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New Deal for U.S. Manufacturers
HumanEventsOnline ^ | 09/29/2006 | Patrick J. Buchanan

Posted on 10/01/2006 3:30:13 AM PDT by NapkinUser

In July, our trade deficit hit yet another all-time record, $68 billion, an annual rate of $816 billion. Imports surged to $188 billion for the month, as our dependency on foreigners for the vital necessities of our national life ever deepens.

China's trade surplus with us was $19.6 billion for July alone, moving toward an all-time record of $235 billion for 2006 -- the largest trade deficit one country has ever run with another. Our deficit with Mexico is running at an annual rate of $60 billion. With Canada, it is $70 billion. So much for NAFTA. With the European Union, it is running at $160 billion.

America as the most self-sufficient republic in history is history. For decades, U.S. factories have been closing. Three million manufacturing jobs have disappeared since Bush arrived. Ford and GM are fighting for their lives.

Bushites boast of all the new jobs created, but Business Week tells the inconvenient truth: "Since 2001, 1.7 million new jobs have been created in the health care sector. ... Meanwhile, the number of private sector jobs outside of health care is no higher than it was five years ago."

"Perhaps most surprising," writes BW, "information technology, the great electronic promise of the 1990s, has turned into one of the biggest job-growth disappointments of all time. ... (B)usinesses at the core of the information economy -- software, semiconductors, telecom and the whole gamut of Web companies -- have lost more than 1.1 million jobs in the past five years. Those business employ fewer Americans than they did in 1998, when the Internet economy kicked into high gear."

Where did the high-tech go? China. Beijing's No. 1 export to the United States in 2005, $50 billion worth, was computers and electronics.

If Americans are the most efficient workers on earth and work longer hours than almost any other advanced nation, why are we getting our clocks cleaned? Answer: While American workers are world-class, our elites are mentally challenged. So rhapsodic are they about the Global Economy they have forgotten their own country. Europeans, Japanese, Canadians and Chinese sell us so much more than they buy from us, because they have rigged the rules of world trade.

While the United States has a corporate income tax, our trade rivals use a value-added tax. At each level of production, a tax is imposed on the value added to the product. Under the rules of global trade, nations may rebate VAT levies on exports, and impose the equivalent of a VAT on imports.

Assume a VAT that adds up to 15 percent of the cost of a new car in Japan. If Toyota ships 1 million cars to the United States valued at $20,000 each, $20 billion worth of Toyotas, they can claim a rebate of the VAT of $3,000 on each car, or $3 billion -- a powerful incentive to export. But each U.S. car arriving at the Yokohama docks will have 15 percent added to its sticker price to make up for Japan's VAT.

This amounts to a foreign subsidy on exports to the United States and a foreign tax on imports from America. Uncle Sam gets hit coming and going. It is as though, after firing a round of 66 in the Masters, Tiger Woods has five strokes added to his score for a 71, and five strokes are subtracted from the scores of his rivals. Even Tiger would bring home few trophies with those kind of ground rules.

The total tax disadvantage to U.S. producers -- of VAT rebates and VAT equivalents imposed on U.S. products -- is estimated at $294 billion.

Exported U.S services face the same double whammy. A VAT equivalent is imposed on them, while the exported services of foreign providers get the VAT rebate. Disadvantage to U.S. services: $85 billion annually.

Why do our politicians not level the playing field for U.S. companies?

First, ignorance of how world trade works. Second, ideology. These robotic free-traders recoil from any suggestion that they aid U.S. producers against unfair foreign tactics as interfering with Adam Smith's "invisible hand," which they equate with the hand of the Almighty.

Third, they are hauling water for transnational companies that want to move production overseas and shed their U.S. workers.

How could we level the playing field? Simple. Impose an "equalizing fee" on imports equal to the rebates. Take the billions raised, and cut taxes on U.S. companies, especially in production. Create a level playing field for U.S. goods and services in foreign markets, and increase the competitiveness of U.S. companies in our own home market by reducing their tax load.

U.S. trade deficits would shrivel overnight. And jobs and factories lately sent abroad would start coming home.

Isn't it time we put America first -- even ahead of China?


TOPICS: Business/Economy; Culture/Society; Editorial
KEYWORDS: alasandalack; buchanan; depression; despair; doom; dustbowl; freetraitorssqueal; grapesofwrath; patbuchanan; pitchforkpat; savage2008; savageforpresident; trade; votesocialist2008; woeisme
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To: RightInEastLansing
"I understand that a large part of neocons are Jewish,..."

I bet you do.

