The Frog in The Well

Retail sales figures for the last quarter of '08 are coming in, and the only remotely positive reports emerging are, "It's not quite as bad as we feared." But there's not very many of those, either. This is not really news, because everybody expected it, and some forward-thinkers are hoping it might stimulate a move away from our consumer-based economy. I, on the other hand, fear that our economic blight will merely push us into a deeper reliance on cheap imports.

In addition to putting the squeeze on an already sickening manufacturing sector, the public health and environmental impacts of this trend need to be scrutinized as well. Let me state upfront that I don't mean to encourage Sinophobia or xenophobia or foodaphobia (I just made that up) or any other kind of phobia. But our price-driven consumerism carries a cost that we seldom consider when we're moving through the check-out line, and that has to change.

As I alluded to above, I'm going to focus on Chinese imports to the U.S. It's a popular subject amongst us formerly employed factory workers, and really popular with those who used to work in furniture manufacturing

Employment in the NC furniture industry has been suffering from a decline since the 1990s. It has dropped from 78,323 in 1996 to 52,453 workers in 2006. The weakening in the traditional manufacturing sectors continues, and according to the Occupational Outlook Quarterly (Spring 2002), it is predicted that furniture occupations will continue to decline due to automation, increasing imports and outsourcing.1 The contracting of the furniture industry has the most impact on North Carolina, which is the largest furniture manufacturing state in the United States. According to data provided by the US Census Bureau in 2001, the NC furniture industry employed the most people, followed by California and Michigan.

Which should come as no surprise to anybody reading this. But one of the painful ironies of this is the fact that, thanks to their depressed economic position, those 26,000 workers (as of 2006) are more likely to be forced to purchase Chinese-made furniture, reducing the chance of an invigoration of their previous sector of employment. There are also environmental issues, which I will get into downrange.

Our trade deficit with China is now calculated in the hundreds of billions. While food and other agri-products have only made up a relatively small portion of that, and our agri-exports to China still outnumber theirs to us around 3-1, that may be on the verge of changing.

Just to give you a little background before I continue, I want to talk a little bit about Melamine. If you're a pet-owner, you're probably familiar with the Chinese pet food scandal, and if you've got a baby anywhere around the house, you've probably heard about the Chinese infant formula tragedy. Both of these issues are connected to a much wider one, which has affected both China and its trade partners, of which there are many.

Melamine is a synthetic compound which, when introduced into animals (or people), can quickly collect in the kidneys forming painful and life-threatening stones and/or renal failure. Milk protein is the basis for a wide range of Chinese agri-products. Chinese milk is (mostly) produced by small-scale farming operations, but the milk is collected by dealers, who then water the milk down to increase the volume. In order to regain the minimum protein levels, they add in melamine. The milk is dried, then used in all sorts of products, including chicken feed. Chickens which are housed in cages over small ponds, so their droppings can serve as food for shellfish like shrimp and prawns. Which you probably have eaten.

For years, China and U.S. importers have tried to gain the approval of poultry imports to the U.S., but were thwarted by detailed and serious health concerns dealing with their methods of raising and processing chickens, as well as the fear of avian flu contamination. A compromise was reached allowing chickens raised in the U.S. to be sent to China for processing, and then accepted back into the U.S. Which was a pointless decision, but it opened the door a little more, which was probably the goal in the first place:

Not surprisingly, no U.S. or Canadian poultry processor was interested in shipping raw carcasses
to the PRC to be cooked and sent back to the United States. As a consequence, the PRC began to
press the United States to permit the importation of processed poultry of domestic origin. In
December 2006, USDA officials, in meetings with representatives from the PRC, agreed to
pursue a new regulation that would permit the PRC to export processed poultry of domestic
Chinese origin.

Congress is fighting this by way of the purse, ruling that no funds be spent on poultry import negotiations with China. But I fear the chickens will soon fly (or swim) here anyway, following in the footsteps of their tiny little shrimp friends.

That's enough about chickens and lost jobs, at least for now. What I really wanted to talk about are the environmental impacts of our global consumerism.

