We Are in Real Trouble

Now we are in real trouble. We've lost the markets for textiles, cameras, radios, TVs, steel, electronics, computers, communications equipment, machine tools, advance technology, robots, steppers, etc. The little that we produce has now been bought up by foreigners. Big Blue, IBM and the Hummer to China; Westinghouse Nuclear and all of its patents to Japan; Bell labs and all of its discoveries to France; Bethlehem Steel to Russia; Genentech to Switzerland. And we can't prepare for war. Boeing's fighter planes depend on parts from India and Sikorsky for its helicopter must get its tail motor from Turkey.

We begin a program to stimulate American production and American jobs. But in April President Obama signs a declaration against protectionism at the summit of the big nations. And now the New York Times editorializes "'Buy American' is a terrible idea." You would think that having to get a Mexican loan to keep the New York Times going would have sobered them up from their mantra of "free trade" and "protectionism." Our trouble is most in the Congress believe the New York Times. Yet Congress is our only hope.

The United States of America was begun in a trade war against the Mother Country's protectionism. Under the Navigation Act of 1632, England required all production in the colony shipped back to England to be transported in English bottoms. Furthering protectionism, England enacted the Townsend Act with discriminatory tariffs causing the Boston Tea Party, igniting the Revolution. Once we had won our freedom, adopted a Constitution, and adopted a national seal, the first Congress in history, on July 4, 1789, pursuant to Article I, Section 8, of the Constitution, assigning the duty of competing in international trade to Congress, enacted a protectionist tariff on numerous articles. We financed and built the industrial giant, U.S.A., with protectionism. Now, the President, the Congress, the press, and the think tanks, all think that protectionism or "Buy American" is a terrible idea.

After World War II we had the only industry in the free world. Fortunately, with the Marshall Plan, American equipment, expertise and dollars, capitalism defeated communism in the Cold War. We didn't bother to open markets and enforce our trade laws in the Cold War. We were anxious to spread capitalism. Of course, the financial community, big banks, and Wall Street, prospered with the cry of "free trade" as we offshored production to Mexico, China, and India. And Corporate America prospered too in the charade of one-way "free trade." Now we have lost our production, our middle class, and almost our economy, and today we're back to the beginning days of rebuilding the nation. That's the whole idea of saving the banks, insurance companies, and stimulating Detroit. Hopefully, we've hit the ball with this stimulation. But if Congress doesn't wake up and follow through, the economy is gone.

What's the matter with the President and Congress? The trouble with the President and Congress is that there are all indebted to reelection, i.e. the money for reelection. For example, I can do nothing about trade as Senator and easily get the money to get reelected because under the Constitution all trade matters affecting revenue should come from the House of Representatives. The Ways and Means Committee in the House of Representatives that handles trade legislation is controlled by New York. Wall Street, the New York banks, the New York brokerage houses, the New York Council of Foreign Relations, the New York Federal Reserve, the New York World Bank, the New York Investment Development Bank, the New York National Retail Federation, the New York or National Chamber of Commerce, my friend New York's Chairman of the Ways and Means Committee, Charlie Rangel, and the New York Times think "'Buy American' is a terrible idea."

President Obama and the Congress must repeal the subsidy that gets rid of jobs - offshoring. President Obama and the Congress must enact a value added tax to get us competitive in international trade and pay for health care and the government we provide. President Obama and the Congress must impose import quotas on autos and auto parts for the stimulus to work. President Obama and the Congress must enforce "Buy American" and our other trade laws if we are to save the economy. We are in a desperate circumstance.

Comments

[Jim Welke]

Senator Hollings,

Thank you for your candor and courage. I hope many pay heed to your assessment of the free trade canard. It would be about time.

Middle class prosperity has been decimated by the sell off of the U.S. manufacturing sector in favor of low cost offshore plants. This trend enriched investors at the expense of wage earners. It's time to back away from free trade and restore protective tariffs -- at least until our competitors institute the same union wages, health-care insurance, worker safety, and environmental protections that we earned at our plants through over a hundred years of hard-fought labor battles.

read more: http://cyclopsvue.blogspot.com/search/label/free%20trade

(yeah, I posted this same comment on your equally commendable post of 6/18/09 -- it can all stand to be said twice...or more)

[joebhed]

Senator Hollings:

You have perhaps boldly marginalized yourself with this call against the corrupt corporate-political cabal known as America's financial-­industrial plutocracy, dismantling America through their lower Manhattan center of Wall Street banksters. I thank you.

