President Obama Brings 10,000 Manufacturing Jobs Back from China (Headlines We'd Like to See)
I am glad that a company called Teletech Governmental Solutions in Englewood, Colorado used our stimulus funds to hire 635 call center employees to provide assistance to people transitioning to digital TV's. But I would be happier if a single one of those TV's were being made in the United States. The simple fact is, over and over again the United States is using its economic might and even our stimulus dollars to send jobs overseas. Some of this is conscious and obvious. There is no doubt that televisions are all made abroad these days. There was simply no reason that, coupled with the requirement to move to digital earlier this year, the United States government could not have invested several billion dollars in television plants in California, Texas, New York or anywhere else with a ready, willing and able unemployed high-tech work force. But none of this was done.
Why not? Because we have neglected the manufacturing base of our economy in much the same way we have neglected financial regulation. There simply is no manufacturing policy in the United States. To his credit, President Obama has appointed Ron Bloom to coordinate manufacturing policy in the White House. But there is an opportunity next week, when the President goes to China, to kick start this coordination effort and begin to make things happen.
There are two steps the President could take as part of his trip to retake the initiative on job creation in the United States. The creation of real jobs will take real work. It is not just a question of pouring money into financial institutions. Also, it will rub some of our trading partners the wrong way. So what? They've had it coming to them, and if there's any lesson the President should take from Tuesday's election results and today's unemployment numbers topping 10%, it's that the American people will not be satisfied with job creation efforts that only help the big banks. Trickle-down economics, which seems to be the theory underlying this policy, is not popular in New Jersey, in Virginia, or in the rest of the country.
The two actions the president can take will create jobs in the United States, will start passing the benefits of the anemic economic recovery more broadly to the American middle class, and will begin the revitalization of the manufacturing sector. First, he must tell the Chinese that they need to let their currency float freely against the dollar. This will immediately relieve the United States of the equivalent of a 35-40% duty charged by China on everything we ship there. More importantly, it will remove a 35-40% benefit, or subsidy, that Chinese companies receive every time they ship something here. The Chinese government gives their exporters this subsidy grant every time they exchange the dollars they get on their export transactions for their local currency, the Renminbi ("RMB"). This has the effect of supercharging China's exports in the manufacturing sector, and speeding the decline of the U. S. heartland.
There is almost uniform acknowledgment that the Chinese currency is undervalued and that this creates an enormous trade advantage for China. Ben Bernanke made this point strongly all the way back in 2006. The United States Treasury Department made the same point in an April 15, 2009 report. But nothing is done. Nothing changes.
On this issue, President Obama cannot come back empty-handed. He must either get a promise from the Chinese to freely float their currency, or take trade action to off-set the export subsidy. If we need trade action, he can apply what is called the countervailing duty law to currency manipulation, permitting the imposition of a duty on exports financed by currency subsidies. Or he can authorize the commencement of what is called a Section 301 case, which requires an intensive negotiation with the respondent country guilty of the subsidy practice. If the negotiation does not lead to a successful result in a short period of time, he can retaliate with a number of trade off-sets. Faced with these potential actions, the Chinese should act on their own, avoiding a confrontation. But if it is confrontation they want, we should be prepared for that. Tuesday's elections make clear that bailing out banks and leaving the job base in ruins will not be enough for the American people.
The second action President Obama should take is to tell the Chinese government they must end all industrial subsidies to manufacturing companies. These have taken the form of direct grants to manufacturers to build new plants, tax breaks, low cost inputs and a score of other innovative ways to create and brace up manufacturing companies. Over $50 billion has gone to the Chinese steel industry, over $30 billion to the Chinese glass industry, nearly $30 billion in subsidies to the textile industry each year. Some limited subsidy practices may have made sense twenty years ago when China was struggling to start up its economy and put its people to work. It makes no sense now that China has a sustained $250 billion trade surplus with the United States, and has had the largest trade surplus with our country of any other trading partner for 89 straight months. Our beneficence can only go so far. China is now a big boy, to put it mildly, and we should demand an end to these WTO-illegal subsidies. Here too, if the president cannot reach agreement in a short period of time, he should take action by self-initiating a large series of trade actions against China and bringing them to a quick resolution.
