MonkeyBusinessBlog: What I Would Tell Premier Hu If I Were President

The Scene: Beijing China. President Salzman and Premire Hu Jintao retire in private to have a frank discussion.

Hu: "Mr. President....

Me: "Please, call me Eric."

Hu: "Ok, Eric. Quite frankly, my colleagues and I have been waiting for at least two decades to lecture YOU as opposed to you lecturing US. {Premire Hu proceeds to lecture President Salzman for a half hour about fiscal discipline, frugality, responsibility, etc, etc..)

Me: "Thank you Mr. Premire for that most enlightening lecture. I want to tell you a funny story about something that happened to me just a couple of days before I embarked to China. I wanted a new laptop computer, so I went online to a good old American company, Dell Computers, and ordered a new laptop. The laptop showed up and guess what happened? I turned the damn thing on and it just flat out didn't work."

Hu: "I hate when that happens."

Me: "Anyway, I look on the box and sure enough it says 'Made in China'. So I call this American company that makes its product in China and guess what? I end up talking to a support person......in INDIA! WTF right? I have an American company that manufactures its stuff in China and sends it service support jobs to India. So I called in my senior economic advisors and said, 'Gentlemen, this is complete bull-sh*t.' So we thought about it and....well, let me bring somebody in here. Michael, get your ass in here!"

{Michael Dell comes in the room}

Me: "Now Michael, I have a hard enough time accepting what a pile of crap your company has become. I think I've spent about 3 years too many buying your garbage before I finally realized that you suck. Anyway, my main beef is, if Michael is going to make crap products he should at least be making them in the USA and bringing back manufacturing jobs."

Premire Hu: {Spitting out water} "What..you can't do that. It would not be in the spirit of free trade!"

Me: "Yeah, well the way we see it in the USA is the last thirty years has just been a huge mistake. We convinced ourselves, including yours truly, that we could let all our manufacturing jobs go because we were replacing them with 'Service' jobs. Besides emptying bedpans and working at McDonalds the service economy was in large part a huge mirage. Most of the stuff we were 'servicng' was a bunch of bull-sh*t financial products that built an entire industry around themselves. That's gone now and we need our manufacturing base back. Therefore, I am going to give Michael here, along with our other companies that actually make tangible things, huge tax breaks to move a good amount of their production back to the USA."

Dell: "But Mr. President, you would have to give us a tax REBATE to equalize the cost of producing our products in America as opposed to China!"

Premire Hu: "And if you moved millions of manufacturing jobs out of China you would cost us millions of jobs!"

Me: "Well gentlemen, the way I see it is, Dell, maybe it will cost you, with the tax break, 30% more to produce your computers that don't turn on when you buy them. But sh*t Mike, if we don't produce real jobs in the USA who the hell is going to buy your products? You may have to raise prices some and eat into your profit margins, but in the long run it beats the alternative.

Dell: "But Mr President.."

Me: "Thanks for dropping by Michael, you can leave now. Now, Mr. Premire, you want us to pay back this tremendous debt that we owe you and you want us to be fiscally responsible. The only real way to do that long term is to produce good paying jobs in America. Maybe we don't have to move assembly jobs out of China."

Premire Hu: "Keep going, I'm listening."

Me: "Hu, you guys have almost absolutely no health care industry outside of your big cities. I know we have our health care issues in the USA but it's not due to a lack of doctors and equipment. You see the types of medical equipment we make in America and you see the amazing types of treatments we come up with. How about you send a delegation over with a few billion dollars and give us some orders for all our fancy medical equipment.

Premire: "This is true, but we just don't have enough trained professionals to populate the countryside and use the equipment and cutting edge procedures."

Me: "That's ok Hu. You like our universities? Best in the world right? How about you build 10 medical schools right along side our best schools in the USA? We'll populate the schools with top professors and your people can go through the same process our best doctors go through. We can do the same damn thing for engineering. You like MIT, Cal Poly? Build more right next to the existing ones! We will train your people up. In the mean time, you like the idea of wind turbines to produce energy? You like other types of energy producing methods? Send that delegation over here with more of that surplus money you are holding and give these twenty companies orders for whatever the hell you know they can build, that you can't at the moment. We can go on and on. Do you know we are using lasers to cut metal now?? I didn't till I saw it on the damn History Channel! I bet you can use a few of those too right?

Premire Hu: "So what you're saying is if we invest a couple hundred billion in the USA to produce the cutting edge things that you are so good at producing, we will create millions of new jobs in the USA, save our jobs here, and get you to be able to pay us back without inflating your way out?"

Me: "You're a damn smart cookie Hu. Now lets eat!"

Comments

Oh by the way, a small thing, the Premier is Wen. Hu is the President.

Posted by: Hong Yu | November 19, 2009 at 11:02 PM

President Salzman, great ideas and comments, as always!

China has been complaining for many years that US blocked China from purchasing high-tech products from US because US politicians'national secutiry concerns. Guess what? In the end, Chinese is forced to either to develop their own technologies or buy from other Western countries. If US government is smart enough, there should be a more balanced way to export the US high-tech products.

On the other hand, the desire of Chinese parents to let their kids to train in US schools is indeed extremely strong and a up-middle class family in China is able to manage today's tuition cost for their one child. I think the biggest barrier is the visa issue - the US consular is notorious to reject the majority of the visa applicants without much elaboration and that's why most of the chinese parents sent their kids to study in shitty schools in UK, Aussie, even Canada because of the visa issue in US. However, as you said, if the US governemt can relax the visa issue, I bet it would be a huge market for US institutions.

Posted by: Hong Yu | November 19, 2009 at 11:00 PM

Sorry folks but Slick Willy only perpetuated it. The manufacturing decline started with "re-engineering" and the idea that by lowering the cost of a chair at Wal-Mart by $0.25 the CEO can make a couple of hundred million dollars more in stock and options. Hey, why not outsource the jobs? It's all about what the executive gets right? And why should the institutional investors who control huge blocks of stock care? As long as the stock goes up right? Slick Willy should be blamed for a lot of things but this is not his original sin.

Posted by: Anon | November 17, 2009 at 11:28 AM