The again, Leed standards apply more to "traditional" construction methods, so some of those more kinky eco-dwellings in the woods made entirely of dirt and scrapped wood probably wouldn't qualify.

Still, these types of communities are giant leaps forward.  Way to go Oregon!

Pringle Creek's Porous Pavement

Ped Shed Blog

Just for starters they are NEW homes instead of remodels meaning that there was a resource waste right there. Renovating and upgrading a block of existing homes uses existing infrastructure, roads, sidewalks, sewers and power lines without creating new infrastructure on former farmland or woodland habitat.  To offset this they did remodel several of the existing structures on site and trying to preserve trees. A "C" on this factor.

Next, they maintained the hideous practice of naming a development after what they destroyed or in this case the dead defenders of the environment.(who can't protest) The names "Goodall Lane," "John Muir Circle," "Coustau Loop" and "Audubon Park" are reminiscent of cities renaming a boulevard through the slums after Martin Luther King Jr.  This faux cutesyness is irresistible I know as the eco-project I was involved with is now "Wild Oak Lane." (bulldozed walnut orchard)

Housing mix is an interesting factor. It's just a fact that the most energy and material efficient shape to make a building in is a cube. It's irrefutable physics as that provides maximum space for the minimum surface area. A sphere or hemisphere is actually better but materials waste, leaks, and livability issues have plagued  geodesic dome builders. Given that I was surprised to see a rectangular slot house and a collection of dormers, extensions and porches used as examples of green building. Architects and builders love complexity in buildings because it drives up building costs (waste) and therefore, fees. Don't ask me how I know this. On the plus side there are a good chunk of attached homes, duplexes, triplexes and row houses on the plan. As modern suburban builders hate these with a passion I would give the organizers a B- on this factor.

Heating and cooling is a curiously vague notion in this plan. The promotional materials say that heating "can be geothermal" Can be? If I'm not wrong Salem houses would require heating for most of the year. A massive savings on geothermal heating and cooling could be available to the future owners of this project if a local geothermal heating district were established. Simply by trenching and laying down large diameter pipe at the same time the sewerage and water lines were laid up to 50% of the cost of individual well drilling could be made. Looped through the development and connected to a dedicated bank of solar thermal panels each house could have access to warmed water as a feed in to heat pumps and hot water superheaters. Systems like this are used in European (them again) apartment blocks as well as college campuses and office parks and offer significant energy and cost savings. All the Leed Certification and Forest Stewardship Council paper in the world can't get a house to a net-zero energy profile if it still has a gas water heater and furnace.

Price is the really nasty kicker though. At a mere $432K US per 2.5 people for "green housing" that puts the global price of saving the climate into the range where opiate induced malaise looks like a far more reasonable and cheaper option. With the median household income in Oregon at $46,349 that's just a bit beyond the budget of most people. In fact it would take the annual income of about 3 Oregon households to afford that one house. How is that supposed to work?

So as long as we think that defeating climate change means building new developments in the suburbs where cob and straw bale houses are discouraged and career paths preclude the option of owner/builder housing we're hosed. We can't win. Any skeptic just has to point out the monthly cost of this very nice project and compare it to the average voters budget.

The project will be a very nice little fantasyland for the local college professor and degreed professional crowd where all the kids will go to Montessori and all the mommies will do yoga at the community center. As a real solution or plausible example for the rest of us it sucks.


Put the Carbon Back

I agree, Pangolin, that cost is definitely an issue: with this kind of promotional material batting for it the green building movement hardly needs enemies. But also did you notice that the lot layout doesn't seem to facilitate simple passive solar design - the predominantly E-W narrow lots (presumably row house lots, it's hard to get a sense of the scale, actually would seem to make anything approaching optimal solar orientation impossible? To facilitate good solar access the row house lots would need to be rotated 90°. The 'cottage #1' model home is clearly passive solar, but how many of the lots shown here could it actually be built on? Perhaps I'm missing something here, perhaps someone familiar with the development could help us understand what's going on.

On the plus side it does seem to be a somewhat brownfield site with some adaptive re-use in its development plan. However it appears to suffer from the classic and all-too-common 'green island syndrome' - putting a ring around a small group of houses and calling it a community does not actually a sustainable community make. It fails to show any meaningful integration with the larger community of Salem and its hinterland on which it will always be umbilically dependent. As such it illustrates the crucial difference between being 'green' and being sustainable.