No doubt some people will say that we have subsidized our auto industry with bailouts. But there is an enormous difference. The Chinese subsidies go to export-oriented industries that are targeting the United States and other export markets. The subsidies to the U.S. auto industry do not affect China's companies, because the U. S. auto companies export hardly anything to China. In 2008, U. S. auto manufacturers exported about 46,000 vehicles to China, composing less than one half of one percent of the Chinese market. In contrast, for example, exports from Chinese pipe producers constituted close to 30% of the U.S. market several years ago. In apparel, China exported over $23 billion of product to the U.S. in the last year.
We have become a country of two economies. The bank, Wall Street and investment economy seems to be reviving. People are making money and going out to dinner with bailout funds. But the middle class economy of manufacturing workers is struggling to right itself after twenty years of government neglect, even before the additional burden of the financial crisis hit them.
The creation of real jobs that are sustaining and that will provide a long term successful life style for American workers can begin next week. But it won't begin without tough action and a demand for real change.
Will Bunch: How Philadelphia Got Its Groove Back -- And Why N.Y. Is Jealous
New York became a black-hole-like force, sucking the energy from Philadelphia, stealing everything from our college grads to tourists. New York got Broadway, the UN, the World's Fair -- and baseball.
Loading comments…
Want to reply to a comment? Hint: Click "Reply" at the bottom of the comment; after being approved your comment will appear directly underneath the comment you replied to
"There simply is no manufacturing policy in the United States."
There is a manufacturing policy in the United States. And the policy is obvious.
The policy is to give American corporations tax breaks for shipping tax breaks to foreign countries.
This policy began under Nixon and has been continued by all Presidents since regardless of whether they are from the Republican or the Democratic Parties.
During this most recent presidential campaign, Candidate Obama promised to take a step back from this policy by taking away the tax incentives given to corporations to ship American manufacturing jobs elsewhere.
Of course, he also promised to renegotiate NAFTA and to push for tax breaks for corporations that create jobs in this country.
The fact that he has not been more aggressive in taking away the tax breaks for corporations that ship manufacturing jobs to foreign countries means either
(a) he hasn't had enough time because he has only been in office for 10 1/2 months,
(b) he's a brilliant chess player and things would have been worse under McCain, or
(c) he is continuing the policy of encouraging the shipping of manufacturing jobs to foreign countries and we should not expect miracles.
How can we keep jobs here when you see corporate marketing programs like this one http://www.softpicks.net/blog/11/cloud-computing-could-save-money-by-eliminating-the-us-jobs-as-said-by-unisys-official.htm
Great article, more likely a better chance for # 1 I think. An analysis of why america continually finds itself on the shorter end of the stick with it's so called trade partners would be interesting.
Buying the things made by heavey industry from China and making the high tech parts here would make a great model for small businesses and bring manfacturing jobs home.
A first step would be for the commerce department to get out bed with the U S chamber of commerce; for the sake of profit the so call smart people heard 6 billion Chinese and it was let Americans fend for themselves, we are going to make lot of money. My understanding are that a country's economy should not be just to make money for the share holders, it should also provide for the general welfare of it people. Henry Ford one of the great industrialists of our time made a product that the people making those products could and would buy, hence the great American economy. This nation has forfeited its ability to make thing for the benefit of it people all for the sake of making a profit; hence the collapse of the US economy; unemployment at record high.
Headline we'd like to see.
Only Big Business Pays Taxes as Only They are Represented by Congress.
Americans revolt and refuse to pay taxes to support a government that refuses to use the funds to improve conditions for the citizens. Americans refuse to pay for Congress, illegal wars, Black Ops, Torture, Bailouts, bad healthcare via insurance companies....
Truly
Headline we'd like to see
Bush, Cheny, Rumsfeld, Powell, John Yoo and others Convicted of war crimes and imprisoned by American Justice System
Truly
Yes, yes, yes! Can't be "America" until this matter is corrected.
Yeah, and when's the last time you saw anything written about the "growing" middle class in America?
Sometimes, I feel like that guy in the "Invasion of the Body Snatchers" desparately trying to warn an unbelieving world that we're all losing our souls to the pod aliens on Wall Street.
When did these idiots in government forget that China is run by communist! They have no respect for human life so there is no way you can compete with them in a democracy.
We must end most favored nation trade status for China. And we need to exclude any communist nation from any trade agreements.
China practices religious persectuion, forced abortions, slave and prisoner labor, has little regard for factory or product safety or the environment and Hu Jintao is number 6 on the state depts worst dictators list.
Do we really want to be supporting this behavior?
