Anyway, as one of your readers, I liked the crack at the end also.

They are being bled dry and robbed blind by predator Chinese 'partners' mandated by the govt.

Serves them right!

The goal is not delay or bribery and corruption opportunities via Copenhagen.
The goal is not jobs, financial opportunities, or new technology.
The goal is survival, good health and healthy food and peace.
The goal is a lasting solution; a garden paradise lifestyle gives that.

Marie Devine
http://www.divine-way.com
God has solutions to world problems we created by ignoring His wisdom.

This group is sometimes called Neo-Chartalism and Modern Monetary Theory (MMT), although it should be emphasized that this is a loose group that does not subscribe to a common moniker. However, what underlies their position is not theory based on assumptions but rather a description of the operation of a modern monetary system based on national accounting identities and stock-flow consistency.

A key work addressed to professionals is Wynne Godley and Marc Lavoie's Monetary economics: an integrated approach to credit, money, income. L Randall Wray "s Understanding Modern Money: The Key to Full Employment and Price Stability is accessible to non-economists. Blog posts (generally accessible) by Wray, Bill Mitchell, Warren Mosler, Scott Fulwiler, and Marshall Auerback are based on MMT.

I agree with him that there are many reasons other than collocation with manufacturing why this is so: Put innovation activity in the earliest and largest markets to learn from and influence the customers, yield to the strategic demands of governmental customers, accept local subsidies, tap local talent pools, reduce the cost of innovators, operate in a more relaxed regulatory environment, etc. Whereas my original post implied that revivifying manufacturing in America would enable us to reestablish dominance in innovation, it isn’t nearly that easy. The US government would have to become as strategic and tough as China and other mercantilist regimes, and even then innovation could not be contained.

On the other hand, Charlie seems to agree with Tyler Cowen, with whom I heartily disagreed above, that where innovation occurs doesn’t matter. Whether the “potential benefits for American workers” mentioned by Charlie are realized will depend in large part on the outcome of negotiations between GE and organs of the Peoples Republic of China. If history is any guide, GE will reluctantly agree to do more manufacturing in China than it would like for these “political” reasons, and the US government will not intervene on behalf of American suppliers and workers or to ameliorate the trade deficit. Ultimately, GE will be willing to manufacture turbines in China, just as Boeing reluctantly agreed to manufacture significant portions of its 737s and 787s there.

As these trends continue, America will continue to have high unemployment and declining real wages—and no apology from GE, whose CEO Jeff Immelt says this about US labor costs:

Labor costs are also a factor, Immelt says: "In the places where you have relatively high labor costs, they've got to be more productive." The labor in any facility, he says, has to be able to compete on a "global basis."

Also, our crippling trade deficits will continue. Every year but one since 1981, the US has run a current account deficit up to 6% of GDP and averaging 3%. Link. This is a transfer of American wealth, economic power, global leadership, and talent to foreign powers, especially China. What GE and the other multinationals are doing with the assistance of the US government is the cause of these problems—not the solution.

I find the GE clean coal program an example of globalization at its best, including the potential benefits for American workers. It’s pretty typical of the advantages of technical globalization which brings together wide-spread expertise into a single product. Yes, the research center is in China but that's substantially because GE sees this as the largest and earliest market for its clean coal technology and is doing it there in part for political reasons; and because it already has a big China presence through roughly 25 commercial installations of its gasifier technology (Ex Texaco), mostly used on pet coke at refineries. My understanding is that the China center is mainly to integrate technology development being done elsewhere, primarily for purposes of the Chinese market. Note that GE recently entered a similar agreement with the University of Wyoming for joint clean coal R,D and D, including a US commercial demonstration.

GE’s clean coal R&D, and the eventual manufacture, is/will be substantially US-based:

*The main reason GE is in clean coal is to sell its turbines. (The main components of its IGCC clean coal setup are the gasifier, essentially a pressure vessel, and a combined generation cycle with both gas and steam turbines.) The turbines, by far the largest value added and labor intensive component, as with all GE turbines will be manufactured in the US.

*Much of the R&D is being done in the US. Gasifier work, including the ex-Stamet feeder technology acquired by GE two years ago, is mostly in Irvine, CA. Additional work, including control systems is in Schenectady and North Carolina. Turbines are in South Carolina Some R&D is being done in GE’s India center.

*Emission control work, including carbon capture and sequestration, I understand is also being done mostly in the US

*All of this is managed by GE’s clean coal group in Houston, which now employs several hundred people.

No doubt some of the manufacturing will be done in China or elsewhere in Asia, but this will be mostly the grunt stuff with low IP and value content, like the pressure vessels. My guess is that other components which have high value and substantial IP (like the Stamet feeder), yet can easily be knocked-off, will be made in the US or else in a way where final assembly can be tightly controlled.

GE is looking to hire more US engineers for this and other energy programs. Unfortunately, we’re not producing the talent.