The true meaning of life is to plant trees, under whose shade you do not expect to sit.

Kwh from solar, total kwh used, total kwh equivalent storage in home heating/cooling loads, total savings from geo heat exchange/heat pump heating and circulation cooling, total solar heat captured for domestic water heating and supplementary home heating.

Total enery costs and savings, payback period for the solar aspects, value of comparable normally built homes in the area, energy costs for those local homes.

The use of geo heat exchange heating/cooling (mis named geothermal, just as in ads here by a local heating contractor) is very encouraging though.  It is really taking off under the radar.  Politicians who have it, like duuhbya, don't even seem to understand why it should be incentivized.

Are all politicians technically illiterate?  It seems so.  Except maybe Gore?  It will be interesting to read his solutions book.  we'll see if he gets it right.

Unfortunenately Romm is heading in the wrong direction lately, touting cellulosic ethanol. The guy who exposed hydrogen fantasies at Gore's recent secret seminar to inform the book?  I think that was it.

http://amazngdrx.blogharbor.com/blog

Salem's Historic Amtrak Station is located on 13th Street SE, only 3 miles from Pringle Creek Community. Daily train service to/from Eugene, Portland and Seattle.

Bus looks good:

Cherriots is Salem-Keizer's bus transit system.
Pringle Creek Community is within walking distance of bus stops.

There are some bike paths, it's hard to tell from the maps if it's near the development.

It's quite sad, because, as others have already noted, they have made some seriously bad decisions that mean it will always be the hybrid super-SUV trophy wife of faux green developments -- way overpriced and way too consumptive of energy and materials, appealing mainly to the ego.

On the "near transit" thing, if you investigate the Salem transit system website, it shows that there is no service on Sundays and very long headways the other days.  Oh -- and you are not allowed to build without a driveway or garage ... gotta design a "sustainable" development around the auto!  

Bottom line is that the project was spec'd during the peak of the housing bubble, and its economics are likely way upside down except for people moving to Salem from collapsing markets elsewhere (CA).  The other large development that was to be put on the site, which is not financially connected to Pringle Creek, has already suffered a developer bankruptcy and so is in limbo.

The Pringle Creek developers appear to have made no attempt to get the kinds of variances needed to actually build something like a sustainable new construction project.  Instead, they simply built the greenest possible thing that challenged none of the deeply un-green paradigms.

It also had the bad luck to arrive right as the real estate meltdown did.  Thus, the project will probably always serve the sprawl lobby as an (unfair) example of what happens if you even mildly deviate from the McMansion development model.

The 5% Project

Saudi Arabia of coal, the coal corporations are pouring the coal out of here and raking in gobs of money.

Oh! by green you do not mean greed back dollars?

OPPS, My Bad...

Don't guess we will win the green ribbon for a while!

The eons of time and nature was good to us down here. It was not until we become civilized that destroying our habitat become fathomable or fashionable.

but i think your last point is your weakest.  price?   it's too high?

what a crock of s"it.  if you accept that the 100 or so houses are going to be lived in by people who were going to buy houses ANYWAY (very likely, no?) then the price is just a way to show there is a market for such housing.  and guess what?  if people step up and buy these, it will mean it's worth it to do them on a larger scale, thus driving price down.

this is how the world works.

this is the reason i paid an exorbitant amount for a PHEV.  i would have spent the money on a new car either way, so why not spend it on a car that gets 250 miles a gallon rather than 15?  is it somehow better to not try to create a new market for products that are more environmentally sound?

i just don't get this line of reasoning.  if you are wealthy you don't count, i guess.  weird.

"The world as we know it" is a sick and dieing beast. Doesn't Oregon have a brand spanking new dead zone in what used to be one of the worlds greatest fisheries? Haven't the salmon refused to come back up and down the west coast this winter? Doesn't climate change threaten to eliminate large masses of the human race or is the sudden run up in grain prices just cheerleading?

