China may back coup against Kim

October 17, 2006 2:08 PM

Newsfilter: North Korea's response to a toothless UN resolution may be a second nuclear test. With military solutions pretty much off the table, it may be up to rival factions within the DPRK to topple the regime. NK coups have been discussed here before, and the end result may not be as pretty as one would hope, but maybe this time the Chinese have had enough.
posted by ernie (57 comments total)

This ought to be fun.
posted by FormlessOne at 2:14 PM on October 17, 2006

may not be as pretty AS one would hope...

yikes, huge difference
sorry 1st post, please hammer don't hurt 'im
posted by ernie at 2:19 PM on October 17, 2006

The 1st post is NEVER as pertty as one would hope.

Really, the Worst Case Scenario involves a desperate and/or crazy despot with nothing to lose deciding to just blow everything up that he can. With coup-ers at his door, Kim might just be that despot.

And when I moved out of L.A. last year, I thought "well, now I'm less likely to get killed by a North Korean nuke". But with the less-than-optimal tests of their missiles earlier this year, I think now the landing point of any NK attack that reaches the US West Coast could be pretty much anywhere...
posted by wendell at 2:33 PM on October 17, 2006

Clinton, Bush, Charles Manson... it doesn't matter who's the president, if China doesn't want to crack down on NK they'll build nukes.

We don't need to pressure NK, we need to pressure China.
posted by b_thinky at 2:33 PM on October 17, 2006

I don't see any solution at all to the DPRK issue that is going to turn out well for the US. China may need us, but we need China every bit as badly. And from a national security perspective (an issue China is every bit as sensitive to as the US government) remaining friendly with the DPRK is infinitely more important than the US's or national community's favor.

I admit to being something of an ignorant American on this topic, but my general feeling is that as a military power, China scares me a little, the DPRK doesn't scare me at all, but China + DPRK is the most intimidating combination I can imagine right now. And that's *without* the DPRK being nuclear-enabled to the point of having an arsenal usable against its neighbors.
posted by wolftrouble at 2:34 PM on October 17, 2006

China needs to suck it up and annex North Korea. The North Koreans had their fun, but it's time for adult supervision.
posted by mullingitover at 2:51 PM on October 17, 2006

I agree China is the problem. And at this point, our only option. What's weird to me is why they don't see it more as their problem.
posted by bardic at 3:06 PM on October 17, 2006

Good post, ernie. I've been waiting for someone to come up with something thoughtful and thorough on the DPRK situation.

And mullingitover: Do you really think that China annexing the DPRK would help matters? South Koreans would have a seriously tough time accepting that.
posted by brina at 3:10 PM on October 17, 2006

Doesn't China own us now?
posted by callmejay at 3:14 PM on October 17, 2006

If the North Korea problem went away tomorrow it means 30,000 US troops are freed up to be moved to Taiwan, in their minds anyway.

Also tens of millions of starving, uneducated, physically stunted North Koreans are a far greater economic liability than East Germans wearing out of fashion track suits driving plastic cars.
posted by ernie at 3:16 PM on October 17, 2006 [1 favorite]

I agree, but it's not like China really gives much of a damn about its own starving peasants currently. Might as well address the issue now before Kim Jong-Il dips into a little too much of the Courvoisier.
posted by bardic at 3:20 PM on October 17, 2006

Or Remy-Martin. I forget what expensive hooch dictators are supposed to drink these days.
posted by bardic at 3:21 PM on October 17, 2006

I don’t buy that increased involvement by China will be (ultimately) a good thing.
Apart from the constant line of b.s. from the white house: ("We're not going to discuss any particular matters of intelligence,” - so, what, citizens don’t get to know anything about foreign policy now?) I don’t think the nature of our relationship with China and Japan will benefit us here (call me an arch-conservative, but those binding treaty obligations rankle) and Rice’s statement: “the United States ‘has both the will and capacity to meet the full range of our security commitments to allies like South Korea and Japan.’”
- uh, with what army?

Pyongyang is erratic and unpredictable indeed, but I keep getting an image of Bush, Rummy and Rice sitting at a table playing Russian roulette and getting slapped silly by Cao Gangchuan and Shinzo Abe who scream: “Mau! Mau! Didi Mau!” at them.
posted by Smedleyman at 3:24 PM on October 17, 2006

From the last link:

"Meanwhile, some of the North Korean elite are seeking their boltholes in China."

