“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Monday, April 13, 2009

Latin America will be the biggest US diplomatic and economic fiasco yet.

Trade between China and Latin America reached a record of more than $140 billion last year, 40 percent higher than the $101 billion of 2007. U.S. exports to Latin America, in the same year, grew at 9.1%.

I wonder how much trade the US will end up with between itself and say Iraq and Afghanistan? How much trade has the US lost to China in Latin America? Take a look:

Viva la progress: China's Latin links

China Daily

There is little doubt that deals will be done when Venezuelan President Hugo Chavez arrives for top-level talks in Beijing Wednesday. His mission, after all, is to improve his nation's ties with China. But no matter what agreements he pens with President Hu Jintao, it will be little more than a diplomatic triumph, likely having little impact on the lives of common Chinese citizens. Right?

Wrong, claims 72-year-old Huang Shikang, the ex-ambassador to Chile, Mexico and Colombia between 1986 and 2000, who feels the bonds brokered today herald a better future and seem far from the days when relations with South America were first forged.

Trade between China and Latin America reached a record of more than $140 billion last year, 40 percent higher than the $101 billion of 2007. But decades ago, it was a very different story.

"In 1986, Chinese commodities could hardly get on to the shelves in supermarkets in Chile, and it was the same in Mexico in early 1990s," recalled Huang, who witnessed the progress of Sino-Latin American ties on the frontline.

Huang first arrived on the continent in 1959 as an interpreter with a visiting Chinese media group. Eight years later, he started his diplomatic career as part of the first long-term delegation to Chile under the China Council for the Promotion of International Trade (CCPIT).

"For many Latin Americans, China was a mysterious country, far away," he said, adding that Beijing had occasionally sent music groups and staged Chinese art shows for locals.

Apart from his daily job of reading the local press for the chief representative of the CCPIT office in Chile and accompanying him to meetings with Chilean officials and communities, Huang said another major task was to "make more friends".

Former Chilean president Salvador Allende, whose term saw the first diplomatic ties with China in 1970, became a good friend, he said, but it was clear that, for Latin American countries, recognizing China was mainly a political need before the 1980s as the country was a permanent member of the United Nations' Security Council.

Things improved dramatically after China started economic reform and its wealth began growing, and Huang found more countries in the region keen to learn more about this "economic powerhouse". By 2004, the annual growth rate of trade volume between China and Latin America stood at 50 percent.

After an extensive working life in Latin America, Huang said the prospect for developing ties further is "promising".

And, today, cooperation between the two has moved on to a much broader agenda than trade.

On March 24, Chavez inaugurated the construction of an $800-million, 290-mile railway project in central Venezuela, financed by the China-Venezuela Strategic Development Fund set up last year. Meanwhile, the nation's first satellite roared into space last October from a launch pad in Sichuan province.

China signed the Free-Trade Agreement with Chile in 2005, extending cooperation from trade to service sectors, while talks on a similar deal with Peru is expected to be finalized soon, according to media reports. And following the onset of the global financial crisis in January, China jointly formed the Inter-American Development Bank.

But China's initial links with countries in Latin America and the Caribbean drew harsh comments from skeptics who questioned Beijing's motives.

The Council of Hemispheric Affairs (COHA), a Washington-based think tank, published a paper last month arguing the blooming ties between China and Costa Rica were Beijing's "aggressive expansion" into the "backyard of the United States".

"China's multifaceted involvement in Latin America means it is expanding its economic and political presence in a region the US concretely has long regarded as its preeminent sphere of influence," it said in its report "China Courts Costa Rica; Expands its Presence in Washington's Backyard".

The COHA also added China's deeper involvement had come at a time when US President Barack Obama's administration had still to "react to new Latin American realities".

In May last year, while still running for office, Obama said: "While the US fails to address the changing realities in the Americas, others from Europe and Asia, notably China, have stepped up their own engagement."

But analysts have not been pleased with this view, not least Peter Lewis, a researcher at the University of Chile's institute of international studies, who wrote in a recent article that China's strategic goal had been over-estimated as people have not understood Beijing's "internal goals".

