Patrick J. Buchanan Examines "The Slow Awakening of George W."

Washington Times ^ | 09-17-03 | Buchanan, Patrick J.

[Theodore R.]

The slow awakening of George W.

-------------------------------------------------------------------------------- Posted: September 17, 2003 1:00 a.m. Eastern

© 2003 Creators Syndicate, Inc.

Last July, U.S. Trade Representative Bob Zoellick delivered a halftime pep talk to dispirited globalists, thrown on the defensive by the hemorrhaging of U.S. manufacturing jobs.

"What ... a surprise," Zoellick railed at his troops, "to see that the proponents of [free trade] ... have so often abandoned the debate to the economic isolationists and purveyors of fright and retreat."

But by September, Zoellick's own boss seemed to be drifting toward the camp of the "economic isolationists and purveyors of fright."

At a rally in Ohio, which has lost 160,000 manufacturing jobs since mid-2000, President Bush railed: "We've lost thousands of manufacturing jobs because production moved overseas. ... America must send a message overseas – say, look, we expect there to be a fair playing field when it comes to trade."

Yes, friends, at long last, we have their attention.

What's behind this radically revised presidential rhetoric? It is this: U.S. manufacturing jobs are vanishing, and unless he turns it around, Bush's presidency may vanish along with them.

The numbers are breathtaking. Manufacturing jobs have been disappearing for 37 straight months. Not since the Depression have we lost production jobs three years in a row. Since 2000, one in every six manufacturing jobs, 2.7 million, has disappeared. These jobs paid an average wage of $54,000.

Unfortunately for President Bush, while he has a good heart, he was horribly miseducated at Harvard. He simply cannot comprehend that it is free-trade globalism that is destroying U.S. manufacturing jobs, and may yet destroy his presidency.

The serial killer of manufacturing jobs is imports, which are now equal to almost 15 percent of GDP, four times the level they held between 1860 and 1960. What has caused this flood of imports? The trade deals that people like Robert Zoellick negotiate and George W. Bush celebrates.

Consider the numbers.

In July alone, the United States exported $86.1 billion in goods and services. But we imported $126.5 billion, for a trade deficit of $40.4 billion. The total trade deficit for 2003 is estimated at between $480 billion and $500 billion. But the deficit in goods will run closer to $550 billion.

The president's father and Bill Clinton contended that every $1 billion in exports created 20,000 jobs. Thus, a $550 billion trade deficit kills 11 million production and manufacturing jobs.

Say goodbye to blue-collar America.

What is the Bush prescription for curing this metastasizing cancer? In Ohio, he declared, "See, we in America believe we can compete with anybody, just so long as the rules are fair, and we intend to keep the rules fair."

How, Mr. President?

Consider the nation that runs the largest trade surplus with us. In July, we bought $13.4 billion in goods from China and sold China $2.1 billion. U.S. imports from China this year should come in around $160 billion, and U.S. exports to China at $25 billion.

We will thus buy 10 percent of the entire GDP of China, while she buys 0.25 percent of the GDP of the United States. Is this "fair trade"? But how does Bush propose to close this exploding deficit? How can he?

Where a U.S. manufacturing worker may cost $53,000 a year, a factory in China – with $53,000 and using the same machinery and technology as a U.S. factory – can employ 25 reliable, intelligent, hardworking Chinese at $1 an hour.

If you force U.S. businessmen to pay kids who sweep the floor a $5-an-hour minimum wage, while their rivals pay highly skilled Chinese workers $1 an hour, how do you square that with the 14th Amendment's guarantee of equal protection of the laws?

Does the president, when he goes on about keeping "the rules fair," mean he will insist that China start paying its skilled workers $25 an hour and subject their factories to the same payroll taxes, wage-and-hour laws, OSHA inspections and environmental rules as ours?

Beijing will tell him to go fly a kite, Made in China.

It is absurd to think we can force foreign nations to accept U.S. rules and regulations on production and American standards on wages and benefits. And why should foreign nations comply, when – with their present policies and laws – they are looting our industrial base and walking away with our inheritance?

