from China. That’s very good news for US consumers. Are you implying that US consumers are stupid?
China gets pieces of paper (IOU’s) whose purchasing power is declining rapidly in recently years — down 15% from 2020 to 2023, so far.
The Chinese businesses and people do not stuff their extra US dollars in a mattress and lose 15% of their purchasing power. They spend the money on US financial or real assets.
For example. Chinese investors loaned $870 billion to the US government as of November 2022. That number was over $1.1 trillion in 2021. I guarantee you that the interest on US Treasury debt held by Chinese investors is not enough to cover the loss of purchasing power since 2000.
5 Foreign Countries That Own the Most US Debt (investopedia.com)
Why We Trade – Foundation for Economic Education (fee.org)
I haven’t visited Mexico so it may be that this is a special case. When I have visited many other countries, I have on rare occasions had people willing to accept my dollars at an outrageous exchange rate, but in most cases foreign currency doesn’t circulate.
I still have a €5 bill in my wallet from a trip to Rome. I don’t expect I could find a single business in Connecticut where I could spend it. And if I did, it would likely be that the clerk wants to have it as a curiosity and will need to exchange her USD for it. Certainly it won’t be accepted and then be given in change to another customer. And that’s not just because it’s worth $5.30.
The US dollar is also an exception, being as it’s still (precariously) the reserve currency. Do you think you can buy a Big Mac meal with a SBD (Solomon Islands Dollar) $100 bill worth USD $12?
Very well put, W.
Then we’re substantially in agreement. One reason for my critique was the increasing tendency on this forum to label any concern expressed about the health of the population or the environment as “alarmism” and the labeling of the posters of such concerns and those who agree with them as “alarmists”, together with wild claims that humanity has never been healthier or happier than now.
There even seems to be a sort of dogma, although never explicitly expressed, to the effect that no matter how large the world population of humans grows, we will always be able to keep all of them healthy and happy – a view that borders on madness, IMO. But the tone and manner in which this view is expressed seems to effectivelyt discourage informed and rational debate on this subject.
I feel we have long surpassed the limits of sustainable population growth,forgetting the biblical story of the seven fat cows and the seven lean cows. And I suspect that the people who control the levers of power globally have belatedly reached the same coclusion, and are preparing drastic measures to remedy the situation.
I’d like to believe otherwise, but I can’t imagine any fair, or even compassionate way things can be put back on track. And I don’t think our rulers are willing to wait for a global catastrophy that they cannot control and may not be able to survive.
otropogo February 25, 2023 7:09 pm
People have been making this claim since Malthus first made it in 1798. He was wrong then, and the same is true today.
In my own lifetime, the world population has tripled, and despite that, people are better fed, clothed, housed, and healthier than when I was a boy.
Far from “surpassing” the limits of growth, it’s obvious we aren’t close to them. I was born in 1947. Look at what’s happened to world poverty since then.
Nor does any sane person babble about “no matter how large the world population of humans grows”. That’s meaningless speculation. The rate of population growth has been steadily dropping for the last half-century. If the drop continues, the population will top out at about ten billion, only about 30% larger than it is now.
That’s my own estimate based on the data. The UN estimates that population will top out a mere 4% higher than my estimate. Close enough for me.
This projected increase is a bit less than a third of the population increase that I’ve personally witnessed since I was a boy.
Color me unafraid.
FURTHER READING: See my posts I Am So Tired Of Malthus and Malthus Redux for discussion of this topic.
How is it that people who regularly rant about the abusive and deceptive manipulation of data by agencies like the UN or various national government agencies will blindly accept and present as proof whatever those same agencies claim when they agree with the conclusion.
Your statement that “ people are better fed, clothed, housed, and healthier than when I was a boy.”
Is based on nothing but willful blindness. What people? Those in North Korea, Yemen, Pakistan, El Salvador, Syria, Afghanistan? Perhaps you think the Chinese or Indians are healthier thanks to the massive air pollution they enjoy? Or that the Turks are better housed now than previously?
It’s this kind of willful blindness that will ultimately be the demise of humanity’s oh so short reign over the world.
What good is mathematical and technical skill when one lacks even a basic BS detector?
You guess/hope that the world population will stop growing when it’s ONLY 30% greater than it is now. Don’t you grasp that we’re not able to properly feed,. shelter and maintain healthy the population we have now? And that it will only take a minor global catastrophy (ie. not a big earthquake in a small part of the world, or a little war in another small part of the world) for people to start and keep dying by the millions?