Lewis said that when China develops its ties with South and Central America, it is because the country is looking for new markets for its exports and for natural resources to power its domestic growth. He added: "Without such comprehension, China will be strategically over-estimated by the US, causing harmful economic and politically consequences for the US, Latin America and China, amongst many others."

In Beijing, Wu Guoping, a professor in Latin America studies at the Chinese Academy of Social Sciences (CASS), said any claim China had branched out into the US' "backyard" was absurd and based on a "Cold War mentality".

"In the age of globalization, a viewpoint like 'Who is within whose sphere of influence?' doesn't stand," Wu said, adding that seeking closer ties with Latin America "aims at no one while no one in Latin America would consider their homeland as the US' backyard."

Barbara Schieber, editor of the Guatemala Times, agreed and has already urged the US to stop referring to Central America as its "backyard". "We find that term offensive and a sign of outdated imperialistic thinking", she wrote online when commenting on the COHA paper.

Along with COHA's controversial viewpoint, though, others have also accused Beijing of trying to "grab" natural resources from Latin America.

"China has been hoovering up South America's commodities to satisfy its booming economy: soya and iron ore from Brazil, soya and oil seed from Argentina, copper from Chile, tin from Bolivia and oil from Venezuela," said the British Broadcasting Corporation, based in London.

Chinese analysts have strongly denied the claims leveled at the nation, while pointing out that the cooperation deals are to the benefit of both countries involved.

Professor He Shuangrong, also with the CASS, agreed China needed resources from Latin America but added the nation's economic growth was "surely a good thing for Latin America", while the need for Chinese investment in the Americas, mainly to build and improve infrastructure, was "very, very big".

The money used in joint-funded projects helped to create more opportunities for people, she added, citing that the Venezuelanalysis had reported the $800-million railway project will create more than 1,800 jobs in the country. The progress of Sino-Latin American relations alongside China's increasing globalization was "only natural", He added.

Last November, Beijing published its first policy paper on Latin America and the Caribbean and, as a general guideline, it outlined the intention to strengthen "comprehensive cooperation" in the region in areas of politics, economics and culture, as well as on peace, security and judicial affairs, said the Foreign Ministry.

The paper also clearly marked out China's goals to promote mutual respect and trust, achieve win-win results and boost common progress.

"They share the same principles, with both sides having respect for multilateralism," said Courtney Rattray, Jamaican Ambassador to China, who added China is handling its relations with Latin American and Caribbean countries "based on principles", not just interests.

"China has an understanding as a developing country of what our needs are, and most of the countries in Latin America are developing countries," he said, explaining that China's growing wealth means a "huge market" for Jamaica's exports in "niche products such as coffee, rum and beer".

When asked for his views on the strong ties between China and Latin America, Rattray enthused: "I think it's a perfect match."

Here is a typical Chinese factory that is beating our brains out. Pick out at least ten reasons why that is happening, considering they have to ship half way around the world to the Americas:


  1. ...and the geniuses in Congress dither over free trade with Colombia, a country that has fought back from the precipice of being a narco-criminal state.

  2. You're forgettin' 'bout Cuba. That's gonna be our foothold for trade in Latin America.

  3. MR. GIBBS: Good afternoon, how is everyone today?

    Q Fine, thank you.

    MR. GIBBS: Good. Before we do our regularly scheduled program, I’ve got a short announcement. And I am joined for the bilingual portion of this announcement by Dan Restrepo, a Special Assistant to the President and a Senior Director for Western Hemisphere Affairs at the National Security Council.


    MR. RESTREPO: Thanks, Robert. (Speaking Spanish.)

    Buenas tardes.

    Hoy, el Presidente Obama ha ordenado que se tomen ciertas medidas, ciertos pasos, para extender la mano al pueblo cubano, para apoyar su deseo de vivir con respeto a los derechos humanos y para poder determinar su destino propio y el destino de su pa?-s.


