Back now according to the i. M. F. Using purchasing power parity china is already 25 percent larger economy than the United States and cons of course you live there for 20 years what did you see here youre in brooklyn as you can hear around us were across the river from manhattan and youre seeing a construction boom here by u. S. Standards but put this into context of our competitor nation as trump calls thats whats going on there component here china has a distribution economically of course and sort of were right the economy in brooklyn where were going to be different than little rock arkansas trying to do they passed us on a p. P. P. Basis on the g. D. P. Back in 2016 so its been a few years already the way i like to look at it too if you just step back and look at it from an economic standpoint they make their shoes and they make our shoes they make their t. V. s and they make our t. V. s they make their car parts and they make our car parts so i think their economy the way we estimate it is that is their economy is absolutely you know massive you. Go any city in china they basically have new airports new roads New Buildings new schools so theres been a massive economic boom that probably is going to be difficult to keep up and you know what i personally believe chinas g. D. P. The last few years is much much lower than the official so looking at some of these technologies like 5 j what way they are leaps and bounds ahead right so and to get it can take on the sputnik moment you know we have the cold war 3 saul going on with the soviet union that same to get the nasa Program Going which gave us a lot of new technologies and there was a huge boost to our economy. Should we look at this in the some other way and say look they are clearly had of us while way 5 g. They are ahead of us. They are also way ahead of the us and a i Artificial Intelligence should we should approach this you think its absolutely theres a lot of areas in the economy where china has caught up or surpassed us you know the mobile payments markets 50 times the size of the u. S. Were over here still writing checks our Banking System is not innovated. 5 g. Weve kind of recently woken up the last couple years and go wow we dont even have a company that can make 5 g. Equipment hallways the 800 pound gorilla 5 g. Theyve been putting hundreds of billions of dollars behind this company they have 800000 engineers 50000. 00 engineers or foreigners theyve hired the best talent in that space to produce a 5 g. Equipment were so far behind the games over you cant catch up on 5 g. At this point with hallway and as geo political superpower that we are in the United States and where a competitor to china were seeing with 5 g. Because the u. S. Doesnt even how one single manufacturer of this telecoms i quit meant we see germany we see brazil likely to do deals with huawei despite the u. S. Saying no what do you think of this well they certainly are putting pressure on on the europeans. To do 5 g. And indeed also the same question is confronting india right. President modi is also being pressurized not to adopt well ways by the standard so the question is if you want to use the sputnik analogy the russians were ahead of us when they launched a man into space before we did and the us mobilized its considerable National Resources and ultimately caught up and did so the russians i would say that its not impossible that the same thing could happen but of course it would mean invoking things Like National industrial policy which is something we havent lights and some 1970 s. How much of this of course is to do with the fact that when you ship all your manufacturing overseas when you ship it to china it was always the theory was that theyre just going to do the the low value added jobs those t. V. s menial labor and theyll never do innovation and come up with the great ideas were going to innovate here but of course innovation happens on the factory floor and how and why did we send our factories over there what role to bill clinton do with basically fighting to have china be part of the World Trade Organization and 2000 he argued in front of congress in march of 2000 he said by joining the w. Cio china is not simply agreeing to import more of our products it is agreeing to import one of democracys most cherished values Economic Freedom of course this is the sort of lie we push on ourselves when we invade a country that were going to go liberate the women and here it was like were going to liberate their economy it was the so the china fantasy the idea that somehow if they start to embrace capitalist forms of Economic Development their ultimate they going to evolve into a liberal democracy and thats turned out to be a complete delusion and fantasy in fact you can argue that even the idea that trade liberalization would ultimately work in our favor it has and theres been a number of studies suggesting that you know our Manufacturing Sector has been devastated by the manufacturing as a percentage of g. D. P. Is that. Lowest point in 72 years for this idea that we retain the software but we all share the manufacturing thats going to be great for both sides win when its been a win win for china and its been a lose lose for the us right im like i have a quote from biden here one of the candidates of course who say quote china is going to eat our lunch come on man yeah he has been doing particularly well in the polls and i think part of the reason for that is because he still uses a playbook thats about 20 years out of date politically and economically of course he was part of a government bill clinton that the great democrats shipped our jobs overseas and it is interesting that weve come full circle that robert light hisor who was almost the lone voice in the neo liberal American Economic and political system back in the late ninetys he said in a piece in the wall street journal the New York Times he warned that if it made it to the w. T. F. Can tell us china would become the dominant trading nation virtually no manufacturing job in the us will be safe he was right today hes now the u. S. Trade negotiator against china when youre reading the Chinese Press what how are they looking at trump how are they looking at robert like hisor in particular and their trade position against china so trump was kind of an x. Factor they didnt know how to deal with trump i mean trump is not acting like a normal politician they know how to deal with the biden family they gave they gave his son a 1500000000. 