Dragons at Your Door review

I just reviewed a good book on Chinese businesses taking market share from American ones.

Most of the book focuses on tactics rather than strategy. They have many examples of how Chinese companies do what they do, and some interesting ideas about how American companies can and do fight back. For me the major point is that China backs these companies, and has set the rules to support them. They want to encourage technology transfer to China. If we do too well under the existing rules they can always change them.

A huge company makes refrigerators. They probably sell some of their smallest and cheapest refrigerators to students in dorm rooms. Now suppose a small Chinese company wants to break into the market. They can use their cheap labor costs to build cheaper products. The best Chinese companies even use the cheaper salaries of engineers to design products better as well as cheaper - but many major stores don't want to retail brands their customers have never heard of. Now suppose these small refrigerators can convert into desks with movable tops. Besides limited funds, dorm students are often short of space. Now there's a special product to appeal to what most companies never even considered a separate market. Once retailers have sold a product by a formerly unknown product to happy customers, the manufacturer has begun building name recognition with both retailers and end users.

Is Basra to Maliki as Iraq is to W?

Since the Basra assault began Tuesday, violence has spread to Shiite districts of Baghdad and other places in Iraq where Shiite militiamen hold sway, raising fears that security gains often attributed to a yearlong American troop buildup could be at risk. Any widespread breakdown of a cease-fire called by Moktada al-Sadr, the Shiite cleric who founded the Mahdi Army, could bring the country right back to the sectarian violence that racked it in 2006 and 2007.

Mr. Maliki has personally staked his reputation on the success of the Basra assault, fulfilling a longstanding American desire for him to boldly take on rogue Shiite groups. But at the same time, as criticism of the assault has risen, it has also brought into question yet another American benchmark of progress in Iraq: political reconciliation.

“We don’t have to rush to military solutions,” said Nadeem al-Jabiri, a Parliament member from the Fadhila Party, a strong rival of Mr. Sadr’s party that would have been expected to back the operation, at least on political grounds. Instead of solving the problems in Basra, Mr. Jabiri said, Mr. Maliki “escalated the situation.”

For the third straight day, the American military was reported to be conducting airstrikes in support of Iraqi troops in Basra. Iraqi police officials reported that an American bombing run killed eight civilians.

The American military did not immediately acknowledge the incident. But Maj. Tom Holloway, a British military spokesman, said: “We are aware of reports of an incident in the Basra area resulting in civilian casualties. We are investigating the report and do not have further details at this time.”

Impact of Basra on Iraqi Oil Exports

This article from The Hindu has more detail than I've seen so far:

As the fighting entered its third day, a bomb hit one of the two main crude oil pipelines heading towards the Basra oil terminal. Oil exports are expected to be affected in a big way as Zubair 1— the main pumping station — has also been shut down. Nearly one-third of the oil produced in the area is transported through the affected pipeline.

“Fire-fighters are struggling to control the fire, which is huge. A lot of crude has spilt on to the ground... We will not be able to repair it unless security is provided for the crews,” Reuters news agency quoted an official from Iraq’s Southern Oil Company as saying. Officials estimate that it would take at least three days to repair the pipeline, provided calm is restored.

With Basra as the headquarters, nearly 80 per cent of Iraqi oil exports are routed through the south.

Deregulation

Via Instapundit, surprisingly enough, EdCone reminds us deregulation isn't always good.

The Gramm-Leach-Bliley Act broke down barriers between commercial banks, investment banks, and insurers established by the Glass-Steagall Act of 1933.

Repealing key elements of Glass-Steagall was a bipartisan effort.

In testimony before Congress last year, Robert Kuttner explored links between deregulation of financial markets and the current deleveraging crisis, and suggested (among other things) "some restoration of the walls against conflicts of interest once provided by Glass Steagall."

Falsehood in the Washington Times

According to the Washington Times,

The late Gen. Vo Nguyen Giap who was the leader of the North Vietnam military stated in his memoirs: "What we still don't understand is why you Americans stopped the bombing of Hanoi. You had us on the ropes. If you had pressed us a little harder, just for another day or two, we were ready to surrender. It was the same at the battles of Tet. You defeated us. We knew it, and we thought you knew it. But we were elated to notice your media were definitely helping us. They were causing more disruption in America than we could in the battlefields. We were ready to surrender. You had won."

Fortunately Snopes.com has a site dedicated to urban legends. This is the page where that claim is shown to be false, and the origins of the rumor are studied.

Sorry, got a horrible virus

Hopefully I'll be posting again in a day or so.

A Shattering Discovery

UPDATE: Read the comments. Debonair Dude thinks the way I use quotations HTML linked to his original posts might be confusing or misleading, so I won't do it anymore, but I didn't change this since I don't want it to seem like I'm trying to hide the way I did it or make his comment not make sense. If he tells me he wants it deleted I'll be happy to do so.

