Which is better for an economy: millions of future jobs and trillions of future dollars, or a few people making a quick buck today by selling out their country? For decades America's 1 percent-backed conservatives have chosen the latter course, and we can see the results all around us. Now the Obama administration has imposed stiff tariffs on Chinese solar panels because China was "dumping" -- selling below cost -- to drive American manufacturers out of business. Will conservatives support their country and our companies or will they continue to side with our country's competitors?
The Commerce Department yesterday concluded that Chinese solar panel companies are "dumping" product -- selling below the cost of production -- into the U.S. market, and imposed stiff tariffs. According to the New York Times' "U.S. Slaps High Tariffs on Chinese Solar Panels":
The United States on Thursday announced the imposition of antidumping tariffs of more than 31 percent on solar panels from China.
... The antidumping decision is among the biggest in American history, covering one of the largest and fastest-growing categories of imports from China, the world's largest exporter.
Again and again technology revolutions come along and disrupt economies. Countries that jump on new technologies are the countries that win the industries and jobs and revenue. This is how the United States became the world power that it is was. Railroads, steel, automobiles, airplanes, electronics, semiconductors, computers, the Internet, pharmaceuticals, biotech and software are a few examples. And in every case our government helped these new industries get off the ground. When these industries took root the payoff was enormous.
Green energy is one such technology of the future. Producing solar panels, wind turbines, etc. will bring millions and millions of jobs and trillions of dollars, and several countries are competing to win a share of this new industry.
China is fighting hard for those jobs and dollars. They are being smart, and they are also pushing past the limits of the rules. From the New York Times story:
Alan Price, a partner who heads the international trade practice at Wiley Rein, the law firm representing the United States companies in both the solar and wind cases, said that China posed a particular threat to America's developing green energy sector.
"China's method is straightforward: it sets forth industry-specific Five-Year Plans and then uses all forms of national and local subsidies and other governmental support to quickly transfer jobs, supply chains, intellectual property and wealth, to the permanent detriment of U.S. and global manufacturers," he said. "China's ability to ramp up and overwhelm an industry is unique and particularly devastating with new and emerging technologies, where global competitors may be less established and can be knocked out more easily and quickly."
To compete for a share of this new industry we need to be proactive. We need national efforts to develop the industrial commons, or ecosystem, that will foster green-tech industries. We also need government policies that promote a market for these products until they take hold, just as our defense industry did for aircraft and other new technologies. And we need to enforce the rules for international economic competition, which is what has happened with the tariff decision.
The New York Times story points out that this was not a political decision by the Obama administration,
The American decision was made by civil servants in a quasi-judicial process that is heavily insulated by law from political interference and does not represent a deliberate attempt by the Obama administration to confront China on trade policy. But that distinction has been largely lost in China, where the solar panel issue has been one of many causes embraced online by the country's vociferous ultranationalists, who put heavy pressure on Chinese officials to respond forcefully to perceived snubs to China.
The rules say that if a country is dumping, then we must impost tariffs. The Commerce Department investigated and concluded that China has been dumping so they had no choice. If we do not enforce trade rules, they are meaningless and countries that cheat gain an advantage, driving out the honest players. That is how cheating, accountability and enforcement work. (Hint: this also applies to banking fraud laws.)
In the case of solar-panel tariffs, we were losing companies and jobs and facing losing the possibility of losing the entire industry to China. From "Tariffs On Chinese Solar Might Help Prevent The Next Solyndra":
You have probably heard about a solar-energy company named Solyndra, but probably what you have heard is a bunch of negative, conspiratorial, anti-alternative-energy, anti-Obama stuff from the corporate/conservative spin machine. The real story is that our government is trying to help us capture some of the new green energy industry that will create the jobs of the future. But China is, too. And China doubled down, and then quadrupled down on government support. They even directly subsidize their companies so their products cost less. This helped put Solyndra out of business. But the Obama administration is doing something about it.
China cheats, and we don't usually do anything about it. They let companies pollute, don't do much about worker safety, pay low wages, and make people work long hours. So-called "free trade" lets companies cost us more than 50,000 factories in the Bush years, and millions of jobs. And it empowers companies here to tell their workers to shut up and behave and accept wage and benefit cuts, or they'll send their jobs to China, too. We continue to just let China take jobs, factories and industries because powerful interests, like Wall Street, make tons of money off of it.