A few remote societies, like the Swiss or the Swedes, who have prepared themselves for disaster, may survive. But the rest of the world will revert to savagery on a scale and with destructive force without any historical precedent.
Pass. All your insults have done is to get your vote canceled on my planet.
I’ll remember that name because now I know that I can safely skip whatever you write. I have no need for that kind of blind bitterness in my life.
Better luck with your next target.
US regulations have to be compared with other nations to see if we are competitive, or unnecessarily restrictive. Environmental restrictions stronger than in other nations are a hinderance to US economic growth, which lifts people out of poverty, Air pollution from China drifts east to the US Left Cost states, so we should be concerned about pollution there — environmentals do not seem to care.
How would you compete with countries controled by governments that use slave labour, have no scruples about poisoning the soil, the water, or the air used by their subjects, and have no fear of ever being held accountable for their crimes against their own people?
If your neighbour is putting toxic substances into your living space, is your answer to send something equally toxic his way? Where there is no law and order, a person must act in his and his family’s own defense.
This was the essence of my earlier comment, that there must be some mechanism for enforcing the things we value on the entire market in our country, including imported goods. It is a wicked problem, because each mechanism that we might choose will likely be circumvented and lead to unintended consequences.
This is a different proposition from throwing up barriers to trade simply because the seller is a foreigner. In my view, if the foreign competitor is not using slave labor, is not poisoning the soil, water, or air, but is able to make a profit selling us something for a lower price than domestic suppliers, then that product should be allowed in with minimal tariffs. The result will be that domestic suppliers must innovate or exit that business, just as an inefficient supplier must innovate or exit the market if a domestic supplier is out-competing them.
That can be very painful for some individuals. A decent society (which is distinct from government) should address those dislocations through training programs, temporary unemployment assistance, private charity, etc.
Where radical free traders have a blind spot is when considering the fact that we can’t enforce fair trade if we don’t have an industrial and agricultural base to survive under siege/embargo situations. In other words when bad actors refuse to engage in free trade and choose war or near-war tactics.
We don’t need to make non-essential products domestically, but we can’t rely on hostile countries to supply anything necessary to maintain a strong military. We have to produce enough food to avoid malnutrition in the event of a blockade.
Ultimately the problem of competing with low-cost countries is that they are poor and willing to work for a subsistence wage. If we want to resolve the problem, they need to get wealthy. We don’t want to solve the competition problem by a race to the bottom.
Tell it to the Haitians. I don’t see anyone helping them to get wealthy. There’s no evidence at all that the governments of the developed world have ever given a third world country a hand up the wealth ladder. Nor that the Western democracies have ever helped poor countries to become more democratic.
What did supporting the anti-Russian resistance in Afghanistan do for the country. Billions taxpayers’ dollars were pocketed by the armaments
manufacturers and “contractors” to produced what? A country way more poor, more unequal, more undemocratic, more sexists than under the pro-communist government whose overthrow the USA financed.
And how about that Arab Spring? Is there any more democracy now in the middle east and North Africa than before? Is the area richer, happier, healthier.
I can’t wait to see what the Ukraine extravaganza will produce. I’m thinking a Ukrainian version on androids of the Wagner Group, selling their warime expertise around the world.
Nato could have/should have immediately declared a no fly zone over Ukraine and shot down everything the Russians sent using Nato planes, pilots and missiles. End of story. Goodby Putin. Why haven’t they just killed him like the head of Iran’s Revolutionary Guard? Hasn’t he murdered enough people yet?
Well nooo. There’s no mony in that for the armaments industry…
If you ignore pollution in other nations and strictly limit pollution in your own nation, the polluters will do more business overseas. And the result will be more globa pollution than ever.
The US environmentalists seem to have no concern about OBVIOUS pollution in China, and too much concern about much less pollution in the US.
As I previously stated, the Chinese air pollution reaches the US Left Coast, so it should not be ignored. It must reach nations neighboring China too. That’s real pollution from Asian nations such as China and India, not CO2 fake pollution.
This is a good article that makes an important point but starts with an exaggeration and leaves out an important point too. I recommended it as the first of up to two dozen climate science and energy articles I have read today,
Honest Climate Science and Energy
I want to thank anyone here who visited my new blog in the first month of operation, with 10,259 page views. I read up to 48 one page articles every morning and share the titles and links with others — sort of what the Drudge Report should have been. At least half the articles are on climate science and energy.
