Whitesburg KY

As the world turns

To the Editor:

The impacts of globalization are numerous, diverse and convoluted. Information, technology and job skill training have become highly portable.

Some developed first world nations that once supplied the world with finished goods are now trading places with rising yet less developed nations which once supplied the worlds with raw materials. Metallurgical coal is one example.

The bulk of all domestically mined metallurgical coal is destined for hungry blast furnaces in China. China now produces approximately 70 percent of the world’s steel. China also imports huge quantities of raw scrap metal from America now. On the flip side, Caterpillar, that signature American manufacturer of heavy equipment and supplier of mining machinery, is moving parts and assembly operations to China.

If the current trends continue unabated, expect in the near future to see Alpha Natural Resources importing Caterpillar earthmoving equipment from China, which was forged and tempered using the raw metallurgical coal they mined here in Appalachia. If that is not a sign of American economic decline, I don’t know what is.

Coal is not the only energy sector ingeniously coopted by China. China is the world’s leading producer of solar panels and wind turbines, despite the fact that American and European ingenuity went into the invention and design refinement of these products. China now dominates the world market supply of these alternative energy products because they subsidize manufacturing operations, deploy a cheap yet disciplined labor force and deliberately keep their currency undervalued.

For years now, the solar and wind industries in American have promoted and taken advantage of renewable energy tax credits, accelerated rates of depreciation and other federal subsidies for deploying these technologies. Disturbingly, when the components are fabricated and assembled in China, this arrangement of federal assistance amounts in the end to China being rewarded by the U.S. taxpayer for their unfair trade practices.

When I say taxpayer, I’m referring to the American middle class. The lower and upper rungs of our society contribute little in the form of direct personal income tax revenue to the U.S. Treasury. The question I always ask myself is ‘how does this policy or that economic turn of events impact the American middle class?’.

Throughout the 1980s, steel was dumped on world markets at price thresholds which essentially put the U.S. steel industry out of business. China was a main culprit.

China has shown great dexterity and fortitude when it comes to hijacking and collapsing Western manufacturing sectors. Last year the Chinese economy exploded at a growth rate of 10.8 percent while Western democratic nations grappled with a severe recession. While some steel comes back to the U.S. in finished or semi- finished goods, much is used internally by China.

China has the fastest growing military on the planet. Experts at Jane’s Defense expect that China’s navy will rival the U.S. Navy sometime in the next decade. By then, we may be borrowing money from China to import fully assembled cruisers and carriers.

Finally, back again to the American middle class. Adjacent to The Mountain Eagle article on Alpha Natural Resources’ possible acquisition of Massey Energy was a piece about federal grant funding for water quality monitoring in the coalfields. Much has been written regarding the true cost of coal and economic figures range widely with regard to the net negative economic impact on society stemming from mining-related externalities such as pollution, subsequent health care costs or future productive use of the mined landscape.

It is important to understand that corporations in our current business model framework have been designed to achieve one goal and that is to maximize profitability for their shareholders. Any rhetorical allegiance to place or principle is secondary to this mission of profitability, merely a temporary marriage of convenience.

Corporations the world over which battle in a marketplace grounded on competition always seek to socialize costs and privatize profits to the very fullest extent possible. China now constitutes a huge yet largely uncharted externality.

Trade deals may pay off to a narrow few in the short run, but beware of future costs. We just may be selling them the very rope they put around our necks. Sorry, make that the steel cable they put around our necks. JAMES LEWIS Whitesburg

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