America is Emulating China’s Economy: Command and Control!
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I got a new acronym for you. And I didn’t come up with this. Robert Zellick, who’s the former trade ambassador for the United States. This is way back when, I’m trying to remember. This is back during the Bush administration, if I’m not mistaken. He was also a deputy US secretary of state, World Bank president. Whoa, W-O-E, Washington ordered economy. I love it.
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I love it. Well, I’m highlighting it today because it goes along with some of the things that we’ve been talking about this past week when it comes to China and handling China and what we can learn from China and command and control economies. And what do we learn from command and control economies? What inevitably happens to command and control economies, communist countries, what happens? They fail. Period, the end, they fail. And it is…
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piece today. He talks about what the current administration is doing. Basically, you talk about the New Green Deal. Well, they didn’t pass that, but they got parts of it in the Inflation Reduction Act. You can talk about the CHIPS Act. All of these things where the government, Washington, D.C., is deciding the winners and losers. And you even take a trip down memory lane. It doesn’t matter. You can do this with Republicans in power.
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Okay, you know what? I’m gonna pick on Republicans right now. I remember Donald Trump and Scott Walker in Wisconsin. They’re in Wisconsin and they’re all excited because Foxconn is gonna spend billions of dollars on this plant and they got all sorts of tax deals and subsidies and they put their golden shovel into the ground and any plant. Did they follow through on any of the things that they said that they were going to do? No, no. Again, command and control.
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let the market decide and good things will happen. Do you think that the government is gonna make wise choices when it comes to our tax dollars? Taking our tax dollars and giving them to private companies for semiconductor, what, these semiconductor companies not making enough money? You watch Nvidia stock? Nvidia needs my money, I just give it to them. I mean, I’d rather take my money and invest in the company, but you’re making me give it to them.
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so they can expand their business. Did you think that the folks in Washington are gonna make the right choices? Do they ever? No. Again, we don’t want to emulate. I talk about the need to compete. The need to compete. You know, always worried about, ah, what China’s gonna do, and what’s gonna happen here, and what’s gonna happen there. Why don’t we just go out there and compete? And let’s compete by doing what we do best. Let’s play our game, which is the free market. We’re the wealthiest country in the world. We got to this point in time.
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for a reason, we know how to do it. Well, why not just keep doing what we’ve been doing? Why don’t we try to emulate what these command and control economies can do? Again, the elites, the powers that be, we talked about that big club that we’re not in, they like running the show, they like dictating the stuff, and they like keeping the wealth to themselves. You get them out of the way, you let the free market decide, guess what? Things work a hell of a lot better. Things become a hell of a lot less expensive.
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I’m gonna go to Zellick’s piece today in the Wall Street Journal. The new economic and social order incorporates six connected elements. The first, it is aversion to trade. The new planners in Washington need trade barriers to limit competition with their protected national economy and reward special interests. Talked about this before. What does this cause? What do we call this? Come on, what do we call this? What do we call it? You’re building a moat, right? You’re building a moat. Companies able to get a moat built around them, protected.
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They’re protected by regulations. This is not good. This is not healthy. Again, I’m talking about too big to fail. What’s it called? Regulatory capture. Okay, anyway, protectionist tariffs add to everyone’s bill. Yes, tariff man Donald Trump was wrong. Okay, he’s super Trumpsters out there. I know, he can do no wrong. His tariffs didn’t work, period, the end. Okay, I don’t wanna hear about tariffs again. It was stupid.
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Anyway, anyway, U.S. has given up negotiating open markets abroad and lowering prices at home. U.S. Trade Representative Catherine Tai told a union panel in Detroit that trade policy had focused too much on liberalization, efficiencies, and lower costs. Isn’t that what it’s supposed to do? Again, this is a U.S. trade representative. What a fool. Yeah, you want, you want.
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You want to level the playing field. Yes, okay, American companies gave up the technology. They agreed to this stuff and it was stupid. It was dumb and we highlighted that. But did the tariffs do anything? No. You know what did more than the tariffs in regards to getting businesses to leave China? Actually, the Russian-Ukraine war did more. Companies were taking a look because they lost a ton of money in Russia because they had it up and leave when it invaded Ukraine.
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and the idea that it’s floating out there that China wants to retake Taiwan, that it could happen, the possibility, they want out now. And we mentioned, we were talking about China. It’s twice as inexpensive to do business in Vietnam now as it is China. And the costs are equal to doing business in Mexico. Do you think tariffs had anything to do with that? No, that’s just the market working its magic.
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In the past, US trade leadership established rules for topics such as services, technology, fair agricultural standards, anti-corruption, and even basic environmental and labor protections. Today’s trade agenda should advocate enhancing digital and data connectivity while respecting different approaches to privacy. The US can’t compete with China’s economic model if it won’t sit at the table of trade liberalizers. Second, the administration’s industrial policy requires
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huge subsidies for favored causes. Oh yeah, man, this happens every time. Obama comes in, he gives green jobs, czar, and all this money that he threw out all these companies, that failed. Anyway, such policies are notoriously difficult to implement and require not so fine tuning. US wants the leading exporter of electric vehicles.
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provoked tariff escalations that pushed Tesla in 2018 to announce a manufacturing shift to China. Beijing is now the principal exporter of electric vehicles. Biden responds by subsidizing U.S. production. European Union, they get pissed off. Threat retaliation. Then we would create a loophole for imports of leased vehicles, which escape the restrictions that apply to U.S. production. Electric vehicle imports.
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continue to grow from the EU this year. Commerce department is now has to decide which semiconductor products to subsidize. What kind of chips, how long, what restrictions? If Washington orders companies not to sell chips to China, what does that mean? Again, third element contributing to woe, antitrust. Man, how many times have I gone off on Lena Conn here on the program again and again and again?
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blocking acquisition. The entire idea that just because it’s big, it’s bad. Is some big bad? Yeah, is some little bad? Yeah, but not all big is bad. But that’s our idea. The Federal Trade Commission Chairman, Timothy Muris, new policy reverses former, excuse me, it’s Lena Kahn now, former Federal Trade Commission Chairman Timothy Muris.
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A new policy reverses 40 years of bipartisan, principled economic standards and opens a door to political favoritism. They want to dismantle business models of entrepreneurs selling innovations to larger enterprises with more capital and marketing reach. That comes right at the advent of artificial intelligence and cloud services has intensified competition and will create opportunities for invention with more open source systems. What does this mean? What is Alex saying?
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Again, I talked about this here on the program. They’re getting away from does it benefit or harm the consumer? Okay, anybody got any complaints really in regards to their Amazon service? I know from time to time they may send you a wrong order, whatever it may be, but for crying out loud, you can go on there and you can have groceries delivered to your door. I mean, honestly.
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They’re getting a real problem with that. Have they not lowered costs? Are things not a lot less expensive for you because of technology? They wanna do away with all that, which is nonsensical. And fourth, he says under Washington’s new theory, regulations must prohibit or discourage disfavored sectors and business models while also controlling consumer and business behavior.
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Yeah, ESG, how often we going off on this? Again, people, I’m gonna say it over and over and over again. Washington ordered economy, not my acronym, it’s Zelleck’s acronym, but it’s a pretty good one. Washington ordered economy will fail. And guess what? Guess what? It lowers us. It puts us on the same playing field. We’re better than China. Why are we gonna lower ourselves to their standards? Anyway, watchdogonwallstreet.com.
