Promise to fall no further behind?

Let's return to the quote presented in my previous post. 

Macleans's Magazine, August 8, 2011, page 13, Columnist Paul Wells:

"When (China's) President Hu Jintao was in Ottawa last June, he announced Canada and China had set a goal of doubling bilateral trade volume to $60 billion in five years, by 2015.  But here's the thing.  China's trade with the rest of the world more than doubles every five years. Its trade with the U.S. has more than doubled in recent five-year periods....Harper's (prediction) amounts to a promise to fall no further behind."

I really cannot find words to describe the sheer nonsense and ignorance of this passage written by Columnist Wells.

Did Wells write this passage himself or was he given the wording by the Prime Minister's office?  Or was he given the wording or general direction by the owners of Maclean's Magazine?

"China's trade with the rest of the world more than doubles every five years".  Is this supposed to be a good thing? 

When China's trade doubles, there is more destruction of the manufacturing sector of every western country including Canada.  More jobs destroyed.  More simplification of the economies of the western countries, making it impossible for young adults to find employment.  Making it impossible for young adults to look forward to a normal life of employment, earning money, saving, marriage, family, buying a house or apartment.  Making it impossible for people of all ages to find employment and have a life of dignity and usefulness in society. 

In the famous book "Festival at Farbridge" by J. B. Priestley, it is England 30 years after the end of World War I.  A man who was in the worst of the fighting in World War I, but somehow survived, is sent to visit a certain house and knocks on the door.  The door opens and the man asks to see the master of the house.  He is ushered in and is amazed and stupefied to see who it is.  He has stumbled upon the now-retired general who commanded his division in the War.  The man remembers the general's statement when he was first put in charge of the division and made his first inspection.  The general said "This division can't be very effective.  It hasn't taken enough casualties."

Is this what Wells means when he refers to a "Promise to fall no further behind."?

Does he mean that we have not yet had enough destruction of our manufacturing sector? 

Does Wells think that "trade" with China is some great thing and countries should rush onto the bandwagon to get some of the benefits for themselves?

I think the basic problem is that columnists and politicians do not understand negative numbers.

Everyone is familiar with a temperature of     - 5 degrees Centigrade.   A cold winter day, but not necessarily a disaster as long as there is no wind.  If later in the day, or overnight, the temperature is   - 10 degrees Centigrade, is this better?  Is it more comfortable?  Obviously not.

Every country that is in a "trade" relationship with China is in negative territory.  Example: Country X's balance of trade in manufactured goods with China is a NEGATIVE number, say - $30 billion dollars per year.   Note the minus sign.  It is highly significant.  Five years later, Country X's balance of trade in manufactured goods with China is - $60 billion dollars per year.  Is this better?

Same answer as for the outdoor weather example!  A resounding NO!

A negative balance of trade of $60 billion per year is much WORSE than a negative balance of $30 billion per year.

It means double the hemorrhage of Country X's real physical money out of the country, never to be seen again.  It means double the loss of manufacturing employment at home in Country X.  It means double the unemployment insurance benefits, double the welfare payments, double the social costs, double the despair of the people of Country X.

It is obvious that Columnist Wells, and quite possibly Prime Minister Harper and his officials, understand nothing of this.

Chinese officials must be laughing their heads off at how easily Canadian officials are fooled and blinded concerning the reality of “trade” with China, and the real intentions of China.

To see whether we have already taken enough casualties, or to see if we are "falling behind" in taking casualties, let’s look at some Canadian data and compare with data from our good near neighbour, the USA! (Data are from official sources and are for 2010.)

Canada.  Negative balance of trade in manufactured goods with all foreign countries including United States.

$80.79 billion.    Population of Canada 34,350,000

Negative balance of trade per person $2352

United States. Negative balance of trade in manufactured goods with all foreign countries including Canada.

$634.6 billion.    Population of United States 312,280,000

Negative balance of trade per person $2032

We can see that Canada is importing manufactured goods at a proportionally higher rate than the United States. We have not "fallen behind".  We are taking more than our share of casualties!

The situation is even worse than appears from these numbers, because the U.S. trade balance includes imported oil, while oil is not included in the Canadian trade balance.  If oil were removed from the U.S. trade balance, the negative balance of trade per person would be less than $2032.

Now let’s look at trade with China only.

Canada.  Negative balance of trade in manufactured goods with China.

$36.13 billion.

Negative balance of trade per person  $1052

United States. Negative balance of trade in manufactured goods with China.

$273.1 billion.

Negative balance of trade per person $875

This comparison shows even more strongly that Canada has not fallen behind in taking casualties.  We are worse off than the United States, in this case specifically with respect to China.  The last thing we need is more casualties, more “trade” with China. 

Now consider Canadian trade in manufactured goods with the United States.  Here is a surprise, to me at least.  The Canadian balance of trade with the United States was an amazing POSITIVE $21.9 billion in 2010, up from the 2009 figure, but well down from 2006 when the trade balance was $63.5 billion. 

I hope no one in Ottawa or at Maclean’s Magazine thinks that we should go into more “trade” with China because our trade with the United States is down.

Only people who don't understand negative numbers look for more "trade" with China.

I use quotation marks because trade is not the correct word.  Any relationship between Country X and China means devastation and destruction for Country X.  The relationship is pathological, exploitive.  The innocent word "trade" does not include these phenomena.