To feed the world's demand for cheap goods, China has grown industrially faster than anyone could have imagined. That growth requires both radical increases in power and an unprecedented consumption of raw materials. Although they have engaged in the construction of large and controversial hydroelectric dams, coal is their main source of energy:

Largely because of air pollution connected to its cars and coal, 16 of the world's 20 most polluted cities in the world are in China. Coal, most of it dirty, fuels 70% of China's energy and is the main source of the country's domestic and transboundary air pollution. Despite major efforts to promote energy efficiency and renewables, China will remain dependent upon coal for the foreseeable future.

China already consumes more energy and emits more greenhouse gases (GHG) than any country except the United States. It is expected to surpass the United States in GHG emissions by 2009. The expansion of China's power plants alone—562 new coal-fired power stations by 2012— could nullify the cuts required under the Kyoto Protocol from industrialized countries. The lack of widespread coal-washing infrastructure and scrubbers at Chinese industrial facilities and power plants exacerbates the problem. Carbon dioxide (CO2) emissions from cars in China are also growing rapidly, replacing coal as the major source of air pollution in major Chinese cities.

Which exposes the single biggest flaw in efforts to exempt developing countries from global emissions reductions treaties. Aside from the trade fairness issues, which are substantial, we will never be able to achieve the reductions we need if countries like China and India are exempted. It just won't happen.

And it's not just a global carbon dioxide issue, either:

Information on Chinese emissions is sketchy since the government has not publicly disclosed CO2 or mercury emissions data since 2001. The most commonly cited numbers attribute 25-40% of global mercury emissions (from coal burning) to China. Within China's borders, air pollution from coal, cars, and dust storms is responsible for 3-400,000 premature deaths and 75 million asthma attacks annually. Data on health impacts internationally are difficult to estimate, but China's SO2 is responsible for nearly half the acid rain in Korea and Japan, and particulates and dust from China are worsening air quality as far as the U.S. west coast.

Some U.S. researchers believe at least one-third of California's fine particulate pollution—known as aerosol—originates from Asia. These pollutants could potentially nullify California's progress in meeting stricter Clean Air Act requirements. In May 2006, University of California-Davis researchers claimed that almost all the particulate matter over Lake Tahoe was from China.

Researchers have also found that mercury becomes more hazardous the further it travels. At the smokestack in Asia it is insoluble, but by the time it reaches the U.S. west coast, mercury transforms into a reactive gaseous material that dissolves easily in the wet climates of the Pacific Northwest. For example, researchers have discovered that at least one-fifth of the mercury entering the Willamette River in Oregon comes from abroad, most likely from China. This mercury is even beginning to build up to toxic levels in the local wildlife.

Back to the furniture problem I mentioned above. As an aside, I managed a discount furniture store in Durham many years ago, and much of the product we sold originated in China. Not proud of it, but I had mouths to feed. Besides, I was a Republican back then, and not prone to a lot of soul-searching. :) It goes without saying that the quality was suspect. But you really have no idea. I was lucky to get this stuff off the floor and into someone's home before it literally disintegrated right before my eyes.

And therein lies part of the problem. Poor quality equals frequent replacement and more trips to the landfill, which is a factor U.S. consumers just can't seem to grasp. As a favor to the diligent reader, I will forego the lecture on false economies for now. But you're on notice: that pricetag is only part of the picture, and an extra five minutes using your brain is not going to kill you.

This furniture manufacturing windfall that China has enjoyed didn't take long to deforest wide swaths of the country. It got so bad so quick that they outlawed timber-cutting for the most part. But they had to get the wood from somewhere:

From deforestation in Russia and Indonesia to coal mining in Mongolia and oil extraction in Africa, China's growing hunger for raw materials and energy has damaged the ecosystems of other countries. Ironically, the massive increase in forestry product imports stems from an ambitious and fairly effective campaign to protect forests within China. The massive flood of the Yangtze River in 1998, which policymakers and researchers attributed to deforestation, led the Chinese government to institute a timber-cutting ban and a major campaign to convert slope lands from agriculture to forestry.

The timber ban, combined with China's already very limited per-capita forest resources, has fueled the rapid rise in China's imports of forest products. This wood has also found its way into products exported to the United States and Europe. A study by the NGO Forest Trends notes that over the past eight years China has captured almost a third of the global trade in furniture, ranking it second among all countries in terms of the total value of its forest products .