The men who have custody today of what was once the most awesome manufacturing base the world had ever seen are ideologues, impervious to argument or evidence. Like the socialists of Eastern Europe, zealots like Zoellick are beyond retraining. They are uneducable. They have to go. The sooner they do, the sooner we can get about rebuilding the self-sufficient and sovereign America they gave away.

[Texas_Dawg]

I would have to say the middle class is generally better, more solid, good people.

Amazing. At least your honest in your bigotry.

Imagine if I said, "Rich people are just generally better people than the middle class." The outrage and uproar on FR would be unreal. Yet you can say that middle-class people are generally better than rich people. It's disgusting.

[Texas_Dawg]

How about a trend showing unemployment is being reduced not increased. Maybe throw in a trend showing wages increasing.

This is a chart of the U.S. unemployment rate:

In 1990, after nearly 8 years of a decline (and economic boom), the rate turned upwards, leveled, then temporarily spiked again (costing Bush, Sr. his Presidency to a cyclical economic downturn). After this temporary second spike, the rate then went on another steady decline for the next 8 years (all this in the age of NAFTA, WTO, etc.) during another economic boom. Then, as should be expected, another cyclical correction kicked in, shaking out the excesses in the labor and wage markets, sending unemployment up, leveling off, then spiking again (where we stand now, thus the same uproar at the President and xenophobia that history demonstrates happens every time in cyclical corrections). If this is the top of the spike and the line (unemployment rate) now continues back down in the same pattern as happened from 1992-2000, will you admit that you were wrong? (Because I can guarantee you we will still be moving more and more towards free trade and a global economy.) If this happens, as I am saying it will (the paleos are the ones saying that this time is different ("jobless recovery", "death of manufacturing", etc.)), will you admit I was correct? Bush won't have to change a damn thing for this to happen. But if he continues listening to the doom and gloomers, he can definitely prolong the spike and minimize the drop unemployment in the next cyclical boom.

[RockyMtnMan]

If employment and wages rise between now and the next election I will happily say you were correct. If on the other hand the opposite is true I expect the same from you.

Barring some unforseen stimulus, I would state that unemployment will get worse and the credit bubble may pop.

[Texas_Dawg]

If employment and wages rise between now and the next election I will happily say you were correct. If on the other hand the opposite is true I expect the same from you.

Absolutely. It's a deal. I'll save the link. Now... no more of these discussions for me for awhile. We'll revisit this in a few months or so. Thanks.

[txhurl]

Dawggy get sleepy?

[RockyMtnMan]

No problem, I'll be happy as a clam if capital starts flowing back into the local economy. My career options will get better and my company will start hitting all it's numbers.

I am a pessimist by trade not by desire.

[Texas_Dawg]

Dawggy get sleepy?

Yes.

[RockyMtnMan]

I'll only rest until one of us is proven wrong, until then it's only settled between me and you.

[Recourse]

I've explained the benefits in several posts, but I suppose you don't feel my arguments are "serious" because they don't agree with yours.

According to your novel theories, massive amounts of U.S. capital should be flowing to low-wage countries, especially China and India. Your theories utterly fail to explain why most capital leaving the United States, including manufacturing investment, flows to other high-wage countries, such as Canada and Europe. According to a study by Deloitte and Touche Consulting, 94 percent of outward U.S. foreign direct manufacturing investment in 2001 flowed to other rich countries. Yes, 94%. If low wages drive investment, how do you explain the fact that, during the past decade, the United States has been a net recipient of an annual average of $20 billion in foreign manufacturing investment?

As many American companies can attest, investing profitably in China and India remains a challenge—because of their underdeveloped infrastructure and legal systems, undereducated workforces, remaining trade barriers, and limited consumer markets. American companies invest less than $2 billion a year in China, and far less in India. That compares to the nearly $200 billion invested each year in our own domestic manufacturing capacity, and $100 billion a year invested by American companies in the rest of the world (and most of that in other rich countries). At the end of 2001, American companies owned more than 10 TIMES as much direct investment in the tiny, high-wage Netherlands ($132 billion) than they did in China ($10.5 billion) and India ($1.7 billion) combined. Obviously, wages are not the only, or even the main, driver of foreign investment.

