Same Old, Same Old -- No Change

Two years ago the Princeton economist, Alan Blinder, estimated that in ten years we will lose forty million jobs to offshoring. Now economists, both conservative and liberal, recommend a plan to create 3 million jobs in two years -- five million short. They avoid the real cause of job loss -- offshoring. So the economists' plan to stimulate loses more jobs than are created. Why? Answer: A Ponzi scheme worse than Madoff.

After World War II Japan determined to take over the world economically by starting a trade war. Japan subsidized its manufacture, targeted items of export, closed its market and sold the targeted export at cost, making up the profit in the closed domestic market. After fifty years Toyota is #1, while Ford and General Motors struggle. The big banks, Trilateral Commission and the Council on Foreign Relations with the Marshall Plan were interested in new markets and spreading capitalism. Their economists called for free trade, but the financial and foreign policy world opposed any enforcement of trade laws to open Japan's market. Corporate America tried numerous times in Congress to have its government enforce free trade, but rebuffed again and again, began offshoring in order to compete in globalization. Globalization is nothing more than a trade war with production looking for a country cheaper to produce. And economists, both conservative and liberal, recommend outsourcing accordingly. China turned the offshoring into an economic hemorrhage. In a race to the bottom the United States outsources its investments, research, technology, jobs -- literally its economy. But economists are not about to recommend a policy that limits the enormous profits from offshoring. They continue to call for offshoring, and they are the same economists counseling Congress.

Congress hates to raise taxes and loves spending. They can spend and not raise taxes so long as China finances our deficits and China finances our deficits so long as we continue to offshore our investment, research, technology, jobs and economy to China. The economists counsel stimulation to continue the offshoring for fear that if we stop offshoring, China will retaliate by refusing to finance our deficits. Of course, the best stimulation is a job. Charged with regulating commerce, Congress abdicates its duty to protect jobs and engage in globalization because they need the contributions of the big banks, Wall Street, and Corporate America. All continue in a quiet conspiracy that remains silent in the press.

On February 27, 2001, President George W. Bush submitted a budget plan to pay down the debt in ten years. Instead, he doubled the debt in eight years. The economists and the candidates for president said nothing about keeping the government on steroids for the past eight years to the tune of $5 trillion. The economists say nothing about last year's deficit or stimulation of one trillion thirty-five billion dollars and still losing jobs. In the last three months they say nothing about stimulating the economy $655 billion (Dec. 8th) and are losing more jobs. Now the economy is over-stimulated. Spending for needed infrastructure is good, but won't jump-start the economy. But, stimulation won't work.

The economists counseled the banks, housing and automobile industry to go broke. The economists recommended a bailout of the financial industry without accounting. Now the economists, conservative and liberal, employ the Vietnam approach of destroying the economy in order to save it by throwing a trillion dollars at the problem.

The people know the country is in trouble. They're trying desperately to save. They are ready to sacrifice. We've got to produce before we can consume. We suffer not from an economic cycle that needs stimulation, but from a depleted economy for the failure of the United States to compete in globalization. David Ricardo's "comparative advantage" in international trade is no longer productivity like "English woolens and Portuguese wine," but government. And our government is AWOL in the trade war. President Obama must lead us out of the Iraq and Afghanistan wars and into the trade war of globalization. He can begin with a value added tax to put a tourniquet on the loss of jobs from offshoring. With a VAT we can cut the corporate tax and provide the money for middle-class tax cuts and universal health care. When the experts testified on a VAT twenty years ago, a VAT of 1% would raise $50 billion. Even with a depressed economy now, 1% will raise $70 billion to $75 billion. A 10% VAT will raise $750 billion and eliminate deficit spending. It will take the Internal Revenue Service and business a year to gear up for a VAT. In the meantime, we can impose a 10% surcharge on all imports as President Nixon did so successfully in 1971.

