Posted on 02/25/2002 10:48:17 PM PST by JohnHuang2
What does conservatism stand for in 2002? What is it we wish to conserve? "Work, family, faith, community, country." Were these not what Ronald Reagan celebrated?
Yet consider what is happening to community, country and work in America because of the free-trade zealotry of the Clintonites and the Bushites, who profess to be conservatives.
Last week, there came to my office from the keeper of the stats of U.S. industrial decline, Charles McMillion of MGB Information Services, the final figures for the U.S. merchandise trade deficit for 2001.
Good news: It diminished by 6 percent. Bad news: It was the second largest ever. America imported $427 billion more in goods than we exported to all the other 190 nations on earth. In manufactured goods alone, our trade deficit was $309 billion, which translates into 6 million lost manufacturing jobs
Comes the retort: Not to worry. America excels in producing high-tech items other nations are not advanced enough to produce. So long as we are on the cutting edge of industrial technology, who cares who cuts cloth, stitches shoes or makes steel?
Well, take a hard look at McMillion's stats. Not only did we run trade deficits in textiles, shoes and steel, we ran trade deficits in autos, trucks, TVs, VCRs, automatic data-processing equipment, office machines, electrical machinery, power-generating machinery, metalworking machinery, industrial machinery and optical goods.
Among the products where America boasts a trade surplus – i.e., we sell more of these to the world than we import – are soybeans, corn, animal feeds, wheat, meat, cotton, cigarettes, hides, skins, scrap, pulp, waste paper, coal, tobacco, rice and fertilizers. Reads like a list of the leading exports of the Jamestown colony.
Writes Paul Craig Roberts, free trader and co-architect of the Reagan tax cuts, "It comes as something of a shock to discover that the United States ... has the export profile of a 19th-century Third World colony." Once the most self-sufficient of nations, America is now dependent on foreigners for 40 percent of our manufactured goods, and our dependence on foreign oil and natural gas now costs us $90 billion a year. Why is this happening to America? With NAFTA and GATT, corporations can move capital, factories and technology anywhere, which gives the comparative advantage to low-tax, low-wage countries with large pools of dependable and docile (i.e., no unions) workers.
And what are foreign folks doing with the billions of dollars we yearly ship abroad for goods made outside the U.S.A.? "In 2000, 97 percent of direct investment by foreigners went for the purchase of existing U.S. assets," writes Roberts. As companies leave America, foreigners come in with their trade-surplus billions to buy up the U.S. companies left behind. "We are not only losing industrial jobs, we are losing ownership of our companies," Roberts writes.
The New York Times' Peter Kilborn, a classmate of this writer at Columbia School of Journalism 40 years ago, took a Sun Belt tour to survey the ghost towns created by McMillion's grim statistics.
In Pima, Ariz., and Bartow, Ga., Kilborn reports, cotton prices have collapsed because of Chinese imports. Uranium mining has stopped in Falls City, Texas. In Loving County, Texas, oil exploration has stalled as we shovel petrodollars to Saudi Arabia. In Brady, Texas, "the ranchers who raise goats for Angora wool are victims of low prices and competition from New Zealand and Argentina."
"All the rural parts of New Mexico are dependent on mining and almost all hard-rock mining is going offshore," one mining official told Kilborn. In Silver City, N.M., Phelps Dodge, the biggest mining outfit in the state, has laid off 1,700 of its 2,400 workers. Copper prices have tumbled 50 percent. If they rise again, New Mexico's mines are less likely to benefit than the mines in Peru and Chile.
Pima, Barstow, Falls City, Loving County, Brady, Silver City – the hollowing out of such quintessentially American towns as these is what our deracinated economic elites celebrate as "creative destruction."
Consider what free trade is costing. America's industrial dynamism and economic independence are vanishing. Company towns are turning into ghost towns. High-paying manufacturing jobs that provided a living wage for one man to raise a large American family on a single income are being shipped to foreign workers.
Has free trade made America more, or less, independent? Has it made us more or less vulnerable to financial crises? What exactly is it that today's conservatives wish to conserve, besides their untrammeled access to the limitless junk down at China-Mart?
Posted on 2/13/02 11:12 PM Pacific by JohnHuang2
A belief in free trade is part of being an economist, and a belief in America's competitiveness is part of the economist's commitment to the global economy.
Economists note that no other country has the depth and breadth of our capital markets, political stability, rule of law protecting contracts and property rights, strong currency, and accumulation of scientific and technological knowledge that makes the U.S. the high-tech leader.