Chinese timber importers acquire 75% of this wood for furniture and plywood export from the Asia Pacific, mainly from Russia, Burma, and Indonesia. Approximately half of these imports are illegal. Such illegal trade is difficult to regulate, especially between Russia and China where the forestry bureaus in both countries are highly decentralized and under-funded. Loss of these remaining major forests creates serious domestic problems of soil erosion and flooding, while globally the concerns are the loss of biodiversity and increasing climate change.

For those wondering about the title to this diary, it's an old Chinese proverb. The story goes: there once was a frog who had lived his entire life in the bottom of a well. One day, a bird landed on the edge of the well, and began telling the frog about how vast and wondrous the sky was. The frog replied with doubt in his voice, "That can't be true! The sky is small and round."

The U.S. is the single biggest consuming entity in the world. When we purchase products based exclusively on our own immediate needs and desires, and with no concern for where they come from or the effects of their production, we are that frog in the well.

Comments

You speak the truth in all your comments, Steve......

but I think it's like a cry in the wilderness, because most don't care. I'm a life member of a national union, and can remember the cries of 'buy America' going back to the 60s. I had a large Chevrolet plant nearby where I lived, and after a while you would notice more and more Hondas, Toyotas, etc., which were owned by these UAW members. So it all comes down to price, even when it's made by slave labor. Morality is never a problem, except on Sunday. Obama threatens to demand concessions, but we all have a price, especially in our government. The next big event for Americans will be when they realize that all that money they spent educating their kids in college will be wasted, because when those manufacturing jobs were outsourced, eventually the engineering and design department jobs will follow.

I think a big part of this:

"So it all comes down to price, even when it's made by slave labor."

has to do with the way we've allowed consumerism to morph into a psychological need. I think it's gone way beyond needing "status symbols" to flash around, like $100 sneakers and fancy electronics gizmos.

Don't get me wrong--I honestly believe my Nike's give me the edge I will need when that inevitable life-or-death footrace finally happens, and an I-Phone like my son's could actually lengthen his life, because now the answer to that overly-stressful question, "What the hell is the name of that song?!", is just a few thumbs away. But you know, even those of us who aren't uber-materialistic buy tons of crap every year we really don't need and often don't even want after a few weeks.

Retail transactions have become an important aspect of living. If we buy cheap(er) stuff, that leaves more money for other transacting. I know some reading this are thinking, "That may be you, Steve, but I only buy things my family must have. I can't afford luxuries."

Oh, yeah yeah. Me too. ;)

How to turn the Titanic around

Now that we have no choice in buying products because most of our American industry is gone, what is the alternative?

I want to see Americans take back the manufacturing themselves with force, without the executives taking profit. Maybe before we lose the skills of our tradesmen we need civil disobedience to rule.

Let's have government take over industry/manufacturing

Yep...government has a steller history of efficiency...keeping costs down....controlling wasteful spending. Best thing we could do now in our horrible economic crisis is to increase government mandates on American industry and medium-sized businesses and small business and even have government take over these businesses and only have hourly employees receive the benefits from profits. What should happen is to have everyone on unemployment riot...march in the streets and demand government be required to hire and maintain employment, benefits, etc. If they can't pay for it...the government should pay for it.

Yep, that's the ticket.

The best thinking is independent thinking.

Excusé moi?

What language are you speaking? Having the people take over is revolution not government takeover.

Must be something in the air today

For crying out loud...what is it with you folks. You're just trying WAY too hard to find something to trash old Smitty for here on this thing.

Get a clue. Read my post loftT...don't add into it something I'm not saying....it was all a joking way of saying all of it is ridiculous. MY GOODNESS....must be something in the air today affecting you libbies.

Maybe I need to draw pictures or something...oops, sorry 'bout that...it wasn't very nice.

The best thinking is independent thinking.

Paradise Smitty! The Great Architect calls?

Best thing we could do now in our horrible economic crisis is to increase government mandates on American industry and medium-sized businesses and small business and even have government take over these businesses and only have hourly employees receive the benefits from profits. What should happen is to have everyone on unemployment riot...march in the streets and demand government be required to hire and maintain employment, benefits, etc. If they can't pay for it...the government should pay for it.