President Obama can create jobs and rebuild the nation's economy by harkening our country's first President's first message to the first Congress. President George Washington stated: "A free people should promote manufactories to render them independent of essential, particularly military, supplies." Years ago, Admiral William J. Crowe, Chairman of the Joint Chiefs of Staff, admonished the Congress that we were relying on foreign production for too much of our defense needs. We had to await flat-panel displays from Japan to invade Kuwait. We had to await Swiss crystals to invade Iraq. We can't produce fighter planes without parts from India. Sikorsky can't manufacture a helicopter without a vital part from Turkey. Turkey prevented our going into Iraq through their country. At the next crisis, the Commander-in-Chief could be grounded for want of a part for Marine One. President John F. Kennedy used national security provisions to promulgate his 7-point program that saved the textile industry forty-eight years ago. Title 23 of WTO permits the Congress to activate the Secretary of Commerce's list of items necessary to our national security so that a nation can be assured of domestic production and supply. When Japan hit Pearl Harbor, President Roosevelt put everyone to work 24/7 and had Ford produce the tanks and General Motors produce the B24 bombers. A nation must have rolling stock. A nation must have food, clothing, steel, electronics, computers, communications equipment, technology, etc. If President Obama reactivates the Secretary of Commerce's list, he can put America back to work and rebuild the economy.

We suffer not from a lack of confidence in the economy, but from a lack of confidence in a government that continues to cut taxes, borrow and spend, increases the debt and waste of interest cost, offshores the nation's production and jobs, refuses to protect our standard of living and refuses to engage in the trade war or globalization. Instead of calling for sacrifice, President-elect Obama calls for the same old, same old -- no change.

Comments

[texanna]

I hope that Pres-elect Obama enjoys his inauguration day, because that's about it for his honeymoon. In our 24/7 world his 100 days has been distilled to 100 hours. I know he's not a magician, but the mess that shrub has left is going to take a 24/7crew several years to clean up. Unfortunately, this country doesn't have several years, so Mr. Obama may have to resort to magic to get it all done.

[ArchAngel]

Completely brilliant!

[cayuse]

Excellent, well said, I pray you and I are wrong, Obama has some time to get back to it again. In that light I have stolen these words that state if voting for change does not change, then

When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. " That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, " That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. "

[dagnew]

He hit the nail on the head......

[Trebor1]

All I hear about is how high the U S corporate tax rate is. I'd sure appreciate it if someone would list the names of the Fortune 500 Companies who actually PAID the the 40% rate.

[AnnfromCA]

Makes complete sense.

[SCG]

Sen. Hollings, I'm afraid your right. Either we recognize reality, or it will recognize us.

[ThePeacemakers]

Fritz in 2012?

[Halsey]

Fritz..you wrote:

"We suffer not from a lack of confidence in the economy, but from a lack of confidence in a government ..."... wake up...it's not one OR the other...it is BOTH and then some..we now suffer from a complete lack of trust in those in whom we had trusted our retirement "funds". Hey..I'm a stockbroker..and my 401k..down 40%..like everyone elses... It IS/WAS/WILL BE..the Lehman's, Goldmans, AIG's, Madoff's;.this country (again)..went on a spending binge...message from 9/11...shop...we hear what we want to hear...till now...it's all bad. I fear, with all your experience, a naivety in you.
I mean..how can a "hollywood" liberal (yup...I'm liberal..but not rich)..complain about a bridge to nowhere..while living in a 30,000 sq. foot house? We are losing...more rapidly than ozone, the middle class; and this portends badly for the future. I'm not anti union..but a Public works program cannot survive if we have to pay $30-$40 an hour for construction workers put BACK to work fixing our sad infrastructure... Sen Hollings, I'm sorry,..but this issue is huge...Obama may be the person to begin the process of getting America back on it's feet..but he cannot do it without our willingness to sacrifice...Yes..we boomers...rolled our eyes when our parents talked about no chocolate or silk stockings..well..guess what kiddos... It is OUR turn to sacrifice...

[cayuse]

My fellow baby grown older, who had a great life. We started working when minimum wage was $1.00. Education was cheap compared today"s cost, we could even attend without scholarships or grants by working summers and part time.

