13
May
13

The Anti-Manufacturing Forces in Washington

The Anti-Manufacturing Forces in Washington – The Made in America Movement. I think I am in good company when I say I would like to buy goods made in America (see National Survey), and that I would like to see more good paying jobs in America, especially in manufacturing. So, I find it hard to believe that there are people out there that do not want the United States to start manufacturing again. And it is not only China. It is actually  groups from within the United States. So, who are these contrarians? How can they exist when we never see any of these people speak out publicly against U.S. manufacturing except someone like John Stossel (instead of linking his post, I will link my rebuttal)? If they never speak, how do we know who these secret traitors are? Answer: By their actions, just follow the money.

Loss of manufacturing jobs with a slight increase due to the stimulus

Loss of manufacturing jobs with a slight increase due to the stimulus

The top link from the Huffington Post is written by Gilbert Kaplan, Former Deputy Assistant and Acting Assistant Secretary of the U.S. Department of Commerce. The article lists the five groups who are against U.S. manufacturing and insourcing. (Click this link to read the article and learn whom they are. Reposted in madeinamericamovement.com.) The following is more of a summary of the link, plus a few of my own comments about the above article. (It is actually quicker to read the article than to read my arguments).

The 5 groups against U.S. Manufacturing

Number 1 – The People Making money by off-shoring. This is the most influential group because they have the most money and they own the most lobbyists working in Washington, DC. That is why there are continued tax breaks for the companies that outsource their jobs to other countries, even though everybody thinks these breaks should disappear. The group is composed of mostly multi-national corporations. And with multi-national corporations, they definitely have no loyalty to the United States of America. The only thing they worship is cold hard cash. That is their only allegiance. If we help them, we become their our current friend, if we make it more difficult for them, we become their lifelong enemy. So, if we want to increase manufacturing in the United States, and it costs them a nickel in total – we are now their enemy, and they will spend 1,000 times more to get their money back. And as long as the United States allows these corporations to buy our politicians, they will always get their way. The people of the United States don’t exactly like this arrangement, but they don’t really think this is corrupt, “it’s just the way our country works”.  However, all the other countries, not calling themselves the United States, think this is one of the most corrupt practices in the world. And they would not be wrong. Corporations run the world and the U.S. About 95% of what passes in Congress is blessed by this group. This is in truth, the real power and the group that needs to be outed. So,why is the Made in America movement avoided in the news, when every day more and more people are asking for items Made in the USA?

The Multi-National Corporate Pledge

The Multi-National Corporate Pledge

Number 2 – Free Trade Extremists. Actually numbers 2, 3 and five are very closely related, and all are heavily influenced with powerful propaganda financed by Number 1. Number 2 – The Free Trade extremists, believe in the ancient theory of Adam Smith. They are actually small in number and their argument is heavily flawed. The theory is that trade will become more efficient and cheaper if nothing inhibits it. The problem is it never worked, and it never will. The best chance that this theory could have worked was when monopolies were outlawed and the United States, at the time, was a bunch of small businesses. But the United States is now run by a conglomeration of Mega-Multi-National Corporations (they are all like monopolies). Just look at your own city and your own town, and count how many of your businesses are a mega-business, like WalMart, Lowes, McDonalds, H &M? The only rules that will come out of Congress now are ones that favor the large corporations – that is not Free Trade.

Chinese Sweatshop

Chinese Sweatshop

The second argument against Free Trade which is well-explained in the Huffington Post, is that the United States is “trying” to play the game of Free Trade. While countries like China, in order to further its “Exports First” Policy, clearly breaks the rules by: subsidizing multiple “private” companies; increasing tariffs on competitor’s imports; strong-arming foreign corporations into manufacturing with their own country; and artificially de-valuing its own currency, making imports more valuable. It is like The United States is playing a card game with everybody but it has to deal with different rules made up by each country, but playing their own cards with the original ‘very narrow’ rules. So, we are not dealing with Free Trade – not even close. Free Trade is a policy worth dropping.

Number 3 – People who Believe that Trade is Less Important than Foreign Policy. These people are what some people call political apologists. They are afraid that if the U.S. raises some of its zero percent tariffs on some Chinese imports, the China will increase their tariff rates on some U.S. product like wheat. The apologists argue that China is too powerful to negotiate with. (There is a trade deficit with China of $239 Billion a year. The US is China’s favorite chump..er customer). This brain-washed argument and solution of number 3 is exactly like the solution of number 2 which is to do less than nothing, but to bend over and take it.