Ultimately you having a PHEV and a net-zero house doesn't mean jack if the people in the bottom four-fifths of the worlds incomes have to burn coal for heating and cooking fuel. You're just branding yourself. Just look at our pResident's Crawford ranch house which has geo-exchange HVAC, rainwater collection and filtering, a greywater system, solar panels and a massive diesel generator. Yet his support of even revenue-neutral means of spreading these systems to the masses is non-existent. His house has them because it makes the place a better bunker.

Price matters because at some level price is reflective of energy inputs. If these houses require excess energy inputs from the larger system the whole point of making them "green" is moot. If ecology is just going to be a status symbol for rich white people you might as well have that conversation with your kids about their bleak future in the ecological ruins of the world.

Like porn the average jane or joe will never, ever, ever get what we see on the screen. We aren't going to get the pretty neighborhood, the net-zero anything, the solar panels or the geo-exchange heating system. If it takes the average income of five working Oregonians to buy one of these "green" just becomes a plaything and "sustainable" is a cruel joke.

Until we recognize that we have to improve the ecological footprint of everybody who burns, coal, oil, or natural gas (even by proxy) we are wasting our time. Until the guy torching the rainforest has another way to keep from starving he doesn't care what you think. Give joe sixpack a way to heat his house cheaper than cooking off GHG's and he'll gladly do it. He isn't going to freeze in the dark to keep you happy.  

Put the Carbon Back

Nice switcheroo...

i'm buying 2000 sq ft of solar panels for my house.  this has several effects.  the minor ones:  it cuts my energy use.  i agree with you that this is minor for the reasons you enumerated above.  however, lots of people having solar power brings down the construction costs, creates expertise and becomes proof-of-concept for adding it on to lower-income housing and mass structures.  is there any of that that seems wrong?  and as for cutting down rainforests--if we don't create new paradigms (whether from the "top" "down" or the "bottom" "up"--i use those terms extremely narrowly) here in the first world, aka the consumption world, why would anything change in the second, or third, material supplying world?

The same will apply to greening buildings.  Who's going to be able to afford $20,000 or so up front? In any case, you're changing the house or building, so it should be part of a mortgage financing anyway -- but if we make the social decision that renewable energy is of priority importance, then we might as well just take money out of wasteful sinks like the Pentagon and give people the money to do it.

The problem is that the financial system doesn't acknowledge that profitable energy flows lead to profitable cash flows on the retail level. The people most unable to take advantage of green energy upgrades are the people who need them the most: renters.

Simply by financing these projects through utility bills independent of the building owner green retrofits could be self funding. Cash-strapped  homeowners could get solar panels knowing that their power bills will drop and remain steady. Landlords could upgrade aging and maintenance plagued HVAC units at zero cash outlay. The utility could connect all of the installed solar panels and geo-exchange HVAC systems into a wireless network and get retail load management.

Most importantly due to the fact that rental housing has the most inefficient heating and cooling systems as a class overall load reduction would reduce pollution the most and reduce the need for new, centralized, generation.

Reduced need for imported fuels helps local economies even if 100% of the savings goes to labor costs. Local labor can prop up the sagging housing market if incomes are stable and spend money in local stores.

Two simple rules changes could do this. Create a utility customer credit union that taps the Feds discount window for energy upgrade loans and give them a small reward for oversight and quality control goals met. Secondly require utilities to refuse to transfer 10% of their service hookups until the building passes a Leed-type certification or purchases a waiver that pays for low-income upgrades.

The loans become a cost transparent part of the utility bill and the customer gets increasing savings over the life of the system. The utility takes a small cut and the simplified billing reduces loan overhead keeping interest rates low. Communities and states profit because money stays at home and pays labor rather than transferring to fossil fuel corporations.

The only losers would be coal and gas companies and screw them anyway; they sell poison.

The current system rewards the most efficient buildings for marginal improvements and locks out the least efficient units from making any improvements whatever (rentals). It's perverse economics where the most money chases the least GHG reductions. Do it the other way and you catch the low-hanging fruit cheaply.

Put the Carbon Back

The biggest emissions threats come from countries in the tropics, where deforestation contributes 20% of global emissions.

They come from a country like China and India, where new coal plants are being built each day.

The best thing we can do is to isolate our own homes, buy some biomass or other renewable electricity, and leave it at that. The rest of our money should be spent on helping China, India and the countries of the South reduce emissions.