But I do not care what their ethnic or religious background is. If they were American Indians or WASPs or Irish Americans, it would not make them more or less wrong. And wrong they are!

Invoking the Jewishness of some or several neocons is a Red Herring trick which works on dumb people. You could vilify the detractors of Noam Chomsky the same way: "Chomsky is Jewish so if you criticize him, you must be an antisemite".

I guess you are paranoiac about my tagline too.

141 posted on 10/01/2006 2:16:12 PM PDT by A. Pole (Hyman Roth: "We have now what we have always needed, real partnership with the government.")
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To: snowsislander

The figure you are looking at includes work in process & inventories (i.e. intermediate stages) as well as finished goods.

Inventories and WIP can only count where they are incorporated into final products in the period they are shipped. Otherwise you end up double counting materials used to build final goods along with the value of the final goods sold.

GDP is final retail goods only, it does not count intermediate stages to prevent double counting.


142 posted on 10/01/2006 2:31:29 PM PDT by ancient_geezer (Don't reform it, Replace it.)
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To: snowsislander
The data table you need to look at is in the NIPA/GDP series which brakes out final retail sales from intermediate products and inventory valuations.

refer: Table 5.7.5B. Private Inventories and Domestic Final Sales by Industry

143 posted on 10/01/2006 2:39:01 PM PDT by ancient_geezer (Don't reform it, Replace it.)
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To: ancient_geezer; snowsislander
That's roughly half of Todster's numbers which is consistant with the idea of double counting of intermediate production stages contributing to final manufacturing value.

The chart said we made $3 trillion worth of stuff, not $3 trillion worth of manufactured goods. The chart includes chemicals and other products that aren't, strictly speaking, "manufactured".

144 posted on 10/01/2006 2:57:30 PM PDT by Toddsterpatriot (Goldbugs, immune to logic and allergic to facts.)
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To: ancient_geezer
That would make the manufacturing shipments figure for the last year 1,620 billion. not $405 billion.

My question remains valid, $1.62 trillion, who makes more? Should we worry when we ship $2 trillion? Are we doomed when it hits $2.5 trillion?

145 posted on 10/01/2006 3:01:58 PM PDT by Toddsterpatriot (Goldbugs, immune to logic and allergic to facts.)
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To: redgolum

What I am saying is this. There cannot be more than ten or fifteen percent of the people working in and around metro areas who need to be in one physical place more than about one or two days a week or one or two days every other week. Most will still need to drive somewhere one day in four or one day in five, but that would take all the congestion off our roads immediately. There is no possibility of 80% of all our jobs being outsourced.


146 posted on 10/01/2006 3:41:04 PM PDT by tomzz
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To: Nowhere Man

The idea would be for some company or companies to set up businesses which provide office services to other business including computers, network access, secretaries and whatever else, and let office workers work from those sites most days of the week.


147 posted on 10/01/2006 3:45:34 PM PDT by tomzz
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To: tomzz
What I am saying is this. There cannot be more than ten or fifteen percent of the people working in and around metro areas who need to be in one physical place more than about one or two days a week or one or two days every other week. Most will still need to drive somewhere one day in four or one day in five, but that would take all the congestion off our roads immediately. There is no possibility of 80% of all our jobs being outsourced.

What type of town do you live in? If there are no jobs that everyone needs to be at, then it must only have service related occupations. Which are the easiest to outsource.

148 posted on 10/01/2006 4:58:05 PM PDT by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: A. Pole
But I do not care what their ethnic or religious background is. If they were American Indians or WASPs or Irish Americans, it would not make them more or less wrong. And wrong they are!

Invoking the Jewishness of some or several neocons is a Red Herring trick which works on dumb people. You could vilify the detractors of Noam Chomsky the same way: "Chomsky is Jewish so if you criticize him, you must be an antisemite".


It's a shame that card is always played. The free traders are like Jessie Jackson in many ways, when cornered, out comes the "race card," or more accuratly, the "ethnicity card." I care if they are right or wrong, if their policies will help or hurt America, ethnicity doesn't play into that. Dang, I'm part Jewish myself and if "we" had that much power, no one told me about it or even given me the cool looking jacket, the key to the executive bathroom, a company car and a super powerful Pentium 6 computer. B-) Throwing stuff around like this is like lighting a smoke grenade on the battlefield, it serves only to confuse and divert attention from the real problem.

BTW, like the tagline, I agree with it.
149 posted on 10/01/2006 5:17:43 PM PDT by Nowhere Man (All Glory to the Hypnotoad!)
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To: A. Pole
"But I do not care what their ethnic or religious background is. If they were American Indians or WASPs or Irish Americans, it would not make them more or less wrong. And wrong they are!