And of course lets not forget the intellectual property theft, currency manipulation and other mercatilist policies that directly harm US mfg and labor
Religious persecution has existed in the US as well, as had racial prejudice and bias. The US govt has also funded millions of abortions. I'm not aware of any slave labor in China. The US also utilizes some prison labor. Plus the US has been trying to push down the value of the currency over the last several years and particularly right now (manipulation?).
we need jobs! it's becoming a national emergency.
How do you say...
TRANSPARENCY....
or is that really a word without meaning....
Don't count on the Pres. confronting China about fair trade.
They think they are being fair as they subsidize so many things.
One factory I say on TV had living quarters at the factory for the workers. I would say this is a subsidy.
We have let this go on for a long time and too bad it wasn't nipped in
the bud when there was a chance to do something about it without making a bigggggg issue about it.
I still say that anything for our Military should be made in America.
But it won't be.
GM even sold the Hummer line to China so that is gone from here too. They will probably fix it up to be a military vehiclea and send
it to Venzuela.
We are so la la la in this country. Seems that the rich and famous
in Washington are incapable of lining anybody's pockets but their own.
Increasing the value of the yuan 35-40% will not help the US economy. First, it will increase the costs retailers pay for imported goods by a lot. Retailers would pass some of those increased costs to consumers. This will result in less profits for retailers and lower real incomes for consumers. The drop in profits by retailers will mean less investment in stores, more stores being closed, and more workers being fired. This would mean less economic growth and higher unemployment.
As for exports, most things shipped from the US to China are raw materials. Since the importation of raw materials to China is pretty much fixed to their rate of economic growth, this will not result in an increase in global trade at all; but rather the substitution of US raw materials from European, Australian, or other Asian raw materials, which would weaken US trading partners. The US does ship some capital goods to China as well, but total imports by China of these goods also depends on economic growth; so if Chinese exports to the US decline, it's unlikely that they'll invest in as many US capital goods (unless they launch another huge domestic stimulus plan). The raw materials and capital goods industries are also not very labor intensive.The hit to the retail market from higher costs would result in much more job loss than the increase in jobs in the capital goods and raw materials markets by far.
here comes dugan like clockwork with his globalist propaganda
the slight if any increase in the coswt of goods will be more than offset by putting US mfg workers back to work in higher paying mfg jobs
TV manufacturing is a commodity business and is not profitable in the US with the high costs here. If manufacturing was profitable in the US then someone would do it. But it isn't. TV manufacturers have either gone bankrupt or moved those manufacturing elements (like Corning) to places where it is profitable.
As for the 636 call center workers paid for by taxpayers, it is a waste of tax-payer funds and does nothing to stimulate the economy. Those jobs add no value to the real economy and create no wealth. And perhaps most importantly, they require taking out additional debt to pay for them. This is money that needs to be paid back in the future with interest. And the additional issuance of debt to fund these jobs puts upward pressure on interest rates. The Cash for Clunker program costs $24k per car sold. This call center plan likely cost an absurd amount per job as well. It's a waste.
the key word is profitable. if we want profit, we can ship all jobs to china.
the problem is if we do that, we may well move to china. without a strong middle-class, this country can't survive, and therein lies the dilemma: how to keep jobs and be profitable. without the manufacturing factor, we will be at the mercy of the service economy, which is not only low-paid but also unreliable.
if you want your company to keep making losses, then just open a company, hire workers and keep making losses.
dont tell me or others that we have allow companies we invest in to keep making losses
A communist nation that has no value for human life will always be more profitable and immoral.
Communism is the perfect capitalist state but its also immoral.
Electronics manufacture is the very definition of "high tech". you know - that high tech jobs that were supposed to replace the "low tech" commodity jobs that went offshore.
except the opposite happened didn't it - the high tech mfg obs that command higher wages are the ones that went offshore, while the simple assembly and repackaging low skill jobs are the ones that stayed behind
todays tvs are even more complex and high tech than their predecessors were just a few years ago, when they were still made domestically
Headline we'd like to see;
Americans declare rights of eminent domain of their economy & country - first step, eminent domain of their homes.
Definition of eminent domain; The power to take private property for public use by a state, municipality, or [[ private person ]] or corporation authorized to exercise functions of public character, following the payment of just compensation to the owner of that property.
The way I see it the banks have been paid for all property with ursurous interest rates - homeowners now have the legal right to claim eminent domain of the entire country and its resources.
Truly
You must be logged in to comment. Log in or connect with
