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Editor’s Note: This essay is part of the New York Times’ new best-selling book,you own nothing: War with the New Financial World Order and How to Fight It Back” by Carol Ross.
Those who lead climate catastrophe are the same ones who have been making bad predictions for over 50 years, with plans that are not only unnecessary, but costly. When looking at the costs of all things “green,” one cost that is not fully factored into the discussion is further destruction of the economy, especially to China.
We’ve been here before and history certainly seems to be ‘rhyming’ again.
In the late 1970s, the United States fell under China’s lure as a potential opportunity to spread its capitalist principles, gain market share, and share its democratic ideals. It was a bet by US government planners that China, a country with a communist history, run by the Communist Party and that does not believe in individual rights, could somehow transform.
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In 1979, the US government granted China Most Favored Nation (MFN) status in trade. During the second term of Bill Clinton’s administration, Congress began discussing granting China permanent normal trade relationship (PNTR) status. Clinton eventually signed it into law in 2000. The US approval of the PNTR paved the way for China’s entry into the World Trade Organization (WTO) in 2001 and, frankly, fueled China’s continued explosive growth.
From there, China never turned back.
This was touted as a broad opportunity for everyone, but in reality it was just one example of government picking winners and losers.
This has worked incredibly well for China.
Hundreds of millions of people in China have been lifted out of extreme poverty and China’s economy and power on the world stage have improved, thanks to changes in trade caused by US actions.
But in the US it was a different story. We imported deflation in the form of being able to buy cheap ‘goods’ from China, but it had long-term effects. It destroyed a significant portion of America’s manufacturing capacity, and with it, high-paying jobs. Between 1997 and 2017, an estimated 5 million US manufacturing jobs were lost.
We are now living in the sequel to this movie.
The promoters of the climate crisis want to move us away from critical fossil fuels and replace much of that energy with what they consider to be more ‘green’ resources. Even if this could be done at scale, even if “green” energy would be better, without its own set of challenges, and without all sorts of costs and national security issues that would come with the transition. , the US would once again give up its competitive advantage.
The United States is trying to bring manufacturing back to America, but there are barriers to this, many of which are self-imposed. Clearly, the United States has no cost advantage in terms of labor. We do not have a cost advantage for many critical raw materials. Energy is where we have the edge. And those who caused climate change want us to give it up too, as if we hadn’t learned anything from ceding part of our economy to China earlier.
Consider an electric car.ford recently announced The EV business is expected to lose $4.5 billion this year, and there is no cost advantage to efficiently build “green” vehicles. China has the ability to make EVs much cheaper. Given various cost advantages, including battery manufacturing, China is launching smaller models for under $15,000.
With this, we not only dominated in China, but also started gaining market share in Europe. Reuters reported that 8% of all new EVs sold in Europe so far this year were made by Chinese brands, up from 6% last year and 4% in 2021, according to automotive consultancy Innovev. reported.
It doesn’t take long to imagine that a progressive Congress could allow China to compete with US automakers in the future.
A big lesson learned from the supply chain disruptions during the COVID-19 era was to strengthen the supply of raw materials. Going “green” means increasing our reliance on China and other countries for rare earth minerals and other necessary “green” materials.
The departure from conventional energy also threatens the United States’ largest export. As of 2022, the United States was exporting about 3.6 million barrels of oil per day.
Perhaps our biggest export is the U.S. dollar, providing cheap funding for the United States, especially the government and its unruly expansion. In 2022, the BIS (Bank for International Settlements, the central bank of central banks, so to speak) announced that “the average daily trading volume with the US dollar as one side of the trade was $6.6 trillion.”
A departure from traditional energy could weaken the dollar’s role in global oil trading, with less oil traded in US dollars and less “petrodollars” pouring into the US Treasury market.
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China is also looking to capitalize on this, trying to forge stronger alliances with the likes of Saudi Arabia and the UAE. This is expected to move world trade further away from the US’s very strong position.
It would be financially and otherwise irresponsible to give up our energy supremacy when we gave up our manufacturing and wage supremacy to China.
And China hopes that the shortsightedness of US central planners will repeat its mistakes.
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Energy is everything for an industrialized society. Access to cheap and reliable energy influences the price of almost all goods and services, and as emerging economies prosper, it also has a positive impact on life expectancy. Energy is life and while China and other countries are doubling down, our central planners seem to ignore it.
The “green” fantasy is creating the conditions for slow economic suicide for the United States. It’s time to stop giving away so much of our economy to China. We must be realistic about our problems and learn from the past before it’s too late.
Click here to read more about Carol Ross