Well, that just says it all for me.
posted by Mcable at 3:26 PM on October 17, 2006

Has anyone reliable confirmed that the first one was even nuclear?
posted by Mr_Zero at 3:33 PM on October 17, 2006

Has anyone reliable confirmed that the first one was even nuclear?

Hmm. Does John Negroponte (.pdf) count?
posted by brina at 3:38 PM on October 17, 2006

I'm nervous about that second nuclear test. Facing clear evidence of peril, we cannot wait for the final proof -- the smoking gun -- that could come in the form of a mushroom cloud.

Has anyone reliable confirmed that the first one was even nuclear?

Uh, I know you said "reliable," but how about American intelligence agencies?

American intelligence agencies have concluded that North Korea’s test explosion last week was powered by plutonium that North Korea harvested from its small nuclear reactor, according to officials who have reviewed the results of atmospheric sampling since the blast.

posted by kirkaracha at 3:56 PM on October 17, 2006

Our relationship with China is the only thing keeping the US government solvent at the moment. Oh not the trade situation (in terms of trade China still needs the US far more than we need them) but the fact that the current federal deficit is largely financed by Chinese banks buying up out debt.
posted by Riemann at 4:29 PM on October 17, 2006

Let me rephrase the question. Has any country other than the US confirmed the test? I do not believe our guys, they haven't gotten anything right in years.
posted by Mr_Zero at 4:39 PM on October 17, 2006

Let me rephrase the question. Has any country other than the US confirmed the test?

Well it turns out that other countries don't tend to have a ready supply of radiation-detecting spy planes they can deploy over the DPRK, or whatever the method was that they used. You're right that the US hasn't gotten anything right in years, but at least this time they appear to be checking, instead of replying on some dude named "Curveball", or whatever it is the US intelligent services do these days. Maybe China can do something to confirm it. I don't know.

How much of their electricity, and other energy supply to the DPRK get from China? Does anyone know what immediate effect China "pulling the switch" would have on the DPRK government apparatus? Could China black them out, then fuck them up before they get time to fire up the diesel generators? Wishful thinking, I guess.
posted by Jimbob at 5:11 PM on October 17, 2006

China could do anything they wanted to the DPRK. Collapse the regime, absorbe the entire country and make it a Chinese province etc... Nearly all of their food and energy needs come from China.

They don't do this as for now they have decided the problems created (in terms of refugees) would outweigh the benefits. They have recently been beefing up their border with the DPRK quite a bit. New razor wire, forcibly relocating chinese citizens in the area etc... in case things do go bad and a couple hundred thousand try to get accross at once.
posted by Riemann at 5:14 PM on October 17, 2006

Selig Harrison had some very insightful commentary on the NewsHour tonight about this. His contention, North Korea is pure belligerence, so if anything the new sanctions just push them further toward another nuclear test. Since we can not stomach losing Seoul in a conflict with the North, why not just make friends with the North rather than continuing our own belligerent posturing? We could then perhaps stop their nuclear aggression, although we might have to give up some "face."
posted by caddis at 5:15 PM on October 17, 2006 [1 favorite]

(by the way, sometimes you can put too many links into a fpp)
posted by caddis at 5:17 PM on October 17, 2006

Their bomb was a failure as a weapon and it used a signifigant portion of their very small stockpile of plutonium. Maybe we just need to keep eggin' them on until they test it all...
posted by Riemann at 5:30 PM on October 17, 2006

We don't need to pressure NK, we need to pressure China.

US: China, fucking deal with NK, or else.

China: How about you fucking deal with your interest rates hitting 12%, no I mean, 14%, oh what the fuck, 18%?

US: You can't do that.

China: We've just put 5% of our US treasuries on sale.

US: You can do that. Please stop.

China: Maybe 10% Perhaps 20%? What little US dollars we'll actually make we can use to buy more oil -- which means you can't buy it.

US: (Says nothing as economy melts.)


