| Author | Message | ||
     Ferris_von_bueller |
Patrick J. Buchanan Though Bush 41 and Bush 43 often disagreed, one issue did unite them both with Bill Clinton: protectionism. Globalists all, they rejected any federal measure to protect America's industrial base, economic independence or the wages of U.S. workers. Together they rammed through NAFTA, brought America under the World Trade Organization, abolished tariffs and granted Chinese-made goods unrestricted access to the immense U.S. market. Charles McMillion of MBG Information Services has compiled, in 44 pages of charts and graphs, the results of two decades of this Bush-Clinton experiment in globalization. His compilation might be titled, "Indices of the Industrial Decline and Fall of the United States." From 2000 to 2009, industrial production declined here for the first time since the 1930s. Gross domestic product also fell, and we actually lost jobs. In traded goods alone, we ran up $6.2 trillion in deficits -- $3.8 trillion of that in manufactured goods. Things that we once made in America -- indeed, we made everything -- we now buy from abroad with money that we borrow from abroad. Over this Lost Decade, 5.8 million manufacturing jobs, one of every three we had in Y2K, disappeared. That unprecedented job loss was partly made up by adding 1.9 million government workers. The last decade was the first in history where government employed more workers than manufacturing, a stunning development to those of us who remember an America where nearly one-third of the U.S. labor force was producing almost all of our goods and much of the world's, as well. Not to worry, we hear, the foreign products we buy are toys and low-tech goods. We keep the high-tech jobs here in the U.S.A. Sorry. U.S. trade surpluses in advanced technology products ended in Bush's first term. The last three years we have run annual trade deficits in ATP of nearly $70 billion with China alone. About our dependency on Mideast oil we hear endless wailing. Yet most of our imported oil comes from Canada, Mexico, Venezuela, Nigeria and Angola. And for every dollar we send abroad for oil or gas, we send $4.20 abroad for manufactured goods. Why is a dependency on the Persian Gulf for a fraction of the oil we consume more of a danger than a huge growing dependency on China for the necessities of our national life? How great is that dependency? China accounts for 83 percent of the U.S. global trade deficit in manufactures and 84 percent of our global trade deficit in electronics and machinery. Over the last decade, our total trade deficit with China in manufactured goods was $1.75 trillion, which explains why China, its cash reserves approaching $3 trillion, holds the mortgage on America. This week came a report that Detroit, forge and furnace of the Arsenal of Democracy in World War II, is considering razing a fourth of the city and turning it into farm and pastureland. Did the $1.2 trillion trade deficit we ran in autos and parts last decade help kill Detroit? And if our purpose with NAFTA was to assist our neighbor Mexico, consider. Textile and apparel imports from China are now five times the dollar value of those imports from Mexico and Canada combined. As exports are added to a nation's GDP, and a trade deficit subtracted, the U.S. trade deficits that have averaged $500 billion to $600 billion a year for 10 years represent the single greatest factor pulling the United States down and raising China up into a rival for world power. Yet, what is as astonishing as these indices of American decline is the indifference, the insouciance of our political class. Do they care? How can one explain it? Ignorance of history is surely one explanation. How many know that every modern nation that rose to world power did so by sheltering and nurturing its manufacturing and industrial base -- from Britain under the Acts of Navigation to 1850, to protectionist America from the Civil War to the Roaring Twenties, to Bismarck's Germany before World War I, to Stalin's Russia, to postwar Japan, to China today? No nation rose to world power on free trade. From Britain after 1860 to America after 1960, free trade has been the policy of powers that put consumption before production and today before tomorrow. Nations rise on economic nationalism; they descend on free trade. Ideology is another explanation. Even a (Milton) Friedmanite free-trader should be able to see the disaster all around us and ask: What benefit does America receive from these mountains of imported goods to justify the terrible damage done to our country and countrymen? Can they not see the correlation between the trade deficits and relative decline? Republicans seem certain to benefit from the nation's economic crisis this November. But is there any evidence they have learned anything about economics from the disastrous Bush decade? Do they have any ideas for a wholesale restructuring of U.S. trade and tax policy, for a course correction to prevent America's continuing decline? Has anyone seen any evidence of it? | ||
| Tom_b |
Not yet. I have been looking for something . Admiral yamamoto replied after the attack on Pearl harbor. "I'm afraid all we have succeced in doing is awaking a sleeping giant" or something pretty close to that. If the situation were to happen again, do we have the indutrial base anymore to fight a prolonged war? I don't think so.Do we have the capabilities to even fight a short economic and trade war? No again..Our enemies won't defeat us militarily, they will do it thru economics. And the us will let them | ||
| Coops53233 |
Pat's points about US consumption are well-taken. We need to live within our means. But that's about the only firm leg he's standing on. His implication that less protectionist trade policies led to the demise of several major world powers tenuous at best. Trade policy in Imperial Britain, Bismarck's Germany, Stalin's Russia, and post-war Japan really had little if anything to do with each country's demise. In fact, I think you could even make the argument that in the first three cases, protectionist trade policies actually helped contribute to their demise. U.S. manufacturing output is far and away the highest in the world (despite job loss trends in the sector). Yes, its hard to believe with everyone saying we "don't make nothing here no more." And I know that is little comfort to the factory worker in Detroit who just lost his job. But the fact is US manufacturing output is still much higher than China's. China's manufacturing output will continue to rise as it industrializes. But this is much more a matter of demographics and modernization than US trade policy. I know this is a real shocker to some