Debonair Dude is a bit annoyed at his fellow conservatives.

Look I don’t know if its me that is not making my point clearly enough, or those people that tend to listen with cotton stuffed in their ears?But I’ll have ONE MORE shot at it. Then you can call me a “Rino” a “Hippo” or what ever other STUPID cliche that you wish to.

Logically he seems to have a point:

2. All of the above have dropped out...ALL OF THEM!

3. The only choice we have now, Or should I say that I have now is to

a. Support the party’s choice who is John McCain.

b. Vote for the 2 Libs, Hillary or Obama ( and that choice will never happen.

But why is he using logic all the sudden? Conservatism is about wanting huge deployments and tax cuts too. It's about not trusting our government to make sure all Americans have health care, but saying it can rebuild Iraqi healthcare - and the rest of Iraq too. It's about saying that industial policy can't work because it violates the laws of the free market, and complaining about the unfair advantage of China with it's government supported industries. It's about being unable to give up any tiny sliver of pork, but cutting taxes to force someone to cut pork in the future.

I think he should endorse Fred Thompson. When I first heard an actor was in the race, I thought we were doomed. He could use all his acting skills to convince the religious right he was one of them, and promise his soul to the rich corporate donors. He would have been Ronald Reagan except the trial lawyers would have loved him too. It turned out he didn't have fire in the belly. If the Republicans had been smart enough to feed him lots of beans and make him bend over, then light a match behind his buttocks, they would have seen plenty of fire, and they could have won the election.

Debonair Dude will probably want to say nobody reads this blog. It just so happens I got e-mail from nobody@hotmail.com who said he was getting bored with my blog and wanted to do something more interesting, such as watching the grass grow, so there goes that argument. I may be dumb, I may even be dumber, but I'm not trying to reason with a bunch of Republicans calling "Rino Rino!"

That's the last thing you hear before the herd stampedes and tramples everything in their path.

The Real Goods on Industrial Policy

Via Avedon Carol's The Sideshow, a Buzzflash book review of Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism, by Ha-Joon Chang. This review of an excellent book which I'm going to get hold of a copy of is also an essay by someone who knows about the subject. Reviewer Thom Hartmann quotes Alexander Hamilton at one point where the author himself only summarizes,

As Hamilton noted (this is only referenced in the book - I'm filling in Hamilton's actual words here):

It is a primary object of the policy of nations, to be able to supply themselves with subsistence from their own soils; and manufacturing nations, as far as circumstances permit, endeavor to procure, from the same source, the raw materials necessary for their own fabrics.

As to how to accomplish that, Hamilton and Coxe had a straightforward plan, which was adopted by the Founders of this nation:
I. Protecting duties.

Protective duties, or duties on those foreign articles which are the rivals of the domestic ones, intended to be encouraged. [B]y enhancing the charges on foreign articles, they enable the national manufacturers to undersell all their foreign competitors.

II. Prohibitions of rival articles or duties equivalent to prohibitions.

Considering a monopoly of the domestic market to its own manufacturers as the reigning policy of manufacturing nations, a similar policy on the part of the United States in every proper instance, is dictated, it might almost be said, by the principles of distributive justice; certainly by the duty of endeavoring to secure to their own citizens a reciprocity of advantages.

III. Prohibitions of the exportation of the materials of manufactures.

The desire of securing a cheap and plentiful supply for the national workmen, and, where the article is either peculiar to the country, or of peculiar quality there, the jealousy of enabling foreign workmen to rival those of the nation, with its own materials, are the leading motives to this species of regulation. …

IV. Pecuniary bounties [industry direct financial subsidies].

This has been found one of the most efficacious means of encouraging manufactures, and it is in some views, the best. Though it has not yet been practiced upon by the government of the United States (unless the allowances on the exportation of dried and pickled fish and salted meat could be considered as a bounty) and though it is less favored by public opinion than some other modes. Its advantages, are these -- It is a species of encouragement more positive and direct than any other, and for that very reason, has a more immediate tendency to stimulate and uphold new enterprises, increasing the chances of profit, and diminishing the risks of loss, in the first attempts.

V. Premiums [incentives for production, innovation, or quality].

These are of a nature allied to bounties, though distinguishable from them, in some important features. Bounties are applicable to the whole quantity of an article produced, or manufactured, or exported, and involve a correspondent expense.

Premiums serve to reward some particular excellence or superiority, some extraordinary exertion or skill, and are dispensed only in a small number of cases. But their effect is to stimulate general effort. Contrived so as to be both honorary and lucrative, they address themselves to different passions; touching the chords as well of emulation as of interest. They are accordingly a very economical mean of exciting the enterprise of a whole community.

There's a whole lot more Hamiltonian goodness there, but I'm pretty sure President Washington's compatriot is out of copyright by now, and has passed beyond litigation in any event.

This is sort of like the essay I wrote a few days ago, except twenty times better. My work as a blogger is cut out for me.