It's quite cheap to slow deforestation, through systems like biochar or REDD, and that's where our money should go.

The big flashy green homes are unreachable for most people and a waste of money. (Of course, if a Hollywood moviestar wants to buy such a home, good for him or her).

But saving a rainforest is much more buck for the money.

It was because the Standard Oil and the robber barons produced a product so cheap and plentiful huge profits could be made on the mass of scale or volume principle.

With the help of the auto industry bought out trolley systems and helped kill mass transit in large urban areas, did everything possible inside and outside the law to promote, create markets for and sell the product.

The pain at the pump and the utility bill will find its sweet spot of maximum tolerated pain and whoever comes up with the cheapest, mass produced
available product will reap the rewards.

Don't depend on the government for inovative idea's that will make oil as antiquated a fuel source as Whale oil. Unless you can find a solar, hydrogen, geothermal, hydro, battery lobby tht is as powerful as the oil or insurance lobby.

An inovative capitalist will develop the technology and then outsource it to China where it can be built and sold at WalMart with volume of scale in mind.

You can only hope it will be green technology, you can't sell air at this time. Then again 40 years ago I never thought you could make a profit off of water. Until they figure out how to charge for sunshine you won't see much movement in solar. There is no long term profit to be made from a solar panel after you make the initial sale. Its not like an oil furnace you have to keep paying to fill the tank for.

The technology is already there for solar panels made in China at a price within the range of the lower middle classes and the battery technology is such that most homes in the country could come off the grid. Thing is there is not a dime profit to be made off the fuel source after you make the initial sell.

Some will come on here and tell me battery technology is not at this time available to make this practical, especially batteries for automobiles. I have watched 20 ton machines down here in the mine industry haul loads for 8 hours without a charge on lead acid. Most large metering stations the natural gas companies use in this area are solar, have to be, the metering stations are most times to far from the grid for any other power source. Some I know of have been sitting there producing for years, no maintenance.

The only drawback to new technology is the source of capital will probably have to come from the energy companies. They are the only ones with the venture capital for R&D and production. They are placing themselves in the unique position again of owning the means of production and distribution of whatever energy technology makes them the most profit. Not necessarily the cleanest, not necessarily the greenest.

The Saudi's did not know what oil was until we went over and developed the industry. Once opec prices itself off the market and the energy corporations have made the last easy dollar or euro off oil they will use there huge bloated finiancial resources to dominate the next new thing. I have no fear an alternative energy source or sources will come on the scene. It is just my hope it will be a green energy or combination of green technologies.

The eons of time and nature was good to us down here. It was not until we become civilized that destroying our habitat become fathomable or fashionable.

And when China makes all of the solar panels, what are we going to exchange for them when the dollar tanks?  

http://www.alibaba.com/countrysearch/CN-suppliers/Solar_P ...

http://www.globalsources.com/manufacturers/Solar-Panel.ht ...

http://www.china-solarpower.com/

http://www.npr.org/templates/story/story.php?storyId=1735 ...

(notice that the last link is to American source, that's for those who are paranoid about anything Chinese (not Jon!)).

    Americans in general need to learn more about what is going on in the world.  Alas, neither the MSM or alternatives do much of a job of covering world events except for disasters.  Sigh...

patrick in Beijing

Now if China would stop shipping so much of their industrial output to the US, and instead reoriented that production power to making renewable energy and rail...well, maybe the rest of the world would wake up (after all, the rest of the world used to imitate the Middle Kingdom, no?)

http://www.pacificepoch.com/blog/25085_0_23_0_C/

http://www.hindu.com/2007/02/26/stories/2007022603281100. ...

http://www.railway-technology.com/contractors/suburban/al ...

http://www.infrasite.net/news/news_article.php?ID_nieuwsb ...

http://www.globalsecurity.org/military/world/china/infras ...

http://www.osisa.org/node/10877

and a little on subways

http://www.wh-china.com/whxw/200802/t574918.htm

current Beijing

http://www.urbanrail.net/as/beij/beijing.htm

and the future

http://en.beijingology.com/index.php?title=Beijing_Subway ...

http://www.chinadaily.com.cn/china/2008-01/16/content_639 ...

elsewhere (a small sample)

http://www.exploreshanghai.com/metro/

http://www.urbanrail.net/as/guan/guangzhou.htm

Maybe I'll do renewable energy some other time, but it isn't that hard to find!!!

