Uncommon Sense

December 27, 2013

China Invests in the Rust Belt; the U.S., Not So Much

According to the N.Y. Times, China is investing in Toledo, OH and other Rust Belt cities:

“. . . Toledo turned to China to make the 360 panels, 1,300 pounds each, needed for an extension to the Toledo Museum of Art. Some here resented the move after China supplanted the United States as the world’s top glass producer. But in the process, city leaders began an improbable and remarkable relationship.
“Over the past seven years since the museum project was completed, ties between Toledo and China have grown numerous. Chinese companies have paid more than $10 million in cash for two local hotels, a restaurant complex and a 69-acre waterfront property. Mayor Michael P. Bell has taken four trips to China in four years in search of investors. His business cards are double-sided, in English and Chinese.
“. . . Huaqiao University, one of the largest higher-education institutions in China, recently signed an agreement to open a branch in Toledo. There have also been preliminary talks between local officials and a Chinese company about an arrangement in which industrial tools would be produced in China, shipped for assembly in Toledo and labeled ‘made in the U.S.A.,’ which would allow them to be sold at a premium.
“. . . Chinese companies made $12.2 billion in direct investments in the United States during the first nine months of 2013. That is up from $7.1 billion in all of 2012, which was itself a record at the time, according to the Rhodium Group, a New York-based consulting company.
“. . . Chinese investors have been buying commercial and residential real estate in Detroit, inexpensively because of the city’s financial troubles, and have agreed to finance a $1.5 billion waterfront development in Oakland, Calif. This year, on a trade trip to China, Gov. Jerry Brown of California discussed Chinese investment in the state’s troubled $91 billion bullet train project.
“But Toledo, a largely blue-collar city of about 280,000, appears to be punching well above its weight at a time when mayors from Philadelphia to San Francisco are returning from China empty-handed.”

So the Chinese government has found many things worth investing in the Rust Belt but us, we’re sitting on the sidelines, which is puzzling. There was a time when major construction corporations would be whipping their Republican representatives to create substantial government-financed infrastructure projects. There are projects galore in and around our cities that only government will tackle. The contracts would create jobs for American workers and fix problems that can only get worse. The cost of borrowing the money for the projects (which we would do in any case), is at an all-time low. Labor is cheaper (relatively) than it has been for decades, materials are cheaper than they have been for decades. So, why the reluctance of Republicans to sign on for infrastructure spending?

Please don’t answer “because of the debt” or “because of the budget deficit.” Republicans ordinarily only pay attention to such matters during Democratic administrations and ignore them during Republican administrations, so they are not real concerns, just leverage points. (The last time the “debt” was an issue was when Bill Clinton was President. Under the Bush’s, not a peep.)

What political priority do the Republicans have that precludes them creating big government contracts for a long-time corporate sponsor? They are still going to the mat to support lavish Defense spending, why not spending on construction everyone agrees is the responsibility of the government?

Got an answer? I don’t.

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