Formerly Great Cities All Over America Are Turning Into Open, Festering Sores

The American Dream ^ | 1-1-2012

[Soul of the South]

The foundations of the USA’s industrial infrastructure were created in the second half of the 19th Century. The federal government was funded almost 100% by high tariffs which kept European manufactured goods out while US factories were being built to serve the home market and employ the immigrants streaming into the country. Plus capital was being invested by banks in long term productive assets such as trains, factories, roads, telephone lines, the electrical grid and ships. The country prospered by focusing on its internal development and ignoring the rest of the world.

Until the 1990’s the US sustained a tariff and quota structure that protected US industry and jobs. The economy grew and added middle class jobs to support population growth. Wages were lower in other countries in 1900, 1950 and 1990 but the tariff and quotas made it more attractive to sustain production in the US. Capital stayed at home and was reinvested in the US economy because the tariff structure worked to benefit US producers and workers.

The Bush/Clinton Wall Street led free trade movement changed the US economy dramatically. Ending tariffs and quotas caused industry to migrate out of the US taking capital and millions of middle class jobs. Wall street shifted from investing in long term productive assets in the US to stripping and destroying American companies through leveraged buyouts. In 20 years the productive capacity of domestic industry was decimated. The first decade of the 21st century saw no real GDP growth after inflation, burgeoning government spending fueled by debt, stagnant job growth and declining standards of living after inflation. We are now mired in an economic depression and looking at another decade of economic decline and a lower standard of living for most Americans.

Unlike the 1930’s there are few idle factories for US workers to return to when economic activity improves. The factories closed during our 20 year free trade experiment have been bulldozed, not idled.

One of the reasons the 2009 stimulus programs failed was to the extent any stimulus money was spent by consumers for tangible manufacured products, that money went to employ people in offshore factories, not US factories. In past decades government stimulus spending would have created demand for domestically produced products.

The free trade policies of the past 20 years have been a disaster for the US worker and the economy. For those who argue the loss of jobs was due to union greed and not the dismantling of of the tariff structure, take a look at the nonunion South and you will see communities devastated by the loss of the manufacturing base. For those who to this day claim The Smoot Hawley tariff caused the Great Deprsssion of the 1930’s, I suggest taking a look at the economic statistics instead of taking the self serving assertions of free traders as fact. Smoot Hawley was passed in 1930, after the 1929 financial crash, not before. In 1929 trade outside the US comprised only 5% of GDP. Manufacturing exports comprised only 2% of GDP. From 1929 to the bottom of the Depression in 1933, US GDP and manufacturing production dropped by 40%. A loss of 100% of manufacturing exports due to Smoot Hawley (2% of GDP) would not account for a 40% drop in GDP. The Great Depression was caused by the drop in domestic demand resulting from the unraveling of the debt bubble built in the 1920’s boom. Not unlike the situation we face today as the debt overhang must be worked through.

The US has a large enough market and abundant natural resources to be virtually self sustaining from an economic perspective. We can recognize the 20 year experiment with open market free trade has been a disaster for the economy and the middle class. Reinstating the tariffs and quotas of the period before 1990, combined with regulatory and tort reform, will result in new investment in domestic manufacturing and millions middle class jobs. Sustaining current policies means continued decline to third world status, millions of unemployed and social unrest.

The founding fathers were advocates of free trade but did not define free trade as making the US market completely open while the rest of the world persued self serving mercantilist trade policies. To the founders free trade meant US merchants were free to trade with merchants in any country. If France and Germany were at war, the US would trade with both. It did not mean the US would have a completely open market while other nations protected their economic interests. While encouraging merchants to trade freely around the world, the new nation levied stiff tariffs on imported goods to encourage the development of domestic industry and fund the government. Despite high tariffs the US economy flourished with free trade and high tariffs on imports.