Or, perhaps we should stop writing checks we can't cash -- and stop pretending we can pressure China.
posted by eriko at 5:31 PM on October 17, 2006

It wouldn't go quite that easy for China (round about the step where they threaten to sell of 5% of the assets backing their central banks) their economy would likely tank as well. Not pretty for either side.
posted by Riemann at 5:45 PM on October 17, 2006

"China: We've just put 5% of our US treasuries on sale."

Yeah, but somebody would still have to purchase them.
posted by TetrisKid at 5:46 PM on October 17, 2006

Since we can not stomach losing Seoul in a conflict with the North, why not just make friends with the North rather than continuing our own belligerent posturing?

You mean...negotiate? Don't you know the tewwawists win if we do that?!?
posted by Jimbob at 5:52 PM on October 17, 2006

Yeah, but somebody would still have to purchase them.

Errrr, that's not quite how it works.
posted by IronLizard at 5:55 PM on October 17, 2006

(by the way, sometimes you can put too many links into a fpp)

Perhaps, but did my best to put mouseover descriptions on everything. What is the magic number then, and Ill do my best never to exceed it in the future?
posted by ernie at 5:56 PM on October 17, 2006

So, NK will keep blowing up nukes in their own territory until the world says it likes them?

I don't think they thought their cunning plan all the way through.
posted by clevershark at 6:07 PM on October 17, 2006

Well, Hell in a handbucket...
posted by taosbat at 6:12 PM on October 17, 2006

Good post! I found all the links to be of interest.
posted by stirfry at 6:17 PM on October 17, 2006

caddis, Jimbob,
It's not just stupid belligerence on the part of the US. Do a little reading on the history of negotations with the DPRK. People throw around phrases like "can't be trusted" when talking about various countries, but they really do apply to North Korea. They are simply unreliable when it comes to treaties. Does that mean negotiation should not be considered? Of course not, but it does mean that all parties involved should be wary. They've promised in the past to stop developing nuclear weapons and obviously didn't. The problem is, as noted by many above, is that there's no real threats that can be made against them if they break a treaty, and they know that. They know we're not going to out and out attack them, because Seoul would be demolished and the region completely destabilized. No one wants that, and so it makes negotiations extremely difficult.
And I think people are really overplaying the "the US can do nothing to China because China holds the majority of US debt" thing. China's economy, the growth of which is at this point basically the foundation of Party power in China, depends almost entirely on ours. Do you really think Chinese officials would destory their biggest and best market, and thus their own market? They're not stupid. It doesn't make the US position stable, as it's quite a mess we've gotten ourselves into. But it does make things a bit more complex than what people here seem to picture.
posted by Sangermaine at 6:22 PM on October 17, 2006

Sangermaine: Just to let you know. A large part of the rest of the world thinks that a large part of the problem IS stupid belligerence on the part of the US.

We remember, you used to have a President who talked to people and kept things calm. He was sabotaged on NK by Arlen Spector on the Foreign Relations Senate Foreign relations committee but he wanted to calm things down.

Then you got this guy, well, and Iraq should have been a lesson. Wars are very, very expensive and very risky.

The rest of the world is very, very worried that the US is playing chicken with both North Korea and Iran. Please stop.
posted by sien at 6:46 PM on October 17, 2006

Ooops. And don't type too fast.
posted by sien at 6:46 PM on October 17, 2006

Sangermaine, the first step to negotiation is to at least have contact. In recent history the US has maintained an attitude of "you're the proscribed enemy, we're ending diplomatic relations, go call Canada if you want to chat". You can see this with Iran, DPRK, Cuba, you name it. It appears that a lot of US citizens are unaware that the rest of the world doesn't operate like this. Here in Australia, we talk to Iran, North Korea etc. Hell, we trade with them. I can buy Cuban cigars and Iranian caviar. Even after the nuclear test, we didn't kick the North Korean ambassador out. Instead, the leaders of the various political parties dragged his ass downtown and told him what they thought about the situation, something the US has the inability to do, having to rely instead on official multilateral discussions, if and when the DPRK ever wants to hold them again.