For some reason, you fail to hit the nail of required reform on the head.
The ultimate truth is contained in another part of Article One and Section Eight - the part that gives the Congress, acting on behalf of the American people, total control of the nation's money system.
You attack the failure of Congress to protect American jobs and the well-being of the population.
My Dad termed this the failure of Congress to properly implement the "priority use of the money supply". That would be OUR money supply, Senator.

As my Dad said, unless you change the monetary system to one working on behalf of Americans, FOR the people, then we cannot contain the flight of capital to seek its own best return from wherever it chooses, thereby exporting jobs due to our monetary policy failures.

Congressman Dennis Kucinich is preparing legislation to end the Federal Reserve's gamesmanship with economic stability in this country, restoring the money-creation power back to the Congress

We already had the Revolution in this country.
Let not those brave lives be wasted.
Please support Kucinich's effort in order to end the dismantling of America by the international banks.

[clevelandchick]

Corporations always hunger for cheap labor. As Thom Hartman put it, with Free Trade the United States, which once used slaves for no-cost/cheap labor, has only outsourced slavery by engaging in free unfettered unregulated trade. Our slaves now work in China for less than a dollar a day.

Not only do corporations fight to keep their sources of cheap exploited labor overseas, they're fighting to lower wages here. It's time for the working people of America to stand up and not just for unions but for trade policies that raise the wages of workers all over the world.

But how do the people get Congress to vote for the people and against the corporations that donate billions to keep these dangerous economic policies in place?

[mikekc]

I think the only way Congress votes against Corporations and for labor and workers is if unemployment gets up to 10-12% and the government doesn't find a way to hide what's happening by falsifying and delaying the release of economic statistics. If the media would report in a more intelligent way on economics that would help too.

[WellTickleMeWillie]

The real enemy here is the underlying economic system of unregulated capitalism. If we ever want to change, we must change the capitalist system. It is the overriding force behind all of our problems here and in the world. How do we do this? Very good question, no easy answers. Obama rode into power on the belief he would change things dramatically. Unfortunately, he put the foxes in charge of the hen coupe and Geitner and Summers did what all good capitalists would do and that was to shore up the banks and Wall street and try to return things back to the way things were before capitalism's melted down. This is a bandaid at best on a systemic problem of unregulated capitalism. Unless and until there is real teeth in regulation, nothing will ever change. Change we can believe in? The jury is still out on that one but it does not look good.

[joebhed]

How?

You're from Clevelend.
And your Dennis Kucinich has the answer.
Let's support his bold call for monetary reform.
All progressives are about to confront their true identity crisis.

I hope we go with our traditions from the Greenback-Labor Party, the Farm-Labor and FDLs of the past. They were ALL supporters of the public money movement.
Are we?

[marko77]

Fritz Hollings is correct. We've become a Third World country as a result of "Globalization," which is a shell game for ripping off the majority of people - particularly in the US. As long as we produce nothing to sell to ourselves or anyone else, we'll continue our economic slide.

[pm247]

The term "protectionism" should be replaced with "self-sufficiency."

The US can and should be fully self-sufficient, limiting economic growth to that which occurs naturally within our borders; but that's just not enough for the voracious sharks of Wall Street. Globalization is all about corporate greed and Ponzi economics -- this requires selling off America in increasingly large chunks.

The chunks are now so large that even a bunch of rubes like us is starting to notice.

[mikekc]

It's not just the selling off of America. While we are selling our assets on the one hand, we are over-inflating and hyper-leveraging the remaining assets as a way to crank up Ponzi profits and drive consumers deep into debt - both personal and government debt. Wall Street benefits both ways - from the sale of assets and the loaning of money to make up for the income loss caused by the decline in value across our society. You also have markets controlled by oligopolies who collude to fix prices at our expense - think energy trading/sp­eculation, big oil, big pharma, hospital holding companies, and insurance companies.

[pm247]

Not to mention the exporting of jobs and importing of cheap foreign labor. All of which amounts to selling off the country.

[S1m0n]

"...all production in the colony shipped back to England to be transported in English bottoms."

I can see why the colonists objected: going through customs must have been a bummer.

[mikekc]

Thank you Senator for writing this. I work in IT and have seen first-hand the negative impact offshoring and importing of H1-B and L1 Visa Workers has had on salaries, standards of living, and prospects for advancement - especially for "old" people in IT which is anyone over about 38. Short of blowing another easy credit bubble, I don't see how we are going to have an increase in employment and standards of living. If the unemployment and inflation statistics were reported more accurately as they were in the past then Americans would be more aware of how bad things are. If you want to convince people of your argument, please do what you can to improve the the accuracy of economic statistics - actual unemployment measured the way it was 20 years is probably close to 20% now.

