Cross-Posted: TobyToons.com (Conservative Political Cartoons)

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Robert Kagan to discuss his new book, The World America Made, the importance of America’s military muscle, and how the world may change if America is no longer the world’s superpower.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Buy The World America Made on Amazon
The importance of U.S. military might shouldn’t be underestimated
The Return of History and the End of Dreams
Of Paradise and Power: America and Europe in the New World Order
Robert Kagan at Brookings

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This week, the World Trade Organization (WTO) issued its much anticipated ruling on whether China’s export policies for critical metals violated the agreement it first entered in 2001 to be part of the WTO. The highest court within the WTO, known as the Appellate Body, found China was in violation of WTO requirements and had breached its original agreement. The decision marks a huge victory for the many automotive, high tech and alternative energy manufacturers globally that rely on China’s rare earth metal deposits to produce their goods.

As stated in a piece I published at Big Government in November, China has a complete monopoly on the 14 critical rare earth metals producing 97% of current world production. Products as fundamental to America’s industrial future as mobile phones, automobiles, televisions, fluorescent lighting, fiber optics and most of our advanced military hardware require rare earths. This monopoly has the potential to allow China to control production within all these trillion dollar industries by simply selling rare earths in China for far less than they sell them outside of China.

The situation had reached a critical state in 2011. Prices for metals such as neodymium have increased 20 fold in just the last 2 years making their use outside of China prohibitively expensive. The system of export quotas, tariffs and minimum export prices made the cost of rare earths nearly half within China then what they are outside China giving Chinese producers and companies China allows to build plants within China, an overwhelming cost advantage over other global producers; an advantage the WTO now says is illegal. The decision is also a major victory for our military which relies on Chinese rare earths to produce everything from Bradley Tanks and F-22 Fighter Jets to Body Armor and Night Vision Goggles.

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Scott Lincicome to discuss a court ruling impacting the Obama administration’s US-China trade practices, how this will impact the American marketplace, and how the Senate may come to the rescue.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

On China Trade, the Obama Administration Just Can’t Stop Digging
Bombshell: CAFC Rules US CVD Law Cannot Apply to China & Other “Non-Market Economies”
China CVD: Time to Unscramble the Eggs

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When not attacking American companies, President Obama gets downright romantic about the grand things American companies do with Washington’s guidance. China is frequently a source of envy (see: passenger rail boondoggles), because China’s statist capitalism-lite floats Obama’s boat. As America’s most statist senator, Sherrod Brown (D-OH) is on board for anything involving more government!

Sherrod asked President Obama about his plans for a federal manufacturing and energy policy during a February 2010 Democrat meeting:

President Obama knows what’s best, and seems annoyed by the democracy blocking his path. For all his worries of “falling behind” autocratic China in the race to throw money at unmarketable products, we have to wonder how much of the New York Times coverage he was briefed on the week before!

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Michael Silver, CEO of American Elements and contributor to Big Government, appears on Bloomberg TV (below) to discuss America’s need for a plan to collect and produce rare-earth materials for the manufacture of modern technology, especially the types of alternative energy touted by the Obama administration.

“America has zero production on all the metals that we currently need,” he says. “China, controlling all these materials, is really set to become the Middle East of the 21st century in the sense that they’re going to control alternative energy sources.”

Highlighting the need for rare-earth material in various military technologies, Silver also suggests the creation of a Strategic Metal Reserve.

The segment below, from the Washington Post:

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Francis Cianfrocca to discuss the iPhone’s manufacturing process, why it can only be done in China, and the reasons technology manufacturing will never return to America.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

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How the U.S. Lost Out on iPhone Work
Apple’s results hinge on the iPhone question
Making It in America

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The fact that Paul Krugman received the Nobel Prize in economics makes sense given that both Al Gore and Obama received the Nobel Peace Prize. But that is the only way that it makes sense.

In his December 29^th column in the New York Times, Keynes Was Right, he continues to make the case that the only reason we haven’t come roaring out of the Great Recession is because we spent too little.

Krugman cites the downturn of 1937 when FDR’s government programs were curtailed and unemployment rose. He says that unlike in that fateful year we should instead redouble our efforts and spend more to prime the economic pump. Austerity is insanity he says. We must spend more as Keynes would have advised, deficits (and inflation) be damned.

Build pyramids as Keynes said we should. So what if the they do not contribute, and probably detract, from the quality of the economy. It is the quantity of economic activity that we are interested in not quality. Get people employed doing whatever. This is the road to prosperity!