And you can see how far this has got things. I mean, has the situation in Iran, or North Korea, or Cuba improved since the US decided they weren't going to have any diplomatic relations with them? Hardly. It just appears to leave the American public believing the rest of the world deals with the situation in the same way as the US. I mean, I've heard people on Metafilter talk about "Iranian Defectors", apparently unaware that Iranians can quite happily travel to most countries in the world, and can quite happily travel home again.
posted by Jimbob at 7:03 PM on October 17, 2006

We're already at war with them, according to international law. We're also already at war with Iran and Cuba. We're funding and training operatives inside their borders, conducting flyovers, and so on. These are acts of war.
posted by luckypozzo at 7:24 PM on October 17, 2006

It's a perfectly good post, ernie. You obviously were very careful and took a long time with it. A single naysayer really isn't too bad in these parts. :)

The bit about how China is not suppressing internet postings expressing dislike of NK is very interesting. China can stomp them whenever they want to... and it's starting to look like they want to.
posted by Malor at 7:29 PM on October 17, 2006

Is there any chance that China could, um, make Kim disappear and install a slightly more sane puppet head of North Korea without making a mess of the whole situation?
posted by gyc at 7:31 PM on October 17, 2006

China is uniquely positioned to annex North Korea with relatively low losses on their side. They could build up troops along their MASSIVE border with North Korea for several weeks under the guise of preparing to help Kim defend against a possible US invasion. Then they could attack North Korea, if you have ever looked at military instillation maps for North Korea you will notice something pretty bizarre about them, they are lined up like a big maginot line in the south facing South Korea, and most importantly as already mentioned several times Seoul.

Following a Chinese invasion of their northern region North Korea would be forced to withdraw forces from the southern border to defend the north. This would be an excellent time for US forces to attack southern instillations and speed up the fall of the country.

The real question here is why would China do this? I don't have a great response to this, but my line of argument with the Chinese would basically be along the lines of "you helped create this problem, and now you are the only ones who can clean it up."

The US of course would have to be prepared to let North Korea remain under the control of China, but this is not all bad. The border restraints would undoubtedly be much lighter meaning freer flow between North and South Korea, and China has "unique" methods that have a decent track record for dealing with poverty stricken rural areas.
posted by sourbrew at 8:56 PM on October 17, 2006

And I think people are really overplaying the "the US can do nothing to China because China holds the majority of US debt" thing.

possibly so, but it's impossible to overplay the "US can do nothing to china over north korea because china has a billion people, lives right next door, can send as many troops as they want to on a lot shorter logistical train" thing

there will be no peaceful solution to this unless china signs off on it ... period ... we should consider ourselves lucky that china would like a peaceful solution ...
posted by pyramid termite at 9:20 PM on October 17, 2006

China probably does not want to take North Korea by force, it could easily turn into an Afghanistan. For one Chinese military strength is actually not all that impressive. Regionally, China ranks behind Japan and South Korea in terms of military budgets and is lacking in offensive military equipment and trained officers which probably make an occupation very difficult. Iraq shows that a country controlled by a dictator/personality cult for decades doesn't easily settle into peace and security and that propping up an obscure militant fringe can mean supporting a Bin Laden or Saddam in his infancy.

And for all the rehabilitation the image of the Chinese has received in these last few years, it wasn't reallly that long ago they were murdering pro-democracy protestors.

I think people in the west get the idea that East Asian countries have relations with their neighbours comparable to the countries of Europe or North America, when in fact the tensions between say Japan and Korea or even China and Vietnam are not terribly hard to spot. Factor in some internal problems in the Philippines and Thailand, nervous Muslim populations in Indonesia and Malaysia, and ongoing issues China has with provinces like Tibet, Taiwan, and to an extent Hong Kong you have a region with a very delicate balance of power.

Something has to be done, but a military intervention would involve a lot more than China or the USA presenting its colours in NKs' capital and should not be taken lightly.
posted by Deep Dish at 9:30 PM on October 17, 2006

Malor: As a poster inside China, the Great Firewall isn't nearly as effective as you think. Not "stomping" out an idea means nothing. Ten times over if it's written in English. It's not nearly as interesting as you think. Typically censorship comes when the gov't says X and a citizen demands the antithesis, not when there's a lot of ambiguity. Debate on the Three Gorges Dam was encouraged up until the moment a decision was made, then debate was banned.