Levy a 30% tariff on all imports, without exception, while reinstating quotas and you will see revenue stream to the Treasury while private capital races to build new factories in the US. Wall Street, multinational corporations, and academics will scream at the change, but jobs will come back and the nation will be stronger. Short term there might be retaliation as other nations take retaliatory action against US imports. However reclaiming the world’s largest market for US industry will quickly replace any lost export business. Plus, will other nations indefinitely cut off imports of US agricultural products and starve their citizens just because we are once again acting in our national interest?

It is time to change course and return to policies congruent with a thriving economy and strong industrial base. Invest the IRA savings of middle class Americans in US factories employing US workers instead of in Greek bonds, Chinese factories, or pure speculation in financial instruments whose value cannot be determined. History shows we can thrive economically with high tariffs while the last 20 years shows that non reciprocal open market free trade is harmful to the domestic economy and detrimental to our industrial base.

[muir_redwoods]

Companies only outsource in response to the confiscatory tax policies of would-be socialist politicians. The cost of setting up and maintaining out-sourcing operations is huge and problematic and only really worth it if the domestic taxes are s bad as they are.

[central_va]

Protectionism makes no sense. It promotes over priced, low quality goods because it stifles competition.

Yea Free Trade works so well we only have fraction of the steel industry we had 50 years ago, a small fraction. We have 22 right to work states in this country and several have very low taxes. We need to save what is left of our manufacturing base. A 10% tariff would be in order.

[A.Hun]

GWB instituted a tariff on imported steel. It didn’t create jobs, it only raised the price.

http://www.washingtonpost.com/ac2/wp-dyn?pagename=article&node=&contentId=A31768-2003Sep18

[central_va]

You should write book becauase nobody is talking about this, no one. Our guys, like Rush et al, are free traders. The left doesn’t seem to care. You forgot to mention open borders and the 46 million on food stamps, but overall you get a grade of A+.

[ronnie raygun]

Look at who is running the cities for the past 40 years and you will find your answer and you will not be surprised. In 08 the cancer came to Washington and 1600 pennsylvania avenue

[Diogenesis]

[Ann Archy]

Please....it’s because of socialism nd a loss of ALL MORALS!!! Abortion, Gay Rights, Divorce, Welfare, Illegals who have no real connection to the USA, Public PENSIONS that SUCK the life out of the Taxpayers....last would be buying everything from China.

[Venturer]

I kind of scanned this, but I didn’t find anywhere in this article where the festering sores in these cities were blamed on those who moved in after the original owners were forced out.

It’s pretty easy to read between the lines though.

[Clay Moore]

We need to rein in the unions for starters. I had an uncle who worked at a steel mill in Beaumont TX. In one of their contracts, they got one week of vacation per year of service.

And we wonder why American industry cannot compete on the global market.

I would love to see our jobs come back here, if nothing else, as a part time welder, I don’t have to worry about getting a load of hot steel where they (Mexico) melted a bunch of x-ray machines with the source still in them.

Between unions, EPA and bunny huggers, I don’t see it happening.

[danielmryan]

Abernathy and I cut through the complex, tromping over an expanse of dirt and concrete toward the northeast end of the development, where a row of apartments looked down from a grassy hill. We paused next to a vacant, boarded-over unit to take in the scene: A stream of ****, piss, tampons, and toilet paper spewed from a dark hole in the sidewalk, poured down the hill, and formed a sort of **** lagoon next to the street. Weeds, about six inches tall, were growing in the little lagoon.

Raw ****, obviously, is not cool. Beyond the fact that it smells and looks nasty, fecal matter provides a haven for dangerous bacteria, most notably E. coli, a virulent pathogen that can sicken and even kill humans, especially infants. In the so-called developing world, according to the World Health Organization, water tainted by feces is a major killer, a prime cause of severe diarrhea, which takes the lives of an estimated 1.8 million people annually.

Jeez. When you consider that the largest gains in life expectancy came from sanitation, that's pretty scary.

[A.Hun]

SoS doesn't need to write a book, he needs to actually do some research because he is just plainly wrong. Mfg jobs have been decreasing while mfg output has risen, and that preceded Clinton and Bush by decades.