Your flawed theories also fail to explain America's continued export success in world markets. Americans remain the world's leading exporters of manufactured goods. The United States today accounts for a steady 12 percent of global exports, the same share as two decades ago, and three times China's share. Chinese exports to the United States have indeed grown rapidly in recent years, but at $125 billion last year, they represent just above 1 percent of America's gross domestic product of almost $10.4 trillion. There is nothing alarming about the fact that Americans spend 1 percent of our income on products made by the one-fifth of mankind that lives in Mainland China.

Like many before you, and including Pat Buchanan, you confuse the passing pain of a recession with a shift in fundamentals. Yes, the recession of 2001 and the slow recovery have been especially hard on the manufacturing and high-tech sectors, but neither is in danger of disappearing. Manufacturing output in the United States remains 40 percent higher than it was a decade ago, and double what it was in the 1970s. We can produce more with fewer workers because of soaring productivity. In information technology services, the United States remains the world's top provider. Under what contorted economic theory does rising worker productivity—up an amazing 4.8 percent in the Untied States last year and still rising—turn a rich country into a poor country?

Obviously, competition from China hurts some U.S. sectors and companies and will even drive some of them out of business. That is an expected result of competition. Trade with China allows our economy to shift production to those products and services where we enjoy an even greater advantage, raising our overall productivity. Erecting new barriers to trade and investment with China would restrict the liberty of Americans and would weaken our economy by reducing competition and raising prices. It would benefit the few at the expense of the many.

American workers retain huge advantages when competing in the global economy. When we shake off the current slowdown, as we have every other postwar recession, American workers will be more productive than ever.

[RaceBannon]

2.1 million jobs lost in this recent downturn. Plus, "Over the past year and two months, we have seen the weakest manufacturing recovery from recession since the Federal Reserve started keeping tabs on such things back in 1919. The data show that since December 2001, manufacturing production has edged up only 1.6 percent, drastically slower than the first 14 months of the previous six recoveries when growth in manufacturing averaged 10.8 percent."

http://www.house.gov/smbiz/hearings/108th/2003/030409/jasinowski.html


http://www.freerepublic.com/focus/f-news/959787/posts
Lawmaker predicts defeat for 'Buy American' language (Defense Department procurement update)

"But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favor of free trade." ~ Karl Marx, On the Question of Free Trade, January 9, 1848 http://www.marxists.org/archive/marx/works/1848/01/09ft.htm#marx

"Communists and socialists feel sure that setting up international “free” trade systems which impose regulations chuck full of intrigues, redistribution plans, arbitrary law, and interdependence schemes, will win out against the conservative interests of every free nation. What could be better than to use “free” trade to reverse the advantage of the relatively free, moral, prosperous, and strong nations of the Earth, so that the tyrannical, amoral, poor, and weak nations of the socialist bloc might get the upper hand? What could be a more cunning approach than to market the idea that those who oppose “free” trade are enemies of freedom?" http://www.newsmax.com/commentarchive.shtml?a=2000/6/27/105655

http://www.freerepublic.com/focus/news/954156/posts
Why FREE TRADE was never the answer.

[JNB]

Ted Kennedy and Bob Kerry are technically Catholics as well, and we all know how many of their views are in contrast with church teachings. Also, how do you know most of the WSJ OP Ed board are Catholics?I know Peggy Noonan is, but from what I know the rest are WASPs. Now National Reviews writers are still mainly Catholic. Still even if they are Catholics, the neo-conservative viewpoint is just in much conflict with church teachings as the liberal viewpoint is. Again, I put my faith ahead of corporations, ahead of economic theory and ahead of America if need be.

[Texas_Dawg]

I'll only rest until one of us is proven wrong, until then it's only settled between me and you.