Yep, that's the ticket.* Smitty

Some ticket! How can you be a fascist Republican and than endorse a Communist Socialist program? Have you consider a career with God as a consultant on how to improve Paradise?

OMG

"That's the ticket"...um...you DO know that means all of what I said was tongue-in-cheek...Right???

My Goodness...You folks know me by now. Geeezzzzz...

The best thinking is independent thinking.

Smitty, your so dang

Funny! I know this is a joke on your part!

Because Government will do such a great job of correcting the economy we should bail out the Chinese when we do this as we will cripple them as well!

You needed to add that in as well.

Thank Goodness !!!

Man !!! Someone with some sense.

Of COURSE it was a joke on my part.

Like I said before...you folks should know me and my beliefs by now.

Sometimes I wonder about you guys here !!!

The best thinking is independent thinking.

The thing is, it's not all gone. Yet.

But it is bleeding away. Some sectors have lost over half of their jobs, while others have held on to most of them. But a lot of those industries are operating on a hair-thin profit margin.

I may do a piece on U.S. industries here pretty soon. I've been kind of bummed out over being laid off, and I'm not even sure if I want to get another job in manufacturing, which is where I've focused most of my job-hunting. It almost feels like I need to figure out what I want to be when I grow up, all over again.

It's not as liberating as it sounds. ;/

Sharrison..can ya get TRA?

(you may already know this so not trying to downplay your knowledge on this unemployment thing, okay?)

When a friend of mine got laid off recently, he got a super deal with the ESC. Because his lay off was determined to be due to foreign trade/jobs going outside the U.S., he is able to go back to technical college drawing full unemployment and mileage bucks and they're paying for the school. He can go up to 2 years under this plan. I believe it's called "TRA".

You write so well...maybe a career in writing or something related..journalism or something (not sure how old you are or your current level of education).

Just a thought...wishing ya luck.

The best thinking is independent thinking.

I'm not eligible

When I first interviewed with the veteran's representative at the ESC, I asked her about tuition assistance via that program. The company itself has to submit a request that it be classified as a trade victim (that's not the real title), and the bar is set pretty high. My (former) employer did suffer from some trade issues, but they're not specific enough to meet the standard.

Okay...just something I wanted to submit to ya

Again, good luck with your work searches. Someone like you can't have to go long without finding something good in the way of employment.

Smitty

The best thinking is independent thinking.

Thanks

This is the longest I've gone without a job since the late 1970's, and it's beginning to freak me out a little bit. I've got a back-up plan that I actually like better than my main plan, but I'm not going to talk about it because I'm superstitious. ;)

I don't think that is correct, sch

When we got TRA back in 2003 WE, the employees, submitted the claim application. The company fought it, and us. We only won our appeal because of some direct assistance from a specific Senator's office. Get a second opinion. I'm not sure you got the best information.

"They took all the trees and put them in a tree museum Then they charged the people a dollar 'n a half just to see 'em. Don't it always seem to go that you don't know what you've got till it's gone? They paved paradise and put up a parking lot."

Will do, Leslie

And thanks. :)

Another proverb says

Chinaman stand on hillside with mouth open for long time before roast duck fly in...meaning to me in this context that the only way back is to beat the living hell out of our Congress to enact fair trade rather than free trade policies, and to end the tax-free ride corporations get by sending jobs overseas. We also need to end the importation of skilled labor when we already have plenty...because we need to pay Americans as well as buy American.

As an aside, ours is not the only economy in the toilet. The Chinese government is worried sick about their huge drop in exports and their own layoffs. They are right to expect massive riots and unrest.

Stan Bozarth

I've always been kind of iffy

about protectionism, but there are some realities that we, as Americans, must face.

There are something like a billion unemployed or seriously underemployed people in this world. The average wage in the Third World is around fifty cents an hour. There are a little under 150 million Americans working for a living, and the average wage is somewhere around twenty dollars an hour. Think about that, especially in the context of global free markets and international mega-corporations.

That's some scary stuff, right there.

I hate that we do buy so much from outside the country

and now folks are looking around going WHAT HAPPENED?

It appears we may have lost the critical mass required to keep ourselves gainfully employed. Nice wright up!