Number 4 – The Ruling Body Of Trade Policies, the WTO, does not enforce trade infractions. The World Trade Organization is supposed to have the power to enforce trade infractions. However, recently the WTO is not enforcing anything including clear infractions by China (see the Huff Post article). So what does this mean? This means there are no referees. Only the combatants make up the rules. Here is the scenario: In one corner is China ( a no-holds-barred-government-involved-country who is determined to do all the manufacturing in the world) wearing the red trunks and wearing boxing gloves and taped feet. In the other corner, is the USA, wearing pajamas, getting advice from the mega corporations to stay passive. The bell rings, China is hyper-agressive. The U.S. walks around in a daze, watching the clouds drift by, while its economy is pummeled. The result: 10 million manufacturing jobs lost since 1980. Upstart China is the number 1 manufacturing power in the world since 2010.

Number 5 – The Economic Theory of 1980. There was a “hot” economic theory running around in the early 1980’s – which was that manufacturing was “Old Hat”, but the new “hip” thing was technology. So, the US would just let its manufacturing go under and we would all become “service” people. At first, things were seemingly going O.K, we were silent about all the factories closing and jobs going overseas because we had a plethora of manufacturing jobs. And with the “tech boom” in the 1990’s, the U.S. was busy making computers and microchips. But the outsourcing was so much greater than anybody had ever anticipated (fueled by a unquenchable greed) that the economists failed to foresee some important points (which now are glaringly obvious): 1) the loss of affiliated jobs transportation, complementary services and community business that catered to the manufacturing population/workers; 2) the real costs of an enormous manufacturing trade deficit (the trade deficit is costing the U.S. an additional 1.5 million manufacturing  jobs every year); 3) the destruction of research and development; 4) the loss of the American middle class – a long time ago, there was only two economic classes, the “rich” and the “poor” until manufacturing came along, and with better wages through negotiating, a new third class called the “middle class” emerged. However since 1980, the rich have gotten richer and the middle class has lost income and buying power to inflation, with much of the middle class falling  into the “poor” class;

The rich get richer, the middle class joins the poor.

The rich get richer, the middle class joins the poor.

5) a feeling of dependence and uncertainty – “dependence” on foreign countries to furnish what we used to make and “uncertainty” – because as we have seen – just about all “service” jobs are outsourcable  and actually “service” jobs are easier to outsource than manufacturing jobs; 6) the loss of the ability to come up with an economic boom – I was talking earlier about the “tech boom” in the 1990’s, but now a tech boom is impossible for the United States to benefit from – in fact, we are in one of the largest economic booms ever in the history of the world with smart phones, electronic readers, iPads, Androids, wi-fi compatible devices – and yet the United States has been totally bypassed by this enormous boom, because we do not manufacture one of these devices at all; 7) the “high tech” things made by the Chinese: the computers, the cell phones, the solar panels were all supposed to be made only by the USA, but China now does all of this and is easily expanding further into high tech adventures like airplanes, aerospace, automobiles and military weapons (currently the meat of American manufacturing – did you expect Chinese manufacturing to stay pat? Did you think our remaining manufacturing jobs are still safe?); and 8) the decimation of the American family and communities.

This outmoded theory of economics still exists with staunch believers. They are considered dinosaurs. If you happen to listen to one of these dinosaurs defending the US should be only a service nation, just laugh right in their face.

Conclusion

It is totally insane that the United States of America is the only major country with absolutely no manufacturing policy. It is like trying to open a business without having a business plan. The United States used to have a plan, the government imposed regulations to protect the country from unfair trade practices. Some hard-right economists called this “protectionism” and that any form of protectionism is just “evil”. Therefore, since 1980, the U.S. government has deregulated and let the chips fall where they may. Not a very wise plan. The plan is called “No Clue”. Here is an analogy of how the “No Clue” policy works: it is like the U.S. economy has been placed on a boat, but the boat has no engine or motor or sail. In fact it has no rudder, no maps, no GPS, no plans and no one in charge. The U.S. economy boat is constantly buffeted by outside forces, such as multi-national corporations and by “exports-first”-mentality of countries such as China. The U.S. responds to this constant buffetting by dropping all of its assets overboard. The inside of the U.S. economy ship looks like it has been attacked by the plague and the outside does not look much better.

The current American policy on manufacturing

The current American policy on manufacturing

The United States needs a plan for to improve its economy and its ability to compete in the future. It means the people of the United States need to take action and elect responsible people who will do “something”, instead of “do nothing” to improve U.S. manufacturing and its economy.

My Solution

So what is my solution to the above problem? As far as clothing, I would start by making three classifications of clothing, all boldly printed on the inside of the garment: 1) Fair Trade garment – fair wages and fair working conditions, 2) Barely Adequate Working Conditions, and 3) Slave Labor and ethically questionable (this is where most of the present clothing would be classified). For garments made from unacceptable places like the Bangladesh Fire Garment Factory and most lately the Bangladesh Building collapse – clothing produced in those facilities would never even reach our shores. Surprise inspections would be required from all manufacturing factories to participate. My second solution, develop a national strategy to improve American manufacturing like this one from the Alliance for American Manufacturing, and third, make all lobbying illegal. Remember to keep America strong and buy American.

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