Smoot Hawley didn't create the depression, it made it worse, throwing many nations around the world dependent on US trade into depression also. It certainly didn't create any jobs here.

A 30% across the board tariff would devastate our economy, not in any way help it. We are the worlds 3rd largest exporter, with over 1.2 trillion in 2010, and as other nations retaliated, that business would evaporate. A 30% price increase on consumer goods would tank purchases, not create mfgs here.

Protectionism doesn't work. Its been proven over and over. However, free trade agreements have increased imports and exports of both parties in every instance, growing business and adding jobs.

That's why lower tariffs and streamlined trade regulations are a conservative mainstay, while tariffs and protectionism are liberal ideals.

[central_va]

Free Trade is a religion, an evil one at that. Worse than liberalism or fascism.

[wintertime]

“If My People Who are called by My name will humble themselves and pray and seek My face and change their wicked ways, then will I hear from heaven and will forgive them and heal their land.” 2 Chronicles 7:14
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Why should God help a nation that :

1) Rip apart its innocent babies in the womb, some being only seconds away from their first breath?

2) **Willingly** sends its precious children ( a gift from God) into godless government schools?
Once in these socialist-entitlement schools the children must think and reason godlessly just to cooperate in the classroom. How could it be otherwise? And...the excuses that Christians make for sending their children into these godless mind-control centers, and the excuses made by Christian teachers running the godless government school camps is an abomination.

[SueRae]

Very, very well written. You’ve given me lots of food for thought..and some excellent points in history for me to do a LOT of further reading. Wow.

[Reagan69]

Someone, please post pics and values of Mitt’s homes !

[A.Hun]

Free Trade is a religion, an evil one at that.

No, it is not. It is business, which is neither good nor evil. Protectionism kills business by letting the federal government pick and choose winners.

That is the fact of the matter.

[Straight Vermonter]

Beyond the fact that it smells and looks nasty, fecal matter provides a haven for dangerous bacteria, most notably E. coli

People won't be worrying about e. coli when there are cholera and typhoid outbreaks.

[danielmryan]

My point is that the problem is deeper than merely a wage differential. There are so many impediments to rebuilding our country and nobody is making the moves that will reverse the decline.

Yeah, but that won't stop certain people from looking for that quick fix.

Have you ever heard of Paul Kennedy? Back in 1988, a book by him came out called The Rise And The Fall Of The Great Powers. He was a declinist who compared the troubles of the United States to those of the Spanish Empire when the South American gold and silver ran out.

He did so on the basis of accumulating national debt, but there's another parallel. Restrictive laws had piled up on the backs of Imperial Spain's entrepreneurial class. The trap that Spain got into was the fact that the people charged with solving the problem in large part were the problem.

A frustrated reformer, bemoaning the impossibility of reform, exclaimed: "Those who can, will not; those who will, cannot." If I fibbed and wrote that the sentence was spoken by a frustrated American reformer last week, everyone (except for those who recognized the quote) would believe me.

It's a damned hard trap to break out of. No-one likes to hear that they're part of the problem. For people who've gotten real power in their hands, it's far too easy to dismiss reformers as mere malcontents. They must be jealous!

Add to that the fact that the system is largely complaint-driven. Those restrictive laws, regulations, etc. - each and every one of them, I'd assume - have a horror story behind them that makes them seem good and moral. Consequently, "only a beast" would advocate their repeal.

The fact is, it's almost too easy to cast a reformer who has his eyes on the real problems as a jealousy-ridden bad guy. Maybe that's what keeps people looking for the quick fix.

Sorry to say this, but history offers no way out of the dilemma. France had its Revolution, but it was a latecomer to the Industrial Revolution and a laggard since then. France's answer to the Model T was the Citroen Deux Chevaux, which first came out in 1949.

[central_va]

Dealing with communists is evil, no other way to put it. I believe in unfettered capitalism, INSIDE the continental USA.

It's a religion, you guys will never let me have the last post, this will go on all day because you can't give it up. Why? because I reject the Free Trade doxology and it causes you to have a melt down. Free Trade priests can't have that.