So the decision is made, our country is engaging in the economic war that has been underway against us. Will our country's conservatives take our country's side?
Oil-backed conservatives have been waging a campaign to discredit green energy, trying to stop government efforts to move us away from dependence on oil and coal. (Please click the links.)
They have used the failure of solar-panel manufacturer Solyndra -- partly due to Chinese dumping -- to paint green tech in general as a bad investment. They have even tried to turn the public against the Chevy Volt, claiming that it "ran out of juice in the Lincoln Tunnel" when it actually just kicked over to the gas-engine charger, and that the car is "flammable" because on test battery got too hot -- as compared to cars that run on gasoline! (Gasoline car-fire data at the link.)
These anti-dumping tariffs change the dynamics of this oil-backed anti-green campaign. Now when conservatives slam Solyndra or the Chevy Volt and otherwise join in this anti-green-energy campaign they are taking China's side against American companies at a time when the country is engaged in economic conflict. This presents a tough choice to the conservative movement: Do they continue to accept oil and coal company funding and side against their country and support China, or will they return to their pro-American roots and side with their country in a time of conflict?
Low prices from trade-cheaters are always attractive. But if we want a slice of the jobs, factories, industries and economy of the future we have to fight back when our competitors cheat.
The solar-installer industry is worried they will be hit hard by this because prices for solar panels could increase sharply. According to BusinessWeek's "U.S. Solar Tariffs on Chinese Cells May Boost Prices":
The tariffs "will increase solar electricity prices in the U.S. precisely at the moment solar power is becoming competitive with fossil fuel generated electricity," Shah said in a statement. "This new artificial tax will undermine the success of the U.S. solar industry."
[...] The U.S. decision to impose import duties on Chinese solar panels will raise their price to $1.11 per watt, according to calculations by Bloomberg New Energy Finance, a London-based researcher owned by Bloomberg LP. That price is 17 percent higher than the current spot price of non-Chinese panels.
Forbes's article "Solar Installers Caught In Cross Fire Of Escalating China Trade War" states:
On Thursday, the U.S. Commerce Department issued a preliminary decision levying steep tariffs against Chinese solar manufacturers, finding they illegally dumped cheap photovoltaic cells on the American market. But the companies that install those solar panels on residential and commercial rooftops -- and which have benefited from a 75 percent plunge in photovoltaic prices in recent years -- are split over the impact of the tariffs on their burgeoning business.
The government could remedy the impact on domestic customers and installers several ways, including:
Of course the oil and coal companies will continue to fight this shift from their "buggy-whip" technology, and will use their tremendous influence over our government to try to hold off the inevitable. But the tide is shifting. The fact that China is fighting so hard and putting so much investment into this sector shows its value to the world economy in the future. The fact that our government is responding shows that we have a chance to win a share of the jobs and revenue that green tech promises to bring.
This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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Let's support a solar future.
The USA actually export more solar to China than imports, this will only hurt us.
http://www.seia.org/cs/news_detail?pressrelease.id=1532
ENTER THE INCOME TAX
Until 1913, tariffs on trade furnished most of the money needed to fund the federal government. Then Congress passed the Underwood trade bill, which canceled most tariffs. Suddenly, Congress claimed it had to find another tax source. Senator Aldrich co-sponsored the 16th Amendment creating the Income Tax. Soon after passage by Congress in 1913, Philander Knox issued the odd announcement that, "The 16th Amendment seems to have been ratified."
Doubting ratification of the 16th Amendment by three-fourths of the states, Bill Benson and M. J. "Red" Beckman traveled to 48 states (Alaska and Hawaii were not states in 1913). They got certified copies of all ratification documents from each of the legislatures, (17,000 documents) and, in a two-volume work, proved that not one state had legally ratified the 16th Amendment as written. See: www.thelawthatneverwas.com
That isn't all. "The Internal Revenue Service was never authorized by Congress." - Public Notice - Media Bypass, March, 1997 - An unconstitutional act is enforced by an unauthorized agency.
