Posted on 01/01/2004 9:04:11 AM PST by Willie Green
...It helps to keep in mind a few simple points. First, manufacturing is extremely cyclical. The manufacturing component of the U.S. industrial production index fell by 5.5 percent a year in 1974-75, then rose by 6.6 percent a year for the next four years. In 1980-82, manufacturing fell by 3.1 percent annually for three years, then rose by 4.8 percent a year for six years. Manufacturing then dropped 2 percent in 1991....
...Unfortunately, it looks as though indefensible assertions about the supposed long-term disappearance of U.S. manufacturing are going to become a familiar political complaint over the coming year (as well as a promising source of special interest campaign funds). This rerun of the old "downsizing" story will again bore us with many more efforts by bumbling business writers and their slumbering editors to trump up some sort of "public agitation." If the rhetoric gets too annoying, ask the authors for a few facts. They just hate that.
Bump
BUT... with it being New Year's and such...
I hereby resolve to make a ping list!
We need to export them and keep the productive people here at home!
The Adminstration and corporations have to become patriotic in the war on jobs.
Bump again.
The Wal-Mart backlash
Complaints about the "Walmartization" of the U.S. economy -- where highly skilled manufacturing jobs get shipped overseas, and U.S. workers are forced into low-paid jobs as retail clerks hawking foreign-made wares -- are growing.
For the world's biggest store, being a political target in an election year is not good news. Most important, many Americans are making a connection between the store that ran out all the competition in town and the shuttering of the manufacturing plant that was the town's big employer
Should we try to reduce productivity to save jobs? While we are at it, do we need to increase tariffs on buggy whips so that we can increase employment in the buggy whip industry?
Lastly, what are we doing to bring back more employment in the elevator operator profession? That profession has been decimated!
1. The president must declare that the United States faces a manufacturing, R&D, and outsourcing emergency no less threatening to America´s long-term future than even the Great Depression. He must also make clear that the crisis stems mainly from the manipulation of world trading system by mercantilist countries and to the encouragement of offshoring by U.S. trade policy.
OK, so you want to make sure that the president feels our pain, fair enough. Now where's the beef?
2. The president should create an Apollo Program-type task force in the federal government to oversee Washington´s response to the manufacturing crisis. Its mission should be to restore domestic U.S. manufacturing to global preeminence and to boost domestic manufacturing employment and wages. The program should involve all agencies of U.S. government.
This is insane. Other than fixing a few laws, the last thing we need is for the government to direct manufacturing. What makes anyone think that the government ought to have such a mission? The second this task-force is started all they will do is start favoring certain industries over others. America is strong precisely because the government is less involved in private enterprise than other nations.
3. Federal R&D spending should be tripled and Washington should offer matching grants to industry. Special emphasis should be placed on tasking the national labs with helping to develop commercially viable, high-tech products to be manufactured in the United States.
Another loser suggestion. Federal R&D spending is typically a disaster. It takes needed money out of the economy and directs it to politcally favored R&D, when the whole concept of R&D ought to center around entrepreneurship and risk taking. Most of the great R&D achievements in this country were obtained by private individuals and private enterprise, with the market directing R&D funds to the most promising ideas. Contrast this with all the federal money spent on Aids research, where the federal money crowds out private investment, and the funds are channeled with the influence of political activists and those with different theories are shunned.
4. The U.S. trade deficit should be quickly and dramatically reduced by imposing a “variable trade equalization tariff” on imports from countries running a trade surplus ten percent or greater of total bilateral trade. These tariffs should be increased each year until bilateral surpluses fall below the threshold level, at which time they would be removed. Tariffs should be imposed on U.S. trading partners as soon as surpluses reach the 10 percent threshold.
Fair enough, we don't need a massive discussion here over tariffs. If we do have a tariff, however, I would prefer the idea recently offered by Warren Buffet, whereby what imports come into the country are dictated by the neccessities of the market, and not by politicians
The United States should offer a partial exemption for the world´s poorest countries, but only if concrete, measurable trade breaks from the other OECD countries follow suit and only if the developing country seeking the exemption demonstrates a commitment to democracy and the economic advancement of all its people. Exemptions are not intended to enrich corrupt, dictatorial elites.
Why offer exemptions? If the point is to protect American jobs, then the point is to protect American jobs. If you offer exemptions to any nation, all that will happen is that the worlds sweat shops will constantly change location evey two years.
