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Commies in Cadillacs: GM Turns Chinese

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Reposted from the Huffington Post


Commies in Cadillacs: GM Turns Chinese

Peter Navarro  |  May 2, 2012  |  Huffington Post

General Motors announced this week that it will startbuilding the Cadillac XTS, CTS and ATX in China in an attempt to keep up with the insatiable demand for luxury consumption by that nation’s nominally Marxist elite. It seems that Communist Party princelings and their crony capitalist clients just can’t get enough Caddies, not to mention the BMWs, Ferraris and Lamborghinis. While China’s ever widening class divide offends human dignity, what is really scary is the way that we have been importing it into America via a trade policy that undermines the value of U.S. labor while increasing the returns to capital invested in China. As American industries flee to China’s exploitive manufacturing heaven, real wages for working class Americans steadily decline. Meanwhile the profits of multinational corporations soar and the growing rift between wage earners and the smart, big money investors swallows our dwindling middle class.

The Cadillac announcement nicely underscores the source of this problem. China Car Times notes “Currently the car is imported from the USA which makes it price much higher than it should be due to higher taxes on imported high displacement vehicles.” A great way to target American imports and jobs. Chinese bureaucrats and law makers at all levels have internalized a national industrial policy which impedes imports from the U.S. while welcoming the American capital investment that creates jobs in China. Most North American made cars imported into China get hit with about a 25% tariff while the Chinese cars that are beginning to sneak into our market a paltry 2.5% tax. DOH! That’s the trade deal presidents Clinton and Bush sold to America when they pushed for permanent “Most Favored Nation” (normalized) trade status and then entry into the WTO for the Boys from Beijing! We’ve seen the outcome of that policy in industries from textiles to electronic assembly. There is no sane reason to believe it will play out any differently in cars, or aircraft as every firm seeks to obtain Apple-like profits off the backs of China’s weary workers.

We should expect to see a lot more GM models made with repressed Chinese labor in a regulatory environment that allows this formerly American firm and its Chinese partners to pollute the environment and injure employees at will. We can also expect to see those cars exported to other countries, killing even more U.S. jobs. In the not too distant future, we will see Chinese made Cadillacs, and other GM cars, imported right back into America, with our timid tariff serving as an ironic welcoming mat to the enemy of truly free markets.

Even after GM drives this latest stake into the heart of America’s manufacturing base, our Faustian bargain with Communist China will continue. American consumers will continue to blindly trade their high paying manufacturing jobs for low prices at Wal-Mart. The administration will surely respond with extended unemployment benefits and more fruitless stimulus, while promoting manufacturing via subsidies to speculative industries. Meanwhile both the president and Congress will continue to advocate the misrepresented version of “free trade” that has destroyed our proven industries, because multinationals will continue to pour money into their Super PACs. China will continue to behave in a mercantilist manner and it rulers will continue to spend their accumulated wealth on a repressive internal security apparatus and a rapidly growing military preparing for war in East Asia.

Supporters of the Bush and Obama bailouts are always quick to assert that GM has paid back its debt to the U.S. However, what GM has really done in the decade or so can be summed up as:

1. Taken billions in U.S. government money. (Ironically, much of which we borrowed from China with interest to be paid by our unemployed kids.)

2. Invested billions into joint ventures in China controlled by Chinese state owned enterprises like SIAC.

3. Closed plants in America and laid off workers in the U.S.

4. Built new facilities and hired more workers in China.

5. Dumped subsidiaries, like its GM Components operations (Delphi), throwing thousand of employees under the bus and then stealing their retirement with U.S. government assistance.

6. Recognized huge profits and reinvested a great deal of them in creating more jobs in China.

It’s no wonder that Cadillac has sponsored a Chinese film celebrating the 90th anniversary of the founding of the Communist Party, an organization that has probably killed more people than in any other the history of mankind* and which continues to repress hundreds of millions from Tibet to Mongolia.

Greg Autry serves as Senior Economist with the American Jobs Alliance and is co-author (with Peter Navarro) of Death by China

*According to the latest updates from Prof. R.J. Rummel, expert on Genocide and Democide.

9 Responses to “Commies in Cadillacs: GM Turns Chinese”

  1. Tom T. says:

    When you see most politicians talk about not wanting a trade war, what they are really saying is, “Who is going to lend us money if China does not—we have tapped out the middle class and don’t want to tax the uber rich or mess up their investments in China?”.

    Tom T.

