State of the Union
President Obama faced two challenges in his State of the Union. First, to restore the people's confidence in their government. Next to make the people confident that their government could solve the problem with the economy. As to the first, the president did a masterful job. He spoke as if he knew what he was talking about and, most importantly, felt what he was talking about. Sure enough the Louisiana Governor, Bobby Jindal, came with the same old Republican politics. Jindal waxed: "The strength of America is not found in our government." Since Ronald Reagan, the Republican creed has been: "Government is not the solution, government is the problem." And with the recent antics of our Secretary of the Treasury on the bank problem, people are beginning to believe that government is the problem. Obama brilliantly dispelled this thought. "History reminds us that at every moment of economic upheaval ..." that government "has responded with bold action and big ideas."
But as to the principal problem with our economy -- the offshoring of the nation's investment, research, development, production and jobs, i.e. the economy, he barely mentioned it. And only as a tax equity problem. Globalization is nothing more than a trade war with production looking for a country cheaper to produce. Every industrialized country on the globe engages with a fierce competition - subsidies, tax benefits, currency distortion, everything imaginable. For example, China just promised Russia steel for a 20-year delivery of $20 a barrel oil. All nations are fighting for their economy, but in this trade war the United States is AWOL.
Two years ago, the Princeton economist, Alan Blinder, estimated that in ten years this nation will lose thirty to forty million jobs to offshoring. The president covered his stimulus plan to create jobs, but said nothing about losing jobs faster than any stimulus could create. At present, the government is the problem. Offshoring is caused not by the little tax cost to producing in-country because corporations pass this on in the price of the product. It's the high standard of living that is required for production in America: Social Security, Medicare, labor rights, minimum wage, clean air, clean water, safe working place, safe machinery, plant closing notice, parental leave, anti-trust, etc. Economists usually measure competition in manufacture by productivity. But in globalization, it's government. The Chinese government controls labor and has none of our environmental restrictions. Moreover, production in China also has a 17% VAT tax advantage - rebated at export. The United States doesn't rebate corporate taxes. In short, the problem with our economy is that, unless business is local, like a laundry or a restaurant, business can't make a profit in our country. This sounds crazy, but in globalization, it's a fact. You can have a wonderful industry producing for a profit, but if your competition goes to China, India or Mexico and you continue to work your own people, you'll go broke. In short, the affirmative action policy of the United States government is to get rid of jobs, get rid of the economy. And President Obama, with his "free trade" economic team, continues our demise.
The president mentioned Teddy Roosevelt's call for reform of health care costs, but he should have spent more time on Teddy Roosevelt's exclamation: "Thank God I'm not a free trader." Business opposes our competing, cautioning "Free Trade," "Protectionism," "Don't start a trade war." The banks, Wall Street, and a substantial amount of our production, have long since offshored making big profits. They even have the United States Chamber of Commerce objecting to "Buy American" in the president's stimulus plan. But the American people are the most productive, the most competitive. The people are proud of our high standard of living and they don't want to go back to dirty air and no labor rights. They were looking to hear from their wonderful president his plan to compete in globalization. It wasn't mentioned.
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It's not true that businesses would go broke sticking with American labor. But they would make LESS PROFIT. Since the Reagan Dark Age, "conventional wisdom" tends to equate slightly less obscene profits with going flat broke, but those of us who have been flat broke know the difference.
Big-shot executives have been dilligently moving all of our jobs offshore because their own salaries and bonuses were based on the profits achieved by any means. Their demands for increased profitability each and every quarter are chalked up to the tyranny of the shareholders, but just who are the majority shareholders in most corporations but the executives and boards of directors? People lose their jobs because "everybody else is doing it" and the possibility of making slightly less profit one quarter as compared with some other soulless org chart is deemed unacceptable. Quarterly profits rank as more important than the livelihoods of the thousands of American workers.
Once upon a time, the purpose of business was to make a sustainable living for all of its participants by producing a valuable product. If people were striving to make a good living over time rather than to attain stratospheric wealth this year, they might see the value of goods produced in America, particularly in light of the quality issues (including health and safety concerns) associated with goods from China or India.
SATAN’S HORDE SHALL BE REMOVED
Overrun with war and uncontrolled leaders
Our world becomes more dangerous each day.
Dishonest politicians, criminals and the media
Survive by their falsehoods at play.
Bible believers preach, that the end is near
Our world as a whole is beyond reform.
God will eradicate all which is wicked
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May its supporters anguish in hell.
By the grace of God and the power of faith
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What we accomplish is heaven’s measure
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Protect and defend what we love till death
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And just why are American industries moving to other countries? We have one of the highest corporate taxes in the World! Why would I want to manufacture anything here at get taxed at 35+% when I could go somewhere like Ireland and get taxed at 11%.
Very simple....
Stop penalizing success by trying to tax it to death!
You need to move to Louisiana and actually see what Pyiush Jundal hasn't done. His answer to unemployment is to refuse the money from the stimulus package that would extend benefits to those who have "LOST" jobs here.
What new industries do you see that has brought growth to Louisiana? The year of crazy oil prices brought speculators huge profits and some response in increasing oilfield jobs but as oil prices fall to the levels of the 70s, that is quickly evaporating and now the boom for oilfield workers in a bust. Two large manufacturing firms moved away to foreign countries and the forest products industry if hurting because of the slowdown in construction. I think you better get your facts straight.
AND No! The corporate rush to flee to third world countries isn't so simple. The main goal is seeking cheap (read near slave) labor and being able to mitigate environmental law and pay little or NO TAXES at all.
A well published fact, from what is available for all to find, is that most corporations that accept corporate welfare here in this country, and they pay much less than the % you state. Those not on the dole, get out of paying that rate by donating big bucks to political candidates and hiring lobbyists to get favorable legislations passed couldn't have been hurting all that bad could they?
