US corporations decided that the way to get rich was to destroy their American consumer base by closing their American factories, throwing their US employees out of work and hiring Chinese instead. The Chinese work for less, you see, and free trade economists say lowering costs makes us better off.
What US corporations and the free trade economists overlook is that giving Americans' jobs to foreigners raises foreign incomes and lowers American incomes. When credit cards and home equity lines are maxed out, there will be nothing to support the US consumer market. The American corporations who moved their capital and technology to China will have to find new customers.
Maybe the Chinese government will let the relocated US firms sell to Chinese customers, or maybe the Chinese government will let the US firms go bankrupt. The latter favors China's strategic interest. Chinese businessmen will purchase the bankrupt firms, and Chinese businesses will sell to Chinese customers.
Americans are pouring so much money into China that China can finance our wars while it buys up our companies.
Everyone was shocked that a Chinese company could outbid Chevron for Unocal. China has already purchased IBM's personal computer business, and is now after US appliance maker Maytag (whose appliances are made in Mexico).
The outsourcing mania has hit the Pentagon, and China will soon be supplying the ships for the US Navy. The Pentagon, seeking lowest cost, is pushing defense contractors to outsource offshore for more materials, components and systems.
This means the end of US shipbuilding capability. Component suppliers to American shipbuilding are already skeletal thin, with most components only having sole suppliers. For example, Manufacturing & Technology News (July 8) reports that 80% of the components for the Virginia Class submarine come from sole sources.
With not enough US Navy ships being built to support even an industry of sole suppliers, Asia is fast becoming the only source for US Navy ships.
You know, it doesn't take a genius to realize that being dependent on a foreign country - and one that is not our traditional ally at that - for our defense capability is not smart. And all China has to do is call in its dollars and our economy collapses. Of course it will collapse if our consumer base is destroyed too. Isn't anybody in power thinking?