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Refusing to change
By ERNEST F. HOLLINGS, former U. S. senator

AUG. 13, 2010 -- Now that President Obama is down in the polls, the TV pundits have gone to screaming: "Move to the center;" "speak with more passion," and on and on. They remind me of a saying aboard ship in World War II: "When in danger, when in doubt, run in circles, scream and shout." No doubt President Obama has done some good things, but after eight years of President Bush, President Obama gives us more of the main concerns of the voters. We supported Obama for President because he promised change.


No president increased the national debt trillions of dollars. But in eight years President Bush increased the national debt $7.5 trillion. During the Bush term, household debt increased $7 trillion. By the time Obama raised his hand to take the oath of office the economy had been stimulated $14.5 trillion, and we were losing 799,000 jobs a month. Stimulation was spent.

Instead of submitting a plan to pay down deficits as he had promised, President Obama went for more tax cuts and stimulation. Instead of cutting deficits of a trillion dollars a year, President Obama on February 1st this year submitted a budget calling for deficits in excess of a trillion dollars each year for ten years. He joined the political Congress with a study commission on deficits, kicking the can down the road on deficits. The commission won't report until the end of this year. Action on the commission's report occurring next year can't be effective until the following year. Instead of change, this will give us two more years of Bush spendthrift government.

Obama bragged in the campaign about his opposition to the Iraq war when he was a State Senator in Illinois. Obama was going to end wars. President Bush's surge was more of money rather than troops. Calling the Sunnis "the awakening;" we paid 100,000 Sunnis $150.00 a month to stop killing the Shiites. But after seven years the Kurds, Sunnis and Shiites are still killing each other. We ought to leave and let them fight it out. But instead of change, President Obama lingers like President Bush. He puts on this pollster politic act, saying all combat troops will be gone by the end of August, but don't tell the 50,000 troops remaining that they are not combat troops. If there to protect our Embassy, 5,000 would be plenty rather than 50,000.

President Bush lingered in Afghanistan. At least he didn't find Afghanistan necessary for the country - only for his re-election campaign. Afghanistan has never threatened the security of the United States. They have just closed the mosque in Germany where 16 Saudi Arabians of the 19 that hit the World Trade Towers on 9/11 plotted. Osama bin Laden escaped to Pakistan, but now President Obama has more troops in Afghanistan than President Bush. After nine years of war in Afghanistan, the front page of The Wall Street Journal states: "Anticorruption officials said they found evidence an Afghan money- transfer business laundered drug money and had ties to top officials." Are we to continue to ask GIs to die for this? President Bush started the corruption in Afghanistan with bribes and pay-offs. Instead of change, President Obama continues the corruption. Instead of a mutilated Afghan woman on the cover of Time. Time should have had the picture of a GI with no arms and no legs. That's our responsibility.

We have been losing production and jobs in the trade war for fifty years. Japan started this trade war by closing its market, subsidizing its manufacture, selling its export at cost, and making up the profit in the closed market. It was a trade war for market share which worked. Toyota is #1 as General Motors has gone bankrupt. China embellished the war for market share to include investment, research, technology, development, production, jobs, trade - the economy. Bill Gates' best of research, Microsoft, is in China. Andy Groves' best of technology is in China.

I worked with Corporate America for thirty-eight years in the United States Senate on measures to have our trade laws enforced. Both Houses of Congress approved, but presidents of both parties vetoed our efforts because of the Cold War. Then President Clinton ended our efforts with NAFTA for Mexico; Permanent Normal Trade Relations with China, and China's entry into the World Trade Organization. This caused a hemorrhage of off-shoring of research, technology, production and jobs to China. Almost one-third of our manufacture and manufacturing jobs were lost during President Bush's eight years. President Bush refused to enforce our trade laws to protect the economy. Instead of change, President Obama continues to refuse to enforce our trade laws to protect our economy.

The middle class was started by Henry Ford's manufacture, awarding health care and retirement benefits to the workers. Manufacture is the engine of growth. Manufacture generates small business. Small business and the middle class can't prosper without manufacture. President Obama engages in pollster politics, showing his concern by signing a manufacturing initiative this week. Bob Reich, an Obama supporter and former Secretary of Labor for President Clinton, said on a scale of ten-to-one that he would give Obama's manufacturing initiative a grade of 1.2. Like the pollsters tell you, identify with the problem, but do nothing.

President Obama should institute a 10% surcharge on imports like President Nixon instituted when our trade deficit was a fraction of what it is today. In the last ten years we have suffered a trade deficit of $6 trillion, and a trillion of this deficit was in subsidized auto and auto parts imports. No wonder GM went bankrupt. No wonder GM now invests in Mexico and China in order to make a profit. President Obama, like President Bush, ignores the problem.

Like President Kennedy in 1961, he could save industry necessary to our security by enforcing the War Production Act of 1950 and create millions of jobs. He could create millions more of jobs by enforcing Section 201 of the Trade Act to save an industry endangered and not wait for it to go bankrupt. President Ronald Reagan obtained voluntary restraint agreements from Japan on steel, automobiles, semi-conductors, and machine tools when he threatened action under Section 201. For change, President Obama could call on Congress to cancel the corporate income tax and replace it with a 5% value added tax. One hundred thirty-five nations in the trade war have a value added tax that can be rebated on exports. But our corporate tax is not rebated on export. Germany, with a 19% VAT, manufactures the parts and engines for the BMW. It ships them at high cost to avoid income tax on its U. S. facility and, in South Carolina has already invaded U. S. automobile production with a BMW plant assembling cars and shipping them back for sale in Germany. Germany now uses its 19% VAT to produce windmills or green jobs in Charleston, South Carolina, at least 15% cheaper than any U. S. production. A 5% VAT would stop the off-shoring of production and jobs; make it profitable for Corporate America to produce in the United States; revitalize the American economy; promote exports, and produce $600 billion. Corporate tax is estimated at $156.7 billion for 2010, leaving $443.3 billion to stop borrowing from China and pay down the national debt.

These are the changes we were looking for. Instead, President Obama like President Bush campaigns around the clock. He refuses to compete in the trade war. He arrogantly assumes the United States is in charge, calling for free trade while communist China controls and take us to the cleaners. He refuses to protect our economy. The country can't stand four more years of Bush policy on deficits, wars and jobs.

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 recently published book, Making Government Work (University of South Carolina Press, 2008).

© 2010, Ernest F. Hollings. All rights reserved. Contact us for republication permission.

About Fritz Hollings

Ernest F. Hollings served the public for 56 years -- 38 years in the United States Senate and as South Carolina's governor, lieutenant governor and a member of the S.C. House of Representatives.

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