00 so thats you know how you can deal with some politicians trump is just is acting is all in negotiation he realizes back to the point of the Manufacturing Base you cant continue to innovate when you dont make anything all the innovations happen on the manufacturing floor and we had the solution and a lot of it comes from academia these economists that you dont need to make anything manufacturing is going away the reality is weve just had the greatest manufacturing boom in history the world just occurred in china not the United States and weve got rid of all our jobs you cant meet have a country of 330000000 people and not be able to make a. You think for yourself realizes that and this is all part of the strategic kind of realignment were going to have to happen and to be fair i think there theres been a number of economists now that say in retrospect that that whole model was wrong even paul krugman has dared to admit that he might have overestimated the or underestimated the impact and allowing china to go into the w t o and this idea that free trade would somehow be great for both sides and im personally a bit regarding light but i think hes the best thing thats happened to the us economy and the government hes probably the most qualified guy in the the cabinet granted that setting thats not sitting exactly a high bar but hes an exceptionally talented trade negotiator and hes the 1st gone i that weve had in that position who not only is the dominant voice he superceded treasury which was basically happy to offshore those jobs so long as you know the Capital Markets were happy but hes been doing this for over 40 years hes been doing this since the reagan years so the democrats arent discussing this issue in particular actually during their primaries but will it become a huge issue against them and in the race against certainly biden is the nominee will because you know he as you pointed out earlier he is biden embodies the the the socalled washington consensus but there is there are signs that some of the other candidates are embracing a different approach notably Elizabeth Warren and she came out with a paper about economic patriotism and reviving the manufacturing so she seems to be hearing a bit to that playbook and i think thats a rather hopeful sign as far as the democrats are concerned well aside from the economic advantages or disadvantages and shifting jobs overseas it does appear china is making a pretty aggressive move militarily and just looking at some of the trends coming out of there theyve perfected the rail Gun Technology that they can now put on a naval vessel you know ive been following the rail Gun Technology for a number of years now this is the. Electromagnetic projectile e fired into has a range of a missile what you can do with a rail gun is you can knock a satellite out of the sky which is. Way out aggressive they can start knocking competitor satellites out of the sky for one thing number 2 the us can build 2 submarines per year. It is a retiring 3 per year meanwhile china is able to manufacture more submarines per year so theres a military advantage there as well as militaristically is there or should that be a something you know i would say that youve got to consider the base from which it starts i mean we still spend on defense u. S. Spends on defense more than the next 10 countries combined so we spend a massive amount more money now we dont spend a particularly efficiently if you look at some of the boondoggle we have out there and the political engineering that comes down but i think we still have a qualitative edge the question is whether you want to continue to surrender that qualitative edge which you will do if you perpetuate this offshoring manufacturing particularly to china but of course china and and the Republican Administration and the trump hes hes met them head on in terms of trade the Previous Administration under obama said were doing the asia pivot and were going to confront them militarily the point max is making about that the fact that we can only build 2 submarines a year even with new funds for the military because you know why because we rely on china for many of them are right you know thats all part of the Manufacturing Base you have to get back all these technologies are interconnected castings for jeans Electronics Embedded Systems these are all if you can make the cars you can make the systems in the plants then you can use it for the Defense Industry and you get rid of all that in the pentagon has come up with papers on this guys we have mostly one supplier for each type of our systems and these these defensive players have become completely dependent on federal government money and completely inefficient all right well were going to take a break come back talk a lot more about china. Front running 2020. Is your media a reflection of reality. In a world transformed. What will make you feel safe. High salacious community. Are you going the right way or are you being led so. What is true what is faith. In a world corrupted you need to descend. To join us in the depths. Or a maybe in the shallows. Kind of. Time after time called parishioners repeat the same mantra sustainability its very important to excel or transition