The US needs to wake up.

[watu05]

Given the moribund posting on the board, I thought I'd charge up the third rail and bring up how can the US compete with China? The last four years have capped years of declining investment in R&D, infrastructure, and education while cultural anger and political gridlock have accelerated. Meanwhile China and other rapidly growing economies has invested heavily in those same areas. Sitting around claiming that everything China has accomplished is due solely to stealing US IP is silly mostly because it is 'just sitting around' instead of getting back wot what got us here in the first place. Microsoft and Apple are competitors. To compete, they work hard to figure out what the other side is doing and what their company has to do to compete, instead of sitting around calling each other names.

So just to really rev things up, here is clip from last weeks' Bill Maher show on the subject. It's an ok start, although Yen is Japanese currency.

It will be interesting to see if this post actually forms a real discussion or just results in the usual snarky attacks and biases. If so, I'll just put those folks on my ignore list and respond to those, if any, who are interested in a discussion.

 

[lawpoke87]

I bring this up every time you start your “China” love fest and have yet to receive an reasonable answer? Why do you compare our economic growth to a developing economy with huge untapped demand (1 billion people) instead of countries with in a similar situation regarding economic maturity (say the EU)? It’s simply a bad comparison.

Would you like to compare median income? In 2020 the average yearly income in China was $2.12 an hour or $4,200.00.

Also....please back up your claim that we have seen years of declining spending in the US of R&D?

 

[watu05]

You have a few numbers which do not portray the reality of China's progress. Personally when I ran a company in Asia in the early 80's there was no business for us to do in China. It was on its lips. The cultural revolution had devastated the entire economy. Now 40 years later it passing the US as the world's most largest economy. Its population was largely uneducated and impoverished, but its traditional values of education were intact. To characterize recognizing what a single country has done in 40 years to move from impoverishment to at least near world leadership as a 'love fest' because they had more people is ...well, to be civil.... is not credible.

My question is much more along the line of Maher's question, China has a plan, the resources, and momentum. At the Congressional level, the US has no general agreement on how to move forward and is deeply divided. What do we do do compete?

If we play the blame game, then we think about warfare as Shon has suggests. If this is a subject that interests you, there's a great book by the former head of the Kennedy Center at Havard on the subject; Destined for War. It discusses what happens again and again when a rising power starts to surpass an existing dominant power.

 

[Gmoney4WW]

I bring this up every time you start your “China” love fest and have yet to receive an reasonable answer? Why do you compare our economic growth to a developing economy with huge untapped demand (1 billion people) instead of countries with in a similar situation regarding economic maturity (say the EU)? It’s simply a bad comparison.

Would you like to compare median income? In 2020 the average yearly income in China was $2.12 an hour or $4,200.00.

Also....please back up your claim that we have seen years of declining spending in the US of R&D?

I wouldn't call China's economy emerging. Just one with a less successful average income. The wealth of China is not emerging. In the 80's to the mid 90's emerging would have been appropriate.

 

[aTUfan]

We used to Honor personal achievement. But not so much now because it might offend non achievers.

When the gov tries to level the playing field, instead of raising the lower group up to meet the standard, they just lower the bar.

We are losing because instead of encouraging excellence we accept mediocrity and tolerate failure.

 

[lawpoke87]

Pretty good read on the topic and explains why any growth comparison to the US is unrealistic.

China Thinks It's An Emerging Market. It Doesn't Look Like One.

China looks nothing like anything in nearly every emerging market country.

www.forbes.com

 

[watu05]

Not sure I read that the same way. Regardless, the Chinese economy is about to surpass the US and in the past four years the Chinese has used Trump's withdrawal from the international community to enhance their stature and build relationships particularly through the developed world.

To repeat a previous post, the cold war with the USSR was mostly about demonstrating to rest of the world which economic/political system could deliver the best results. Liberal democracy won. Now we face a similar race with a largely market driven authoritarian government which has done something no country has done before: gone from abject poverty to near world leadership economically in less than 50 years. They have a cutting edge space program, show case infrastructure, expanding personal wealth, and a population that is more supportive of their government that the US is of our government.

