Guest Column By Dick Eastman
When Henry Kissinger and David Rockefeller met with Zhou Enlai in China in 1973—just after President Richard Nixon had visited China establishing official relations—an understanding was reached whereby the U.S. would supply industrial capital and know-how to China.
In return Kissinger-connected corporations would gain the monopolistic advantage of low-cost labor production which could outcompete all U.S. domestic industry.
The comparative advantage gained was being able to hire Chinese laborers who were ready to work hard at exceedingly low cost—with no drugs, no alcohol, a strong work ethic, no unions, no paid benefits and weak environmental standards. And with such a large labor pool, burned out workers could simply be replaced. This gave the Rockefeller/Kissinger corporations a major edge over their domestic U.S. competitors who had to pay relatively high wages, high regulation costs, deal with union strikes and collective bargaining etc.
Of course, the American consumer did not see greatly lowered prices commensurate with such greatly lowered labor costs. The $19.99 plastic action-figure toy marketed with a Hollywood movie still cost $19.99 even though it cost $12 to $15 to produce in the U.S. but less than $2.00 per copy to produce in China and transport to America’s West Coast container ports for distribution throughout America.
The consumer paid pretty much the old prices but the corporations split the monopoly profit with China’s Princelings since it did not take much of a lowering of prices to drive high-wage, high-benefit, contracted-labor domestic corporations out of business (not to mention the environmental and workplace safety regulations with which domestic companies were saddled). Then, Wal-Mart became a near-monopoly retailer that increased and reinforced the widespread selling of these off-shore manufactures.
Thus, America’s domestic producers were not simply being bested on one or another area of production; they were being bested across the entire spectrum of manufactured goods that American buy. It was anticipated that these domestic firms would fail, and their failure was hastened by the banks maintaining a deflationary domestic economy in the U.S. throughout the post Rockefeller-Kissinger-Zhou buildup of China and the degrading of American domestic manufacturing.
Remember, the entire money supply of the U.S. is borrowed—that is, the money co-created with a debt of an even bigger amount (principal plus compound interest) that must in due course be returned to the lender. But money in the domestic economy was going to multinational corporations and to China, while also going to taxes to pay on the national debt that resulted [NOTE: Due to U.S. industrial depletion, federal revenue receipts as well as the tax-take of state and local governments, shrunk, resulting in greater government borrowing and therefore greater public debts—TRUTH HOUND note]. And of course, compound interest was attached to that debt.
Rockefeller and Kissinger were (and to some extent still are) at war with middle-class America—with intelligent, self-supporting, self-respecting, ambitious, industrious citizens who always pose the greatest threat in the form of populist politics to the bankers and their Bank-of-England/East-India-Company/Rothschild monetary and trade system, the very system that Rockefeller and Kissinger were representing and expanding when they visited Zhou Enlai.
So here we are in 2016 and newly elected President Donald J. Trump says he intends to place a tariff on goods imported from China, while the media decries the tariff proposal as a violation of “long-standing liberal free-trade policies.”
One more thing in defense of who I believe was a great president and a warning for the new one.
Richard Nixon opened China believing in peaceful co-existence and the fact that if given time for a fair comparison of how free-enterprise and representative government functions in contrast to the communist planned economy, that the U.S. model would win out over a system where each receives what the state deems he needs and where work is ordered by the state.
But of course Kissinger and Rockefeller instigated the Watergate coup against Nixon—a frame-up with John Dean and Kissinger as the real “Deep Throats” by my deductions from public information—so that the Rockefeller/Kissinger plans for China’s industrialization and America’s deindustrialization could proceed unopposed, as it certainly did after Nixon resigned to avoid a constitutional crisis that would hinder the proper working of government.
Nixon should have fought them because they were about to take a financial axe to this country as soon as Nixon was gone. When Nixon was gone, they first robbed the middle-class of their savings with banker Paul Volcker’s “QE” (quantitative easing) bond purchases at the New York Federal Reserve branch. Then, when that was accomplished, America’s savings-and-loans were cast into crisis (because they had been taking in money short-term at 3% and lending long-term at 6%). This helped force the deregulation of banking to Rockefeller advantage—after which Volcker moved to become Federal Reserve Chairman in control of the discount rate. With that lever of power that sets the interest-rate framework of the nation, Volcker inaugurated the tight-money (deflation) policy that has persisted to this day, making it very hard for firms to invest in automation to combat the cost advantage of Chinese subsistence labor.
Japan was hit with deflation too — they were going to provide us with the robots. THE WHOLE THING WAS A GREAT PLAN AGAINST US, COORDINATED AT EVERY LEVEL, WITH EVERY INSTITUTION, FROM THE NEWS TALKING ABOUT HOW THE LEVERAGED BUY-OUTS OCCURING IN THE DEFLATION WERE MAKING US “LEAN AND MEAN,” WHEN IN FACT THEY WERE TEARING OUT THE GUTS OF AMERICAN PRODUCTION. And the news media and the economics and business administration courses in colleges sung the praises of international free trade and the “efficiency of markets” nonstop.
I watched it all from a pretty good seat on the sidelines, but of course I was marginalized as just another excess white person who needed to stand aside so that blacks and women could have their fair chance. And who could argue with that? So I took to the internet to see what effect I could have simply speaking as a citizen, where I’ve met encountered considerable abuse and ridicule, which certainly makes it unpleasant to try and be the “Paul Revere” awakening the good citizens.
I do wish President Donald Trump the best. But let us make sure that none of the neo-conservatives he is taking into his administration are really “Kissingers” beholden to Goldman-Sachs CEO Lloyd Blankfein. Beware of new Watergates.
[Washington writer Dick Eastman taught economics at Texas A & M University and also studied the behavorial sciences.]