Invoking the Jewishness of some or several neocons is a Red Herring trick which works on dumb people. You could vilify the detractors of Noam Chomsky the same way: "Chomsky is Jewish so if you criticize him, you must be an antisemite".

I guess you are paranoiac about my tagline too."

Spare me the indignation. Anyone who listened to Buchanan mewl on and on about the naked aggression of Israel against the innocent sovereign nation of Lebanon knows that Pat is a plain old fashioned Jew hater.

I am curious, who do you consider to be prominent figures in today's neocon movement? Are President Bush and his cabinet members neocons?

150 posted on 10/01/2006 5:20:53 PM PDT by RightInEastLansing
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To: KevinDavis

"How about banning robots in factories????"

We've practically done that. If you check the number of industrial robots in service in Japan, Europe and the U.S., you'll see that Europe has A LOT more than the U.S, and Japan has a lot more than Europe.

The relative differences are:

Europe has twice as many as U.S.

Japan has twice as many as Europe.

Our domestic robot industry is focusing mainly on defense applications, since we can get cheap labor to do the other stuff. Yet another reason to get rid of illegals. (It would spur investment in machinery to replace them.)


151 posted on 10/01/2006 5:29:33 PM PDT by BikerJoe
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To: Toddsterpatriot
All depends on whether or not the nation has what it needs for survival in the crunch doesn't it.

Time of war, the condition that controls the requirement for independent industrial and resource capacity, is the essential measure.

You figure we have that which necessary to prosecute full scale war of survival replenishing stocks then we have all that is required.

If we don't well guess it won't matter, it will be the conqueror's problem to worry about.
152 posted on 10/01/2006 5:48:28 PM PDT by ancient_geezer (Don't reform it, Replace it.)
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To: RightInEastLansing
I am curious, who do you consider to be prominent figures in today's neocon movement?

I do not care about individual personalities. I do not agree with neocon views same way as I do not agree with feminists or free market fundamentalists.

153 posted on 10/01/2006 5:51:20 PM PDT by A. Pole (Serbian proverb: "Bog visoko, a Rusija daleko." [God is high above, and Russia is far away.])
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To: BikerJoe
Our domestic robot industry is focusing mainly on defense applications, since we can get cheap labor to do the other stuff.

Exactly. As history shows the cheap labor was the main inhibitor of technological progress.

154 posted on 10/01/2006 5:53:24 PM PDT by A. Pole (GWB believes that "guest worker" program will satisfy economy needs for cheap and plentiful labour.)
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To: redgolum

D.C. area, inside the beltway in Va.


155 posted on 10/01/2006 6:13:16 PM PDT by tomzz
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To: A. Pole
"I do not care about individual personalities. I do not agree with neocon views same way as I do not agree with feminists or free market fundamentalists."

You don't care about "individual personalities", but you do "understand that a large part of neocons are Jewish." O.K. then.

Let me clarify a couple of things for you. First and foremost, Buchanan hates Jews. His irrational treatment of Israel leaves no doubt. As for the free trading neocons in the GWBA, the departure of Wolfowitz leaves them conspicuously Jewless. Not that either of us cares.

156 posted on 10/01/2006 6:59:15 PM PDT by RightInEastLansing
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To: tomzz
LOL! In that case, you are definitely right. Many of the people probably could commute via the computer.

Most of my career has been in the Midwest. Light to heavy manufacturing base, with the usual support services around it.
157 posted on 10/01/2006 7:09:39 PM PDT by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: RightInEastLansing
As for the free trading neocons in the GWBA, the departure of Wolfowitz leaves them conspicuously Jewless.

So may we call them neocons now? :)

158 posted on 10/01/2006 7:12:10 PM PDT by A. Pole (GWB believes that "guest worker" program will satisfy economy needs for cheap and plentiful labour.)
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To: A. Pole
So may we call them neocons now?

You have my blessings.

159 posted on 10/01/2006 7:21:51 PM PDT by RightInEastLansing
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To: ancient_geezer
You figure we have that which necessary to prosecute full scale war of survival replenishing stocks then we have all that is required.

I have never said that. All I've said is that those who claim we no longer manufacture anything in the U.S. are off anywhere from $1.62 trillion to $4.3 trillion.

You never did answer, who makes more stuff than we do?

160 posted on 10/01/2006 7:42:18 PM PDT by Toddsterpatriot (Goldbugs, immune to logic and allergic to facts.)
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