The challenge the US faces is how to deal with China's rise. For the past 40 years US companies have viewed China as a huge market they want to tap into and as a source of cheap manufacturing, all of which have enabled the Chinese economy. China's domestic market is now large enough to support continued growth without too much concern for trade wars, as Trump's failure to muscle the Chinese into submission via a tariff war demonstrated.

So do we try to slow the Chinese down somehow, view them solely as a military threat, or do we figure out how to coexist? Part of that will have to do with our view of China's goals. If one looks at Chinese history over millennia, not years, they have not been particularly expansionist and more importantly place a huge emphasis on social stability. Also unlike most Americans, the Chinese are deeply aware of how the US and other western nations mistreated China through the drug trade, coercive trading pacts, occupation, and direct military intervention. We may think we are great trust worthy Americans, but the Chinese recall the humiliation they suffered.

My concern is that the US will view China's rise as a reason to blame China as instead of focusing on getting our own act together. Over the past decades US Infrastructure maintenance and development in the US has stagnated and federal support for R&D has declined. Polls indicate that satisfaction with the US government has declined while political, cultural, and racial tensions have grown. For thousands of years leaders faced with internal divisions have used foreign threats as an excuse to unite a country, even when those threats were largely in the eye of the beholders.

 

[TUMe]

Looking at China over millennia is a bit odd since we see a Communist government that has existed only since the end of the Second World War and Communism only since the First World War as a form of government anywhere.

I agree we can’t see them only as a military threat, but it is hard to ignore island military bases far from China. I would also like to point out maneuvers between China and Taiwan that send a pretty clear message, regardless of actions a millennia ago.

 

[lawpoke87]

1) This paragraph in the linked story is fairly self-explanatory "China's growth rate of 6%-plus makes it a developing country, contrary to what Washington thinks. The U.S. couldn’t grow at that rate if it tried"

2) China has 4 times the population of the US. Long term there is zero we can do about China having a larger economy than ours. Population along with natural resources dictate as much.

3) I pay much more attention of overall R&D spending than just federal. Private R&D expenditures in the US have risen rapidly. Total R&D expenditures in the US is also rising, Growth largely comes from private industry. China just happens to have over 1 billion more consumers than the US. Can we do better...sure. However, lets keep things in perspective when we argue about growth and economic scale.

4) Seeing that a majority of federal R&D spending is in the area of national defense can someone explain to me why more defense spending on R&D is essential to a growing economy? Say opposed to other technologies in the private sector.

 

[lawpoke87]

R&D historical numbers

https://fas.org/sgp/crs/misc/R44307.pdf

 

[noble cane]

Im curious.. how many political parties are represented in the Chinese National Assembly?

How many free and independent press organizations do they have?

Who sold the Chinese the tech to get their rockets off tge ground?

How much does the Chinese govt manipulate their currency to maintain financial advantages?

What happened to Hong Kong when they expressed displeasure with their government?

 

[watu05]

Looking at China over millennia is a bit odd since we see a Communist government that has existed only since the end of the Second World War and Communism only since the First World War as a form of government anywhere.

I agree we can’t see them only as a military threat, but it is hard to ignore island military bases far from China. I would also like to point out maneuvers between China and Taiwan that send a pretty clear message, regardless of actions a millennia ago.

China is still China. The communist government is the current form of authoritarian government, but hasn't China always been authoritarian? Mao was. The emperors were. Probably why most Chinese seem to accept it.. As long as the good times roll, who's to complain?

Also there is pride in what their country has done is such a short time. Authoritarian governments can be incredibly efficient. No wrangling over property rights, being tied up in court, or similar hurdles. Just get it done. All the things that US business complain about, get sliced through if necessary.

From the Chinese perspective, they may see our bases as an existential threat that they have to guard against. The US has how many overseas bases? 80 a hundred? I think China has 2. The US has projected military power into Asia before, so concern about our capability isn't dumb.

Mutual distrust is corrosive.

 

[TUMe]

Good point about the emperors being authoritarian. But don’t forget William the Conqueror was. Same time frame.😎

 

[watu05]

It took 400+ years for liberal democracies to work out the forms that we are accustomed to seeing today. China's history and culture have not even started down that road, so the assumptions underlying their sense of what government should look like are not the same as ours.