I hate to criticize this article because it makes a very important point, has great memes, and uses the term Biden Crime Family, which I used on an old blog back in 2019. but:
“The countries of the West are slowly destroying their manufacturing, mining, and fossil fuel producing industries by way of well-meaning but ultimately destructive “environmental” regulations.:
This is true for the EU, but has not been true for the US yet. Although Bidet is trying to follow the EU, we are not there yet. There is a still a “Buy American” attitude claimed by the Bidet Maladminstration, although that may be empty rhetoric. We can see if US manufacturing is really being destroyed by looking at long term Industrial Production. Those data, at the link below:
Industrial Production: Total Index (INDPRO) | FRED | St. Louis Fed (stlouisfed.org)
The chart shows US industrial production has almost stopped growing since late 2007, which is bad news, but that is not yet a “slow destruction”. Of course Jumpin’ Joe Bidet is not done yet.
Sorry if this comment gets tedious — I wrote an economics and finance newsletter, ECONOMIC LOGIC, for 43 years, so this subject interests me.
Although lax environmental regulations are one reason for outsourcing manufacturing, there are also lower wages and possibly lower energy costs (coal) too. For Chinese solar panels, there is also slave labor — can’t compete with that. The wage gap leads to more automation in US manufacturing, with fewer manufacturing jobs, and more imports. That’s bad news for potential US blue collar employees.
But the cheaper Chinese products we can buy are good news for US consumers, especially older folks like me on a fixed income and lower income folks. For example, I just stocked up on oolong tea made in China at a price of $5.59 for 100 tea bags — I bought 10 boxes for the next year. The price had been $4 before the Bidet inflation. At the local supermarket 20 oolong tea bags of an “America”: brand are over $3.50 each, so are $17.50 for 100 tea bags. Why should I pay $17.50 when I can pay $5.59?
Conventional economic theory says trade benefits everyone involved. That refers to free trade. In reality, governments get involved to avoid free trade.
An additional point: The insane Nut Zero green dream project will require the biggest expansion of mining and manufacturing (and CO2 emissions) in world history … even though over 7 billion people live in nations who could not care less about Nut Zero. It does not appear that much of the new mining and most of the new manufacturing will be done in the US, UK, EU, Australia and New Zealand — the nations leading the unnecessary Nut Zero project to “fight” an imaginary climate crisis.
“This is true for the EU, but has not been true for the US yet.”
The EU is running their businesses off to China and other places as fast as they can due to a shortage of energy in the EU, due to delusional beliefs about CO2 and the Earth’s weather and climate.
This is not happening in the U.S. In the U.S., where radical Democrat policies are making things difficult for local industries, these industries are moving to more favorable U.S. States, rather than overseas.
Fortunately, in the U.S., if one States jumps off a cliff, other States can decide not to jump off the cliff. That’s one of the beauties of the American system of government.
Very good point
We still have red states with traditional values
The IEA say to get the world to “over 250m EVs by 2030” will require 50 new lithium mines, 60 new nickel mines and 17 new cobalt mines. A total of 127 new mines.
If that target is not reached and only 200m EVs are produced by 2030 it will need 30 new lithium mines,, 41 new nickel mines and 11 new cobalt mines. A total of 82 new mines.
They acknowledge that bringing a new mine into production can often take up to 16 years but someone somewhere has obviously come up with a cunning plan to more than halve that period. 🙂
If we reach 200m EVs by 2030 there will only be another 1.2bn ICEVs to replace by 2050
Source: IEA Global EV Outlook 2022 ‘Securing supplies for an electric future’
How many more mines will it take to replace all those batteries once they run out of juice?
I don’t think the planners of this climate change fiasco have thought everything through.
The Pebble Mine started down the permitting road about 1982 and was recently told that it cannot proceed with its mining plans.
In the interest of clarity regarding the main topic of this blog, I totally agree with your assessment regarding “Nut Zero”. However, arcane arguments about economic policy in a changing world tend to fall on deaf ears….
In reality, people like Gretta can truly blame their parents for failing to provide a firm footing in reality as they entered a still very cruel world. Perhaps, they were so far up in the Maslow pyramid of needs, that they failed to realize that even their super-precocious child needed to grow up before taking on the world. Like the mediocre athlete pushing his ‘promising’ child to the limit to compensate for his failed athletic ambitions, Gretta’s parents truly failed her. Her “Joan of Arc” persona will end in misery for her and he followers sooner than later. Not to mention all the UN and EU government fools who failed to step in and tell her to just shut up!