To govern -- or -- to campaign
By ERNEST F. HOLLINGS, former U. S. senator
JULY 8, 2009 -- Campaigning is usually good for government. And government is good for the campaign. But the needs of the campaign sometimes conflict with the needs of the country and government -- which prevents good government. That's the situation in Washington today.
We need desperately to stop the offshoring of jobs, production, and the economy. But the President and Congress need contributions for the campaign. The financial crowd that furnishes the contributions wants to keep the U. S. market open so they can dump their offshored production back into the United States market for a big profit. To keep the market open, Wall Street, the big banks, their think tanks, Corporate America, and the Business Roundtable engage in a charade of opposing protectionism and cry "free trade." Congress, needing campaign contributions, refuses to regulate trade as the nation goes out of production.
was textiles, then watches, toys, athletic gear, cameras, then radios,
TVs, electronics, then steel, then communications equipment and computers,
now autos. GM goes broke and we say Detroit doesn't know how to make a
car - Detroit doesn't know how to compete. The President and Congress
know how to compete; that's how they got in office. But they refuse to
compete because that would cut off contributions. They refuse to protect
jobs and the economy.
Morris describes in his book, Theodore Rex: In 1900, "[t]he
United States was already so rich in goods and services that she was more
self-sustaining than any industrial power in history." Protecting
the economy continued: Roosevelt for agriculture, Eisenhower for oil,
JFK for textiles, even Reagan for steel, autos, computers and machine
tools. But President Bill Clinton threw over organized labor that elected
him and went for the money. He put the white tent out on the White House
lawn and the Fortune 500 came. He rammed a flawed trade agreement with
Mexico through the House of Representatives and offshoring commenced in
interest. Then Clinton enacted Permanent Normal Trade Relations with China
causing the offshoring of jobs and production to hemorrhage.
War II, Japan started the trade war for market share by closing its market,
subsidizing its production, selling its export near cost, and making up
the profit in its closed market. Others followed suit, with China becoming
the supermodel in the trade war. China controls its finance and labor,
subsidizes its production, rebates its taxes on exports and protects its
market and trade. It does everything to attract foreign technology, investment
and production. In the last ten years, China has brought 300 million of
its poor into the middle class. China has become the economic superpower
as the U. S. destroys its middle class, its economy enfeebled.
Typical Washington politics. Promise to protect jobs in the campaign but in office against "protectionist signals" for the contributions. Typical American arrogance. We think we are in charge of the global economy when we are AWOL in a trade war. In globalization, we operate on the basis of cooperation. We think by setting an example, keeping our market open, others will follow. But China, Japan and others operate on the basis of competition for market share in globalization.
States is not about to close its market. But we'll have to set limits
like tariffs and quotas to survive. The limits will have to be measured
in order to bring the competition to open trade. It won't be easy, but
President Obama can't perpetuate four more years of the fraud of "free
trade." He can't spend trillions for bail outs and stimulus to create
jobs and not plug the hole of offshoring jobs. Two years ago, the Princeton
economist, Alan Blinder, warned that in the next ten years the United
States would lose thirty to forty million jobs to offshoring. Henry Paulson
started jump-starting the economy eight months ago and last month we still
lost 467,000 jobs rather than creating the 100,000 necessary to sustain
the growth in population. In the trade war the United States must come
in from the cold. The President has reached his Rubicon.
Senator Hollings of South Carolina served 38 years in the United States Senate, and for many years was Chairman of the Commerce, Space, Science & Transportation Committee. He is the author of the newly published book, Making Government Work (University of South Carolina Press, 2008).
© 2009, Ernest F. Hollings. All rights reserved. Contact us for republication permission.
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