Santa Claus is Chinese and other such worries

Christmas is the time of christmas trees, caroling, shopping and lots of stress by people from both the left and the right worrying why Barbie is made in China and not New Jersey.

One such rant from last year was recently forwarded my way: Santa Claus is Chinese, Or, Why China is Rising And The United States is Declining by Lester Brown of the awfully impressively sounding Earth Policy Institute :

I know Santa Claus is Chinese because each Christmas morning after all the gifts are unwrapped and things settle down I systematically go through the presents to see where they are made. The results are almost always the same: roughly 70 percent are from China. After some research, it seems that my one-family survey is representative of the country as a whole.

If your patient enough go read the whole thing. It’s filled with scary information such as:

This year Americans will spend over $1 billion on Christmas ornaments from China. And in perhaps the greatest irony of all, even nativity scenes are made in China. Last year Americans spent more than $39 million buying nativity scenes shipped in from the East. China’s success in attracting foreign investment capital and mobilizing this huge workforce has made it the workshop of the world.

Damn, that is ironic??? Actually, someone explain to me why it’s ironic? What is ironic is the only hint that this article wasn’t written by Pat Buchanan was the nice hippie like “earth” in the institute’s name.

It is often hard to make out when reading anti globalization rants whether they are from the left or from the right. I guess it doesn’t matter anyway, both sides are filled with demagogues ranting scandalous news bites out onto the unsuspecting public.

From Pat Buchanan’s site

Last year, we incurred a $450 billion merchandise trade deficit and manufacturing jobs declined to levels unseen since the Civil War. A quarter of our steel, a third of our autos, and two-thirds of our textiles were imported. America, once the world’s greatest creditor, was once again its greatest debtor.

From Lester Brown’s article:

he U.S. trade deficit is growing by leaps and bounds, nearly doubling from $452 billion in 2000 to an estimated $850 billion in 2006. Rising oil imports and the trade deficit with China account for over half of it.

The fact of the matter is that trade deficit on it’s own is a fairly irrelevant figure. For example it doesn’t take into account most of the services that the US export. In particular Financial Services is an important one. Chinese and others invest their money in the US not to “enslave” us, but to make good returns.

With this money US fund managers invest in US businesses and jobs. When people lend you money to build new stuff it’s called investing and it’s a good thing for both parties.

In other words we focus on what we are good at, which is our advantage. It is not in our advantage to have Barbie doll factories in Mountain View or a Nativity scene manufacturing plant in Chicago, but it IS in our advantage to have Google, eBay, Nasdaq etc.

The US still has fairly low unemployment. Which brings me to my point. People like Buchanan and just about everyone on the left have this nostalgic view of a time period that now is past.

Unfortunately though we must accept that the time of the fat top hatted capitalist smoking cigars while millions of dirty workers in blue overalls leaving the factories at 5pm when the whistle blows is over. It did provide a fun packed black and white version of the world. Good vs Evil and all.

Cars have replaced horse wagons and planes, trains. It might be fun to think about the good old days when nativity scenes were made in Pennsylvania, but really what most people consider the good old days was a relatively prosperous 10-20 year period which coincidentally includes the childhood of most baby boomers. However that short period itself was a huge economic and demographic change over the US just 15 years earlier, where people were quite literally starving on the streets.

Things ARE getting better all over the world, even the US. Poverty is declining world wide at levels unheard of before. If current trends continue even Africa the last outpost of the “old” world will see major change over the next 20 years. All of these are because of globalization, which works hand in hand with technology to change everything.

I am personally happy to see so much stuff from China in my shopping basket. The parents of the people who made those things were no doubt affected by the massive famines they had during the 50’s-70’s. Here is hoping that in 10 years time when I buy my first plastic christmas tree, that I can look at it and it says made in Ethiopia.

The Chinese manufacturing revolution is also helping lower the barriers of entry into the middle class for people all over the world. After all all the creature comforts are now a lot cheaper than they were.

I’m also happy that by some long trail of events that smart investors in China are investing in silicon valley, helping the cream of the worlds intelligensia work on the next generation of economy changing services and products right here in the US.