More to the point, for countries that are looking for successful models to follow, China's burst of economic success looks attractive, far more attractive than the USSRs. At the same time the US has not been presenting it's best foot forward. January 6, BLM, mass shootings, a recession, and big portions of our population claiming that our elections are rigged and our government is illegitimate undermines our international appeal and ability to get things done.

Let's be clear, I love the USA, am proud to be a Vet, and value being a US citizen, which is what makes me concerned about addressing our own performance instead of blaming someone other country thousands of miles away.

 

[watu05]

R&D historical numbers

https://fas.org/sgp/crs/misc/R44307.pdf

Notice the severe decline in the federal numbers which is the source of funding for basic research. The tax laws were changed to encourage businesses to do R&D, but those numbers are overstated as companies push as much as they can in to R&D because of the tax consequences. Also there is a big difference between R and D.

I used to have had the same view of R&D as a single item, but have been disabused of the idea by classmates and family who have been run labs at the NIH, worked in the space program, run VC's, and been physicists teaching at research universities. By and large businesses do the D part to bring ideas to market and work hard to lock down the benefits of the results (aka IP) for themselves.. The Federal government funds the R part, basic research, because it is hard to pin down who in the society will benefit from the investment and it is important that the results be shared. The R part is the foundation on which the D part is built.

The US has kept up its federal funding in the medical/biological area and defense, but not others.

If I am too far off base, I suspect CLong will correct me.

Here's some articles that explain the situation much better than I can.

Measuring a slide

https://itif.org/publications/2019/08/12/federal-support-rd-continues-its-ignominious-slide

A longer discussion.

https://www.brookings.edu/articles/is-u-s-science-policy-at-risk-trends-in-federal-support-for-rd/

 

[lawpoke87]

Notice the severe decline in the federal numbers which is the source of funding for basic research. The tax laws were changed to encourage businesses to do R&D, but those numbers are overstated as companies push as much as they can in to R&D because of the tax consequences. Also there is a big difference between R and D.

I used to have had the same view of R&D as a single item, but have been disabused of the idea by classmates and family who have been run labs at the NIH, worked in the space program, run VC's, and been physicists professors at research universities. By and large businesses do the D part to bring ideas to market and work hard to lock down the benefits of the results (aka IP) for themselves.. The Federal government funds the R part, basic research, because it is hard to pin down who in the society will benefit from the investment and it is important that the results be shared. The R part is the foundation on which the D part is built.

The US has kept up its federal funding in the medical/biological area, but not others.

If I am too far off base, I suspect CLong will correct me.

Here's some articles that explain the situation much better than I can.

Measuring a slide

https://itif.org/publications/2019/08/12/federal-support-rd-continues-its-ignominious-slide

A longer discussion.

https://www.brookings.edu/articles/is-u-s-science-policy-at-risk-trends-in-federal-support-for-rd/

Again....federal spending on R&D has not declined by a significant amount. Not sure why you keep repeating this. Now...if you want to argue it’s declined in relation to GDP or as a percentage of total federal spending you would have a valid point. However, in terms of dollars spent it’s a wash.

Now back to federal R&D. Roughly half goes to defense. I’m not sure what benefits we’re missing or economic issues result from defense R&D. R&D hasn’t dropped in medical areas as you mention. Thus, I’m not sure what significant effect you’re alluding to here. There simply isn’t a lot left compared to defense, medical and private investment.

 

[noble cane]

WATU.. the Manchurian poster.

 

[lawpoke87]

I’m simply not sure why anyone on the left wants to emulate an economic model where the median hourly wage is $2.25 an hour. 🤷‍♂️

 

[noble cane]

I’m simply not sure why anyone on the left wants to emulate an economic model where the median hourly wage is $2.25 an hour. 🤷‍♂️

When they get their authoritarian govt installed here, that will be the benchmark.

