Posted on 07/30/2003 12:47:19 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
WAUSAU — Three key members of President Bush´s economic team ended a daylong, three-city bus trek across Wisconsin on Tuesday with an earful of economic anxiety.
The cabinet officials — who have a reputation for always remaining on message, in this case about the administration´s jobs and growth policies — frequently deviated from their theme to hear from workers and small manufacturers concerned about the flow of jobs to China.
Also mentioned: Rising health costs, the service sector´s low wages and a proposed federal regulation that would exempt many white-collar workers from overtime.
Treasury Secretary John Snow, Commerce Secretary Don Evans and Labor Secretary Elaine Chao´s efforts to highlight expectations that the economy will grow in the coming months were scheduled to continue today with stops in eastern Minnesota. A job training center at the Mayo Clinic, a roundtable with investors and a meeting with employees of the electronics retailer Best Buy are planned.
The most serious doubts about the economy came from an audience of workers and suppliers at a Harley-Davidson factory in the Milwaukee suburb of Wauwatosa. They repeatedly raised questions about the loss of manufacturing jobs to China.
The Harley-Davidson factory was selected as a success story — its U.S. motorcycle sales set a record in the second quarter and 13 percent of its motorcycles are exported to countries such as Japan.
Even so, workers and suppliers say their good fortune is an exception among Milwaukee-area manufacturers.
Small businesses that supply custom-made machinery to this motorcycle power train factory say they are under great pressure to relocate their operations to China and that low-priced Chinese imports are driving down prices.
“What can the administration do to level the playing field?” asked President Irv Palmer of Manutech, a 50-employee machine shop. He cited business subsidies from the Chinese government and a fixed currency rate as impediments to fair competition.
“That´s not right. That´s not free enterprise,” said Evans, who agreed that government subsidies are anticompetitive. He noted the Commerce Department has 120 offices around the world to monitor the business practices of U.S. trading partners and his department will issue a report in September making recommendations to shore up this country´s manufacturing.
Robert Schuemann, executive vice president of Signicast Corp. in Milwaukee, stressed the urgency of the situation, saying parts manufacturers are moving to China “as fast as they possibly can.”
The executive for the metal casting maker and Harley-Davidson supplier seconded Palmer´s concerns by asking what the administration can do get the Chinese from keeping the exchange rate on their currency, the yuan, fixed in relationship to the dollar — a practice that has kept Chinese imports artificially inexpensive.
“Long term, you can´t devalue yourself to prosperity,” said Snow, explaining that Chinese officials realize they can´t keep their fixed currency.
The Chinese are investing in U.S. government securities, and “at some point those foreign reserves become troublesome to the global trading system,” he said. Economists have estimated a floating currency would raise the price of Chinese goods by 15 percent to 40 percent.
However, the move to a floating currency in China would have to accompany other economic reforms.
“I think changing the currency has to go hand in hand with changing financial regulation, the banking structure,” Snow said.
Michael Retzer, controller of W.G. Strohwig Tool & Die of Richfield, complained about the U.S. trade deficit with China. The Chinese are buying scrap steel, scrap paper and untanned hides instead of finished goods, he said.
Both Snow and Evans told reporters later in the day that they plan to travel separately Asia to talk to Chinese officials.
Snow said he is considering traveling to the Asian Pacific Economic Cooperation meeting in September in Thailand.
The creation of high-paying jobs instead of low-wage service positions came up at both of the first two stops.
Chao, the labor secretary, said her department has created a commission looking at job creation in high-growth industries.
Wisconsin Citizen Action trailed the official tour group with its bus of about 25 community activists opposed to the recent tax cuts.
The activists were kept at a distance at the first two stops. But at the last stop of the day, a Culver´s Frozen Custard restaurant in Wausau, they mingled with reporters to point out that Wisconsin has lost 52,000 private-sector jobs since Bush took office.
The most receptive audience — small business owners — participated in the roundtable discussion in a Green Bay suburb.
“We are looking for an improved business climate,” said Gary Conger, who hosted the session at his forklift distributorship, Conger Industries, and expressed his hope that tax cuts would translate into additional sales.
More than a dozen members of the National Federation of Independent Business listened attentively as Evans told them that 51 percent of the recently enacted, $350 billion tax cut package would go to small companies.
Snow repeated the administration´s prediction that the economy is expected to grow by 3 percent in the third quarter, 3.5 percent in the fourth quarter and by more than 4 percent in 2004.
Two key economic reports on second quarter economic growth and July unemployment won´t come out until later this week, but the cabinet officials said other indicators already show positive signs.
For FY 2002, interest paid on the National Debt was $332 billion, or roughly 18% of federal revenue for that year. For the first 9 months of FY 2003, the Treasury has already spent over $277 billion in interest expense. (source)
"I am one of those who do not believe that a national debt is a national blessing, but rather a curse to a republic; inasmuch as it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country."-- President Andrew Jackson - (1824)
"Think what you do when you run into debt;
you give another power over your liberty."
-- Benjamin Franklin (1706 - 1790)
This sounds hopeful but I am not holding my breath for something positive.
Ping and any one who wants on or off let me know
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