Does the Iphone add to the trade deficit?

Apple's blockbuster Iphone is made in China. Last year Apple imported $1.9 billion worth of Iphones from China. Making the US-China trade deficit worse by $1.9 billion.
But, the Chinese merely assembly the I-phones. They have to import all the parts. Of the $178.96 wholesale cost of the Iphone, China only gets 3.5% or $6.50 a phone. 6% of the cost comes from US made parts, nearly twice the value add of China. The big hitters are Japan (34%) Germany (17%) and South Korea (13%)
But the Commerce Dept just credits the full price of the Iphones to China, since that's where they come from. Nobody has the time or expertise to do a manufacturing cost breakdown of every imported manufactured product.
From a standpoint of computing the US trade deficit it probably doesn't matter. Whether you charge the Iphones all to China, of split it up by national content, it's still an import. To us, it doesn't matter all that much who the trade deficit is with, it matters that we have such a deficit.
To the Chinese it matters a good deal. The Americans are pressuring China to revalue their currency upward to reduce their trade deficit. If the Iphone costs were partly laid upon Japan, Germany and South Korea, it would help the Chinese resist American pressure.
The most interesting thing is the narrow slice of value add given to China. For that little work, I'm surprised Apple makes them in China. Better to make them at home, under Apple Corp control. It's easier to keep the quality up in your own factory. And, you keep your technology to yourself, rather than sharing it with a potential competitor.

Republicans, the party of the working man

I did a lot of door to door campaigning as a Republican candidate this fall. It got so I could make a pretty good guess about the political sentiments just by looking at the house as I walked up to knock on the door.
Manicured green lawn, a BWM or Prius in the driveway, carefully maintained house, figure a Democrat. Shaggy lawn, with a few weeds and some kids toys, a pickup truck, some do-it-yourself home repairs in progress, figure a Republican.
I did better in Bethlehem, which has a lot of residents who work for a living, than I did in Franconia, which has a lot of wealthy retired folk.

Winter's back

I got 8 inches of new snow on the porch, and it's still floating down. It's 18 degrees F (seasonable) and the sun is trying to break thru the clouds.

Tom Clancy, Dead or Alive

Clancy's latest book is out, in hardback. As a long time Tom Clancy fan, I splurged on the $28.95 hardback. It isn't as good as the previous Clancy thrillers. It's set in the "future" after Clancy's last book "Tail of the Tiger". It has a dozen protagonists and villains and the narration jumps from one to another every couple of pages. There is a "co author" and the book reads like Clancy did the outline and the co author did all the writing. Sort of like the "Op Center" books.
Proof reading must have been done by Word for Windows. It allowed "site" to pass where "sight" should have been used, "Y-turn" for "U-turn", and other oddities.
Wait for the paperback, or wait for your library to get it.

Tax Freeze has the votes in the Senate

The great tax deal of 2010 seems to be moving forward. This is the "no income tax hikes for anyone, 35% estate tax" deal that has enraged the left. There was plenty of talk about how holding taxes steady would cost $zillion in tax revenue. But to be real about it, a tax hike during Great Depression 2.0 will make the depression deeper. Holding taxes steady might make the economy perk up. And the estate tax (death tax) is a killer of small business. When the small business owner dies, the small business is required to cough up incredible amounts of cash, which it does not have. So the business is liquidated to pay the estate tax.
What has not been discussed on TV is the pork attached to the bill. Ethanol tax credits, money for windmills, and extension of 50 strange tax loopholes. Essentially Obama got many of his pet spending projects, in return to agreeing to not hike taxes on anyone. I can only hope that the cost of Obama's earmarks isn't too bad. I have never seen anyone in the news business, not even Fox, comment on the cost of Obama's goodies.

Aviation Week tribute to the Space Shuttle

No discussion of the Shuttle program is complete without mentioning the two horrible accidents, and the loss of all on board. Aviation Week feels that both accidents were caused by NASA corporate culture, a culture of "press on regardless" controlled by inexperienced and poorly educated suits.
The first accident to Challenger, where the solid rocket boosters leaked flame onto the external hydrogen tank, causing an explosion 73 seconds after liftoff, was clearly a management failure. Morton Thiokol, the maker of the solid rocket boosters, called the cape the night before the launch and expressed concerns about the low temperature. The Thiokol engineers feared that the silicone gaskets that sealed the solid booster joints would stiffen in the cold and fail to seal against combustion pressure. The Thiokol engineers had it exactly right, that's what happened and the leak of white hot flame from the booster exploded the shuttle and killed the entire crew.
NASA management, rather than postponing the launch, demanded Thiokol put their fears in writing. When the Thiokol suits demurred, NASA pressed on with the launch.
This was incredible to me. In USAF, had we received a telephone call from our engine maker expressing concern about the J75's powering our fighters, we would have believed them. We knew those engines had problems, we were used to company tech reps making light of deficiencies. Should Pratt & Whitney have volunteered information about problems, all hands, from crew chief up to wing commander would have taken it VERY seriously.
NASA management seems to be all political appointees, paper pushers with no practical experience. That can be a killer.

RGGI rides again.

According to this, money raised by the RGGI tax on electricity, which was supposed to go for virtuous greenie things, is being diverted to paying the bills.
New Hampshire's budget is opaque, but last year there was $50 million budgeted for "Greenhouse Gas Abatement". Whether it actually got spent or not is unknown, at least to me. That's a lot of money. That's 10% of this coming year's budget deficit ($600 million estimated).
The "Regional Greenhouse Gas Initiative", a joint deal involving the New England states and New York, was going to tax electric companies and earmark the revenue for "Greenhouse Gas Abatement" what ever that might mean. Which is one of the reasons we pay the highest electric bills in the nation. We get hit with 20 cents per kilowatt hour which adds up to $100 a month just to keep the lights on in a small house.
We would do better to drop the RGGI tax, drop the "Greenhouse Gas Abatement" and recover the New Hampshire Advantage.