Lesson Learned

The one lesson I learned in fifty-two years of public service was as de Tocqueville said: "America is good." All elements of our society support the nation's economy, except Wall Street and its entities, such as the big banks, brokerage houses, etc.; a/k/a the financial leadership. It is not interested in the U. S. economy. Its interest is in the investment economies; China, India, and Mexico. As the financial leadership continues to wreck our economy with protection for itself, it shouts "protectionism," "free trade," against the U. S. protecting its economy from offshoring.

Let me first qualify as a friend of business. I've won every Chamber of Commerce recognition imaginable. In 1979, I won the New York Board of Trade award and in 1981 I was the speaker when it was given to Sam Walton of Wal-Mart. As Governor I instituted technical training, attracting so much industry as to change South Carolina from an agricultural to an industrial state. In the United States Senate, I worked with Corporate America for protection of their investment and production -- passing five trade bills, all blocked or vetoed by the president. In 1992, the National Chamber of Commerce's president, Bob Thompson, publicly endorsed my reelection to the United States Senate; but by 1998 the National Chamber of Commerce put out thousands of flyers against my reelection. I understood. NAFTA with Mexico and Permanent Normal Trade Relations with China forced Corporate America to offshore. I had voted for NAFTA with Canada because Canada had a free market. Mexico didn't -- so I opposed it. The European Union taxed themselves $5 billion over five years to develop a free market in Greece and Portugal before admitting them to the EU. I recommended the European Union approach of building a free market in a country before its admission to the EU.

Today, Corporate America is still concerned about the U. S. economy, but remains quiet because of the stranglehold that the financial leadership has on both business and Congress. No one said it better than Senator Dick Durban of Illinois the other day when he lamented on the floor of the United States Senate: "The banks own this place."

The financial hierarchy, Henry Paulson, Larry Summers, Timothy Geithner, put on a grand charade of stimulus to save the economy but oppose reciprocal trading in globalization to save the economy. They stimulate AIG, Citicorp, and the insurance companies that should have been put in receivership under the Reform, Recovery and Enforcement Act of 1989. President George W. Bush had just stimulated the economy $5 trillion in his time. Now eight months after Paulson told the Congress that he was appropriating $700 billion to stimulate, another $737 billion by Congress isn't working. We're still losing jobs like gangbusters. No mystery. We're bailing out the economy boat desperately with stimulation, but the financial leadership opposes plugging the hole in the hull from offshoring. AIG and the financial entities are given the ultimate protection of financing and government takeover. But it's a "no-no" to compete in globalization. It's a "no-no" to enforce your trade laws. It's a "no-no" to trade. McKinsey, Peterson and other "experts" keep grinding out warnings against protectionism, against "Buy America," shouting "free trade. And as fast as we give money to GM to invest, GM invests in China.

The reason Congress is quiet about trade is money -- and the financial leadership furnishes the money. In my last race for reelection to the United States Senate for the seventh time in 1998, I had to raise $8 ½ million. That's $30 thousand a week, each week, every week, for the six-year Senate term. A Senate race today in South Carolina would cost between $13 million and $15 million. This means that every working hour, the Senator has his or her mind on fundraising; no time for constituents; no time for the needs of the country; only time for the needs of the campaign. Mike Mansfield used to require a vote every Monday morning at 9 o'clock to be sure we had a quorum. And we stayed in session until 5 o'clock on Friday. Today we finesse a vote after 6 o'clock on Monday to get back from New York or California from fundraisers and adjourn on Thursday so that we can get to California for a Friday fundraising lunch. We don't care about Washington and Lincoln. We've merged their birthdays for a ten-day break called Presidents' Day for fundraising. We have fundraising breaks every month with the month of August gone for fundraising; Columbus Day break; and we give thanks for a fundraiser at Thanksgiving. Even with all this effort, you still have to rely on the national party for help. There is no way for a Democrat in Republican South Carolina to raise $8 ½ million by himself. This explains the confrontational party politics in Washington.

