File this under ‘Unsafe Halloween candy from China”:

On October 8, the Canadian Food Inspection Agency issued a warning on Pirate’s Gold chocolate coins.  The milk chocolate coins, imported from China, contain levels of the toxic compound melamine.  Read more here.

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  Last year, the U.S. Consumer Product Safety Commission recalled 17.6 million Chinese-made toys that were found to have excessive levels of lead.  Unfortunately, unsafe toys and products continue to arrive from China, with $50,000 worth of lead-based toy jewelry being seized in Seattle two weeks ago.

Under these circumstances, parents are right to be concerned about the quality and safety of children’s costumes for Halloween. 

Miami’s CBS4 TV reports that a Chinese-made Halloween costume lacking safe, fire-retardant materials, caught fire and burned a 4-year-old boy.  According to CBS, the buy’s mother “had no idea when she chose her son’s costume for Halloween that it was not flame retardant. She says it was made in China and manufactured by Disguise, a company that - according to its website - is the world’s leading costume manufacturer.”

Disguise’s website notes that it brings “over ten million costumes to the American market each year.”  ManufactureThis has inquired of Disguise as to whether those 10 million costumes are all imported, and whether those costumes are sourced from China. 

Saying “Trick or Treat” is a Halloween tradition.  But being tricked by potentially unsafe costumes is no treat, indeed.

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In the run-up to this week’s highly successful AAM Town Hall meeting in Green Bay, AAM gave radio interviews throughout Wisconsin.  Madison’s Sly the Maverick conducted a lengthy interview with AAM Director Scott Paul, and Communications Director Steven Capozzola spoke with Eric Mack at Wisconsin Public News Service.

Both interviews emphasized the need to enforce existing U.S. trade law in order to strengthen the position of American manufacturing.

And not only did Sly conduct an informative interview with Scott Paul, but he subsequently moderated an informative panel discussion at the AAM ‘Keep it Made in America’ program in Green Bay.

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It’s Halloween, and the holiday is a fitting conclusion to a scary month on Wall Street, indeed.  October is on track to go down as the worst month in the American stock market since 1987. 

Unfortunately, there are signs that “the scary” is not going to end with Halloween.  This week’s report on the drop in the third quarter GDP, and the worst decline in consumer spending since 1980 forecasts more difficult economic times ahead.  The U.S. economy is two-thirds consumer spending.  But job losses, increases in food and fuel costs, falling property values and the shrinking credit have brought an end to the longest “shopping spree” on record. 

Corporate executives—yes, even those who were at the helm of the institutions that are now getting government “rescue” funds–might still be able to do some Holiday shopping this year.  The Wall Street Journal came out with an analysis that shows financial giants owed their executives more than $40 billion for past years’ pay and pensions as of the end of 2007.  We are not talking “golden parachutes.”  The $40 billion sum is mostly for special executive pensions and deferred compensation, including bonuses, for prior years.  Some examples are: $11.8 billion at Goldman Sachs Group Inc., $8.5 billion at J.P. Morgan Chase & Co., and $10 billion to $12 billion at Morgan Stanley. 

Another interesting bit of information is that at some companies, the debts to executives exceeded the amount owed in pensions to all employees.  Even as companies have complained about the cost of retiree benefits, they have been awarding larger pay and pensions to executives. Wall Street looks more and more like a mirror of the trends that have been developing in the U.S. economy at large.

In the final weeks of President Bush’ second term in office, the White House is working hard to push through as many as 90 federal regulations, many of which will lead to significant deregulation of private industry, including power plants, mines and farms.  Others will ease controls on emissions of pollutants that contribute to global warming relax drinking-water standards and lift a key restriction on mountaintop coal mining.

Pushing regulation through in the countdown to the new President’s inauguration is apparently a time-honored tradition.  President Clinton pushed through even more new regulations before he left office.  However, the Bush Administration was able to withdraw 254 of Clinton regulations immediately after taking office, many of which were amended or scrapped all together.

  Possible protests against Chinese repression in Darfur and Tibet were such a worry to Beijing that officials created a “watch list” ahead of the Olympic Games to identify potentially disruptive athletes.

No protests materialized at the games in August, but Chinese officials were well prepared.  Among their targets were U.S. Olympic team members including softball players Jennie Finch and Jessica Mendoza as well as soccer player Abby Wambach.