All this stability and leadership causes foreigners to send their money here for safe haven and secure investments. The inflow of money keeps the dollar strong, which encourages imports from abroad and a trade deficit year after year after year.
These arguments are reassuring and make sense. Still it comes as something of a shock to discover that the U.S., the world's high-tech leader, has the export profile of a 19th-century Third World colony.
Twenty years ago when I was a U.S. Treasury official, the U.S. trade deficit came mainly from oil imports. Today our trade deficit is driven by imports of energy, consumer goods, and manufactured goods.
A table prepared by MBG Information Services in D.C., from Commerce Department data shows the U.S. trade balance for 85 separate industrial and commodity classifications. The only high-tech goods of which the U.S. is a net exporter are airplanes and airplane parts, military technology and specialized machine tools. In 2000 the U.S. was a net importer even of spacecraft.
What does the high-tech U.S. economy export? Are you ready for this? Hides and skins, metal ores and scrap, pulp and waste paper, tobacco and cigarettes, rice, cotton, coal, meat, wheat, gold, animal feeds, soybeans and corn.
We can't even make our own clothes. Clothing is the third-largest contributor to our trade deficit, after vehicles and crude oil.
Even our agricultural exports are declining as the "green revolution" takes hold abroad and U.S. farming shuts down.
The case for free trade rests on comparative advantage. Each country is supposed to specialize in what it does best. Where does the U.S. have a comparative advantage? Apparently, our comparative advantage lies in a political system that doesn't mind if foreigners buy up our assets.
Very little of the foreign money flowing into the U.S. is for the purpose of building Toyota and BMW plants. Eighty to eighty-five percent of direct investment by foreigners in the U.S. economy goes into mergers and acquisitions. In 2000, 97 percent of direct investment by foreigners went for the purchase of existing U.S. assets.
We are not only losing industrial jobs, we are losing ownership of our companies.
This is bad news for Americans training for engineering and high-tech occupations. The jobs are moving out. Recently, Motorola announced the company was moving more of its manufacturing and research and development jobs to China.
The jobs that remain in the U.S. are being filled with engineers imported from India at half the salary.
As capital and technology are now completely mobile, the only comparative advantage lies in labor costs. Companies are chasing the lowest labor costs. For awhile, the move was to Mexico, but before Mexico could get on its feet, the move shifted to China.
Propagandists call the move to China "free trade" and "globalization." But the Chinese don't see it that way. They say, "You can't sell here unless you produce here." That's blackmail, not free trade.
Few companies are making money in China, but the hype is that with 1.5 billion consumers China is the market of the future. If it doesn't work out that way, equity shares will suffer another pricked bubble.
The U.S. is on its way to becoming a country whose corporations are foreign-owned and foreign-based. The U.S. will decline as a consumer market as there will be no high-productivity jobs to support consumer demand.
The U.S. is importing a new population that will help it on its way to Third Worldism. Every year millions of poor and uneducated immigrants, both legal and illegal, pour into the U.S. from alien lands that have never been part of the rational scientific culture of the West. Today 20 percent of the U.S. population is foreign-born or children of foreign-born.
This massive influx drives up the demand for income-support programs while driving down the taxable wages in retail and service sector jobs, where Americans are forced to seek employment as higher-paying automotive, electronic, textile and manufacturing jobs leave the country.
The U.S. is still a superpower, but it is a country with very little, if any, control over its future and its destiny, a country whose time is running out.
Paul Craig Roberts is a columnist for The Washington Times and is nationally syndicated. --------------------------------------------------------------------------------
Well, take a hard look at McMillion's stats. Not only did we run trade deficits in textiles, shoes and steel, we ran trade deficits in autos, trucks, TVs, VCRs, automatic data-processing equipment, office machines, electrical machinery, power-generating machinery, metalworking machinery, industrial machinery and optical goods.
Among the products where America boasts a trade surplus – i.e., we sell more of these to the world than we import – are soybeans, corn, animal feeds, wheat, meat, cotton, cigarettes, hides, skins, scrap, pulp, waste paper, coal, tobacco, rice and fertilizers. Reads like a list of the leading exports of the Jamestown colony.
PATHETIC
I don't agree. His argument is as phoney as the Democrats who decry soft money on their way to a soft money fundraiser.
Confucius say: "If man condemns imports, make sure he not wearing Italian suit and driving German car."
Hmmmm... Let me think about that.
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