What is happening at American Airlines is being replicated in America. We are lean and mean. That makes profits and growth!

Even when American costs are brought down by efficiencies, there is still the matter of an uneven playing field. China, as you know, forced its money down 40% more than a decade ago. That let them attract companies like Wal-Mart, which I seem to recall now buys 10% of China’s exports. They have set their prices below the cost of production, in violation of agreements. What’s more, in an age of open borders and zero tariffs, they have slapped 100% tariffs on auto parts imported from America, forcing U.S. companies to make parts in China in order to build cars there. That fascinates me. A year ago the Chinese government griped about the 33% defect rate at Chinese plants making car parts, so speaking for myself I am not going to be heading to any showroom next year to see the new cars being made in China. The Chinese factory losses are being made up by funds coming in from the U.S. I am not hopeful about that flood of money to China being sopped or slowed, now that a leading Wall Street investment banker who is a passionate friend and promoter of China is the new N.S. Treasury Secretary.
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But there are plenty of other places in the world where nations are working to get that playing field brought down to flat level. Europe is one such place, and American exports to Europe are running very strong. (Imports from Europe are slacking off because their prices are much higher now, in dollars. But the real success story has to do with our northern neighbor, Canada - which is one of our biggest trading partners. A generation ago, the American and Canadian dollars traded t about even par, stimulating a large cross-border trade going both ways. But then the Canadian money plunged in value. Four years ago the Canadian dollar hit a record low of 61.8 cents American. But the Canadian dollar has now snapped back to almost 90 cents American, close enough to allow well-run, efficient U.S. operations to sell in Canada at a profit. And that is exactly what many of them are now doing. Canada sells America a great deal of energy, including oil, gas and electricity. That gives them plenty of dollars to spend here. Some of that money is now going for U.S. manufactured goods. And a chunk of the rest is buying farm products, such as chickens – which can be raised and processed in America and shipped across the border at lower prices than Canadian producers now charge. This kind of two-way trade, between the U.S.A. and Europe, for example, opens the door for resurgence in American economic strength. There are growing indications the high price of gasoline and heating oil is causing Americans to pull back on some of their trips to the shopping mall. The big loser if this proves to be the case will be Red China, which has made the mall its primary target with exports. China makes a lot of its toys in prison factories, staffed by political prisoners – meaning they have no labor cost. Their profit on toys is invested directly into the Chinese military, which is trying to get strong enough to stand up to both America and to the increasingly powerful Navy of our strongest Asian ally, Japan.