Beijing’s heavy security efforts during the Olympics should come as little surprise, though.  As AAM Director Scott Paul noted several times during this month’s ‘Keep it Made in America’ Town Hall Tour, China employs 30,000 “Internet police” to monitor and restrict web use.  Transmission or discussion of terms like “liberty” are heavily censored, and websites that discuss free speech or democracy are frequently shut down.

This is the non-face of China’s ruling regime.  While promoting a colorful Olympics, the same Beijing elite actively limit the rights of their countrymen.  This is the same regime that has also amassed nearly $2 trillion in foreign exchange reserves—plenty of cash to pay for Internet police.  Or, conversely, a good argument for why the democratic United States should seek to balance its trade ledger with the People’s Republic.
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AAM’s Town Hall Meeting in Green Bay this past Tuesday night was a big success, drawing a crowd of 350 according to the Green Bay Press Gazette.  Winter has come early to the Midwest, but that didn’t stop concerned voters from coming out to hear about the importance of strengthening U.S. manufacturing.

As FOX11 TV noted AAM exists “for one purpose, which is to try to strengthen the manufacturing base in this country.”

And so, AAM successfully concluded it’s Fall 2008 Town Hall Tour– a few thousand miles, a few rental cars, some tissues and lozenges, some sweaters and heavy coats–but a lot of smiles and grand accomplishment.

After the election, AAM will pick things right up and make sure that the next administration is keenly aware of the problem’s facing U.S. manufacturing and why keeping it ‘Made in America’ matters.

U.S. economy contracted 0.3 percent in the third quarter, the Commerce Department reported today, which is a significant slowdown after growth of 2.8 percent in the prior quarter.  Consumer spending, which accounts for two-thirds of the economy, dropped by the largest amount in 28 years in the third quarter. 

The money from the spring government stimulus infusion into the consumers’ pockets has run out and this is the result.  But hang on: we are not in the recession, yet!  The National Bureau of Economic Research, which is the authoritative arbiter of recessions in the U.S, has not made its determination of whether the country has entered a recession.  The classic definition of a recession is the contraction of GDP for two consecutive quarters. 

Well, I guess the markets took their cue from the low number of the drop in GDP—that, and the Fed Reserve rate cut to 1% yesterday,– and decided things aren’t that bad.  Stocks rose in early trading today, the Dow was up 116 points by late morning. 

For average U.S. consumers though today’s relatively low, by markets’ estimation, GDP decline must be of little consolation.  Floyd Norris, the chief financial correspondent of The New York Times and The International Herald Tribune makes a point in today’s NYT article that if only consumer purchases were counted in GDP, it would have fallen at a 3.1 percent in the third quarter, not 0.3 percent. That, Norris says, is the worst consumer quarterly performance since the second quarter of 1980.

The other similarity with the fall of 1980 is the Presidential election.  Voters will be going to the polls on November 4, undoubtedly hearing a little less jingle in their pockets. 

Part of the change in our economy that needs to take place in order to make the people in this country better off is our trade policy.  Barack Obama brought the issue of the U.S. trade with China and the unequal footing upon which it rests to the finishing stretch of the race for the White House.  He acknowledged in a letter to the National Council on Textile Organizations that China’s massive trade surplus with the U.S. is a direct result of “manipulation of its currency’s value,” and stressed that “China must change its policies, including its foreign-exchange policies.”

China’s currency manipulation is making news again.  This time, it’s because North Carolina’s votes are up for grabs on Tuesday.  The state’s beleagured textile and garment industry is suffering because of China’s subsidies and currency manipulation.

Manufacturing workers are receiving more attention in this election for two reasons:  mounting job losses and an electoral map that overlays industrial America nearly perfectly.  The key battleground states of Pennsylvania, Ohio, Indiana, North Carolina, downstate Virginia, Missouri, and earlier battlegrounds of Michigan and Wisconsin, have all been devastated by manufacturing job losses.  You can see the state-by-state tally here.

In a letter released yesterday, Sen. Barack Obama said he would press China on currency manipulation and support vigorous enforcement of “Buy American” laws, drawing a contrast with Sen. John McCain on the issue.

Regardless of the outcome on Tuesday, it’s clear that we need much more aggressive enforcement of trade laws, designation of China as a currency manipulator, and an Administration and Congress that will understand the value of keeping it made right here in America.