In 1971 and 1973, in a bipartisan vote, we limited spending in campaigns to so much per registered voter so neither the candidate nor the contributor could buy the office. But a five to four decision by the Supreme Court in Buckley vs. Valeo permitted the candidate but not the contributor to buy the office. James Madison never thought that his First Amendment right of free speech would be limited by money. I tried for years with a bipartisan Constitutional amendment permitting Congress to limit or control spending in Federal elections so that we could return as Congress intended in 1971 and 1973. If Congress and the States enact this Constitutional amendment, members of the Congress will be freed from the stranglehold of the financial leadership and have time to save the economy. Two things are bound to happen. Sooner or later Congress will take care of health care and enact a VAT tax to pay for the government we provide. President Obama is on course for health care, and while he is still popular he needs to get "the foot in the door" on a VAT. Today, 150 nations have a VAT at an average of 15.5%. The Internal Revenue Service advises that it will take a year for business and the I.R.S. to gear up for a VAT. No need now to determine the amount needed. Just get it enacted at 2% and adjust it up or down as it replaces the income or corporate tax.

Comments

[Jim Welke]

I didn't think there was anyone left with the courage to speak truth to power. Bravo, Senator!

[KC the SuperDog]

Sen Fritz, you GO Dog ! We all need to write our politicians to ask them to do everything possible to limit or curtail the ability for US firms to import workers from overseas to fill US job vacancies. 1) The recent changes in the H-B1 and L1 visas should be immediately revised in light of our current economic crisis. That law was designed to attract workers from other countries to fill skill vacancies during the 1990's. Since unemployment is at a record high, these skills could and should be easily filled by American workers. 2) We should also evaluate tax law changes on large US corporations like IBM that are financially motivated to send work to foreign countries WHILE THEY LAY OFF those Americans that previously had that work. Companies such as IBM have already advertised their intentions to move as many jobs as possible from US to foreign workers (administrative as well as highly skilled/technical work). Big corporations arrogantly believe that the US Government can and will do little to stop the exodus of US jobs at these alarming rates.

Please work to change policy to make it less attractive for HEALTHY, FINANCIALLY STRONG companies like IBM to move work out of the US so they can improve their financial position even further. Their actions at this time of high unemployment are socially irresponsible and anti-American.

[Articulator]

Free trade agreements only work if there is a level playing field. There needs to be labor/environmental requirements written into the free trade agreements and other agreements like a countries currency has to float on the market. Unfortunately the lobbyists in Washington represent those that benefit the most from paying migrant workers in a foreign country next to nothing so they are only too happy to send the jobs overseas. If the rest of the country is going down the tubes, they dont care because they are getting a big take.

[themodernleader]

Luckybear. I agree with you. Free trade is almost always the best policy---if you are on the winning side. Free trade losers experience the fate of mercantelistic colonies. We fought a Revolutionalry War to get from under the yolk of mercantelism. Now we have enslaved ourselves voluntarily to benefit the future of a few traitors at the loss of self-governance and self-determination.

[Mildmannered]

And U.S. corporations are moving their resources and jobs overseas.

[veracity]

You don't need to tell us (the readers) here at HuffPost, Senator :Hollings!

The President, and his "economic team," however (banksters all - emanuel, rubins, summers, gensler, wolin, etc., ad naseum) seem to think that Americans going broke, as Wall Street exces SIPHON OF the ENTIRE national GDP, and then OFFSHORE those billions to their tax-have fund shelters, is "Okey-Dokey"!!

[iridium53]

Thank you.
Harry Reid is no Mike Mansfield.

For whatever reason, the Democratic Party has become anti-business. Especially anti- small business.

They sure do love big banksters, though.

[polaris12]

Another big hole that is sinking the ship of state, which people have stopped discussing, is the 10 billion dollars a month we are still paying out for the occupation and suppression of resistance in Iraq and Afghanistan. Everything else in this country may collapse, but we will continue this colonial obsession -that some how only we know what is best for these countries and our will must prevail at all costs.

[themodernleader]

I supported Fritz Hollings when he ran for President. He did his best to same our textile industry and was overwhelmed by lobbyists for foreign groups and American financial interests. Where are the once independent textile workers? Most of them did not go on to better jobs. They either retired early or went on the public dole.
Senator Holling's claim that Congress is controlled by financial interests and other monied groups is credible given his years of honorable service to our Nation's governance. His cry for a Constitutional amendment (or new Chief Justices) is just as prescient and courageous.
International "free trade" is finished because it created winners and losers, we, being the biggest loser of all. Continued reluctance of Congress and the President to change the rules of trade is leading to an extremely unstable and dangerous citizentry.
Last, a VAT tax scheme is an aristocratic advancement in lifting monies from the people. It is regressive. Our graduated taxation equitably applied is a model for growing, achieving organizations to envy and emulate. We must reapply it in dealing rationally with our deficit crisis. My mentor Senator Hollings is wrong on this one detail in his profound article. He is the best of the best in public service and fidelity.