    MR. GIBBS: And while we have Dan here, if there are some specific questions on this we’ll be happy to take them.

    Q Is this a first step toward diplomatic recognition?

    MR. RESTREPO: This is a step to extend a hand to the Cuban people in support of their desire to determine their own future. It’s very important to help open up space so the Cuban people can work on the kind of grassroots democracy that is necessary to move Cuba to a better future.


    Q Does it mean between the two countries that you have diplomatic relations?

    MR. RESTREPO: This is reaching out to the Cuban people.

    Q So the answer is what?

    MR. GIBBS: I’m sorry, what was the --
    Policy Changes

  4. ...and what does China take from Latin America? Look at Peru as an example.

    One new open-pit copper mine is expected to produce a quarter of a million tons of copper a year and it is only one of five major Chinese mining projects planned for Peru.

    The result will be that US consumers will pay more for copper. China is trying to get the Costa Rican government to do a joint venture refinery in Costa Rica. Why, as Costa Rica has no oil wells? Venezuela of course.

  5. The US has to develop a manufacturing base, and incorporating Latin America into the plan is just good business.

  6. One good thing about having your manufacturing base decimated, is it allows you to install all new plant at the greatest possible efficiency. I am going to post a video clip of a typical Chinese factory at the bottom of this post. I have been there and can tell you, it is the rule and not the exception.

  7. About a month ago, I wrote a post, entitled, "China. Friend Or Foe? Opportunity Or Challenge? Or, Why Can't We All Just Get Along?" The post was on an unnamed client of mine who had written me an email regarding a wind energy project in which he had helped an Ohio company secure necessary parts from China.

    My client had written me an email regarding this project and of how he thought his handling the China outsourcing had saved American jobs. My post used my client's story to make the point that outsourcing products or components is not the same as outsourcing jobs.

    Forbes Magazine liked my client's story and asked me for his name. After securing my client's permission, Forbes contacted him and the story has run, aptly entitled, "One Way To Save U.S. Manufacturing Jobs."
    China Style

  8. You know, this just isn't our international forte. A seeming paradox, given that we are the world's greatest economic power. The French are extremely good at it; the Chinese approaching their level of savvy. But to be fair, their economies are structured in such a way, with government-owned and government-sponsored enterprises, that the initiatives are easier to coordinate and far less contentious.

    Meanwhile, feeling under pressure, the Admin may go and do something phenomenally stupid in Somalia.

  9. To that end, American Majority has constructed a micro-site,, to collect the names of people at the various Tea Parties who are interested in running for local office or in becoming better activists. The micro-site will automate and collect the information, which will then be fed to American Majority.

    The web site is not complete yet, but will be fully active come April 15th.

    "American Majority's core principles are freedom for the individual and freedom in the marketplace. We also believe that national change begins at the community and state level.
    Now What?

  10. This is all "Good" for us. We need a little competition down there. If they trade with China and make some money they can spend it with us.

  11. For you greenies...

    Green Job Destruction: The Spain Study (Netting to negative via governmentOptimistically treating European Commission partially funded data, we find that for every renewable energy job that the State manages to finance, the Spanish experience cited by President Obama as a model reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created, to which we have to add those jobs that non-subsidized investments with the same resources would have created....

    The study has other fascinating facts, including the cost of creating a green job (571,000 Euros each!), and how many jobs are lost in the economy as a result of putting on more renewable power.


    The arithmetic of green jobs is ineluctable and grim. For each utility worker who moves from conventional electricity generation to renewable generation, two jobs at a similar rate of pay must be foregone elsewhere in the economy, otherwise the funds to pay for the excess costs of renewable generation cannot be provided. Moreover, by raising costs throughout the economy, high cost green energy will reduce the competitiveness of US exporters, thereby destroying (presumably well-paying) jobs in such industries.


    Basically, those of us who have been arguing against the “Green Job” and wind-power boondoggles have, if anything, understated how absolutely dreadful these ideas are!