Riemann: Thank you for being a voice of reason.

sourbrew: Though highly imaginative, it's about as likely as a Tom Clancy story. The simple fact is China just isn't as upset as America is about this. Are they frustrated and annoyed? Yes. As I've said previously, America has conducted over 1000 tests, China has conducted it's own as well... this is a bit more provocative, sure, but it's just not some life-or-death scenario that their noisy troll of a next door neighbor is talking shit and detonating third rate nukes underground.

Read up on contemporary Chinese foreign policy. There isn't much to read because they don't have one outside of a steadfast commitment to sovereignty. They don't want anyone telling them how to run things or what is and is not Chinese territory so they do likewise for the rest of the world, even in worst-case scenarios like Darfur.

China is committed to two things: stability and growth. A destabilized North Korea goes against both those objectives. So outside of your own armchair general daydreams, what are you basing this off of?

You admit as much in your rhetorical question... where is the "why?" Your best answer was that we'd kinda want them to. So again, why would China want to?

[don't mean to isolate you, but you made an easy target]
posted by trinarian at 9:54 PM on October 17, 2006

To what extent is Kim Jong Il in total command of DPRK? I would guess that real power is held at the top ranks of the army. Evidence for this is KJI's recent declaration of the "army first" policy. Some analysts have speculated that the nuclear tests are being forced by pressure from the army. In that case, a coup wouldn't make any significant difference.
posted by metaplectic at 10:11 PM on October 17, 2006

Another view of China is that she wouldn't actually mind very much if that South Korea and her belligerent divisions of Samsung, LG, Hyundai, etc. were out of the picture. Let Kim do to them with weapons, what China has been unable to do with low prices. And then smack Kim down.

Don't forget that the People's Liberation Army is a major shareholder in many Chinese enterprises. The same corporate corruption that influences U.S. policy no doubt (and maybe even to a stronger extent) influences Chinese policy. Historically, communists have been a bit more bloodthirsty in their dealings with competition than have capitalists.
posted by three blind mice at 10:28 PM on October 17, 2006

"For one Chinese military strength is actually not all that impressive. Regionally, China ranks behind Japan and South Korea in terms of military budgets and is lacking in offensive military equipment and trained officers which probably make an occupation very difficult."

Yeah. They've been working on modernizing though.
One of the things that hampers them is one of their greatest
strengths as a nation and as a military force. They've always been able to mobilize a LOT of people very quickly in response to something, and they've always excelled at an aggressive form of defensive fighting. (Seems to be indicative of their political thought as well. This line is NOT to be crossed. Once it is, all bets are off).
Mobilizing that fast has often led to supply and reinforcement problems (plenty of historical examples, but in the modern era - I'm thinking of the Hundred Regiments Offensive, they won, with a big 'but' - typical).
On the other hand the aggressive defense has worked to their advantage since they haven't worried much about stuff outside China through a big chunk of their history. The Battle of Changde is a great example of that, the Kunlun pass and the Japanese attack on Hengyang in August of 1944 (for tactics - although the Chinese lost at Hengyang it cost the Japanese so much they weren't able to stop Chinese troops from owning the countryside around the city).

During the Korean war, in April of 1951 at the Imjin river the Chinese won, but, no resupply so, they couldn't advance before UN forces could regroup. At Chosin they had the same problems and a lot of Chinese died from the cold. Ostensibly they won, but they took a LOT of casualties (But they were doomed from the outset: Chesty Puller was there.)
posted by Smedleyman at 10:43 PM on October 17, 2006

(and what trinarian sed)
posted by Smedleyman at 10:45 PM on October 17, 2006

It wouldn't go quite that easy for China (round about the step where they threaten to sell of 5% of the assets backing their central banks) their economy would likely tank as well

China has been diversifying thier foreign currency accounts for the last five years -- partly because they expect us to comitt suicide (finiacially) and partly because they think they'll need to use this weapon.

This is a nation that has this habit of sending divisions worth of troops, getting battalions back, and then looking at the map -- if they captured territory, they called it a win.

Let's say they do firesale US Debt, and it takes out 10% of their GNP. This is a huge blow to the economy. Question -- who comes out better, China or the US?

Yeah, but somebody would still have to purchase them.

That's the point. New quarter rolls around, and the US has to deal with paying off bonds that have matured. Since we're running a defict, we can't do this with cash, so we have to sell new bonds to pay the old. Call it refinancing if you will.