 

[aTUfan]

A lot of our budget is for foreign aid.. we have deficit spending so we have to borrow from China.. How about we cut out the middle man and let china provide the aid. The we can borrow less and cut our budget

 

[Gmoney4WW]

FALSE A lot of our budget is for foreign aid.. we have deficit spending so we have to borrow from China.. How about we cut out the middle man and let china provide the aid. The we can borrow less and cut our budget

During end of Obama's administration less than 1% of US budget was spent on foreign aid. During the beginning of Trumps administration 1.2% of US budget was spent on foreign aid. I don't think approximately 1% qualifies as a lot.

 

[aTUfan]

And that 1% adds how much to our debt?

 

[Gmoney4WW]

A whole lot less than the rest of our budget.

 

[aTUfan]

I have $10,000 of debt so another $100 won't matter

 

[watu05]

I’m simply not sure why anyone on the left wants to emulate an economic model where the median hourly wage is $2.25 an hour. 🤷‍♂️

Somehow in 50 years China has become the world's largest automobile market with luxury brands becoming dominant, raised 600,000 people out of abject poverty where their wages were probably unmeasurable, and built an amazing infrastructure while ours has stagnated. That might catch some poor country's attention, or make they open to accepting China's offers to build/finance ports and railways in their country.

All beside the point, the question for the US is how to deal with China? Start with the assumption that they are the enemy and that all our responses should be couched in those terms? Try to figure out how to both compete and cooperate through direct negotiation and international institutions? Or is the US doing just fine and all we need to do is make sure China stops stealing our IP and hammer them with tariffs.

I doubt Microsoft employees sit around saying how awful it must be to work at Apple, instead of trying to figure out if they can work together (Mac versions of Word, Excel), compete head on, or otherwise achieve Microsoft's goals.

China appears to think strategically. When I worked in East Africa in the early 70's, it was surprising to learn that China was building the TansZam railroad across Tanzania and Zambia to insure they access to those countries' natural resources in the future. They were using what they had (how to build a railroad, labor and financing) to lock up access to natural resource in Africa for the future.

 

[noble cane]

China appears to think strategically. When I worked in East Africa in the early 70's and I was surprised to learn that China was building the TansZam railroad across Tanzania and Zambia to insure they access to those countries' natural resources in the future. They were using what they had (how to build a railroad and financing) to lock up access to natural resource in Africa for the future.

Hmmm... isnt that what the lefties here call imperial colonialism? I mean. Didnt the Brits build railroads where ever they went?

 

[lawpoke87]

Somehow in 50 years China has become the world's largest automobile market with luxury brands becoming dominant, raised 600,000 people out of abject poverty where their wages were probably unmeasurable, and built an amazing infrastructure while ours has stagnated. That might catch some poor country's attention, or make they open to accepting China's offers to build/finance ports and railways in their country.

All beside the point, the question for the US is how to deal with China? Start with the assumption that they are the enemy and that all our responses should be couched in those terms? Try to figure out how to both compete and cooperate through direct negotiation and international institutions? Or is the US doing just fine and all we need to do is make sure China stops stealing our IP and hammer them with tariffs.

I doubt Microsoft employees sit around saying how awful it must be to work at Apple, instead of trying to figure out if they can work together (Mac versions of Word, Excel), compete head on, or otherwise achieve Microsoft's goals.

China appears to think strategically. When I worked in East Africa in the early 70's, it was surprising to learn that China was building the TansZam railroad across Tanzania and Zambia to insure they access to those countries' natural resources in the future. They were using what they had (how to build a railroad, labor and financing) to lock up access to natural resource in Africa for the future.

China’s political system affords them the opportunity enact policies with long term benefits. It’s a distinct advantage over the US where our Administrations act in 3 year windows. Unfortunately, I don’t see this changing.

No one is disputing China is making progress on most fronts. I’m not sure if civil liberties is one of them but that’s a discussion for another thread. They have 1.4B consumers. A huge untapped market which offers growth opportunities no other country in the world has with the possible exception of India.

 

[watu05]

European firms in China ‘between rock and hard place’ as Xinjiang row rages

EU Chamber of Commerce in China says its members are facing an increasingly politicised business environment.

www.scmp.com

Xinjiang and treatment the Uighers a major problem and challenge for European businesses in China.

