What, the Trade Deficit Doesn't Keep You Up Nights?

Call it a personality flaw, but this blog seeks to make a contribution toward reducing the egregious U.S. trade deficit with East Asia, which raises issues at the core of why our economy is in deep kimche, our currency is in even deeper, and our social values also yielding some chagrin. This means somehow inducing major (and minor) U.S. construction, engineering, transportation, and heavy equipment corporations to more creatively sell large volumes of high-value added exports to Asia. If we manage that, can selling to the rest of the world be far behind?

Come January, the new U.S. Cabinet, of whatever party, will be faced head-on with the brick wall problem of how to prevent a dollar crisis. We also have a new government in Japan and in South Korea, and China is ready to work the issue, if we are open enough to see it. (Leading East Asians have been calling for a new monetary system since 1997, but therein hangs another tale for another post.) The time is ripe for serious changes in the way this nation has conducted Asia policy, or lack thereof, for a decade.

The American business sector can take the lead, if it has the vision.

We can let the Chinese economy lead us on an unending spiral of downward global wages -- or we can take Henry Ford's view. Ford upset J.P. Morgan by offering to sharply increase the wages of his auto workers. "I'm doing it so that they can buy my cars," Henry patiently explained -- and they did. We can reverse the decline in global wages, by selling high-wage, high-valued added U.S goods to China, in such infrastructure projects as will raise living standards, education, and real productivity in China -- enough to raise wages in China. That's how we built this country. China is industrializing whether we like it or not; why not sell them Ford's brand of the American model (also the basis for the Japanese and Korean "economic miracles") and make them our allies?

I can think of nothing more exciting than the opportunity to work with Japan, to create and sell large infrastructure construction projects, power plants, construction equipment, and other heavy U.S. industrial equipment, in China, South Korea, and the rest of Asia. Yes, there will be competition, but the Japanese and Koreans will be so shocked and relieved to see us pitch in there constructively, that the surprise factor and good will could give us an enormous advantage. Having worked with officials of those countries for years, I know they are eager for these kinds of bridges to be built between the U.S. and Asia.

When greenhouse gases and global warming keep you up nights, consider addressing the problem with a positive, out-of-the-box, creative solution -- such the helium-gas cooled Gas Turbine Modular Helium Reactor (GTMHR) mini nuclear power plants prototyped by General Atomics in San Diego. The Chinese are already considering the technology -- why should we leave them to "bake their own," when we can sell them something better made in the USA, and be in on the ground floor to have some say-so in how it is used?

Why not use such a technology to put in a new electric power infrastructure in a place like Gwangyang, South Korea, where they are developing a super-port (it will be a second Pusan) in the middle of nowhere? It's a beautiful, deep harbor, with nothing today but a fishing village. Lesser minds would have made of it a Carribean-style resort, with casinos. The Koreans have the vision to see that the southern tip of their little peninsula is going to grow massively, and will need twice the port capacity they have now. Why not put U.S. companies in on the ground floor to sell large amounts of U.S. goods to build these projects?

Why let Dubai have all the fun? At least in Dubai they understand that these kinds of projects can make a lot of money -- and that sometimes it is necessary to invest for a hair longer than a one-year time frame, in order to think big. Maybe, egads, even a decade or two?

Which again raises the issue of the dollar and the monetary system, or lack thereof. "If Korea had tried to industrialize during the current floating-rate era, we never could have done it," a top Seoul official told me in 2005. "How could we make 10- and 20-year investments to build entire new industries as we did, if we had no idea what our currency or your currency would be worth from one month to the next? We would still be a third world country."

Do we have the people and the companies with enough vision to see that we should tackle these issues with creative solutions using science and technology?