Posted on 12/12/2003 12:38:41 PM PST by Willie Green
For education and discussion only. Not for commercial use.
The Bureau of Labor Statistics reports that only 57,000 net new jobs were created in November. Forecasters had predicted three times that many jobs would be created, given the massive stimulus dumped into the economy by tax cuts, increased government spending and monetary expansion by the Federal Reserve – not to mention the slew of home mortgage refinancings due to the Fed´s keeping rates low. Though the Bush Administration was quick to claim progress, the tepid pace of job creation still leaves the country with fewer jobs than a year ago. The manufacturing sector lost another 17,000 jobs in November – the 40th consecutive month of decline – and there are 549,000 fewer manufacturing jobs today than a year ago. Every major manufacturing industry has lost jobs over the past year.
The Bush Administration has been running a public relations campaign to convince both American business and the general public that it is serious about reviving the manufacturing sector. Yet, signs persist that the White House only sees concern over closing factories as a political problem, not an economic problem, and is thus not really committed to doing anything constructive.
What former Deputy Secretary of Commerce Sam Bodman said at a business conference last June remains true: “There was a comment [concerning] a vision for manufacturing within the government. I will tell you it is very hard for this government to have a vision on anything.” Bodman candidly told the “Made in America 2020: The Future Face of Manufacturing" meeting in Washington. He continued, “A lot of what I hear you all asking -- we need a leader, we need somebody to take a position and do things -- that runs counter to the way the town works and you need to know that.”
Examples of how things work in Washington permeated the omnibus appropriations bill passed by the House on December 8. The bill spends $328 billion to fund 11 government departments through next September, and $492 billion for other non-military purposes. The measure was riddled with pork barrel projects “earmarked” for favored Congressional districts. Yet, the National Institute of Standards and Technology will have its budget cut by 12 percent ($81 million) in 2004. Its scientific and technical laboratories will experience a budget cut of 4.3 percent ($15.2 million).
NIST's Manufacturing Extension Partnership (MEP) budget is slashed by 63 percent, from $106 million to $39.5 million. The MEP´s national network of centers was created to help small- and medium-sized manufacturers modernize their operations. The Bush administration, through the Commerce Department, had requested a 90 percent budget cut for MEP to essentially kill the entire program. In a $2 trillion Federal budget, the amount “saved” is trivial, but the message sent is unmistakable.
If new technology is not developed in the United States to meet the needs of advanced production, industry will either have to import the technology from overseas or, more likely, see foreign industry take the lead and create the future.
Mike Wojcicki, president of the Modernization Forum, the association representing manufacturing centers, was quoted in Manufacturing and Technology News on December 5 describing how things work in Washington: “They don't care about small manufacturers -- they care about large manufacturers, who contribute lots of money to PACS -- that's what it comes down to." And it is the large manufacturers who are shifting their operations overseas and who do not want any government effort to keep industry in America.
Another area where the influence of transnational corporations predominates and makes the formulation of national strategy impossible is China policy. James Sasser, who served as U.S. ambassador to China from 1995 to 1999 and was a U.S. Senator before that, recently told Bloomberg news, “The Chinese really don't do any lobbying. The heavy lifting is done by the American business community.” On his visit this week to the United States, Chinese Premier Wen Jiabao first went to New York where he rang the bell to open the New York Stock Exchange and spoke to the American Bankers Association. When he came to Washington, he spoke to top executives Tuesday at the Ritz-Carlton hotel at an event sponsored by the Chamber of Commerce. Of the Fortune 500, some 400 have set up operations in China. They lobby heavily for appeasement policies to protect their investments, and an open American market to which they will export much of what they produce in Chinese factories.
It is no wonder then that the Bush Administration has made no progress in persuading Beijing to halt is currency manipulation or comply with its market opening obligations under the World Trade Organization. The transnational corporations do not want any progress on these issues because they have aligned their business models with the ambitions of the Chinese government. With easy access to the top echelons of the U.S. government greased through campaign contributions, they have influenced American trade officials to back off from any confrontation with China. Thus, when Deputy Assistant U.S. Trade Representative Charles W. Freeman testified before the Senate Subcommittee on Oversight of Government Management on December 9, he told the lawmakers that while there were two China-specific safeguard mechanisms under Section 421 of the Trade Act allowing American industries to cope with market disruptions caused by “increasing economic integration with China” (yes, he did use the term “integration” rather than “trade”). President Bush has not invoked either of them.
Freeman also said that the Bush administration has no plans to launch a complaint against China's currency peg at the World Trade Organization, nor would it initiate a Section 301 case under U.S. law charging Beijing with using currency manipulation to gain an unfair trade advantage.
This lack of government action leaves a boost in exports to China as the only “solution” to the current problem, a solution favored by both Beijing and the major transnational corporations. Premier Wen has voiced displeasure with restrictions on the export to China of high-tech products with potential military applications saying, “I ardently hope that the relevant U.S. departments will make a clean break with those obsolete concepts and anachronistic practices, and throw them into the Pacific Ocean.” What China wants is technology and capital with which to build what Beijing calls “comprehensive national power,” which it intends to use to challenge the U.S. across the board. Alarmingly, there are any number of heedless businessmen willing to help China do this, while equally imprudent American officials look the other way. It is now perfectly clear that the many trade and national security problems with China are not going to be addressed by the Bush administration.
William R. Hawkins is Senior Fellow for National Security Studies at the U.S. Business and Industry Council.
Bump
That has a decidedly Marxist tone to it ...
Are you suggesting that free traders are Marxists?
No, just that the "commodity theory of labor" rings remarkably like Marx's Labor Theory of Capital.
Karl Marx was a free trader. Draw your on inferences.
I did not google hard enough to get the names of the economists but I had read that many did in fact expect more jobs to be created. I believe that the adminstration itself set a goal of 200,000 a month last summer.
You've put your finger on something. The Marxists and the "the free market will solve all of the problems of mankind" crowd both see human beings simply as economic units, homo economicus, economic man -- workers, taxpayers, consumers.
I am compelled to respond. Maybe you are not old enough to remember when these things followed the classic model. Like in the 1950s, 60s, for example.
150,000 people a month being recalled / hired would be peanuts. We've just had the second anniversary of the beginning of the recovery stage. In the old days everyone would have been back at work for months and getting ready for the next downturn.
Stephen Roach writes about a new model. Right or wrong, I don't understand why more economists don't admit that this ain't their dad's recession.
Perhaps I misunderstand and you are saying that in this particular recovery -- not the classic model -- it is not reasonable to expect so many jobs at this time. IMO, for this particular recovery, two years is indeed early in the recovery. What's going on today is nothing like what I remember.
Hey, don't leave out the #2 increase, hotel maids (accomodations).
That would certainly help. Take coffee pots for instance.
The ones you buy at Wal-Mart for $15 are really annoying. They leak water out as they're brewing, and the pots don't pour well. Seems like some American company could make a better one for...say...$30. But maybe not.
Hmm, this is a FACT that free traders treat labor as a commodity. So maybe it is their affinity with Marxists that is ringing.
That's only partly true. Karl Marx supported free trade for the west because he saw - just as Adam Smith saw - that unbridled "free trade" - the variety worshipped today by neocons and liberals alike - would desctroy the western manufacturing capability. He also knw that it was the only way an economy with government control of manufacturing and transportation could survive, by importing that now destroyed manufacturing capacity. I don't know how surprised he would be to see so much of the neo-con western world lining up to slit its own throat, though.
Adam Smith knew this too, which is why he insisted, in many instances, on tariffs.
It does make one wonder about the difference between a government and economy controlled by a few individuals, and one controlled by a few corporations.
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