So, the treasury auctions off new bonds, which gets them the money to pay off the matured bonds and whatever deficit spending the administration has done.

So, we come to auction time, and...nobody buys, because China is dumping their treasuries.

What can the US do.

Short term bonds (T-bills) pay off a fixed face value, and are sold at a discount (so, if you bought a $100 T-bill for $90, you'd make $10.) They self correct -- if the US can't sell that for $90, they drop the price until it does sell.

Longer bonds (T-notes and T-bonds) are different. They pay the face vaule back at maturity, plus interest every six months (these are called coupon payments -- in days of yore, you're bond certificate would have detachable coupons you redeemed for the interest payments.) So, you lend the US (say) $10,000 for ten years, and you get a payment every six months for the bond, plus $10,000 back at the end of the term.

If the market doesn't want these bonds, the only way to entice is to increase the coupon payments.

I picked the 10 year T-note here on purporse. The mortgage market uses it as a baseline for setting mortgage rates. If the coupon payments rise, the interest rates rise for mortgage holders.

Almost all of these bonds are tradable on secondary markets (the exception is the US Savings Bonds.) Bonds sold on the secondary markets are priced below par, so you could sell a $1000.00 bond for $950.00, and the buyer would make a $50 profit on the deal when the bond matures. (What about the interest? Depends on how the bond was sold. Many are sold as "strips" -- the interest coupons are removed and kept, or sold seperatly.)

So, China gets pissy and firesales US debt. The auction comes around, and nobody's buying, because they can make more money buy US debt from China than they can from buying it from us.

However, the US *needs* to sell, it has bonds maturing that it must pay off, or very bad things will happen. What can it do?

In very short terms, T-bills fix themselves. The auction just drops the buy price low enough to make them attractive. This hurts us at the next few auctions, when it comes time to pay the bills back, and we only got $85 for a $100 note.

In long terms, we have to make the current issues attractive again. The only way to do this is to raise the coupon paymets, which is to say, to raise the interest rates the bonds pay. Since most of the consumer long term debt is tied to these rates, that raises those rates as well.

How much higher? Depends on what it will take to get people to buy the bonds. That's all that matters, because if we can't sell them, we run out of cash, which means somebody presents a mature bond, and we can't pay it.

This would be a dark day -- the first time in the history of the United States that the US had renounced a valid debt.

Suddenly, *everybody* holding low-interest US debt wants out. What can we do? Well, what anyone with sub-par debt does, issues bonds that return much higher rates. Why?

Bonds are a gamble. You may not get paid back. How do you sell them? Interest? How much? Depends on the risk. Up to the present day, US bonds paid low rates, because they are the benchmark for a stable security. "Junk" bonds pay much higher rates, to make up for the risk that the bond may default and pay you little to nothing.

So, the moment that the US bond picks up more default risk, the interest rate will rise to enable it to be sold, because things rapidly get ugly if the US continues to default on bonds.

So, interest rates rise rapidly, capital in the US gets expensive, and dollars get scarce (as we try to service the debt with increasing interest rates.) The US economy is current based on cheap capital and cheap transportation. Dollars scarce kills the latter, the former went away with the bond increases. Sic Transit Gloria America. Worse, the temptation to print dollars leaps to the fore. Look up "hyperinflation."

China may never actually sell a bond, just offering them on the market low enough could do the damage.

What does this do to China? It hurts them. They have a very large investment in the US Dollar and in US Debt, much of with could become worthless or close to it. So what happens after that. The worst part for them will be the RMB-USD untie, which will hurt the value of the Renminbi, but if the USD is plummeting, that will be a better answer for them.

China has resources and manufacturing in place. They can try to export to other markets (and they're working hard on developing such.) They also have been increasing their Euro holdings, which with a USD plunge, are likely to pay off well, and if the Euro becomes the new petrodollar, will pay off in spades.

The US has resources, but almost no manufacutuing left -- and a large part of what is left is home constuction, which will be a dead industry with interest rates high. We have a huge currency deficit, so we don't have much in the way of forex reserves.

It will be a very long dark time. China will be hurt, the US will be devestated, and when you gut shot those two economies, the world isn't going to have a good time either.

But, in the end, China will come out in a vastly better position than the US, quite possibly as the dominant economy of the entire world.