Withholding taxes, an emergency measure initiated only for World War II, are still collected.
Income taxes pay only Federal Reserve debt and IRS expenses. "Income taxes do not fund any government function." - Page 12, President's Private Sector Survey on Cost Control, January 15, 1984 - Library of Congress.
http://www.wvculture.org/history/journal_wvh/wvh55-6.html
Senator Harley M. Kilgore and Japan's World War II Business Practices
"...In their negotiations to purchase aircraft, the Japanese managed to acquire important technical information. In 1937, the Japanese were planning to acquire a Boeing bomber which the United States army forbade the sale of for a one-year period. Boeing offered to sell them a "similar model." Boeing advised the Japanese that "they would be able to design and build a similar type of bombing plane, either independently or in conjunction with Japanese engineers and would manufacture a certain specified number per year, or make one model plane selling the manufacturing rights for the style so designed.."
Profits over patriotism
===
It depends on how you define the economy. Are we talking the economy of the few or the economy of the many? If we're talking about the usual economy of the few, then making a quick buck by selling out the country wins, hands down. Every African and Latin American dictator has understood that.
Globalization's New Underclass
"Stephen Roach (New York)
Billed as the great equalizer between the rich and the poor, globalization has been anything but. An increasingly integrated global economy is facing the strains of widening income disparities -- within countries and across countries. This has given rise to a new and rapidly expanding underclass that is redefining the political landscape. The growing risks of protectionism are an outgrowth of this ominous trend.
It wasn’t supposed to be this way. Globalization has long been portrayed as the rising tide that lifts all boats. The surprise is in the tide -- a rapid surge of IT-enabled connectivity that has pushed the global labor arbitrage quickly up the value chain. Only the elite at the upper end of the occupational hierarchy have been spared the pressures of an increasingly brutal wage compression. The rich are, indeed, getting richer but the rest of the workforce is not. This spells mounting disparities in the income distribution -- for developed and developing countries, alike.
The United States and China exemplify the full range of pressures bearing down on the income distribution. With per capita income of $38,000 and $1,700, respectively, the US and China are at opposite ends of the global income spectrum. Yet both countries have extreme disparities in the internal mix of their respective income distributions...."
It doesn't help that some conservatives try to blame consumers for offshoring of manufacturing jobs.
I'll keep the work up until the revolution starts . ;-)
So now everybody who installs a $200 Chinese solar panel has to pay a $62 tax to the US government (which then gives this money away to oil companies... and the nuclear industry). The Chinese won't care about the American consumer paying what, essentially, is a penalty for trying to be "green". They will produce their panels at ever lower prices for themselves and the rest of the world, no matter how foolish Americans are.
Doesn't sound like you did.
:-)
That's where PACE bonds come in:
www.pacenow.org
You see for most Americans, to move to green energy, it's the financial and business model that needs repair. And although you may employ a few thousand Americans building panels, you would employ millions making American homes, green acceptable. All at the lowest interest rates the country has ever seen.
The Volt then becomes an energy supplier, if it can backfeed into a house, the state has feedback tariffs in place, PACE bonds and it can also double as a car, when it's not generating a profit.
http://en.wikipedia.org/wiki/Rentier_capitalism
But who charges up the Volt? You analogy makes no sense, a typical Volt owner comes home with the batteries depleted. They use electric from your home to charge up the car, start the day with the batteries fully charged up.
Another scenario, charge the cars at your workplace. But if you use the batteries to power your house when you get home, they will be depleted in the morning.
By the way, PACE is a great idea...
Solar electric also often has batteries to store the power. As far as work is concerned, it depends on what shift you work or whether you work from home or are retired. So the idea is that one looks at all the possibilities and lays the ground work now using PACE bonds. You can always add the car or truck later.
How many inverters does one need to buy?
Fair enough, now let the global market openly bid on rare earth minerals from China AND let Chinese firms pay the global price.
China cut off exports of rare earths to Japan, that is not a free market.
The Chinese restrictions on rare earth exports do create plenty of good jobs in US and Canadian rare earth mines, by the way. So what, exactly, are you complaining about?