ManufactureThis wrapped up a busy month on the road last night at beautiful Lambeau Field in Green Bay, Wisconsin.

Our “Keep It Made in America” Town Hall meeting had so many highlights that it’s hard to know where to start.

Well-known Wisconsin radio talk show host Sly moderated a panel discussion that included insightful remarks from Jon Geenen of the United Steelworkers, Rod Bolhous of Milwaukee-based Bucyrus International, Inc., Margrete Strand of the Sierra Club, and Sachin Chheda of the Wisconsin Fair Trade Coalition.  Among the topics:  the plight of the paper industry in Wisconsin, how an American manufacturer is able to keep more than 2500 jobs in Wisconsin, the work of the Blue-Green Alliance to grow new “clean energy” jobs, what we need to do about China’s unfair trade practices, and what a new trade policy would look like. 

Rep. Steve Kagen (WI-08) laid out his vision for trade and manufacturing next year.  His opponent, John Gard, was invited, but did not attend.

A.J. Hawk and Mason Crosby of the Green Bay Packers gave their support for keeping good jobs in the community, telling the nearly 500 gathered in the atrium at Lambeau Field that a strong manufacturing base is important to the football team and the community.

And we received a terrific welcome from Green Bay Mayor Jim Schmitt, State Rep. Tom Nelson, and Steelworkers District Director Mike Bolton.  In a region that has seen dozens of plant closures and layoffs from unfair trade practices from China, the meeting helped to galvanize public support for a plan to grow manufacturing in Wisconsin and throughout America.  We hope Washington will get the message.

You can see and read a bit of the media coverage of the event here and here.

Even this long-time Chicago Bears fan was honored to be at Lambeau, together with the community of Green Bay, A.J. Hawk and Mason Crosby. 

A ray of light for manufacturing?  The Commerce Department reported today that orders for durable goods —a gauge for longer-term business investment— were 0.8 percent higher in September than August, the fourth increase in five months.  However, the biggest gains came in a 30 percent surge in orders for civilian aircraft, which can be highly volatile from month to month. But businesses also invested in transportation equipment, including motor vehicle-related parts; capital goods; electronic equipment; and heavy machinery.

Well, the U.S. Presidential election is less than a week away.  And whoever becomes our next President he will take stewardship of a country during hard economic times.  Unfortunately, the government’s “house” is in no better order than the global economy.  The deficit for the 2008 fiscal year alone was $455 billion, or 3.2 percent of the country’s total economic output. Analysts say it could reach $1 trillion in 2009, or more than 7 percent of projected economic output, with the country in recession and fighting a two-front war. Economists consider anything above about 3 percent to be a troublesome level for the deficit.  Today’s New York Times article asserts that while both candidates have promised to be better fiscal managers, each has outlined tax and spending proposals that would make annual budget deficits worse.

In another effort to stimulate the economy, the People’s Bank of China has cut the key one-year lending rate again today from 6.93% to 6.66%.  China is facing tougher economic environment of its own, with growth slowing to 9% in the third quarter from 11.9% in 2007 and industrial production expanding at the slowest pace in six years in September as export markets dried up.  However, Chinese government has not attempted any large-scale government stimulus as the U.S. and the European governments have done.  Economists are saying that the rate-cut “isn’t likely to have an immediate impact on China’s economy; what’s needed is more government spending.”  The question is why the Chinese government is sitting on its cash and not acting?

Yesterday, a senior Chinese climate official said richer countries should set aside 1% of their GDP to help poorer nations fight global warming.  The remarks by Gao Guangsheng, who heads the climate change office at the National Development and Reform Commission, China’s top economic planning body, were the first to propose specific demands on developed countries.

On Wednesday, the National Development and Reform Commission released a paper that lays out China’s long-standing position that developed countries should shoulder the burden of lowering emissions of gases such as carbon dioxide that are chiefly responsible for causing a rise in global temperatures.  Developing countries should do so while helping poor countries with money and technology to fight climate change.

According to experts, however, China has become the world’s biggest emitter of carbon dioxide, a greenhouse gas, produced from coal combustion among other pollutants, surpassing the United States in these emissions.  Global warming would be better helped by China working out how it can cut its own emissions, rather than issuing recommendations to other countries on how they can better spend their money combating global warming.