Do you really think they wouldn't take the pain to gain that?
posted by eriko at 5:58 AM on October 18, 2006 [2 favorites]

eriko, you just scared the crap out of me, and here is why:

Maybe this is stereotyping, but here goes anyway: From what little I've seen, the Chinese tend to think in terms of decades and even generations about where they are and where they want to go, whereas we USians think in terms of business quarters (3 months) and election cycles (two years). And they were willing to adopt the single-child rule to deal with population problem -- not with perfect social and political harmony throughout China, but generally they stuck to their guns and are making it work.

(If the Great Chinese Girlie Shortage doesn't result in social upheaval and war, that is.)
posted by pax digita at 6:26 AM on October 18, 2006

The US has resources, but almost no manufacutuing left

This is just asinine. It's as dumb as saying that there's almost no manufacturing in Europe.

There's almost no manufacturing in the US. Except for the millions of automobiles. And the commercial aircraft. And the military aircraft. And the construction equipment. And the farm equipment. And the pharmaceuticals. And the medical equipment. And the chips. And the chip fabs. And, and, and, and.

Yes, there's almost no manufacturing in the US. Except for the trillions of dollars of manufacturing output.

You could tell a similar story about Europe, as well. Manufacturing output is down, especially as a proportion of economic activity. But the US (or US/Canada integrated market) and EU remain absolute manufacturing powerhouses.
posted by ROU_Xenophobe at 6:50 AM on October 18, 2006

Sangermaine, it would seem that you are parroting the Bush talking point that NK cheated on the Clinton agreement. True, they did, but in a minor fashion. Rather than sit down with NK Bush declared the treaty broken and then stopped living up to our obligations (shipping oil). NK then declared itself free to pursue its nuclear program, which it did somewhat successfully as we see. We might not be in this mess if Bush had not been so unwilling to talk. Bellicose threats won't work, unless we are willing to sacrifice Seoul. Negotiations could work, but not with Bush in office as he is too proud and stupid to pursue diplomacy with anything other than military force.
posted by caddis at 7:30 AM on October 18, 2006

This is just asinine. It's as dumb as saying that there's almost no manufacturing in Europe.

Compare the US in 1955 to 2005, and it is a very accurate statement. We have less jobs in manufacturing now than we did in 1950, yet we have almost double the population (The 1950 Census recorded 151.3 million.)

Another way to look at it is the labor force of 2005 is the same size as the entire population of 1950. If Manufacturing jobs held steady in the US, you'd expect there to be twice as many manufacturing jobs in the US.

In reality, that number has dropped well below the 1950 number -- indeed, the manufacturing sector has lost about 3 million since 2001.

Worse, for tradesmen, is where the jobs are. Construction, in particular, new housing construction. That's the only reason the manufacturing sector looks only sick as hell, and not dead. Everything else we make is tiny by comparison.

In the 1950s, America made everything and sold a bunch of it everywhere. Today, we make almost nothing in the way of consumer goods, and even in the industries you cite as being America's strength, somewhere between a third (aircraft) and 90% (semiconductor) of the market is now import.

You can celebrate that we still make cars (Have you *looked* at what's happening to the big three in the US? Have you noticed that we didn't import many cars in the 1950s?) and airplanes (which is basically only because of Airbus pulling a double stupid in the form of the A380 and the sudden reversal to the A350) and semiconductors (which require huge capital investments, which aren't going to happen in a depression, and lordy, compared to the far east, we don't make many semiconductors.)

That's not much to celebrate, and about the only thing that would be exportable in a high-transportation/falling dollar market will be semiconductors. It's just a shame that the capital investment to make a fab is so high, because we won't be able to afford to make more of them.
posted by eriko at 8:58 AM on October 18, 2006

Compare the US in 1955 to 2005, and it is a very accurate statement.

Sure.

But that's a dumb comparison. "There is almost no manufacturing" is not a statement relative to any previous level, it's an absolute. By any absolute measure, there is a completely tremendous amount of manufacturing going on in the US.

There is of course also a tremendous amount going on in Europe and Japan and China and Korea. But a lower relative share of manufacturing does not imply that almost nothing gets made in the US. Your argument is like saying that because a billionaire has lost half his money, he's no longer rich, or that the existence of Richard Branson means that Paul Allen isn't a rich man.