Remember that China is still a developing country, with a per capita income about 1/33rd that of the US.  (It may be slightly higher now, due in part to the collapse of the dollar).

That means it has less money.  The money it gets to build things comes from selling things to other countries (though it also buys).  If it could only sell things internally, it would be poorer still.  This is true for all developing countries, and is why they want access to where the money is, the developed countries.

Blaming any of them for selling Americans what they want is like blaming Columbians and Afghans for America's drug appetites.

Want to buy solar panels and windmills?  Subway systems?  Environmentally friendly products?  Just ask!!!

patrick in Beijing

Now, I realize that a significant amount of the goods coming to America are inter-company transfers -- but I don't think those are that massive, the US presence is much smaller than the Japanese, for instance.  But Walmart, for instance, buys from Chinese contractors.

OK, if we look at what is actually going on with real things, like solar panels, and rail (by the way, thanks for the links, the comment will definitely go in my rail bookmarks) -- if we look at the movement of real goods, those solar panels that are going to the US could instead go somewhere in China.  So what would the sellers get instead of dollars?  Well, they'd get Chinese currency, in other words, looking at what transpires in terms of real goods, they would get other goods from Chinese factories.  Which is perfectly possible, because China is producing plenty of goods for which to exchange the other goods that are being made, all within China.

In other words, at this point China has a huge internal market, which is why American and other companies want to be in China.  And the internal market is there because of the manufacturing.  

When the US currency tanks to the point where the Chinese have to change their exchange rate to 4 to the dollar instead of 8, there will be some readjustments, which the Chinese elites are definitely not looking forward to, but the end result will probably be better for the Chinese economy -- because like the US economy in its heyday, most economic activity will not be global, it will be internal.  And that will be a good thing.

      It's not THAT simple!  First of all, China doesn't have a huge internal market.  Around ten percent of their people would count at middle class in the West, the rest are still far far behind.  They  don't have money to buy solar or wind anything.  They need money to buy food and health care and clothing, stuff like that first.

      They just don't have the Chinese currency.  You can't just print it up to order.  The internal market is very lopsided, and where it is big, it is big because of capital inflows.  No capital inflow, no big market.  

      If eliminating poverty was as simple as you describe, the entire developing world would have done it already!!  Sorry, it doesn't work like that.

      When was this "internal" heyday of the US economy?  The US built it's economy on the slave rum tobacco international trade.  And throughout American history has aggressively sought raw materials from abroad.  

      The difference now, is that instead of only buying raw materials from abroad, there is more balance, the rest of the world gets to sell some manufactured goods to the US which can help raise their standards of living.

      Sorry, the idea of living locally still strikes me as rooted in unreality.

patrick in Beijing
     

So, Patrick, let's assume that up to a certain point in time, it was to China's advantage to have huge trade surpluses with the U.S.  The question is, did they pass the breakeven point already, or is the breakeven point still in the future?  It all depends on the worth of the dollars they are getting.

Developing from internal demand has a long and positive record.  Up until maybe the 1980s the exports plus imports only accounted for about 5% of the US economy; off the top of my head I'd say it's closer to 20% now.  I'm not saying China should shoot for that, but when a national economy is also fundamentally a continental one, trade is not as important (as far as the US always needing trade, that is possible, but the sources of its industrial strength were internal.  Perhaps the main point of the Civil War was to make sure that an industrial, as opposed to plantation, style of economy dominated).

Now export-oriented development also has a long and positive history.  The problem is not that China is exporting, the problem is that it's exporting to the US.  Logically, if a nation's future economic health is determined by it's manufacturing sector, and the Chinese manufacturing imports into the US are helping along the decline of the US manufacturing sector; and China in the future would benefit from a healthy US economy, which would have to be based on a healthy manufacturing sector, then China may be hurting itself in the long-run if it's hurting the US manufacturing sector.  The big qualification for this is: if the US is determined to destroy its manufacturing sector anyway, then everybody might as well join the party until the carcass is picked clean anyway.  But it would be nice if the US wasn't that stupid -- I'm not holding my breath.

