Protecting manufacturing jobs has long been considered an issue that only people in the Midwest or in unions cared about. However, a recent USA Today/ Gallup Poll showed that Americans believe the number one way to solve the jobs crisis is to keep manufacturing jobs in the U.S.
The manufacturing jobs crisis has been accelerating rapidly; 5.5 million high-paying manufacturing jobs have been lost since 2000, with an incredible 2.1 million lost in the last two years alone. Such rapid loss has startled even typically free-trade-loving political pundits into agreeing that something needs to be done to protect manufacturing. Establishment columnist Robert Samuelson wrote in The Washington Post this weekend:
Greater conflicts and a collision of national egos seem inevitable. No longer should we sit passively while China's trade and currency policies jeopardize jobs here and elsewhere. Political differences between the countries are increasingly hard to ignore.
It's not just low-skill jobs that are disappearing anymore; it's high technology jobs that were suppose to be the new core of the U.S. economy that are leaving as well. Recently, 19 U.S. trade associations, which have traditionally backed free-trade measures, asked the Obama administration to take action against China's efforts to force them to turn over advanced technologies developed with American taxpayer money.
On the trade front, President Obama has taken some preliminary steps to stem this threat to the American economy, such as enforcing an anti-dumping ruling against Chinese tire makers last year. Also, Obama released a "Framework for Revitalizing American Manufacturing," which Steelworkers President Leo Gerard labeled a "good start."
However, China is taking advantage of U.S. Senate inaction on stimulus investment to jockey to the top of the race to lead the global economy. China invested 70 percent of its yearly budget into stimulus spending to keep its economy going through the economic downturn. Meanwhile, Senate Democrats fumble with a severely inadequate $15-billion-dollar jobs package. Former AT&T Broadband Chairman Leo Hindrey argues in a must-read piece today that an inadequate stimulus response is actually creating an opportunity for the Chinese to pull ahead of the US:
China's economy is visibly re-booming while much of the world, especially America, continues to face severe economic problems. The Great Recession has in fact quickly turned into China's "great opportunity," with American companies cutting both their payrolls and their capital spending, thereby driving business to China at the same time that Chinese manufacturers are boosting their global competitiveness, directly on their own and indirectly through subsidies from their partner central government.
Companies aren't moving to China simply to take advantage of cheaper labor costs in low-skill production work; today it's to build computer chips and wind turbines, taking advantage of the infrastructure subsidies, tax breaks and, of course, illegal currency manipulation that is responsible for 90 percent of the savings associated with manufacturing in China. (Currency manipulation alone accounts for 25% of the savings, according to economist Peter Moriri).
As Norbert Sporns, a Seattle-based CEO who recently moved some production to China, said, "The major reason why we're [now] sited [in China] is not because of cheaper labor, but because of government support, because of the infrastructure that is laid out properly."
As Congress looks for ways to solve the unemployment crisis it should invest in increased infrastructure spending with strong Buy America provisions. The American Society of Civil Engineers estimates that $2.2 trillion is needed over five years to bring it back to proper conditions. Investing in infrastructure does more than put people to work right away building roads, bridges, etc; it helps create the type of environment business to succeed--something China is kicking our butt in. It also helps American manufacturing grow as jobs gains from infrastructure investment can increase by up to 33 percent when strong Buy America provisions are included.
In order to have a real jobs bill, we must invest heavily in infrastructure with a strong Buy America provisions. States face a $357 billion budget shortfall and local governments are facing an additional $80 billion budget shortfall. This could help create million of jobs, revitalize American manufacturing, and keeps states from being forced to choose between cutting education or stopping bridges from falling down.
Senate Democrats should go back to the drawing board and do a real job bills that makes America competitive with China by investing in infrastructure with Buy America provisions. A recent Gallup poll shows there is broad bipartisan support for this among the American public. More importantly to some Senate Democrats, there is broad support from the establishment pundits that they often seem more concerned about pleasing. Our economy, with China on the rise, can simply not afford inaction by the United States Senate.
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Did you know George Washington insisted he have an American tailor make his American made suit for his inaugural speech? George Washington: "Their safety and interest require that promote such manufacturers as tend to render them independent of others for essentials" Abraham Lincoln said: "If you buy from them we get the goods and they get the money, but if you buy from us, we get the goods AND the money! Teddy Roosevelt cried" Thank God I'm not a free trader!" Thomas Jefferson said" 'The prohibiting duties we lay on all articles of foreign manufacture, which prudence requires us to establish at home, with the patriotic determination of every good citizen to use no foreign article which can be made within ourselves, WITHOUT regard to difference of price, secures us against a relapse into foreign dependency"
How can we retain our manufacturing base and status as a world power when we give away the farm with our lousy trade deals! Bottom line, this nation was not founded on the pursuit of happiness to mean the destruction of our sovereignty. Are we a market or a nation?
Not to mention foreign OWNED manufacturers subsadized with US dollars (ie-Toyota) who come here to bust labor unions and lower our standard of living with their two tiered wage system.
Wouldn't you prefer to pay 10 percent more for goods and keep your jobs? This point is observed in a must-see video at Tech Ticker, where private equity guru Lynn Tilton outlines this very same thing, observing it's not the cheaper labor, it's the way the proper incentives are provided by the Chinese (and other) governments, which we can do here. Part of the solution: LESS GREED (This eye-opener is toward the end of the video) at: http://www.businessinsider.com/private-equity-mogul-tilton-says-obamas-job-proposal-wont-do-jack-2010-2
The broad support for manufacturing is NOT bipartisan. It is non-partisan. People don't care if government support for manufacturing is bipartisan or supported by just one party.
There is more demand for the products of low-skill manufacturing than for credit default swaps. An auto worker or a bank clerk does more for the economy than bogus economic theories. Try driving your free trade theory to work on a rainy day.
Call Phil Grahm, Robert Rubin or those other great banking innovators and ask them what your bank balance is?
State of the Art Infrastructure spending will create more jobs than tax cuts. But it must be followed up by government support for manfacturing, including tariffs or outright bans if necessary.
It's all good.
But to create jobs, those are all "indirect" means, and don't immediately or even certainly employ anybody.
On the other hand, to appropriate public funds to directly hire someone is immediate and certain, and involves the least amount of "run-off" (money that goes elsewhere and not to the employed person).
I don't mean hire people permanently in the public sector, and not even at the wages and benefits that government employees receive, but to do so along the lines of what the former Comprehensive Employment and Training Act (CETA) did, which was to hire people for 12 to 24 months, at a decent wage, and have them working all types of jobs for local governments, in public schools and on town highway departments (DPW) especially.
I worked a CETA job in the 70's, so I know what I'm talking about.
It was money in my pocket, it wasn't unemployment, I worked at a school, and it was something I could put on a resume.
CETA evolved directly out of the Works Progress Administration program (WPA) of the FDR administration.
It has since evolved into less direct employment of persons, and more into tax incentives and other things that don't directly or even certainly hire anyone.
It has since become "trickle down" (tax incentives), which immediately employs no one for sure.