Staid of the Union
Posted by SCapozzola on January 29th, 2008
President Bush focused on the economy in his final State of the Union speech last night. Among his many items was a call for Congress to extend Trade Adjustment Assistance (TAA) for displaced U.S. manufacturing workers.
ManufactureThis suggests that there might be a different way to look at the question of downsized factory workers. Instead of recognizing manufacturing job losses as a “done deal,” why not fight to retain these jobs in the first place.
A 2007 study by the Economic Policy Institute (EPI) found that 1.8 million U.S. jobs have been lost to China since 2002.
Upon joining the WTO, Beijing promised to halt illegal trade practices such as currency manipulation. To date, the Chinese continue to manipulate their currency as well as to subsidize manufacturing and dump exports on the world market. The result is a continuing, predatory attack on domestic U.S. manufacturing that has led to record factory job losses.
ManufactureThis asks a simple question then: instead of throwing in the towel, and planning for the retraining of U.S. factory workers, why couldn’t President Bush announce plans to enforce existing U.S. trade law? Why not take tough action against countries like China for their illegal practices? Concerted action could help to keep manufacturing jobs in the U.S. instead of sacrificing them.
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January 30th, 2008 at 8:04 pm
Currently domestic manufacturers pay income taxes to both the federal and state governments. They pay payroll taxes to the federal government and property taxes to local governments. In short they are heavily taxed. But goods made in China are taxed very little if at all. That’s like reverse protectionism, giving the advantage to Chinese made goods while punishing American made goods. That only make sense if the objective is to destroy American industry. Unfortunately that seems to be exactly what is happening.
Our constitution clearly gives government authority to levy taxes on imports. Why can’t we reduce taxes on American manufacturers and levy an import tax on foreign made goods? We did that for many years.
Some people will say we can’t levy tariffs because the Smoot Hawley tariff caused the great depression. But that is not true. The depression began before Smoot Hawley was passed so it could not have caused the depression. Also the Fordney McCumber tariff of 1922 raised rates nearly as high as Smoot Hawley did but no recession followed.
It is totally foolish to think that American workers and American manufacturers can compete with buck-an-hour labor in China. It will not happen.