Why China beats the U.S.A bit of local history. Fieldale, located outside Martinsville:
We know China is already our principal banker, to the tune of nearly $1 trillion. As Mr. Obama's record spending and borrowing continues -- he'll be the greatest bond salesman in American history -- our financial reliance on China grows daily. But that's not all.
China also surpassed the United States as the world's biggest automaker in the first half of this year, with June sales soaring 36.5 percent from a year earlier. The Chinese registered 6.1 million car sales for the first half of the year. That way outpaced American sales, which were just 4.8 million.
Also, China has no capital-gains tax. It only has a 15 percent to 20 percent corporate tax. The United States, on the other hand, is raising its cap-gains tax rate to 20 percent.¹ It's also increasing its top personal tax rates.
In fact, the scheduled income-tax increase along with a much-discussed 4 percent health care surtax will balloon the top U.S. tax rate all the way to 51 percent. And there's more. To finance so-called health care reform, congressional Democrats are talking about raising the tax rate on capital gains and dividends by another 1.5 percent while installing a value-added tax (VAT) that would begin at 1.5 percent.
So top tax rates in the United States may edge into the mid-50 percent range.
Here's the clincher: Year-to-date, Dow Jones stocks are off 8 percent, while China's stocks are up 71 percent. The world index is up 4 percent. Emerging markets are up 25 percent. They're all beating us. None of this is good. [link]
"In 1916-1917, Marshall Field & Company of Chicago, Illinois, purchased 1,841 isolated acres in central Henry County, Virginia to build a company mill town to produce quality towels for the Marshall Field’s Department store. The area was strategically located along the Smith River between the Danville & Western and the Norfolk & Western Railroad lines. The company town flourished with the 245,000 square foot Fieldcrest Mills, approximately 300 workers’ houses, a business section that contained a grocery store, movie theater, post office and bank, two schools, a community center, churches, roads, and the first electricity in the region."²
"The Fieldale Mills have consistently been said to 'produce enough towels to wipe the face of the earth.'"³
In the last five years, the U.S. textile industry has lost 210,000 jobs.
Before that, Fieldale lost its heart and soul in 2003:
Pillowtex Files Chapter 11 Bankruptcy Petition
At its peak Fieldale had as many as 1,500 local residents working in its Pillowtex factory, the last of its textile mills. When it closed its doors forever, nearly 1,000 Virginians were thrown out of work, and Fieldale was effectively out of the textiles business.
But the name lives on. Being sold over the counter today by a retailer near you, quality dish towels at low discount prices:
Fieldale, the name associated with the mills that produced "enough towels to wipe the face of the earth" thrives.
This was no accident. As Kudlow lays it all out above, we allowed it to happen. It happened.
We now rue our efforts.
May God have mercy.
1 Note: While the Chinese corporate tax rate is between 15 and 20%, the U.S. corporate tax rate is 40%.
2 From National Historic Register of Historic Places registration form
3 From "David Lindsay."
* It is unclear whether today's Fieldale Mills is associated in any way with the former Fieldcrest Mills of Fieldale, Virginia.