[luckybear]

Well that was a lot jumbled together. Your wrong about free trade; it's a little more complicated than just pushing the evil financial interests. Protection is a serious matter. Free trade is almost always a better policy than protectionism. Read Paul Krugman's academic writings on the issue or read Jagdish Bhagwati extensive work (he taught Krugman @ MIT). These issues are much more complicated and really can't be summed by in three paragraphs. Read Gordan Brown's Wall Street Journal piece on the dangerous of abandoning free trade. Fareed Zakaria has written newsweek articles on the dangers of protectist nonsense as well. Most economists and serious professionals are free traders. This includes our President; Obama won't be re-opening NAFTA.

http://online.wsj.com/article/SB124347347390360975.html

I'll agree on the endless campaigning; something should be done about the endless need to raise money and the problems it causes with conflicts of interest.

[WritusMaximus]

Yup, NAFTA sure helped stem the tide of Mexican workers into the U.S.! The illegal immigration problem? You see, Reality has yet to catch up with Theory, but we just gotta keep Hope alive!

[bobwalters]

No, you're wrong about "free" trade -- which it isn't and never has been. What is touted as "free trade" is opening foreign markets to exploitative investments by the financiers and banksters who can ship US technology and manufacturing capability overseas, then claim "open markets" to ship manufactured goods and commodities back to the US at the expense of American workers. And I believe you're misquoting Paul Krugman, or taking his points out of context. It isn't "protectionism" to support domestic industries and businesses, any more than it is "socialism" to have a federal industrial policy. I find it rather interesting to hear the right-wing ranting about it being the duty of the President to protect the safety of the American people (it isn't -- the oath is to protect and defend the Constitution) and in the very next breath scream "protectionism" as a pejorative if there's any move to protect the financial well-being of the bulk of the population by creating and maintaining a progressive industrial policy that supports and promotes domestic industry and jobs. The financial overseers of our government are not, as Senator Hollings points out, interested in investing in America or American jobs, but they sure as hell like living and headquartering here, as they enjoy exceptional freedom, lower taxes, lax or non existent regulation and protection and expansion of their overseas investments by the CIA and the US military. It's all about getting the American workers and taxpayers to finance their own enslavement.

[luckybear]

Have you read any Krugman? I assume not. I assure you that he is an unabashed Free Trader. His Nobel prize was on trade patterns and he empathized after he won that his work just confirms the case for greater trade liberalization (more free trade). I'd keep reading. Your massive paragraph is full of inaccurate cliche' ridden left-wing drivel.

[Bernique]

I heard today at a meeting that Montanans have a campaign to "buy their Senator back" (Senator Baucus). They'll take $5 donations from anywhere to get it done.

Senator Hollins, as in health care and elections, Europeans lead the way ...

[TXfemmom]

Oh, the voice of reason and wisdom. Our system, however, has become so tilted and so controlled by the few and the greedy that the only way to overcome it is to have a mini-revolution of sorts.

[bobwalters]

Or maybe a MAXI-revolution -- of sorts.

[OneTop]

Perhaps a good starting point would be to reform campaign financing. Yes I know that it has been tried before.

Until the US at large come to grips with how corrupt the ruling class is -- as a result of the quest for campaign donations, what will be achieved ? It is a never ending round robin of influence peddling and fund raising of which is never in the interest of the individual citizen.

[Realization]

Right on. The Financial types and Treasury have been pushing policies detrimental to the U.S. for years. What scares me about the GM and Chrysler bailouts is that it seems they are being run by financial folks instead of manufacturing guys. Treasury has never contributed anything positive to our trade agenda. (Personal observation from experience.) It doesn't understand manufacturing, looks down on manufacturing, and should be put at arms length. Frankly, besides some decent economists (but we could import them form Japan, Korea, or Germany since most of ours put theory before reality and practicality).

Time to set up a "robust" Department of Industry and Trade that will look overseas for best practices and adapt them to rejuvenate manufacturing and technology before it is too late. (Sorry about the "robust". I hated that word when the government used it but couldn't resist.)

[hulka37]

You are great Fritz.