    9 for 4


    Like the stimulus you loved as a kid when you ate too many green apples...

  12. Rufus the average Colombian spent $138 with the US last year.

    The reason we are not good at it is because for so long we did not have to be. Our domestic market was enough for all but the biggest of the big.

    China on the other hand, had nothing and by running factories like the ones in the video clip undercut every American manufacturer in that particular field.

    Imagine an American manufacturer trying to open and run a factory like that in New York.

    We have another chance at this time to re-industrialize the Americas. We cannot do it with the US only. It must be done on a continental scale.

    I hate to be a bore on this subject, but we have another opportunity that will not be here ten years from now. China is structurally imposing itself in a way that is her right, but the consequences of what that could mean for the future does not seem to be well understood.

  13. The US has to develop a manufacturing base, and incorporating Latin America into the plan is just good business.

    Mon Apr 13, 09:45:00 PM EDT

    How do you deal with those who see the demise of domestic manufacturing wherever they look?

    In case you missed the Clinton years, some of the loudest screeching was in response to manufacturers leaving the country, going south and east. Not a few politicians wanted to enact punitive legislation to halt the "exodus."

  14. Only with manufacturing will you have a wide spread raising of incomes. The financial model wrecked jobs and was subsidized by cheap Chinese imports, and recycled dollars that made a very few incredibly wealthy.

    Enough people got tired of it and now 50% of US citizens accept some form of welfare socialism.

  15. China is structurally imposing itself in a way that is her right, but the consequences of what that could mean for the future does not seem to be well understood.

    - dear host

    Roger that.

    We did not have to be good at it, and we also established a habit of forming political relationships, maintained with great difficulty, on the foundation of defense relationships. In this, we are rather unique - though the Russians are still in it. The French, the Chinese, like most others, for the most part use the avenue of economic ties toward the same end.

  16. That is a political problem unfortunately easily exploited. It is mostly caused by the onerous tax, litigation and regulatory burdens placed on domestic manufacturers.

    Give 100% tax deduction for capital investment for manufacturing. Drop capital gains for manufacturing plants and cap corporate taxes at 10% for domestic manufacturing. Enact loser pays tort reform and you will not have to worry about the factories that get built in Mexico.

  17. Higher wages in manufacturing will convert that increased economic activity to ordinary income, taxed as it is, and with the propensity of factory workers to spend, will more than offset the loss in tax base at the factory level.

  18. "Only with manufacturing will you have a wide spread raising of incomes."

    I'm not arguing with you, I'm only pointing out that when you raise the profile of an issue in order to get movement on it (trade was the biggie during the Clinton years) it draws some hellacious fire. And in years of economic deceleration, the sell is only that much harder.

  19. Too bad Obama does not believe in it, because he has the ability and talent to explain it, although Obama is demonstrating some very healthy trends in situational ethics in the executive office.

  20. Authority already exists that could alleviate at least some of the tightening of credit. I would point out that Title 3 of the Defense Production Act (DPA), provides for the government to guarantee loans to companies that play an important part in our nation’s defense industrial base, companies that would be important to mobilization efforts to change over from a peacetime to a wartime economy, should the need arise.

    Obviously, the machine-tool industry fills that description. That is precisely why President Reagan authorized the negotiation of a machine-tool voluntary restraint arrangement with Japan and Taiwan in 1986.

    Reagan believed that our nation could not afford to lose a significant part of the machine tool industry and still be able to mobilize quickly if the need arose.
    Congress Forgets Manufacturing

  21. I was in a city outside Guongzhou, where for thirty blocks, on both sides of the street were machine shops no more than on average 15 meters wide.

  22. The government and the lawyers just need to let people do their work.

    Convert 75% of the law schools to schools of engineering and science.

    Tax proceeds from lawsuits at 90%.

  23. “Back to basics” would work on a national level, if we had leaders who would acknowledge it. It would mean halting reckless outlays of federal money to industries and organizations that cannot account for their past problems, nor offer credible plans for their future viability.

