Our Jobless Recovery Is Too Slow! More "Stimulus" Spending Isn't the Answer!

03/18/2010 05:12 am ET | Updated May 25, 2011

Understanding What Went Wrong: I speak from more than 30 years of experience in national economic matters reaching back to the Nixon Era in 1970. That was a time of big impact by Japan and the new global economy, and of course the first overtures to China. I believe that most of the jobs troubles we're having today stem from trade and financial policies adopted then and that are basically still followed today! Very simply we gave away far too much and are still doing so now. It's high time we change!

What's different since 1970? Then the US was beginning to run trade deficits, but only about $10 billion annually. Economists said "Don't worry -- if some policy decisions favor other countries some, we'll benefit in the global gains." They also said "We're going to float the dollar, so If we begin to run bigger trade deficits, the dollar's value will adjust to keep our exports competitive!" If anyone had said "With those policies, we'll later run $500 billion dollar annual trade deficits and lose many manufacturers and their good jobs, the economists would have said "Impossible -- It can't happen." But it did, and America's companies and employees are paying a very big price!

Our trade deficits grew steadily until they reached $700+ billion in 2004! Since the recession began in 2007, thousands of plants have closed, with millions of jobs lost. Our manufacturing employment is down from a peak of 20 million workers in 1979 to about 10 million today in a much bigger population. Those are the results of ineffectual policies over many years. Most economists now say "This is unsustainable!" The seriousness of the lagging jobs recovery and our ballooning trade debt demand that strong corrective action be taken now as a top priority.

What Are The Key Elements of A Fix It Program?
Here's what's needed for a robust jobs recovery and a deep reduction in our trade deficits. Most of all, let the forces of fair competition revitalize our manufacturers and their good jobs!!

  1. Make it national policy to achieve a balanced trade account over a very few years.
  2. Keep our markets open with a new tradable import certificate system.
  3. Recognize that a strong domestic industrial. base is essential for national security
  4. Create a level playing field here for our domestic producers vs. foreign competitors.
  5. This is crucially important to attract new investments and for plants to reopen.
  6. Recognize that our past wide open "free trade" policies failed badly .Negotiate better deals. The floating dollar alone doesn't keep us competitive as was promised.
  7. US parent companies must re-examine the claimed benefits of off-shoring jobs.
  8. Cheap foreign labor may not be a good trade-off for out-of-work consumers here.
  9. Enact an updated version of S.3899 -- "The Balanced Trade Restoration Act of 2006" Even while being debated, it will provide leverage in trade negotiations and help in raising capital to reopen plants and start hiring again! It will have a fast, real impact.
  10. Most important -- let level competition with importers restore our manufacturers and their good jobs! foreign

The Balanced Trade Restoration Act of 2006 (not enacted -- ready to update)
S.3899 provided for issuance of tradable import certificates based on the value of US exports. Purchase of certificates in a face amount matching the appraised value of any imports will be required. thus causing balanced trade and fair competition.. The Act is market-based and doesn't target or favor any country or industry. It permits all imports as long as the necessary certificates are submitted. It has the extra advantage of not needing government funding or deficit spending as do most other current proposals, such as for infrastructure or more "stimulus." And we can move very fast! No international negotiations or long trade disputes over claimed trade violations. Best of all, the US has by far the largest market in the world. We're quite willing to share it with all other countries if they'll compete in it on fair, level terms with US producers