Comparing to the 1950s, when the previous world centers of manufacturing had just spent 6+ years getting bombed to shit, is particularly dumb.

Put another way, for a variety of reasons US manufacturing output was so completely dominant in the 1950s that it could fall by relative or even absolute amounts and still be utterly immense.

Again, you could tell a similar tale for European manufacturing output, which is also immense. This isn't some misplaced rah-rag patriotism on my part. I just get tired of the pernicious nonsense that the mere existence of Chinese and Korean manufacturing implies the nonexistence of American, Canadian, or European manufacturing. Even with the growth of Asian industrial powers, the manufacturing output of the US/Canada and Europe is gigantic.
posted by ROU_Xenophobe at 10:17 AM on October 18, 2006

Did North Korea really break the 94 agreement not to produce highly enriched uranium? Or is this another situation of cherry picking "facts" to justify decisions that have already been made, a la Iraq. Please read this artical by Selig Harrison in Foreign Affairs It would seem to fit a pattern of behavior exhibited by the current administration.
posted by flummox at 6:21 PM on October 18, 2006

Put another way, for a variety of reasons US manufacturing output was so completely dominant in the 1950s that it could fall by relative or even absolute amounts and still be utterly immense.

In absolute terms? Maybe, but the numbers don't bear that out, and if you eliminate cars and aircraft, things are even worse. (Oil will eliminate cars and aircraft soon enough.)

In terms of supporting the US economy? Not even a drop in the bucket. That's the issue. Up through the 1960s, industy is what made the American Economy run. Note I picked 1950 to be fair. I could have picked 1940 and really made the decline look worse. That's cheating.

The point is that manufacturing in the US is a trival component of the current economy, thus, it cannot support our current level of wealth based on exports. In a capital and credit crunch, nobody will be able to scale it up anytime soon either, even if you can get US labor to accept Korean wages (or worse.) Heavy industry takes years to develop, light industy isn't that much quicker -- esp. when most of the steel and machinery is imported anyway. (Which means with a falling dollar, you can't even buy the steel to machine or the machine to work steel.)

Add in the large part of the industy of the US that's going to dissappear with the housing market, and you get to my point. Manufacturing in the US is gone -- it cannot, even it if doubled and redoubled, even being to replace what we import, and in a falling dollar, we won't even be able to get the tooling to rebuild it.

Normally, you get out of the currency deficit by export. In a falling-dollar era, exports become easy, because your products are cheap compared to overseas currency. But we don't have the plants or the workers anymore to export enough to even soften the blow.

In short: I call the US manufacting capability basically zero, because that's exactly how much support it will offer the economy in the upcoming capital cruch. In 1930, we were stuck in a similar spiral, but we at least had the plants and tools to build with, and a government with enough capital to prime the pump come a market (okay, the market was WWII, but it worked -- we had the people and the plants and the tools. We had to modify much of them, but we had the people and tools to do that as well.)

Now? The government is broke, and there aren't any plants to export with. Nobody to prime the pump, and hell, no pump.
posted by eriko at 5:26 AM on October 19, 2006

eriko, I forgot this thread and just remembered it when reviewing old comments. I don't know if you'll see it, but I wanted to say that that's a brilliant summation, and I agree with it 1000%. I've been trying to say many of the same things over the years here, and I think you did a better job than I've managed yet.

We are in Truly Deep Shit. And, completely unlike the current Republican bullshit about Clinton being to blame for Al Qaeda (total crap)..... THESE problems DO trace to Clinton and Greenspan, and the incredibly reckless monetary adventure they took us on. The reason the 1990s were such a huge boom was, by and large, money-printing. And that will be the first weapon they will reach for when the crunch starts.

I personally believe we will see hyperinflation, rather than a deflation. I thought we were going to start deflating in 2000 when the Nasdaq crashed, but the incredible measures the Fed took, and the great lengths the Japanese and Chinese central banks went to, kept us out of the toilet for a bit longer... and, of course, made the eventual flush that much stronger. The Fed has been reckless with money since Greenspan took over. Printing money is all they know, and that's what they'll do when the bottom finally does fall out.

Anyway, GREAT posts. Thanks!
posted by Malor at 4:20 AM on October 22, 2006