The other problem is that the goods that China is shipping to the US could be more beneficially used inside China if china is not getting much back in return except for fast depreciating dollars anyway.  And there are still 5-year plans in China, it's not like the central government could not direct goods where it wants to -- it still retains great control over the economy where it wants to.

At some point, a "tipping point" (I don't really like that word outside of it's original use, but ok), will be reached, sort of like a star that has enough mass to self-ignite, and China will be pretty much self-reliant, at least industrially (I'm ignoring environmental problems here).  I don't know if it's hit that point yet, but, for china's sake, it should do it before the US acts like a red star (no pun intended) and implodes.

As a Minneapolis real estate agent, I am interested in green building techniques.  I wrote a post one that seems rather far-fetched, but is common in most of the world:

http://realestatetwincities.net/what-is-cob/

Please share this post with your readers in any way that you can. Do you think there is any way anything like this could catch on?

        First, we need to consider trade surpluses.  Basically, a trade surplus (or deficit) is the difference between a currency value (dollar at this point) of sales and purchases between two countries.

        China having a trade surplus doesn't mean the government gets to keep all of that money.  A lot of it belongs to private companies (stored in local, then national, then eventually the central bank).  The bank can invest some of that money (though not all of it).  In doing so,  it must pay attention to issues like liquidity, and return on investment.  (Since this is other people's money, it really shouldn't manage it in a risky fashion.)

        (BTW, I know that American banks have paid no attention to any of this in recent years, but hey, look at what's happening now).

        In any case, all of this money doesn't belong to China to do with as it sees fit.  A certain amount belongs to foreign companies (and not only American!!), and more and more to local companies and private citizens.

        So, the idea that China has its pockets full of money to play with is misleading.  It just isn't true.  

        (Really, the American MSM is so poor at talking about the world, if there were such as thing as libel, they would all be out of business!!)

        So, the tipping point you are talking about doesn't have a real meaning.

        You state that "Up until maybe the 1980s the exports plus imports only accounted for about 5% of the US economy; off the top of my head I'd say it's closer to 20% now."   This number (off the top of my head) sounds suspect.  How are you calculating it?

       The US from the beginning of the modern era (WWII) onward was heavily involved in foreign trade both as an importer of raw materials and an exporter.

       The decision to manufacture goods in China is not made by the Chinese government most of the time, it is made by the companies doing the manufacturing.  US companies moved those jobs, not the Chinese government.

       Seriously now, if China said "hey we don't want those manufacturing jobs", do  you think that the US companies would go back to America?  Hell, no, Vietnam, India and elsewhere, next stop!!

       You misunderstand the nature of the Chinese government, and it's five year plan.  If you have time, you should study it more.  It's not the simple matter you described.  Much of the economy is market based (which is what the US among others , demanded, so it is a little late to complain).

       The idea of local manufacturing is pretty much meaningless (unless you happen to be sitting on a pile of ore of various kinds along with energy sources to process it).  At this point, where would you get the land, resources, labor force and capital to make the changeover?

       If the US wants to manufacture, it should manufacture what the world wants to buy from it.  Airplanes are an example.  Hey, wait!!!!  The world, including China does buy airplanes.

       How about super computers!!!  Oh, darn, those can't be sold to most countries.

       China still has a huge, largely poor (though not starving) agricultural workforce.  It needs to grow quite a bit to lift them all up to a comfortable life.  And so does India, and Bangladesh and other developing countries.

       As to whether trade benefits developing countries, I assure you that if the day ever comes when they think it doesn't, they'll stop.  (Unless like the poor Iraqis, their resources are stolen at gunpoint).

       Jon, note that the countries without much trade are among the poorest in the world.  

       Americans can insist that American companies meet or exceed environmental and labor standards in developing countries (or match American standards when they locate in developing countries (unless they are weaker)).

       That would be useful.

patrick in Beijing

It shows GDP, imports, and exports, all in current dollars.  Basically, my "top of the head" cut the figures in half:  if you combine imports + exports as a percentage of GDP, it went from 10% in 1960 to 37% in 2006 -- in 1983 it crossed over to permanent negative (the runup of interest rates led to a super"strong" dollar that permanently killed a good chunk of our exporting industries).  Look for yourself...it's fun!