In addition, exceptions would be made for energy imports and other commodities that are not found in the United States and for which no acceptable substitutes exist.
The problem with this is that you wind up politicizing everything too much. The lobbyists will go nuts, and deciding which industries are exampt from the tariff will be a big political game. The tariff should be uniformly applied, in order to minimize the influence of politicians on the process.
5. Companies manufacturing or assembling in the United States should be barred from treating service work performed overseas as a deductible business expense. Private companies that outsource overseas the processing of sensitive records, such as medical and financial records, must ensure that their subcontractors meet U.S. privacy standards or face stiff fines.
Good idea.
6.. Washington should declare a moratorium on all current and future free trade talks pending development of new national trade strategy. The United States government clearly has lost the ability to negotiate trade agreements that enrich the great majority of Americans and strengthen the domestic manufacturing base on net. U.S. leaders should not engage in trade negotiations until this ability is regained.
Whatever. Can you all imagine the politics that would be invovled with a "National Trade Strategy"? Just impose the damn tariff. When was the last time a "national strategy" produced anything other than a lot of hot air, and special perks for lobbyists clients?
To develop a fundamentally new national trade strategy, the president and Congress should appoint a National Trade Strategy Commission that includes representatives of business plus civil society groups, such as labor unions and environmental groups. The business representatives on the Commission should be dominated by companies and industries that produce the great majority of their product and value in the United States. The Commission should also include representatives of the nation´s science and technology and national security communities.
Bad idea, largely for the reasons stated above. How anybody can think that bigger governement involvement in business by politicians is a good idea is beyond me.
7. Washington should declare a moratorium on U.S. compliance with WTO panel decisions pending dramatic reform of organization to reflect America´s position in world economy. The UN Security Council veto and the IMF/World Bank weighted voting systems are possible models of international organization structures appropriate to America´s geopolitical and economic superpower status. If appropriate reform is not completed by the end of 2005, the United States should declare its intention to withdraw from the organization as soon as legally permissible.
Fair enough in principle, but abrogating treaties is something that must be taken very seriously, less other countries start doing the same.
8. Washington should declare a moratorium on U.S. compliance with NAFTA panel decisions pending reform of NAFTA´s dispute-resolution process to reflect U.S. predominance in the North American economy. In addition, NAFTA´s rules of origin and external tariffs should be revised to offer meaningful trade preferences to goods with much higher levels of North American content.
Ditto for the previous comment
9. The U.S. government should resolve the Foreign Sales Corporation tax dispute with the European Union and the World Trade Organization by replacing the current FSC tax incentive with a major tax break for any company, either American or foreign-owned, that performs genuine manufacturing activity in the United States. Qualification for the tax break would require detailed certification that true manufacturing is occurring in the United States.
Tax breaks are a bad idea. There should be one uniform low tax rate throughout the country.
10. The United States should expedite procedures for anti-dumping and countervailing duty suits. Threshholds for standing, actionability, and remedies should all be eased. In addition, remedies should be extended to companies up and downstream from immediately affected industries to ensure protection for suppliers and consumers, and prevent foreign economic interests from using divide and conquer tactics against domestic industries.
Is this needed once the tariff is imposed? The idea here has to be to have as little involvement by the politicians as possible. Giving every politicians in every congressional district the ability to insert preference for whatever industry is in their district into bills is a recipe for disaster. Just like those of us who support a flat tax to remove preferences from the tax code, the same idea must apply to trade. Fair and uniform practices for all.
11. The current steel tariffs should be expanded to cover industries using significant quantities of U.S.-made steel. Further, the option of extending the tariffs beyond the original three-year deadline should be left open in order to determine conclusively that foreign steel subsidization and dumping have ceased.
What does that mean? Extending a steel tariff to cover other industries? Does that mean its not a steel tariff anymore? Shouldnt the above tariff proposal make this unneccessary? Ditto my comments about government involvement. It should be kept at a minimum.
12. A stiff tariff should be imposed on countries determined by the U.S. government to be manipulating their currencies for trade advantage. In light of the Treasury Department´s equivocation on the currency policies of Asian mercantilist nations, the definition of currency manipulation that now exists must be broadened. A strong dollar remains in the long-term interests of the U.S. economy, but foreign governments must not be able to distort trade flows to the advantage of their companies by giving them artificial cost advantages.
