Banks in the 1990’s? 2000’s? REALLY?
Where were you in the 70’s when Steel plants all over the country were closing due to the Clean Air Act?
When the small auto plants in small towns across America were closed and sent to Mexico, because the Clean Air Act, and the 1976 UAW Strike result made those plants unable to produce a profit, or assure an uninterrupted stream of parts for the assembly lines?
Time after time, after time, government regulation, Union activism, and ever-increasing taxes have run American Manufacturing out.
And it’s not like the CEO’s haven’t been telling you why, for almost 4 decades now. The CEO of Emerson Electric, which bought RCA, was called largely ignored when he said “If the US is no longer interested in Jobs, I’ll just move them elsewhere” in 1998. GUESS WHAT? HE DID. Most went to Brazil and Malaysia. Around 20,000 of them.
Another Example: The Mercury-filled lightbulbs law cost 35,000 mostly union manufacturing jobs ALONE, and has created a potential civil liability tail that is HUGE. That’s why we went from making them domestically, to importing most lightbulbs from Mexico and China now.
Yeah, we need to bring manufacturing back. But we have to restore the conditions to make it work, FIRST. Grand pronouncements mean nothing without action.
The loss of the textile and furniture industries was 100% about the reduction in tariffs and quotas. These industries employed millions of nonunion workers in the south. Environmental regulations and unions did not kill these factories, one sided free trade did.
The Chinese factories that picked up the production were subsidized heavily by the Chinese government who wanted to provide jobs for its people. Zero percent interest loans for constructing factories for the export market and 15% rebates on the value of goods exported were common. A standard workday was 10 hours and the daily wage was $1.00. Young female peasants streamed from the rural areas to live 8 to the room in the dormitories next to the factories and work in the factories.
Goldman Sachs and other NY banks lobbied hard for the end of textile tariffs and were highly involved working with textile and apparel companies to sell off the US assets and pump their stock prices for outsourcing. The US consumer did not get the benefit of significantly lower prices, the higher profits instead were spent on stock buybacks facilitated by the banks and ruinous acquisitions. Once great companies such as Burlington Industries, Pillowtex, West Point, Springs Industries, either no longer exist or are shells of their former glory having been stripped of cash and assets by bank financed corporate raiders such as Carl Ichan. The once thriving rural southern mill towns are characterized by high unemployment, declining standards of living, high rates of substance abuse, limited opportunity, and high rates of welfare dependency. Somehow the high paying service jobs the free traders promised never made it beyond the big cities.
Free traders will say it is the US worker’s fault he can’t compete with $1.00 a day labor. I suppose if the goal of free trade is to reduce the standard of living of US citizens to third world levels this perspective is correct.
Another option is to charge foreigners for access to our markets through tariffs as we did after the Civil War when we built the largest industrial economy on the planet and the first broad middle class. Personally I’d rather spend $2 more to buy a dress shirt made by middle class Americans, or a toaster assembled by my neighbor, than pay more than that in taxes to fund the social services supporting the chronically unemployed.
Bring back US manufacturing, both high skilled and low skilled. The decimation of manufacturing in the nonunion south proves it wasn’t all about unions.
There is a national security aspect to this as well. Go to war with China and the US no longer has the ability to provide clothing for its people, much less the troops. The supply chains no longer exist.
Ding, Ding, Ding. We have a winner. We also need a better tax system for corporations to encourage making their profits here, and not abroad.