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We were so full of “hope” for “change.” No, I am not talking about the election of Barack Obama, one of the most effective Progressive presidents in American history. I am speaking of the excitement felt within the Conservative, Libertarian and Center Right and Left political communities after the 2010 election delivered the House and a non-filibuster proof Senate to the American people. Finally, most of us thought, some balance in the federal government. Maybe, just maybe, the Progressives and Liberal Democrats in federal government would be forced to the table of true and honest compromise; compromise fitting of a truly free people. But, as we look back over the year, what did we really get for all that so-called “compromise?”

With Republicans in control of the US House of Representatives, the body where – by the mandate of the US Constitution – all legislation relating to revenue is to begin, many on the Right and in the Center believed that the reckless and spendthrift fiscal actions of the 111th Congress would be constrained if not reversed. With a sizable number of new members identifying with the oft demonized TEA Party, there was high hope for a glimmer of fiscal sanity to emerge from the halls of Congress. And while the TEA Party members of Congress are to be congratulated for doing exactly what their constituents sent them to Washington to do, in the end, they were thwarted by establishment, inside the beltway Republicans and the despotic obstructionism foisted upon them by Senate Majority leader Harry Reid, D-NV, (to be fair, Reid was aided by a less than reform-minded Republican leadership in the senate, led by Mitch McConnell, R-KY).

The Budget
In absolute defiance of the fact that it is law that Congress must pass an annual budget for the federal government, Senate Democrats – once again, led by the indignant political disgrace that is Harry Reid – refused to abide by said law in passing, reconciling and advancing to the President an annual budget. It has been over 900 days – almost three years – since the last budget has been presented to the President for his signature or veto.

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From The Washington Post:

Since the failure of the company, Obama’s entire $80 billion clean-
technology program has begun to look like a political liability for an administration about to enter a bruising reelection campaign.

Meant to create jobs and cut reliance on foreign oil, Obama’s green-technology program was infused with politics at every level, The Washington Post found in an analysis of thousands of memos, company records and internal e-mails. Political considerations were raised repeatedly by company investors, Energy Department bureaucrats and White House officials.

The records, some previously unreported, show that when warned that financial disaster might lie ahead, the administration remained steadfast in its support for Solyndra.

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LOS ANGELES /PRNewswire/ — There will be no more “Made in the USA,” with millions of jobs lost if the United States doesn’t start mining and stock piling certain strategic metals, according to Alisha A. Ahern, co-director of the Academics & Periodicals Department at American Elements, the global chemical and metals manufacturer which published the list. Today the company released the 2011 U.S. Endangered Elements List (EEL11) naming the five metals that can most upset American industry, especially if the countries that the U.S. imports the metals from decide to shut off supply.

American Elements funded preparation of the EEL11 to help manufacturers, the government and consumers better understand the gravity of the situation. 20th Century metals such as copper, iron, nickel and tin have given way to 21^st Century critical metals, particularly the rare earths, of which the U.S. mines almost none.

“Today China mines a whopping 97 percent of all global rare earth production. America no longer has the resources to manufacture the things we invent,” says Ahern. “New metals like the rare earths have become essential to thousands of household goods including computers, cell phones, cars and nearly all electronics. If we lose access or run out of these elements, there will be no more ‘Made in the USA.’”

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On today’s edition of Coffee and Markets, Pejman Yousefzadeh and Kevin Holtsberry are joined by Hunter Baker to discuss the eventful and impactful books they read in 2011 including autobiographies of Dick Cheney, Donald Rumsfeld and Condeleza Rice; the growth – and subsequent persecution – of the church in China; and more.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Hunter Baker
No Higher Honor: A Memoir of My Years in Washington
Known and Unknown: A Memoir
In My Time: A Personal and Political Memoir
God Is Red: The Secret Story of How Christianity Survived and Flourished in Communist China
American Grace: How Religion Divides and Unites Us
Adventures of an Accidental Sociologist: How to Explain the World Without Becoming a Bore
Mockingjay (The Hunger Games, Book 3)

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The importance of strategic metals to the U.S. economy came into sharp focus last November when China cut off Japan’s rare earth metals supply over a territorial dispute and Japan immediately backed down. Since then, Americans have learned that the majority of rare earth deposits are in China, accounting for 97% of world production.

China’s action against Japan also exposed a more threatening strategy in the works‐‐ to create a two-tiered price structure with China’s manufacturers receiving rare earths at significantly lower costs than the rest of the world. Prices outside China are now 20 times what they were 2 years ago and 40% higher than inside China.

Is America confronting a situation similar to the 1970s OPEC oil embargo? No, the current situation is actually far worse. Deng Xiaoping famously noted 30 years ago that “the Mideast has oil, China has rare earths”. What he didn’t say was unlike the Mideast, China also has the means to manufacture and distribute globally every product that requires rare earths, which today includes automobiles, computers, cell phones, fluorescent lights, much of our military equipment and nearly every green technology‐electric cars, wind turbines, fuel cells, solar panels, etc. This is precisely what makes the current situation so dangerous to the long term prospects for the U.S. economy and American jobs. A two‐tiered price structure could make it impossible for American manufacturers to compete with China in the 21st Century.