But would you or I have had this great life without higher wages. When I started programming I made $500 a month at the end of the Army and my first Job after that. Yes, Prevailing Wage is about $160 in a small town. But as the worker gets $40 the owner of the construction company gets $120. Then the worker really only gets $30 after taxes, the owner gets a write off his $120

But as you say what is important. If the worker gets more money by higher wages and jobs he buys things. If the most and richest owners get more appreciation and lower taxes, corporations get nothing and the economy gets nothing, just RICHER RICH is the problem. I gave you the solution.

Question: If interest goes up because workers spend more money, why would the RICH not get richer getting higher interest rates? Debt would be more expensive of course. WHAT IS THE ANSWER?

[BARRISTER]

Senator Hollings, you are absolutely right !!! I would go further; I would adopt the Japanese model and protect American manufacturing jobs. I would penalize outsourcing offshore by levying an impost on the resulting imports. Just let American companies employ Americans. It is "Globalization" - Commercial Imperialism - which destroyed the American middle Class. It was the American Middle Class which made America wealthy.

Charity begins at home.

[schatsie]

We also have to stop insourcing people... The immigrants with their VISAs are taking jobs from Americans in the Corporate ploy to keep wages down... Teachers, nurses, doctors, software people...We should be sending them home and training our own people....

[lvdragonlady]

Maybe if congress had the b****s to outlaw out sourcing and penalize companies that do it, we would not be losing so many jobs to 3rd world countries.
I know that JPMorgan outsourced jobs (helpdesk and accounting) to India and put more then a few people out of work and this was a couple of years ago. But you never ever hear about this kind of thing until it is too late. Why should these companies be bailed out by the American people we they do not care about us?

[yesivoteddem]

As alway, Sen. Fritz is dead on right on these issues.

I used to produce Labor funded talk shows (pre Air America) and he was always my fave guest and I learned much from about these issues.

The Senator stood up on fair trade issues that matter more to actual working class Americans than any other.

He never represented the swells - he stood for those who few stand for.

I wish we were swearing him in as Prez in 2 weeks instead of another Harvard educated hero of the Wall Street crowd.

My VERY Best wishes to SENATOR FRITZ

[schatsie]

bingo!

[chocolatecity]

We can fix the offshore exporting of jobs by adjusting the tax code. If you raise taxes on companies that export jobs to the point where it is no longer profitable to export jobs. We will have solved half of the problem there. The next part of the equation is more difficult. That would be to get out of the WTO. If Obama can get that done, I'm for repealing term limits on the presidency and FDRing Obama.

[research]

FAIR trade is what we need.

Workers pay and rights should be factored into tariffs and trade regulation.

Nations that treat workers and people badly, should pay a tariffs into a fund to help those workers and people.

I disagree with your opening argument:

The right kind of Stimulus DOES work.

Giving to the banks doesn't work. Specially while they continue their unregulated Shorts CDS and CDO's

Bailout out failing industries is a temporary band aid.

Public works green infrastructure purchased by the Government for it's facilities,

Is direct spending. That will get people Jobs. Save the industries, restore the economy.

Obama's Plan is a Great start.

[lvdragonlady]

Screw fair trade. It is ONLY fair to the companies and not to the American people.

[research]

Screw "Free" Trade.

We need Fair Trade. Please consider it.

[mommadona]

Corporations should no longer be considered "persons" in the eyes of the law.

There is no such thing as "free trade". Let's put that puppy to rest.

Globalization is a delusion of the Pax Americana crowd, funded by oil money located in small fiefdoms in the Arab world. THERE IS NO 'THERE' THERE.

US Government representatives - both HOUSE and SENATE need extensive remedial training in the meaning of GOVERNING. It does NOT mean RUNNING A BUSINESS. (And the ones with that mindset have been darn miserable in their performance, I might add).

GOVERNMENT, in this country, is about the PEOPLE.
That's IT.