Posted on 09/05/2011 9:49:48 PM PDT by Bratch
Once, it was a Labor Day tradition for Democrats to go to Cadillac Square in Detroit to launch their campaigns in that forge and furnace of American democracy, the greatest industrial center on earth.
Democrats may still honor the tradition. But Detroit is not what she was, not remotely. And neither is America.
Not so long ago, we made all the shoes and clothes we wore, the motorcycles and cars we drove, the radios we listened to, the TV sets we watched, the home and office calculators and computers we used.
No more. Much of what we buy is no longer made by American workers, but by Japanese, Chinese, other Asians, Canadians and Europeans.
"Why don't we make things here anymore?" is the wail.
Answer: We don't make things here anymore because it is cheaper to make them abroad and ship them back.
With an economy of $14 trillion, we may still be the best market in the world to sell into. But we are also among the most expensive markets in the world in which to produce.
Why is that? Again, the answer is simple.
U.S. wages are higher than they are almost anywhere else. Our health, safety and environmental laws are among the most stringent. Our affirmative action demands are the most exacting, except possibly for those of Malaysia and South Africa.
Does the cost of production here in America alone explain the decline in manufacturing and stagnation of workers' wages?
No. For since the Revolution, America has had a standard of living that has been the envy of the world. From the Civil War through the 1920s, as we became the greatest manufacturing power the world had ever seen, our workers enjoyed pay and benefits that were unmatched anywhere.
Yet our exports in those decades were double our imports, and our trade surpluses annually added 4 percent to the gross national product. How did we do it?
We taxed the products of foreign factories and workers and used the revenue to finance the government. We imposed tariffs of up to 40 percent on foreign goods entering our market and used the tariff money to keep taxes low in the United States.
We made foreigners pay a price to get their products into our market and made them pay to help finance our government. We put our own country and people first.
For corporate America, especially industrial America, this was nirvana. They had exclusive free access to our market, and foreign rivals had to pay a stiff fee, a tariff, to get their products in and try to compete with U.S. products in the U.S. market.
What happened to this idea that made America a self-sufficient republic, producing almost all it consumed, a nation that could stay out of the world wars as long as she wished and crush the greatest powers in Europe and Asia in less than four years after she went in?
A new class came to power that looked on tariffs as xenophobic, on economic patriotism as atavistic and on national sovereignty as an antique idea in the new world order it envisioned.
By 1976, editorial writers were talking about a new declaration of interdependence to replace Thomas Jefferson's Declaration of Independence, which was now outdated.
The new idea was to replicate America on a global scale, to throw open the borders of all nations as the borders of the 50 states were open, to abolish all tariffs and trade barriers, and to welcome the free flow of goods and people across all frontiers, thereby creating the One World that statesmen such as Woodrow Wilson and Wendell Willkie had envisioned.
By three decades ago, this globalist ideology had captured both national parties, a product of universities dominated by New Dealers.
But why did corporate America, with its privileged access to the greatest market on earth, go along with sharing that market with its manufacturing rivals from all over the world?
The answer lies in the trade-off corporate America got.
Already established in the U.S. market, corporate America could risk sharing that market if, in return, it could shift its own production out of the United States to countries where the wages were low and regulations were light.
Corporate America could there produce for a fraction of what it cost to produce here. Then these same corporations could ship their foreign-made products back to the USA and pocket the difference in the cost of production. Corporate stock prices would soar, as would corporate salaries -- and dividends, to make shareholders happy and supportive of a corporate policy of moving out of the USA.
Under globalization, America's investor class could and did get rich by the abandonment of America's working class.
America is in a terminal industrial decline because the interests of corporate America now clash directly with the interests of working America -- and, indeed, with the national interest of the United States.
And both parties are either oblivious to or indifferent of what is happening to their country.
Tariffs are not the answer. The answer is to get rid of labor cartels, excessive requlations, taxation, and government control. Tariffs will just increase prices, give labor cartels more power, and trigger a global trade war reducting economic activity world wide.
Unions and the minimum wage continue to impede America’s rightful place as the world’s supreme economic power.
Disagree.
http://cafehayek.com/2011/08/quotation-of-the-day-40.html
There is much more about free trade vs protectionism at the Cafe Hayek blog.
The only thing that forced American auto companies to improve their product was competition from abroad. Competition did not hurt the auto industry; unions did.
All I’ll say is if import tariffs are raised drastically you will soon have a global depression that will make today look like the good old days.
Apple, Google, Microsoft, Oracle, IBM, Facebook are all software companies, and employ hundreds of thousands of American software engineers. Intel is trying hard to become a software company.
Tell Americans jocks to put down their wrenches and shovels, and toss away outdated visions of muscle-fueled manufacturing greatness. Ask them to sit in front of a keyboard and learn OOP and C++. The future is theirs.
Very Buchananish - but he has some core concepts about right.
The goals of corporate America are not in line with those of blue collar America.
As a general principle for recovery - would be a good baseline to start with - aligning the goals of citizens.
Of course - he described conditions which ARE constitutional, and ARE NOT under the control of the government - while ignoring the insanely large growth of the Gov - Fed and State - that is largely un-constitutional, and IS the responsibility of the government.
I would bet - if we went back to core concepts of Constitution, we would magically find out that in the process, labor and capital also came back into line.
For example - if we reduce all of the red tape and confusion the gov is responsible for - a lot of business starts to look good in the US. Look at Boeing and South Carolina issue - perfect example (if easy).
In other words - he is addressing priority 2.
Remember: anytime you hear someone use the phrase "shareholder value" positively in a sentence then you know that you are listening to an oracle of wisdom and intelligence.
Please hush up and listen further to tips on how you can properly invest your 401-k funds for retirement.
Oh yes...
... and they're not building any more land!
We are still the number one manufacturer in the world. That's not to say there aren't serious problems but facts are facts.
Oh boy, here we go.
“Industrialization and low skilled manufacturing labor is an outdated concept.”
Guess no one ever told the Chinese that. When are boneheads ever going to realize that there are just some people who can’t do anything except dig ditches and tighten bolts on an assembly line?
I doubt the ‘Bill of Rights’ would ever pass in this day and age. The communists RATS would never allow it.
Buchanan is correct in most things, just not the religion that is at fault. Self-deception is his fault.
But it wasn't enough for the fatcorps and big biz owners, so they bribed and bankrolled the politicians to flood America with tens of millions of low wage illegal aliens.
All this while the American private sector workers twist in the winds.
Profits, regardless of consequences.
Direct comparison are tough, but US wages aren't ridiculously high compared to many other countries.
http://www.worldsalaries.org/manufacturing.shtml
Direct comparison are tough, but US wages aren't ridiculously high compared to many other countries.
http://www.worldsalaries.org/manufacturing.shtml
Bjarne Stroustrup (inventor of C++) is an Aggie, BTW. To be fair to tu, they had another notable name on their roster. Yes, the late Edsger Dijkstra (goto is evil) was a teasip. :-)
These are the good old days! Believe it, my friend.
lol thanks for the laugh. Let me guess. You are in the software biz?
This article is definitely a target-rich environment, so I'm going to pack it in for the night with one final comment.
Pat's idea here works if one company does this and thereby gains a competitive advantage. It doesn't work if all companies do it, continue to compete with each other and none has a competitive advantage. Any company that artificially inflates its managerial salaries and dividends will be crushed by competitors who don't and can therefore undercut its price.
If fact, most companies that shift production overseas are forced to do so by competitive pressures and don't necessarily make more money by doing so. Their cost of production may be lower, but then so is their sales price.
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