 

[watu05]

Distrust continues to ramp up. https://www.msn.com/en-xl/news/othe...n-old-video-of-retired-us-colonel/ar-BB1eZqzr

 

[watu05]

The 2025 Olympics?? Tom Friedman is a much better writer than I am.

 

[watu05]

Out of control spending in the wrong places?

 

[lawpoke87]

Why is CNN showing a picture of an ex-President instead of Biden when talking about future military spending....other than the obvious?

 

[watu05]

The US spends $1.7 Trillion on failed airplane but POT refuses to spend the same on improving our infrastructure and competitiveness. We need to wake up and invest in our future.

McConnell says GOP won't support Biden's infrastructure plan, vows to fight Democratic agenda

McConnell's comment all but assures Democrats will have to pass a more than $2 trillion infrastructure plan on their own.

www.cnbc.com

 

[lawpoke87]

https://www.usdebtclock.org/

 

[HuffyCane]

The really interesting component is how divided Australia is. Half the country has sold or wants to sell all of its critical infrastructure to China like ports and bridges. The other half of the country thinks they will be at war in five years and is rearming to prepare for it.

 

[aTUfan]

Why do we even need a military anymore. Our country, constitution and culture are being invaded electronically. Without one shot being fired, we are losing.

 

[watu05]

The really interesting component is how divided Australia is. Half the country has sold or wants to sell all of its critical infrastructure to China like ports and bridges. The other half of the country thinks they will be at war in five years and is rearming to prepare for it.

Interestingly Australian company MacQuarie has a long, successful history of buying up US infrastructure and renting it back to us. That was one of the few ways states and cities could raise capital to build new infrastructure...by shifting to user fees via sale lease back.

 

[watu05]

As of 2019 American taxpayers have spent $6.4 trillion on post-9/11 wars and military action in the Middle East and Asia, according to a new study.

America has spent $6.4 trillion on wars in the Middle East and Asia since 2001, a new study says

That total is $2 trillion more than all federal government spending during the recently completed 2019 fiscal year.

www.cnbc.com

This amount understates our entire military spending, as it only counts the parts of the DoD budget that went into these particular wars. Spending on the $1.7 Trillion F35 program (a flop) for example is not included. The 2021 DoD budget request is $705 Billion.

Our expenditures are are equal more than 144 countries combined.

The U.S. Spends More on Its Military Than 144 Countries Combined

$121.1 billion. That’s how much more money the United States spends on its military than 144 other countries combined.

www.nationalpriorities.org

It is hard to believe that we need this level of military or that those wars made the US much safer. They did, however, result in 800K deaths.

Say the US had cut it's defense spending by 30%, closed a few of our 800 bases abroad, and invested that money in R&D, infrastructure, education, and alternatives to carbon fuels. Wouldn't we and the world be better off?

 

[lawpoke87]

.

Say the US had cut it's defense spending by 30%, closed a few of our 800 bases abroad, and invested that money in R&D, infrastructure, education, and alternatives to carbon fuels. Wouldn't we and the world be better off?

Suppose that depends on the actions of Russia and China and whether you live in the US or Europe/Middle East.

A 30% reduction in defense spending shouldn’t greatly affect our ability to defend our mainland if those cuts are mainly focused abroad. They would significantly decrease our ability to project power across the globe however. Europe would need to spend considerable more on defense to counter any potential Russian threat. Same for our allies in the Middle East and Asia. I’ve been an advocate of those countries contributing more to their own defense so I see little downside other than US influence abroad.

 

[watu05]

Suppose that depends on the actions of Russia and China and whether you live in the US or Europe/Middle East.

A 30% reduction in defense spending shouldn’t greatly affect our ability to defend our mainland if those cuts are mainly focused abroad. They would significantly decrease our ability to project power across the globe however. Europe would need to spend considerable more on defense to counter any potential Russian threat. Same for our allies in the Middle East and Asia. I’ve been an advocate of those countries contributing more to their own defense so I see little downside other than US influence abroad.

There is also an upside if those funds were invested in US assets, such as R&D, high speed trains, education, roads, from which we would have already had a return. With interest rates at all time lows, not investing in long term assets is crazy.