people, but China will continue to keep making stuff as long as the demand exists, whether that demand is in the US, China, or somewhere else in the world. It's really unclear how our government artificially raising the price of Chinese goods as they enter the US border will change that. At best, it can only slow it down a little. Instead, we should be looking at ways to reduce the cost of producing right here at home. We need to make our goods, which are already highly competitive on quality, more competitive on price. Our corporate tax rate is the 2nd highest in the industrialized world. The cost of doing business in the US is what's driving employers overseas. Furthermore, trade negotiations are how we get other countries to agree on an enforceable framework of trade rules. Without trade agreements, we have no leverage with which to change our trading partners' behavior. Whoever thinks we can unilaterally tariff our way into perpetual trade dominance must have slept through their discussion of the 1930s in high school history class. Lowering the cost of doing business in the US, as well as holding other countries accountable when they cheat on the agreed-upon rules of the road (WTO and bilateral agreements) are how you stay ahead in today's global economy... not protectionism. | ||
| 99savage |
Good & valid points, all of them. - This debate has been raging since the founding of the Republic. - Was one of the causes of the Civil War. Worked mostly in manufacturing since the late 50's. Worked the last 22 years w/ a privately held company that was determined to be a world wide competitor & were accountable only to themselves. Automation can overcome the effect of "coolie labor" but nothing a manufacturer can do will overcome the self perpetuating bureaucracies that make it all but impossible to actually build anything. EPA, OSHA, EEOC, NYS-DEC we spent more time & money massaging them than building things. We had more engineers in Human Resources stroking OSHA than in Product & Manufacturing Engineering combined. - Spent more on air handling equipment to assure compliance w/ Title V (I thought we already complied but could not document it) than for machine tools. Equal Opportunity - Oh Wow! - Always employed a lot of minorities & that was never an issue FOR US (sux to be building something in the boonies tho). - If they were there I would prefer to hire chicks but honest to God lady, not that many little girls grow up wanting to be millwrights. Hear a lot of yapping about outsourcing but damn little effort put to reducing domestic impediments. | ||
| Ft_bstrd |
I think his observations about manufacturing job loss and reduction in industrialization might be correct but for he wrong reasons. If we had a national law prohibiting the utilization of ANY manufacturing resource out of the country, it wouldn't necessarily guarantee US jobs or economic prosperity. Given the regulatory and tax expenses imposed on large and small businesses in the US, two things would be the outcome: 1) Fewer businesses would be created as a result of profit margins too narrow or nonexistent to survive economically 2) Higher costs of products resulting in fewer exports, fewer jobs, less economic growth The best defense is a strong offense. If you want to preserve American jobs, make it more profitable to keep jobs in the US. Drop the corporate tax rate. Reduce the tax incentives for establishing foreign divisions. I like the idea of having a pro-rata tax reduction based upon the percentage of US labor. If 100% of your labor and production component is US based, your corporate tax rate, whatever it is, is reduced by 50%. If 100% of your labor is foreign based, you pay the full ride. Give the businesses a positive incentive to keep businesses here rather than trying to tie the hands of US competition. Whatever defensive tactics are taken, retaliatory measures will be employed that hamper US exports and exacerbate the trade deficit. My wife started a children's clothing company 4 years ago. There is NO us manufacture for the processes they need available even if they wanted it. The cost to produce domestically would double the cost of production. Here's how that plays out for their company. Clothing manufacture follows a process called Keystoning: You produce a garment that costs $5 to produce. You double your production cost, and this price is what is charged to stores as wholesale cost, $10. The retail store doubles the wholesale cost, and this becomes the retail cost, $20. From a production standpoint, my wife's company has to be careful about the production costs. A garment that costs too much to produce will result in a wholesale price that a store won't pay because the retail price will be too high to sell the item. So a doubled production cost, given a $20 final retail price, would result in a 0% profit margin for my wife's company. They would never have been able to go into business. The stores who have bought their products for he last 4 years wouldn't have had products to sell to make a profit and would not be in business. There is NO evidence that higher wages automatically result in economic prosperity. Higher wages, artificially created, result in higher product prices and ZERO net increase in buying power. | ||
| Crusty |
http://www.youtube.com/watch?v=008BPUdQ1XA | ||
| Rocketsprink |
"There is NO evidence that higher wages automatically result in economic prosperity. Higher wages, artificially created, result in higher product prices and ZERO net increase in buying power." So you're saying all the lowering of wages and pay cuts are a good thing? Funny. Haven't seen the price of goods drop one frickin' cent. And now that people make less, they spend less. How can that be a good thing? | ||
| Tom_b |
No he is not saying lower wages or paycuts. He said high wages artificially created.. there IS a HUGE difference | ||
| Ft_bstrd |
If I told you I made $500,000 a year, would you be impressed? If bread costs $5,000, would you still be impressed? Higher wages are only a good thing when the relative cost of what you are buying remains the same. Creating an artificial "living wage" results in lower employment and higher costs. Labor is like any other good or service. Artificially raise the price and you create a surplus. Sometimes that surplus is reflected in unemployment. Sometimes it is reflected in higher costs. | ||
| Buellkowski |
Just to put things in perspective, here's January 2010 import data. The one imported item we spend the most on: crude oil. | ||
| Buellkowski |
And also January 2010 export data. | ||
| Buellkowski |
The President just signed this Executive Order last week. Goal is to double U.S. exports in 5 years. |