By the way, does the frog allow himself to be picked up by the bird so he can see the vastness of the sky and then was eaten instead?

Actually, the bird got frustrated

with the frog's ignorance, and told the frog to come up and take a look. And the frog just crossed his arms(?) and refused. Then a sea turtle came by, and told the frog how vast the ocean was. And the frog asked the turtle if the ocean was as big as the puddle in the bottom of the well, and the turtle told the frog the ocean was over a thousand miles wide; much bigger than the puddle. Finally the frog started to realize how insignificant his life had been.

I'm...not really sure what he did about it. I guess I'm spoiled, and expect all the answers to be handed to me. :)

Here's a little Zen for the weekend:

"Before enlightenment; chop wood, carry water. After enlightenment; chop wood, carry water."

That works as well

either way works with our current situation.

Our ignorance and inability to use foresight when developing these trade agreements is using the frogs limited view of the world. Of how important we are. We are guilty of that as a nation.

We continued the frogs arrogance by not believing a second set of eyes. We are now at the point where in the global economy on the production side, we have allowed our arrogance to cripple ourselves.

I do not want our country's decisions to take us to the point where we make ourselves insignificant. We have the potential to make the world a better place and we have the desire along with our allies to see the big picture. That people have a worth. Many countries today belief that certain groups of people in their own country do not have a right to exist. Only through tolerance are those people around. As late as 1860s this country believed that as well. If a slave owner decided to cull his property of slaves, he had the option of doing so in a variety of ways. Some ways extremely inhuman. That was a societal idealism. Society no longer accepts that. Hussain felt the Kurd's should be eliminated.

This should be our legacy to the world. To make it so every person is viewed as important. No society should accept a person is insignificant just because of who they are or what they believe. No person should be taught by their society that they are insignificant just because of birth.

In the movie "Tora, Tora, Tora" just before the final credits, one of the last words was "we have woken a sleeping giant". The admiral was talking about the industrial might and potential of the US. That appears to be gone now. We do not have that.

For WW2, it was a matter of retooling the lines to make the products required to slow down the advancement. While that was happening, we were building additional factories for the advanced items needed. I doubt if we have the lines in working order to retool to a war footing. I know Revere Ware Copper and Brass of Rome, NY was a factory that did this. They made great hand made pots and pans. They also had the dies and molds to press out the 5" shell casings. I think my dad said Revere had two lines working. That factory moved from NY to Kentucky or Tennessee and I think it has moved out of the country now. Those two lines are gone. It would have taken less then a week to tool the line to make it produce war materials. Now we have to build that building, get the presses, make the molds, train the factory worker. Much longer then a week. That is another aspect we have lost sight of. We are a fat lazy giant that may not be able to wake up and defend itself. To many people are ignorant of this. We do not have the industrial capacity to quickly retool to defend ourselves.

My understanding is China is kicking out 1 or 2 diesel subs a year. These boats are quite and very difficult to find. We cannot match that. We are doing a sub every other year. Their subs will be able to wreck havoc on shipping lanes, supply routes and will challenge the US Navy's ability to keep sea lanes open for all to use.

In WW2, the Japanese sub skippers tried to engage our capital ships and sink military big boys. We went after the little transportation ships (oilers, transports, supply ships) shuttling supplies from all the islands going back to Japan. That crippled Japan. They did not have the resources to wage war and eventually bled. We are close to being Japan. We have a fair amount of resources, we have the might, but we do not have the factories to fight off a determined foe. This was not the straw that broke Japan, but it was one of the many straws that eventually helped win that war.

We are dependent now on imports. When China decides to cut us off from Asian imports, they will have the ability to control the sea lanes enabling that to happen. Our arrogance in the ability of China to defend themselves will allow this to happen.

I am not all that sure who is the principle backers for the money we have been borrowing, but I speculate that money is being funneled to Asia. So the potential next big clash, China, we are sending them a lot of our money, dependent on them for much of our imports/creature comforts and we are paying to build the sub fleet that may one day threaten our Navy and stop the imports from coming to us.

Not sure if the rest of the folks see that, but I do.

Do we have the critical mass in factories to retool to a war footing and protect our country? I wonder if Congress can answer that question?