[denny8844]

Unemployment decades ago was measured the same way it is today They made the same caveats 20 30 and 40 years ago as they do now I dont know how this got started that somehow the rates are measured differently than in the past I remember in the 70s recessions that the media said the same thing they do today

[ChimesOfFreedom]

The Bureau of Labor Statistics reports six different measures of unemployment, and the most widely quoted one, U-3, is indeed more narrow a measure than methods used in the past - but you have to go back to the 1940s and 50s. U-4 and U-5 (9.3 and 10.1, respectively, in April) are closer to the older methodology.

[mikekc]

How it got started that rates are measured differently today is because it's true. The way numbers are collected and reported changed under Clinton. Read this, and google if you need more evidence. Kevin Phillips book "Bad Money" discusses this topic as well.

http://seekingalpha.com/article/117296-true-unemployment-rate-is-not-reflected-in-government-numbers

[Greggo]

Sadly, all of this story is very true.

[macohmz]

There are political figures left over from the JFK years still in Congress. That's the problem. They've been around long enough to become indifferent, callous towards ordinary Americans. They sign legislation without a thought about how it's going to affect America or the world. That's if they pay attention at all. They do everything they do because they think they're safe. And for the most part they are. Most the public still follow the game of "left verses right" which keeps them safe. I've known for some time that this game is a farce.
They might as well be "shirts and skins" for all the real good they do. America is ready for alternatives to these 2 old ethically worn-out political parties.
I was hoping America could survive the loss of the Democrat and Republican parties. Now I don't think America will survive the Democrat and Republican parties.

[ChimesOfFreedom]

With all due respect, Senator, you seem confused. You call for protectionism even while noting there's very little left to protect (we've lost "textiles, cameras, radios, TVs...."). Our economy is globalized, which undermines the very concept of the USA as a nation. Frankly, I think we are in bigger trouble than you realize.

The prescient screenwriter Paddy Chayefsky got it right over 30 years ago: "There is no America. There is no democracy. There is only IBM, and ITT, and AT&T, and DuPont, Dow, Union Carbide, and Exxon." The names have changed, a little, since then. But the days of "what's good for GM is good for America" are over. Once this was more or less true, that the success of a giant US corporation could be counted upon to benefit the US. No more. The money still flows to the same tiny elite, but they no longer find the US an attractive market. Why is that, Senator? The answer is simple: we are dwarfed by the emerging markets in Asia. They can employ Chinese in China and Indians in India, and they can sell to them too. Those markets are far bigger than we'll ever be, and the labor is relatively cheap.

As the Asian middle class develops, we'll be ready and waiting to become the new Third World, the latest and greatest cheap labor market. Then we'll get a taste of what Corporatism has done to the Third World for decades now.

[demockracy]

An interesting side note to your observations is that Hollings was the sole Democrat to support Graham-Leach-Bliley (AKA the legislation that killed Glass-Steagall, and unleashed the current financial disaster) in its initial Senate vote. This bill divided the Democrats in the House, and passed by a veto-proof margin for Bill Clinton to sign. There's plenty of blame to go around, but the Republicans led the charge, and Hollings went along with this.

[ChimesOfFreedom]

Certainly, there is no shortage of Corporatists on the Democratic side of the aisle.

[denny8844]

What I saw was that the Senate vote was 90 to 8 which means that more than one Democrat voted for it I think you are confused sorry about that

[mnich13]

Well, we invented regular and curly fries. If we can just come up with a new style and/or flavor for french fries, I'm sure that will fix everything.

[marijam]

Well, it's a shame you retired. Nobody in Congress today gives a flip, and we're powerless to stop them.

[JeffKolakowski]

Hollings makes a good point about the New York Times, as it has always been infatuated with “free trade”, even now as it as siphoned off our core prosperity. The sad truth is that rethinking or repealing the trade agreements that have hollowed out our economy, is not even up for discussion among the nation’s elite and ruling class. Obama quickly dropped any talk of reforming trade agreements after he beat Clinton in the primaries. This country needs a lot less borrowed stimulus as it does a fundamental restructuring of our entire economy, a restructuring that reserves a fair share for working people.

[twofish]

Remember when Obama staffers supposedly told the Canadians "now, don't worry about his anti-NAFTA talk, it's just campaign rhetoric." I guess that was a true story.

[RandVictims]

China is finally paying the West back for the opium dumping. Only this time, the drug of choice is slave labor.

Capitalism killed America. Don't be confused.

[RandVictims]

Slavery kind of sucks, doesn't it?