  2. Mo says:

    China lends us money? That is another myth. The US prints new money out of thin air to buy goods made in China by the multinationals where China then uses the money to buy treasuries because they can’t buy up US companies so publicly. The US should be printing the money out of thin air to pay American companies to manufacture in the US.

    States cannot just wait on the federal gov’t to solve trade problems the federal gov’t created in the first place. Every US State needs to create their own state bank where they can deposit their tax revenues so that credit can be granted within the state to fund industrial activity so that supply chains can be built up. Other countries like China, South Korea, etc. all have public, industrial and development banks that grant credit to various industries which allows for companies to dump products overseas below cost.

    • Tom T. says:

      The question is an accounting one. If we were just printing money out of thin air to pay for Chinese goods (and I am not knocking your point here), then we wouldn’t be issuing Treasuries to pay for it. There would be no new debt created, just dollars. As it is, we are creating debt by issuing IOUs backed by the faith and good credit of the U.S. banking system that bear interest.

      Tom T.

      • Bodie says:

        ever hear of double dipping?

        • Tom T. says:

          I was really thinking about a spend the dollars (on U.S. goods) or lose them. This bit about loaning them back to Congress as IOUs our children have to pay for is simply the worse possible policy I have seen in my life.

          Tom T.

  3. Mo says:

    The US prints money out of thin air to buy goods made in China and then wants them to invest in the US when the US can just print money to invest directly in the US and pay US companies to manufacture in the US.

  4. Joe Brooks says:

    From Mr Wade:

    General Motors is becoming China Motors. Forget the spin. The evidence is clear and convincing. Did U.S. taxpayers save GM for China? Listen to the candid comments of GM’s CEO.

    • Tom T. says:

      George Orwell’s prophetic book is coming to pass. The oligarchs know how to confuse the issues enough for them to profit by selling out the U.S. public interests to whomever.

      If the average Chinese has to go to the Chinese govt. to exchange yuan earned in China for dollars, what makes these companies think they will get to expatriate their dollars earned in China– unless it is to set up a touchless class of plutocrats across the globe who have their own interests above national interests of the people in their country.

      It seems the tax breaks for big money has found its way to China to be invested, but more importantly, to sell out U.S. technology to the global plutocrats who are setting up their own world order. They have it made. They know that politicians in the U.S. are easily bought and their profits can buy a majority of them at any time on any issue. It just has to be done quietly and under the radar.

      A VAT tax needs to be imposed on all imported goods, especially if the country imported from has VAT taxes. The cost of selling U.S. workers and the economy out have to be stopped.

      Our plutocrats are selling the goose that lays the golden eggs.

      I have no problem with China increasing its standard of living but if it comes at the expense of our government being financed by Chinese earnings and our politicians on the take, it is a bad deal for Americans.

      Tom T.

  5. Joe Brooks says:

    Commies in Checking Accounts

    “The increasingly controversial Federal Reserve offered a green light on Wednesday for banks controlled by the Communist Chinese dictatorship to gobble up American financial institutions and enter the U.S. banking market despite national security concerns, sparking warnings among critics about the rapid spread of the brutal regime’s influence within America. Analysts, meanwhile, called the unprecedented approval a “landmark step” for regulators that could have global implications.

    Under the U.S. central bank’s decision, the Industrial and Commercial Bank of China (ICBC), the largest bank in the Communist Party-run country with assets estimated at some $2.5 trillion, will be allowed to become a holding company and acquire the Bank of East Asia in New York. It marks the first time that a Communist Chinese bank — ICBC is more than 70 percent owned by the regime — has been permitted to take over an American bank. All 13 branches of the U.S. institution will be taken over.

    “This unprecedented acquisition of a controlling stake in a U.S. commercial bank by a mainland bank is strategically significant,” Chinese state-run media quoted ICBC chairman Jiang Jianqing as saying. Other financial executives with the regime’s firms — three of China’s top four biggest banks received good news from the Fed this week — expressed similar excitement.

    Some free-market advocates have suggested that shutting out Chinese banks from the U.S. market would be tantamount to protectionism. However, other analysts point out that the financial institutions are not true “companies” in the traditional sense — they are state organs owned and controlled by one of the most ruthless dictatorships on earth, a regime with the blood of tens of millions of victims on its hands.”

    This is absurd. Since when does the Federal Reserve trump the power of Congress? Uhhh, pretty much since it’s creation.

    Still, I have sent this on to my Reps, they could halt this further colonial effort by Red China.


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