A constant refrain from economists and politicians is that American innovation is our way out of the current financial dilemma. Breakthrough U.S. discoveries in the past have created whole industries such as automobiles, commercial flight and computers, generating millions of jobs and national prosperity. But what if we are unable to participate in the next great American discovery simply because we can’t get the necessary raw materials at competitive prices? The millions of jobs would blossom where the materials are available. Today, that is China.

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Governor Jon Huntsman to discuss entitlement reform, China, the EPA and more.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Huntsman, the Moderate, Endorses Ryan Medicare Plan
Comparing the Entitlement Reform Plans of the GOP Presidential Candidates
Huntsman slams Romney for pandering to voters on economy
Jon Huntsman’s Bold Plan for Health Care Reform
Huntsman, Schwarzenegger ink global warming pact
Western Regional Climate Action initiative details
Jon Huntsman’s campaign site

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On today’s edition of Coffee and Markets, Pejman Yousefzadeh and Kevin Holtsberry are joined by Ian Morris, the author of Why the West Rules–for Now: The Patterns of History, and What They Reveal About the Futureto discuss that while it is difficult to tell the future, geography helps significantly shape destiny, how it explains the rise of the China, and the possibility that it may overtake the West.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Buy Why the West Rules–for Now: The Patterns of History, and What They Reveal About the Future on Amazon
IanMorris.com

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American Exceptionalism has routinely been underestimated by America’s adversaries. We have argued for the last year that powerful trends are reshaping U.S. that will lead to result a rebirth of American manufacturing, coupled with positive business trends, and just as powerful political trends are shrinking the size of government and its capacity to intervene in the economy. The combination of these trends will create a sustained upward spike in the American economy.

Last week the Financial Times newspaper published an editorial: “America Must Manage Its Decline”. The jest of the FT article was that United States must develop an effect foreign policy, similar to Great Britain’s in 1945, to manage her economic and political decline:

“If America were able openly to acknowledge that its global power is in decline, it would be much easier to have a rational debate about what to do about it. Denial is not a strategy.”

President Obama, the American press, the rabid right wing, and even a Harvard professor were all excoriated by the FT for their pathetic reliance on such homilies as: “Decline is not a condition. Decline is a choice.” From the high floor in the FT’s office tower, the author cynically snarled down at America’s inability to take “determined action” to increase higher education funding and “self-indulgent episodes such as the summer’s near-debt default” as prime evidence of America’s “declinism” and the inevitable rise to economic dominance by China.

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From BusinessInsider:

Steve Jobs told President Obama he probably would not be re-elected, Walter Isaacson wrote in Jobs’ soon-to-be-released biography.

That’s because regulations and unions in the United States were crippling its ability to remain competitive with emerging powerhouses like China.

The biography was picked up by the Huffington Post, which published excerpts earlier today.

Jobs met with Obama in fall 2010 and said it was too difficult to build a factory in the U.S., which led the company to build manufacturing plants in countries like China.

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Scott Lincicome to discuss the recent passage of free trade agreements with Korea, Panama and Columbia, Mitt Romney’s potential trade war with China, and the impact of Big Labor on America’s trade policies.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

One cheer (at most) for our new free trade agreements
The FTAs’ Price Tag, ctd.
In Both Parties, a Schism on Trade
Romney: China must respect the free-trade system
What’s Driving Mitt Romney’s China-Bashing?
Mitt Romney’s Aggressive China Rhetoric Questioned By Conservatives
The Obama-Romney Tariff

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From Reuters:

China warned the United States that it would damage relations, and American jobs, if it forces Beijing to let its currency rise under a law to be voted on in the U.S. Senate on Tuesday.

Vice Foreign Minister Cui Tiankai on Monday underlined Beijing’s opposition to the bill, saying it could trigger a trade war and hold back global economic recovery. He said that relations could also be hurt by U.S. arms sales to Taiwan.

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There is a word missing from the “solutions” offered by both Democrats and Republicans to the searing economic crisis visited upon America by a combination of craven financial speculators, complacent regulators, feckless politicians and not a little bit of greed amongst many borrowers.

That word is “sell.”

It is only in the selling of surplus manufactures – as Adam Smith taught us – that new income enters the economic system, with the corollary effect of demonstrating, maintaining and advancing the  institutional and operations frameworks for national competitiveness.

So we must ask ourselves, what is America selling to the world? (more…)