Red Scare: Our Economic War with ChinaOctober 20, 2011
Dylan and the Megapanel is joined by Stephen Leeb, author of Red Alert: How China’s Growing Prosperity Threatens the American Way of Life.
RUSH TRANSCRIPT FROM MSNBC.COM
>>> well, one topic you hear a lot about on this program is, of course, china, and there's a fierce debate over our relationship with that country. both as a large foreign creditor of ours and, of course, provider of a variety of consumer goods. they have also cost us a wide variety of american jobs and continue to facilitate the enrichment of certain multi-nationals who are invested in that rigged environment in front of you. currency manipulation and china's ability to produce the goods we consume and sell them back to us as a tax protected by a tenfold tax for what we would charge for them for american goods. if the currency in the tax doesn't get you, there's another part of the debate that sometimes gets lost in all of this. that is the fact that chinese leadership is engaged in another type of economic war with the united states which is a resource war, and our specialest today is author of " red alert?" how china's growing prosperity threatens the american way of life. pleasure to have you here. specifically what resources would you point us to, as a matter of fact, that you believe that are in control and pose a real threat?
>> certainly rare efforts come to find. they have about a 90% monopoly on --
>> why does rob care about that?
>> i mean, for a lot of reasons. one, you cannot build a suitable wind turbine, scale wind as a source without heavy rare efforts and a lot of military equipment is also dependant on heavy rare earths. you should really care about it because though it's on everyone's radar screen, no one is doing anything about it. i mean, this is what's really remarkable. there are rare earth deposits. we just opened a molc core mines. mines in order to be processed, refined, et cetera, because it's a big deal and we don't have the skill sets in this country to do that. where do we send that ore to be processed? guess, it's china. china, not only do they have massive deposits of rare earths, but they are probably one of the few -- they are one of the very, very few countries that can process it. we have huge deposits of rare earth sitting in canada. no one is doing anything about them.
>> can i ask you about it.
>> isn't that a lot of that due to environmental regulations that we've got in this country? actually refining that stuff you irradiate the earth for years to come.
>> and refining is a big problem and there's another problem. we did actually do a lot with rare earths. we don't have the engineers --
>> we closed those in california.
>> we did, but now we've reopened them.
>> did we make the decision that we would rather poison china than us.
>> same way we put the paper and pulp factories in south america, poison them.
>> as you know in malaysia there's a huge processing plant by an australian company that didn't want to put it in western australia, goes forbid, there's nothing but wallowbies there.
>> not a lot of good choices in this world where we sit. we're sitting in oil in the context of 9.1% oil in this country. brent oil is at $110 a barrel. if you ask any economist worth his salt 12 years ago, 9.1% unemployment in the usa, zero growth in the zur zone, what's the price of oil, he would have said $10 or $15. it's sitting at $110. there's not a lot of good choices, but the point is in this country, even if you got around the refining problems, even if you wanted to dedicate an island to refinement, we don't have the still sets to do it. this ore is radioactive, et cetera. we don't have the skill sets.
>> i'm sitting here amazed by what i'm hearing, and a little frightened by what i'm hearing.
>> you should.
>> you actually should be.
>> and is the problem -- what can the united states do? you just said we don't have the -- the united states doesn't have the talent. we don't have people --
>> we have the talent. we just don't have the education. we have the people that can learn.
>> we have people that can learn.
>> but what you're talking about needs to be done now and we don't have people who can do what you're talking about.
>> needs to have been done five years ago. not just rare earths, it's solar. we're so missing the boat here. look, there are two alternative energies in the world that really count, solar and wind. there are others, yes, nuclear, et cetera.
>> geothermoal, but the ones, that you know, are scaleable, are solar and wind. china has a hammer lock on these energies right now, and let me just sum it up why you really should be scared. we're basically fighting a war with china now and china knows it and we don't know it. there's been a lot of press built on currency manipulation, et cetera. china is raising their currency exactly when they want to, not when we wanted them.
>> can i follow up.
>> i'm sorry.
>> what role does regulation play here in the united states for allowing china or helping, aiding china to get this hammer lock on not just what you were just talking about, about everything?