You may have thought that, because of the expansion of the US empire in the post-war period, that we were acting like Britain, pulling in huge amounts of raw materials and exhaling huge amounts of manufactured goods (something Ricardo thought was the natural order of things, thus his theory of comparative advantage, but that's another story).

What happened, actually, was that corporate America established itself all around the world, thus the multinational corporation, but the US was mostly busy playing imperial cop, not British imperialist.

Anyway, let me try to make my points clearer.  I'm worried about two things:

First, that China is getting ripped off by sending its manufactured goods to the US, for which it receives deteriorating dollars.  So China puts in labor and resources and gets lots of pollution, the US gets to use the goods.  That seems imperial, frankly; and as you point out, much of it is not controlled by China, but by foreign firms.  

There's a very easy way to fix this: let the Chinese currency float on world markets. But this is exactly what the Chinese government has been resisting, feeling that to do so would knock a lot of people out of work.  But I think this will happen eventually anyway -- there should at least be some planning for this eventuality.

Concern number 2: The US manufacturing base is shrinking.  There are many reasons for this: maybe first is the military-industrial complex, which has sapped the competence right out of the manufacturing sector (for more on this you can look at some of the work of my mentor, the late Professor Seymour Melman).

Related to this is the continuing incompetence of the managerial class in the US, which has become better at financial machinations than manufacturing.  More and more, financial executives are controlling manufacturing companies.  Partly because of this, when thinking about competing, they think more about lowering wages, than about improving production techniques.  This led to:

Outsourcing (runaway shops), partly because the managers are incompetent, but also because management wanted to destroy the unions.  And then, finally, because of the cheap labor in the developing world.

So China is only part of the puzzle, and every time I mention the idea that the US should do its own manufacturing it seems to push a button that says "anti-trade".  I am not advocating anti-trade policies -- the most important trade policy with respect to China is simply to make the Chinese currency float -- but it is to everybody's benefit, including the Chinese, if the US is a wealthy trading partner, and it can only do that if it manufactures.

I think that trade is vital within a region, because manufacturing production systems are continental or subcontinental in size, usually greater than a single country.  Outside of a region, it becomes more complicated.  Now, the US did provide a market for Korea and Japan which was helpful, and the developed countries should certainly provide markets to poor countries to help them up.  But the imbalance going on with the US and China is way beyond that, probably at this point to the detriment of both.

   Jon,

        I had not looked at the trade part of your spreadsheet.  But by now, you should know I always want the details.  (Especially with statistics!!).  One of the problems with trade statistics is what is included and excluded.  I have been wrestling with the Statistical Abstract of the US lately, suffering mightily.  

       Does trade include only manufactured objects, or services as well?  If an American company makes it in Europe, and gets the profit (which then accrues to its shareholders and employees in the United States), where does that money go on the balance sheet.

       If I seem picky (I am!!), it is because in another lifetime I worked inside large corporations writing computer systems that had to clearly allocate such numbers.  (For instance, one company sold something at a profit to a wholly owned subsidiary which then did some work to it and sold it back (at a profit) to the company, which then did some more work and sold it to the public at a profit).  (The company was the only customer the wholly owned subsidiary had.)  How to account for the costs/profits and expenses.  Not so clear always.

      For instance, some goods are manufactured in China, then sold to companies in Hong Kong which sell them to the US.  Is this part of the China/US trade?  How about if they are sold to companies in Singapore?  Some goods are largely manufactured in Korea or Japan, sent to China for finishing (a relatively small part of the process), then sold to the US.  Which trade balance?  If a Chinese company (under contract) pays $90 to a Korean company for an item, finishes it, then sells it to the US for $100, it reflects $100 against the Chinese balance, and nothing against Korea.

      You may say this doesn't happen, but companies spend lots of money to make this and other things happen.  (Ask me about textiles sometime!!!).

      So, trade is not as simple as it seems sometimes.  Merely looking at gross trade figures isn't very useful (especially since in the US, goods get shipped back and forth across the Canadian and Mexican border in mind numbing volumes!).

      But let's move on to currency.