Whatever. (Honestly, I really don't care if I convince anyone or not that unilateral free market capitalism works.) I'm just glad you were honest enough to give me some standards to meet. The Willie Greens of the world will never be wrong no matter what happens. They will just have much smaller audiences until the next cyclical downturn when they will reappear talking about what geniuses they are.

Here's another stat for you: The recent decline in the price of oil. One reason companies have been slow to hire (although not really, historically-speaking in a correction), despite corporate profits increasing so much this year, is that the price of oil (and therefore fuel and everything else basically) is still very high due to recent world events (Nigeria, Venezuela, the Middle East, etc.). But as Iraq is coming back onto the market, Russia is increasing its production, and Venezuela will be forced to do the same, the price of oil will continue to drop. That is tens of billions of dollars saved by not being wasted on oil. That is money for reinvestment, increasing stock prices, growth, and jobs. I thank God that Bush's timing on this is so great. His spike happened a year before the election whereas his father's happened during the election year, causing the Perotistas to freak out ("that sucking sound" and all that crap) and help elect Bill Clinton. GWB's economy and job market will be well into recovery phase by next year. Hillary's waiting till 2008 for good reason. She's evil, but she's smart. She knows this President is simply destined (I wouldn't even laugh at people who say "divinely so") to win.

[Texas_Dawg]

Like many before you, and including Pat Buchanan, you confuse the passing pain of a recession with a shift in fundamentals.

Amen. (See my recent posts on this thread to RockyMtnMan.)

[Recourse]

You might want to read my post above. It refers to actual statistics, or what I like to call "facts."

[riri]

See, now that was a, basically, for you, civil post.

Maybe you just aren't a morning person.

[RaceBannon]

Williams really blows it sometimes.

Look at this example:For example, the fact that a Mexican road construction worker might earn just $3 an hour, while his American counterpart earns $25 an hour, doesn't mean Americans can't compete. The reason is simple. American workers have more capital(modern heavy equipment) working with them, making the output of a day's work much greater.

If we gave the modern equipment to the Mexican workers, they would be on an even competion work productivity wise, right?

Well, what does Williams think is going on overseas?? We gave these people CNC machines for cryuing out loud!!

Most of these free-traitor idiots have never worked in manufacturing, and it shows in their comments.

Why FREE TRADE was never the answer.

[Texas_Dawg]

See, now that was a, basically, for you, civil post.

I've posted explanations like that 1,000 times on FR. And then you get 1,000 replies from Willie Green and a bunch of morons that despise Bush and capitalists to begin with, filled with a bunch of Pat Buchanan rally buzzwords. So I have fun with it and feed their fire.

[Ciexyz]

I can see the way the 2004 election will go in PA. My vote for Bush won't even matter...the state will go Democratic if the economy doesn't improve for blue-collar workers. Don't even talk to me about how the economy is supposedly improving. It may be for some sectors of the economy, but not here in PA and Ohio. Impressions are everything! Don't blame the media or the spinsters on the news channels.

People in this region believe that Bush has basically turned around the 9-11 terror threat, so now he can be bounced from office for a Democrat who can bring back prosperity to the common (blue collar) worker.

I don't agree with that scenario, I'm simply reporting what I see in this area. Please take note, RNC!

[NMC EXP]

...monetary policy, which is the real culprit for the loss of manufacturing jobs as American products simply cannot compete in foreign markets of Third World countries.

Monetary policy certainly is a factor.

However, when it comes competeting in foreign markets you are looking thru the wrong end of the telescope.

From 1890 to 1973 trade (import and export) as a percent of GNP averaged 14%. In other words the US was practically a closed economy. This was a result of tariffs which averaged 24% From 1950 to 1973 real (inflation adjusted) wages (non-supervisory personnel) increased by 47%.

After WW2 the US began unilaterally reducing tariffs to their present average of 4%. As a result, in 1973 trade as a percent of GNP began to increase. When it did real wages began to fall. From 1973 to 1991 wages fell 19% and are still dropping.

The point is, we do not need an expansion of trade beyond the 14% of GNP historical average to have a healthy economy.

Remenber Ayer's Law: "That which has happened, can happen."

Regards

J.R.