Letter to Stupid World

I recall some market religionist (economist) saying that having American car companies go under wouldn't be so bad - after all Toyota, Volkswagen, etc. now make cars in the US, and they aren't about to shut those down.

Free Lunch has a tale for him. Back in the 90's, GM had developed a process for a radically improved magnet, a magnet that had critical technological and military uses. China wanted this technology, GM wanted access to the China market, and wanted to buy the GM subsidiary. Politically well connected bankers put together a deal, Clinton free trade fanatics pushed for approval, and concerns about national security were swept aside by including a proviso that China should keep the manufacturing facilities in the US.

China next bought all the other magnet
manufacturers and moved all production to China. The Bush administration was too distracted or too corrupt to object.

Market fundamentalists are so blinded by their religion that they can't seem to grasp that there are in the world some who think beyond their next quarterly earnings report and care about things beyond Mr. Ricardo's theories. And therein lies the secret of how China again became a great power and the US frittered away its world dominance.

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