>> well, i don't think it's -- obviously in the rare earth area it probably has played some role, but those huge deposits that i'm talking about, they are in canada right now and in very remote parts of canada, and they are massive, except they are going to probably take billions and billions of dollars to develop. why not a manhattan project to develop this stuff so that it doesn't, you know, cause all this harm. i think if this country doesn't, you know, one word you've never heard mentioned when you hear all these debates in congress about austerity is growth. i mean --
>> that's true.
>> interviewed the fellow, senator from vermont, i didn't hear one word about growth. china has a five-year plan. they are going to spend half a trillion dollars a year on new industries and mostly new energies. that means by 2015 they will have spent $2.5 trillion. that's effectively what we spent on the second world war. they are fighting a war right now.
>> and they understand that that war goes to shattering any dependency on energy resources.
>> because they know the ultimate end game is energy independence and as james woolsey likes to say when he comes on to talk about energy, the shattering of dependance on oil is central to the independence of this nation or any nation as sure as we had to shatter our dependance on salt 100 years ago where you were going to die if you didn't have salt. now you're going to die if you don't have oil.
>> couldn't be more correct.
>> and the bonus here is you create a lot of jobs.
>> tonight of jobs.
>> let me give you one quick statistic. the end of the second world war, our debt as a percentage of gdp was greater than it is now. what's the difference? the second world war, maybe inadvertently, obviously the focus of the debt was to win the war, and we won the war, but we also created an infrastructure that allowed us to grow for a generation. today this debt has gone nowhere. let's focus on growth, guys. we're fighting china. let's -- let's get three or four or five manhattan projects and, you know, let's win this war, you know, not with guns. not with guns. with more people working.
>> with ideas.
>> with ideas.
>> that's exactly what you want american leaders to be doing right now. you want congress to lead and propose.
>> the projects.
>> want them to do it five years ago or ten years ago. i mean, china started planning for this back in the '70s when dung was starting all this capitalism in china, he was on top of this. i mean, he saw this kind of thing happening. back in 1998 when -- when oil was trading at $9 or $10 a barrel, china started their first oil company which was called petro china. ten years later it became the largest oil company in the world. i mean, these are guys that think not in quarterly or year blocks, they were thinking ten or 20 years. i got interrupted, talking too much, but dung was talking about rare earths back in the '70s. yeah, the middle east has oil and we have rare earths. guess what china is doing in saudi arabia right now? they are putting solar panels, enabling saudi arabia to desalinate water with solar energy. now you go figure. i mean, they have become the biggest partner of saudi arabia right now. i mean, heaven forbid, once they get enough military might there, we're going to lose all clout in the middle east.
>> meanwhile, you look at the american political debate, the american political debate doesn't include a talk about debt restructuring or a conversation about job creation and on the scale as it were, and the fact of the matter is the government couldn't create 30 million jobs. the creation of industries is the only thing that will create 30 million jobs and what you've said is we want the president to hire 30 million people. it's piercing the veil of innovation with that type of thing that allows that sort of thing.
>> it's win, win, win, only if we get the message. please, america, wake up. we're all americans. we're not republicans and democrats. we're all americans. let's wake up.
>> time that we all walk away from lefty and righty and do forwards and backwards.
>> there's some backwards in there but we'll try to go forward. we're all rather --
>> but i think at the same time pleased and awakened by your passion and the clarity of your message, and i suspect there will be others who will continue down this path. we compliment you on running into the town square and screaming.
>> do something, for god's sake. the book " red alert, how china's growing prosperity threatens the american way of life." imogen, john, rob, thank you. whether it's the china currency rigging or the corrupt functionality of our banking system, all of it speaks to a basic sense of unfairness in the government and policy systems that surround everybody in this country, and for that matter much of the world. up this afternoon on dylan ratigan.com, a new episode of radio-free dylan, a podcast, this time a conversation with professor bill black and zuccotti park occupierser goldie and calvin of why theish us use of the day are not left and right but instead a conversation of taking the future of this country forward. next, get caught in a lie perhaps? you can blame it on your friends. it's not really your fault. i'll explain after this.