Once again, not neccessary if there is a flat and uniform tariff. Just imagine that amount of lobbying that will go one with this one. This author is proposing a system that is more ripe for corruption than the tax code is. I also find it interesting that this author who complains about the trade tariff wants a stronger dollar. The stronger the tariff, the larger the trade deficit will be.
13. The defense industry must be treated by the federal government in a fundamentally different way from the commercial sector. It exists solely to serve the national interest and national security, and must be structured and managed accordingly. Therefore, a 65 percent U.S. content requirement should be imposed on all military procurement, rising to 80 percent in five years and 95 percent in ten years. This requirement should immediately cover the procurement of all goods and services for domestic military facilities and operations, and to the fullest extent possible cover foreign bases as well. Presidential waiver authority should be sharply limited, especially for countries that have records as problem traders or that demand offsets for purchases of American weapons systems.
Ok.
14. Public money taken from the domestic economy by taxes or borrowing should be returned to the domestic economic economy by the procurement of American-produced goods and services. Procuring government services domestically is also necessary to ensure the continued privacy and security of the financial and health records of all Americans. Thus a 50 percent U.S.-content requirement should be imposed on all non-military federal procurement, rising to 80 percent in five years and 95 percent in ten years. Presidential waiver authority should be sharply limited. This requirement should immediately cover the procurement of all services for domestic facilities and programs.
ok
15. The scheduled abolition of the Multi-Fiber Arrangement governing world trade in textile and apparel should be suspended indefinitely, pending a study of the effects of the MFA's abolition on domestic and third-world producers in these industries.
Don't know what this is, so I can't really comment except to say that there should be one fair and uniform tariff policy across all industries.
16. Stiff tariffs should be levied on countries that impose offset requirements on U.S. defense manufacturers.
This is ridiculous. If we are going to say that we must buy our defense products in the US because it is in the interests of national security, we should not start fights with other nations because they do the same.
17. The president should declare a moratorium on foreign acquisitions of U.S. defense-related companies pending completion of comprehensive study of the status of the roughly 1,500 such companies acquired since 1988 under the current policy framework and government screening system.
Sounds good
18. Strict, detailed country-of-origin labeling should be required on all food and agricultural imports.
Sounds good
19. Legal immigration into the United States should be limited to 500,000 annually. Enforcement measures to halt illegal immigration should be dramatically increased, including significant and sustained increases in the budgets of those federal agencies responsible for enforcing immigration laws.
Sounds good.
Immigration at today´s levels – both legal and illegal – can only serve to depress wages for American workers by artificially inflating the supply of labor. Moreover, the most likely victims of such massive immigration flows are the recent arrivals themselves, who are forced to compete directly for jobs with the unending flow of newcomers arriving right after them.
OK
The H-1B visa program for technology workers should be abolished. A new federal commission comprised both of U.S. technology worker interests and tech industry interests should conduct a study to determine labor needs in technology industries and how they should be met.
I don't think it should be abolished, just sharply curtailed. Let's say that the best aircraft designer at Embraer in Brazil wants to leave, and Airbus and Boeing are both interested in making smaller planes like Embraer makes, should Boeing be prevented from hiring the guy so that he just goes to Airbus? Think about it. There are some damn good foreign workers out there, and its better if they work for American companies than foreign ones.
LONGER-TERM MEASURES 1. Washington must insist that any future trade agreements be strictly reciprocal and strongly enforceable by the U.S. government, unilaterally if necessary.
OK
2. Any future U.S. trade agreements must include provisions penalizing signatories for currency manipulation. IN fact, currency manipulation can be used to defeat or offset the effects of reducing or eliminating trade barriers.
All currencies should just float freely, that would solve this problem.
3. The president should launch a major diplomatic campaign to press other OECD countries to increase third world imports, enforceable unilaterally by tariffs on the products of any non-cooperating OECD countries. Under-importing of third-world products by the European Union and Japan in particular has greatly increased the pressure on the U.S. market to absorb third-world production. Greater burden sharing in this vital sphere is urgently needed.
I think a fair and uniform tariff would make this unneccessary.
Because the overriding interest of U.S. trade policy is to advance the economic interests of the great majority on the American people and the long-term security and prosperity of the United States, Americans should feel no special obligation to import goods or services from third-world, or indeed any other, countries.
Then why does the author impose special considerations for poor countries above?