      Certainly it would benefit America if China let it's currency float free.  It would wipe out a lot of the value of reserves that China is holding.  (Personal disclaimer, since the vast majority of my income is Chinese, it would benefit me personally.  It might even raise my income level up to around 80% of poverty in the US!!!)

      But how would it benefit China to do so quickly?  The job loss and disruption would be enormous.  Of course, Americans don't really care about that, but you might understand that the Chinese do.

      The cash buying rate at the bank of China is 7.03 as of today (down from 8 not long ago, and down from 7.5 just a couple of months ago).  This is quite a change!!!

      The government is floating it's currency, but slowly and with controls to help it absorb the effects of the changes.  This of course is frustrating to currency speculators, but why should the government care about them?

      So far, the government seems to be doing a good job of managing the change (though inflation is showing some worrisome signs here) to the best needs of its people.  The American government does the same.

      Why would anyone expect anything different?

patrick in Beijing

This way of handling trade statistics is as it should be, because what we're talking about it GDP, as in Gross Domestic Product, not Gross National Product, or GNP, which is how they more commonly measured national output when we were growing up.  In GNP accounting, we'd have to keep track of what country owned the company doing the business, which would be very messy, as you saw.  So we're stuck with the figures we have, although the US still seems to have the best statistics, even after 7 years of bush.

Now, probably because of the globalization that has been going on for decades now, the UN and everybody agreed to use GDP as the basic accounting structure (isn't national accounting fun?).  This is much more straightforward, because otherwise you'd have to keep track of who did what all along the trade sequence, which is much more difficult than noting it down at ports,etc.

The US occasionally tries to figure out how much of our trade is intracompany transfers, and they put out reports on it, but it still is pretty murky to me.  But another important part of doing it GDP-wise, in my opinion, is that you at least get some idea of how the currencies should be, relative to each other (by the way, Jane Jacobs thought there should be many currencies, that something like the Euro was a mistake, but I guess that's another issue).  In other words, you get an idea, as in the American case, if there's a serious imbalance going on.

So, that leads to the currency issue.  Sorry I was not following the slow ascent of the yuan, it sounds like they may indeed be carefully planning this out, which sounds smart to me.

By the way, I've spent a fair amount of time digging through the statistical abstract -- although there is a lot there, I haven't gone through all of it -- so if you want to ask about something off-line, please feel free.

     Thanks for the offer.  I can generally understand it, but alas, am generally skeptical.

     In one of my other lives I spent years pointing out problems with the calculation of affordable housing to planning officials in the pseudo-liberal city of San Francisco.  Median income was derived by combining San Francisco with San Mateo and Marin.  (Marin is one of the wealthiest counties in the United States, San Mateo is considerably wealthier than San Francisco on the whole).  First we pointed out that this "inclusion" created an artificially high income level.  Then we would note that students, retired people, unemployed people, people working part time, military, and people who would be considered unemployed (except we stop counting them when they are so discouraged they give up, we just ignore them).

    All of these things raised the average (and median) incomes to artificially high levels.  So, if you really wanted to build "affordable" housing, you needed to lower the definition.

    Ah, but they replied, the federal government has agreed that this is a good way to calculate income levels.  Case closed.

    So, just because people have agreed to use THEIR definition of GDP as valid, doesn't mean that it is, nor that we should not examine it critically.

    After all, the same folks brought us trickle down and the continuing absurdities of the current US growing wealth gap.

http://www.nytimes.com/2008/03/02/business/02jobs.html

    (BTW, one of my concerns in all the talk about the greening of the economy is who is going to get the jobs, will affirmative action clauses be included in any programs?  I see no evidence that they will (nor much concern about such issues on the part of many MSE (main stream environmentalists), and it is very troubling.)

patrick in Beijing

As for green jobs, one positive aspect is that Van Jones, an important African-American leader, has been in the forefront of "green collar" efforts, and has pushed the legislation to emphasize training lower income people.

   Van Jones is a great guy.  He is brilliant, a great speaker and a hell of an organizer.  But he is still just one guy.

   It needs ALL of US to push for jobs and job training for low income people and especially for people of color, especially Black folk.  The Times had an article on the economy the other day pointing out the problems folks are having finding jobs right now.

   In fairness, I should say that I think that most people involved statistics are honorable and doing their best, but inexact numbers are an inexact science.

patrick in Beijing