    It would mean allowing failure to happen, so that proper accounting can take place and new possibilities can emerge. And it would mean ensuring that government officials are as accountable for mistakes and misdeeds as private citizens are.

    Most encouraging about the “back to basics” approach is that it is always available, always applicable, and always effective. It will work, once it’s tried.
    Basic Truths

  24. Let's not lose sight of the fact that the U.S. in the number one manufacturing country in the world. It would take a whole lot of them little coolies in the film clip to equal the export dollars of a Boeing 777.

    Having said that, we still have a lot of work to do. When you put up the Costa Rico post I thought of how Mexico City is trying to get their Municipal Solid Waste under control. They want to convert it to electricity.

    All of the S. American countries, I think, have enormous problems with sewage, waste, etc. We could be doing some business, there. They'll soon be running low on oil. We can do some business with that.

    We're not going to export wallboard, and plastic Christmas trees, but we can sell them Water Treatment systems, and Medical technology.

    But, first, they have to be able to buy. Maybe, they'll make some money trading with the Chinese, and Indians.

    And, above all else, remember, it is S. America.

  25. May not be the most efficient manufacturing process around but it seems it might be a little less alienating, to use a Marxist term, the folks get to know one another and can visit, and what are they going to do with a half a billion Chinese who are out of work because of new efficiencies? Put them all in the Army?

  26. Last year as energy costs rose, but before the meltdown, I recall the news that a lot of manufacturing was returning from China to places like furniture plants in the Carolinas. Haven't heard much on that lately, what with the finance market collapse and Zero's constant pounding of businesses and the economy.

  27. While we still don't exactly how much debt the Fed is purchasing with printed money, we know the Chinese are out of the market. For those fearing our recent bailouts and stimulus plans will cause runaway inflation this is an ominous sign.China Slashes New Purchases Of US Debt

  28. The bond offering this morning was "oversubscribed" by about 3.5 to 1, I think.

    The Chinese have been pretty much out of the U.S. bond market for a couple of years, now, IIRC.

  29. Green hell.

    This Can’t Possibly End WellApril 12, 2009, 11:41 pm

    Forget for a moment the real scientific questions about the future magnitude of anthropogenic global warming. Just imagine the abuse of this new proposed statute, given that incredibly difficult nature of causality in a complex, chaotic system like climate:

    Global Warming Lawsuits [Greg Pollowitz]

    "An under-the-radar provision in a House climate bill would give plaintiffs who claim to be victims of global warming a way to sue the federal government or businesses, according to a report Friday in The Washington Times.

    "The Times reported that Democratic Reps. Henry Waxman of California and Edward Markey of Massachusetts added it into a bill they authored.

    "The provision, which was just released, reportedly would set grounds for plaintiffs who has “suffered” or expect to suffer “harm” attributable at least in part to government inaction. The provision defines “harm” as “any effect of air pollution (including climate change),” according to the Times. Plaintiffs could seek up to $75,000 in damages a year from the government, with $1.5 million being the maximum total payout."

    Remember that it was just weeks ago that the President of the United States blamed flooding in North Dakota on global warming. If flood damage that resulted from a colder-than-average winter and near record snowfall can be blamed on anthropogenic global warming, then anything can.

  30. Good Lord!

    plaintiffs who claim to be victims of global warming a way to sue the federal government or businessesOn the other hand maybe we can sue unca Sam out of business.

    We really do have insanity running the country now. The only question is how much damage will be done and how long it will last.

    would set grounds for plaintiffs who has “suffered” or expect to suffer “harm” attributable at least in part to government inaction. --or expect to sufferGood Lord!

    Obama is putting out this carrot to the Iranians---you can keep on enriching, just please, please come to the table.


    This book I'm reading on evolution has a good section on the number of species which have inhabited the earth in its history. The number is really huge. And, even today, we have identified maybe less than half of the species around now. Kind of puts things into persepctive.