Such imports are especially unacceptable if they sacrifice the interests of American workers and domestic companies. But a campaign to get Europe and Japan to do more is needed for three reasons: to counter perceptions that U.S. protectionism is the greatest current barrier to third world economic development; to highlight America´s record in promoting this development; and to call attention to the poor importing records of the other main OECD countries.
Let's just mind our own business. The last thing we need to do is to worry about everyone else's trade policies. If the tariff is fair and uniform, we won't have to worry about this. We can't go around telling every country in the world exaclty how to run their affairs.
4. The United States should focus any new trade agreements on high-income countries capable of serving as final consumers of U.S. exports. Washington´s recent focus on third world countries capable of serving only as re-export platforms has been a substantial contributor to today´s current trade deficits. In particular, the United States should seek a free trade agreement with Europe that excludes agriculture. Washington should also take stronger measures to open Japanese and Korean markets, including unilateral tariffs if necessary.
OK
5. The president should remove responsibility for monitoring and enforcing trade agreements from the office of the U.S. Trade Representative and place it in the Department of Commerce. As the lead agency for negotiating new trade agreements, the USTR´s office has every incentive to soft-pedal the deficiencies in both the structure and functioning of these agreements. Dividing these responsibilities would eliminate a major policy-making conflict of interest.
Whatever, I don't know.
6. Congress should enact strict foreign lobbying reform covering all federal officials, including lifetime bans on working for foreign interests for former senior Executive and Legislative branch officials.
Good idea
7. The Commerce and Defense Departments should be designated as co-chairs of the inter-agency Committee on Foreign Investment in the United States, which reviews all proposed foreign acquisitions of U.S. defense-related companies. Exon-Florio filings must be made mandatory, and the threshold for investigation lowered. With the Treasury Department chairing this panel for its decade-and-a-half of existence, national security concerns have not been adequately addressed in CFIUS´s decisions, which generally reflect only Treasury´s desire to see surplus dollars in foreign hands repatriated effortlessly.
I have no idea which bureaucrats should do what. but ok
8. The president should commission immediate reports – written by special Commercial Action Teams composed mainly of industry representatives and some government officials – on foreign subsidies existing outside the steel industry and implement tariffs to offset them. Washington should first offer to negotiate the abolition of such subsidies, but it must insist on results that are achieved quickly, as well as completely verifiable and enforceable by the U.S. government.
One uniform tariff makes this unneccesarry. Of course, we should expect other countries to raise tariffs if we raise ours.
9. The federal government must publish more complete and timely foreign trade and investment data. This data should include detailed information on the importing, sourcing, and employment trends of all multinational companies and in fact all companies that do business in the United States. The provision of the data to the appropriate government agencies must be made mandatory.
To what end? We don't need more bureacrats nosing around business. A uniform tariff and immigration restrictions makes all this unneccessary.
10. The president should launch a comprehensive review of all U.S. defense alliances to determine which remain relevant to 21st century U.S. interests. The president should explicitly state that foreign policy and defense considerations will no longer automatically trump the economic interests of the United States and the American people.
OK. Anyway, this author wants to play God and micromanage the whole world. In addition, he wants to have the government creep into every facet in our lives with trade laws that would rival the IRS code for their complexity and corruptability. A much better soluton is just:
1. A fair and uniform tariff across all industries. No special deals for certain industries over others. I prefer the Buffet proposal, which is not really a direct tariff at all, and would still allow signifcant imports where the market dictates that they are most needed.
2. Immigration restrictions.
3. Regulations to keep the defense industry home for strategic reasons.
These three simple things are far preferable to a million new goverment panels and regulations for the politicians to manipulate.
Posts like these are meant to confuse. Look at the bottom line which lies in the status of the market.
Taxes have been reduced, the market is on a solid upswing, and employment nationally is improving.
To nitpick issues as these to warp opinion, is generally synonymous with formulating a political agenda.
Interesting concept Willie. So interesting that it struck a response from me. HAHAHAHAHAHA, in your dreams.
An ability to maintain "high-tech" edge militarily mostly depends upon having a POTUS that has a firm understanding of what it takes to defend our interests. We have overcome that issue temporally through the 2 term limit (thank Gawd) and the exchanges of US technology have been stifled to China's demise if not to others.
The industrial infrastructure itself is collapsing.
"Output" figures are often deceptive because domestic finishing operations take full credit for the final product while more crucial steps earlier in the production process are outsourced offshore.
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