In collegiate economics classes we fully learned why free trade theoretically lifts the prosperity of everyone.
However, that's not what we have now. One way free trade is insanity. We need trade that is free and fair. This means having free trade that takes into account labor and environmental policies of the two countries as well.
For more background and discussion:
http://www
When Jimmy Carter started talking up international human rights, it was a step in the right direction but it missed the mark. That is because people around the world don't really see voting rights and freedom as high a priority as their standard of living. President Obama can correct this by making worker rights an important pillar of his presidency. Stressing the need to abolish once and for all the sweat shop where child and or prison labor is used, unsafe conditions abound and a total lack of environmental responsibility. Toughening anti sweat shop enforcement coupled with the right of workers to unionize will eventually level the playing field and improve prosperity around the world without the risk of a trade war.
Very good opinion piece, Fritz. What exactly do you propose we do to counter globalization?
Maybe I am looking at this askance, but I have always thought that as industrialization evolves, with robotized machinery replacing manpower decreasing the number of jobs and population increases increasing the need for jobs that sooner or later in a manufacturing economy-(such as we have)- the unemployed numbers would increase and continue to increase as population increases.
Offshoring may have cost the USA jobs, but in the long run it will be the industrial revolution coupled to synthetic intelligence that will make capitalism no longer a viable form of economics, or at least not the dominant form of economics. Some sort of barter system and return to manual labor is the only solution I can see. The machines freed us, but the trade off is not one sustainable for man's self-esteem. And our current system only leads to war as a means of reducing the excess production as Eric Blair so thoughtfully explained it. Our weaponry will undo us also unless we undo it first.
Obama indeed has a plan. It will take more than a generation to convert our society to renewable energy and end our dependence on foreign oil. This work can not be outsourced (at least most of it)... Pres. Obama intends to commit our country to a complete overhaul of our energy system. What comes after that is anyone's guess.
What did Senator Hollings think when all the textile mills left New England for South Carolina because of the cheap labor there? What about the New England economy and all those New England textile jobs? But wait, New England has done well since and all those unskilled textile jobs were replaced with other jobs, most of which required a much higher degree of skill.
Fritz Hollings was an anachronism when he was in the senate, and he is irrelevant now. Don't challenge him by attempting to engage in an intelligent argument - he'll only be further convinced of the right wing conspiracy.
My grandparents and my parents both survived the southern flight of the mills. I would further argue that the increased northern labor cost was driven by unionization. But that is another argument for another day. Or is it, Detroit?
What is puzzling here is how the dots are not connected by these capitalists. Globalization will move jobs to the cheapest labor markets in the world, More American high paying jobs will be lost as well as the technology that is associated with it. Standard of living here will decrease. The middle class will shrink and disappear. Now same capitalists expect to SELL the cheap imported products to a dwindling consumer market that will be unable to buy these goods without going deeper in debt. It is a recipe for American capitalism's eventual self destruction. Oh I know, they are just concerned about their next quarters earnings and not concerned about the long haul. That explains it all. Now we can all rest easy knowing it's all about the next 3 months. Sic...
The middle class has not disappeared in any way because factory jobs have left. The percentage of manufacturing jobs relative to all jobs in the US economy peaked in the early 1950s, and I'm pretty sure the US has come along just fine despite that fact. The total number of manufacturing jobs in the US, in fact, was lower in the year 2000 than in 1968. The only real problem regarding free trade has been the speed of which manufacturing jobs have been lost their decade. This has happened much too fast and it's mostly because of China. You can't just wipe out five millions jobs and expect the economy to replace them in a few years. The economy needs time to adjust.
http://www
The items you list in the "Standard of Living" costs are all government taxes on business. How can you refer to these as a result of our high standard of living?
The simple fact of the matter is that Government through ever increasing regulation and taxes, has increased costs beyond productivity gains. And lets not forget the unions. Unions have caused even more job erosion by increasing cost on end products, such as automobiles. In order to pay these union contacts Auto companies have been forced to buy components and sub assemblies so cheaply that suppliers were forced to pay lower and lower wages until finally the products were produced off shore. This all to support fat union contracts and even fatter government spending. The result ends up having one class of worker getting poorer to support another class of worker (Union Employees inside and outside government).
totally wrong analogy! The unions did not cause the loss of jobs.
It's so hard to argue with all of your facts.
And its not an analogy, they are facts.
If you disagree, please explain with something other than OH HUH.
Globalization is nothing more than a trade war with production looking for a country cheaper to produce. Here, Here , Sir i totally agree with you on this issue .
Thank you, Senator. It's long past time we face the facts. "Free trade" is a charade. When your country's policy is wide open markets but all your competitors wisely protect their markets to some degree, that's not free trade at all. That's just your country being played for a chump.
International trade is important and worthwhile. But protecting your own economy, manufacturing, and jobs is even more important. The cheap goods you get from outsourcing all your labor winds up being very, very expensive indeed.
wow, i agree with a liberal...
You are absolutely correct Senator. Free trade will be death of America's manufacturing (and industrial production) industry. Global capitalists aren't motivated by patriotism, but by the almighty dollar. They'll get all the tax breaks and ship America's jobs to Bangladesh, the Phillipines, and even Somalia (if cost of labor is zero). Soon enough, American will be reduced to employment just in the service industry, e.g., employment at MickyD. hotels, auto dealerships, etc. But, go to anyone of these places nowadays, and lowly paid immigrants are being bused in to do dirty work. Telemarketing is being shipped to Phillipines and India. Telecommunications and Technology to India, China, Taiwan, and Singapore. Auto industry is being shipped to Alabama, Mississippi (cheap labor, hostility to unions).
We need FAIR TRADE not FREE TRADE!
We need tariffs and reciprocity.
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