  31. North Korea says will restart nuclear-arms plant 14 Apr 2009 03:29:57 GMT

    Source: Reuters

    SEOUL, April 14 (Reuters) - North Korea said on Tuesaday it saw talks on ending its nuclear weapons programme as "useless" and it planned to restart its plant that makes arms-grade plutonium, its KCNA news agency quoted its Foreign Ministry as saying.

    The U.N. Security Council on Monday unanimously condemned North Korea's long-range rocket launch nearly two weeks ago as contravening a U.N. ban, and demanded enforcement of existing sanctions against Pyongyang. (Writing by Jon Herskovitz)
    It's all part of the new smart diplomacy. We actually want them to do this.

  32. It doesn't take a rocket scientist to know that it takes a rocket to launch a satellite. So, a launch of a rocket is not equivalent to a launch of a ballistic missile.

    (It is unlikely that North Korea has a nuclear weapon small enough to attach to a missile.)

    The United States puts a lot of store on verifiability. But did anyone verify whether a ballistic missile or a satellite was launched?

  33. Going To A Tea Party May Make Me A "Right Wing Extremist"You may be one too. A lot of you have at least some of the identifying thought patterns.

  34. I haven’t yet chimed in on the tea parties, but they have been on my mind for some time. I have questions.


    At first glance, the parties appear to be merely a reaction to the economic policies of President Barack Obama. After all, they’ve come about amidst several new policies on both Capitol Hill and at the White House.


    Could it be that conservatives are simply exhibiting a delayed reaction to fiscal policies they would have otherwise strongly opposed? There could be some reasons for this.
    Delayed Reaction?

  35. This comment has been removed by the author.

  36. Sam, these days you might fall in the government category
    called "expatriate right wing extremist"-:) heh

  37. And you, Linear, with your opposition to government energy policies, are highly suspect.

    We will have our signs made tomorrow. We're going to Coeur d Alene, staying over night, tomorrow night.

  38. Reposting for format.

    A lot of you have at least some of the identifying thought patterns.

    Get out of my head, Bob.
    Gotcher placards made up?

    I walked in a demo one time, by accident, more or less. Actually, now I think about it, I was part of one in San Francisco long ago, also. Sight seeing. And then there was that day in the spring of '68, caught up in the stampede of students through the left bank streets, following a bugle and a flag. The bugler and the flag bearer had a clever ploy. They'd burst out on the street from a store front, and take off down the street hell bent for leather. The crowds were attracted, and began rushing to see what was happening. This begat more crowds, and soon you had a riot size crowd followin' that pair with the horn and the flag.

    Tue Apr 14, 02:19:00 AM EDT

  39. Sounds a little like the The Pied Piper of Hamelin story.

  40. Damned Blogger still screwed it up.

  41. And you, Linear, with your opposition to the government's less energy policies....

    Damned blogger....I've been having trouble too.

  42. This comment has been removed by the author.

  43. This comment has been removed by the author.

  44. From the DHS report on "right wing extremism"--

    Rightwing extremism in the United States can be broadly divided into those groups, movements, and adherents that are primarily hate-oriented (based on hatred of particular religious, racial or ethnic groups), and those that are mainly antigovernment, rejecting federal authority in favor of state or local authority, or rejecting government authority entirely. It may include groups and individuals that are dedicated to a single issue, such as opposition to abortion or immigration.-
    You are now a right wind extremist if you are against abortion or immigration. Or the destruction of the Constitution, and the destruction of the 2nd Amendment, and courts legislating, and......

  45. I'm a marked man, Bob. In good company, though.

  46. Gotta recharge some strength for tomorrow and Wednesday. Night Linear.

    Think I should wear a head covering, so as not to be identified? :)

  47. Wear a nice silk scarf wrapped over your head like a dorag or whatever they call 'em. Or a headband and feathers.

  48. An 8 beaver stetson with a montana dent would become you.

  49. Cabela or J. Deere cap with ski mask.

  50. Cabela or J. Deere cap with ski mask.That would work. You could just be lost in the crowd of others with the same uniform.

    Good night, Bob.