If we can’t keep up our positive balance of trade in manufactured goods with the United States, because our dollar is high or for any other reason, we should at least work very hard to ensure that our negative balance of trade in manufactured goods with all foreign countries does not become larger, i.e., does not become a larger negative number.

We must reduce imports and increase domestic manufacturing.  Our negative balance of trade in manufactured goods with all foreign countries ALMOST TRIPLED in the last five years:

Year 2006   $27.89 billion

Year 2007   $32.59 billion

Year 2008   $58.99 billion

Year 2009   $75.54 billion

Year 2010   $80.79 billion

We are going in absolutely the wrong direction.  It is wrong to say "this is the way of the world today and we have to accept it".  We can't accept a growing hemorrhage of real wealth out of our country.  We can't accept a hemorrhage of jobs, with the result that our people of all ages can't find employment. 

Fortunately our negative balance of trade in manufactured goods with China only increased by 27% over the last five years.  Maybe this is what Columnist Wells and Prime Minister Harper refer to as "falling behind".   I refer to it as the first bit of good news I've heard today!

Ignorant of the simplest facts!

In Macleans's Magazine, August 8, 2011, page 13, Columnist Paul Wells states:

"When (China's) President Hu Jintao was in Ottawa last June, he announced Canada and China had set a goal of doubling bilateral trade volume to $60 billion in five years, by 2015.  But here's the thing.  China's trade with the rest of the world more than doubles every five years. Its trade with the U.S. has more than doubled in recent five-year periods....Harper's (prediction) amounts to a promise to fall no further behind."

These statements are absolutely unbelievable.  Does Paul Wells not understand how pernicious and damaging these statements are?  How they put an upbeat face on a disastrous situation?.  Does he not understand the disservice he is doing to the Canadian people?

Let's get some background.

Balance of Trade in manufactured goods between Country X and all other countries in the world is expressed by professionals in the following way:

Balance of Trade = Exports minus Imports

If Country X exports $100 billion worth of manufactured goods per year, and imports $50 billion worth of manufactured goods, then the Balance of Trade in Manufactured Goods of Country X is a POSITIVE $50 billion per year.

This situation is good for Country X.  The people of Country X have manufacturing employment, and the country benefits from the value-added effect of manufacturing.

But suppose the situation reverses itself due to unwise policies followed by the Country X government, and the situation becomes:

Exports $50 billion per year

Imports $100 billion per year

Balance of trade = exports minus imports = $50 billion minus $100 billion

       = minus $50 billion per year

In other words, now Country X has a NEGATIVE balance of trade in manufactured goods with all foreign countries of $50 billion per year. 

First of all, everyone has to understand that the $50 billion amount is real physical wealth leaving Country X every year.  In time the impoverishing effect of this hemorrhage of wealth will become apparent.

Any intelligent person can see from the above discussion that in relation to trade in manufactured goods we have to know in which direction the goods are going.

We look at

Exports minus Imports

Call to mind your school arithmetic and even algebra if you wish.  There is a great difference between a positive number and a negative number. 

The little bit of arithmetic shown above tells us the NET result of our export/import activity. 

If the NET result is POSITIVE, then Country X is in good shape.

If the NET result is NEGATIVE, then Country X is in bad shape, with real wealth hemorrhaging out of the country to pay other countries to do manufacturing for Country X.  At the same time, there are many unemployed workers in Country X who could be doing that manufacturing, rather than standing in line at unemployment offices and requiring unemployment insurance and welfare payments from the government.

Simply mentioning a "trade volume" is absolutely meaningless.  We have to know the NET result of "Exports minus Imports" to know if we are heading in the right direction.

I suspect that "bilateral trade volume" is calculated in a way that breaks every rule of logic, arithmetic and algebra.

There is some export of manufactured goods from Canada to China.  The value of the goods is a positive number from the standpoint of the ordinary working men and women of Canada.

There is a huge import of goods from China to Canada.  Our stores are filled 90% with goods made in China.  Again from the standpoint of ordinary Canadians, the value of the goods is a disastrous negative number.

Prime Minister Harper is an economist and therefore should know the difference between a positive number and a negative number.  Yet what he is doing is stripping the plus sign or the minus sign as the case may be from the export and import amounts.   The result in arithmetic and algebra is the "magnitude" of the number.  Then Harper and all the bureaucrats and columnists simply add the two magnitudes to get a very attractive number which they try to sell to the populace.

China has announced a policy of becoming self-sufficient in all common manufactured goods by 2020, and extending the policy to include airliners, communications systems, and railroad systems by 2050.

I guarantee that any increase in "bilateral trade volume" is accomplished by an INCREASE IN IMPORTS FROM CHINA, while exports to China at best remain level.

Hilary Clinton gave a speech in January 2011.  She also talked glowingly about trade with China.  She also totally disregarded plus and minus signs and simply added magnitudes.  She doesn't seem to know or care that America's negative balance of trade in manufactured goods with all foreign countries is over $500 billion dollars per year, somewhat over half of that being due to "trade" with China. 

Unfortunately, Canada's negative balance of trade in manufactured goods with all foreign countries is proportionally even worse, at $89 billion dollars per year. 

Hilary Clinton is effectively a lobbyist for China and as such is in conflict of interest with her other job, Secretary of State.

Is Stephen Harper also a cheerleader for China, putting a happy face on Canada's decimated manufacturing sector and disastrous unemployment situation?