sustainable transport sustainability spain or man out to more equitable and sustainable wealth. They claim their production is completely hamas. It. Companies want us to feel good about buying their products while the damage is being done far away this is 2nd eldest thats the point any minute i need money. We didnt even an. Understood superman in. You know world of big partisan movies lot and conspiracy its time to wake up to dig deeper to hit the stories that Mainstream Media refuses to tell more than ever we need to be smarter we need to stop slamming the door on the bats and shouting past each other its time for Critical Thinking its time to fight for the middle for the truth the time is now for watching closely watching the hawks. Welcome back to front running 2020 with max and stacy were talking about this. Moment between the u. S. And china well the u. S. Catch up can the u. S. Even catch up stacy without some kind of industrial policy exactly in order to compete on that sort of scale we need an industrial policy i would think because of course the Apollo Program which we introduced under j. F. K. To compete with russia it cost 600000000000. 00 in current terms but we have the manufacturing capacity at that time do we need an industrial policy an order to even rise to this challenge that china presents to us well in the world yes and we used to do the industrial policy very well until low growth and reagan came into office in the 1980 s. And said that government is the source of the problem rather than part of the solution but theres been a number of goal of the works by people like marianne and i was you who pointed out for example that the i phone is a good example which was derived and stood on the shoulders of a considerable amount of government already and the idea that these things just magically appear through the magic of the free market is just a fantasy and given how Financial Lives are economies you cant rely on the free market alone to get us anywhere near to the right kind of policy to catch this is one of the things in the political season i dont understand because a lot of flag waving and a lot of usa usa from the. Poloi in the audience but then when asked about Economic Policy they hate the usa its like the usa cant do anything the government stinks its all about private corporations thats why we should throw out everything and the government can never accomplish anything in their very negative toward their own country and duplicity there and they dont understand that as you point out without the Us Government there would be no i phone there would be no. That there being no war when in world war 2 there would be no man on the loan right right so they dont seem to be a disconnect and if you look at things we fund we fund the wrong things right what do we publicly fund sun sports stadiums china funds chip factories so were trying to figure out what happened to 5 g. They just rolled out their 60 center 60 is going to be 10 x. 0 or 5 g. You know you look at electric vehicles right they pour hundreds of billions of dollars behind even battery maker who is now becoming the number one in the world control the space they have 4 percent of the penetration influx of us already which is twice the u. S. And theyre going to be 50 percent within a couple years they really know each charge and stations all over the country so they have a plan they have a policy its you know to dominate the century integrated circuits i mentioned the chip funds in the usa we used to make 25 percent the World Semiconductors were going down to 5 percent because we live in a world of finance capitalism and were getting played by china whos really plain state capitalism and we have done this before i mean in the 1980 s. There was a concern that the Semiconductor Chip market was going to be dominated by the japanese and the koreans and we set up something called cemetery which was the private Sector Consortium with the government and effectively the u. S. Was able to leapfrog and move to the next formal form of Semiconductor Technology was a very very successful project and it was profitable but somehow weve decided thats not a good model to follow anymore i would i would argue that thats exactly the kind of model that you can follow and you can use the military as well you dont have to pick winners and losers you can just how the military is saying you know we want a vehicle with these kind of specifications if you can build it for us we will guarantee you a market of eggs and thats the way you can actually support private industry in that regard quantum computing another example china put a lead in 1000000000. 00 in a Quantum Computing Center we had just under a 1000000000. 00 for quantum computing thats going to be the next you know the next big thing so yeah absolutely look at every technology. We need to have some type of plan around it for the end the absence of an industrial policy in america is quite apparent during this time of a trade war and has applied all these tariffs to chinese. And weve also had the tax cuts a trillion dollars of tax cuts where does everything go into share buybacks and well thats just thats just it i mean 1st of all the tax reform was a joke because it was basically a means for the companies to use the result in cash flow to their stock prices because c. E. O. Compensation is basically predicated on what the stock price of the company does as opposed to the underlying operations which is why i disaster like boeing even though the Company Getting back to the china and apollo able to get exactly the point a point is that you you have to direct these things in the right way and and the problem with trump is that you know hes hes got a handle on the the problem in the sense that he said he recognizes there is a problem but hes using the 19th century solution protectionism tariffs as a means o