Globalism vs. Americanism
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Down at the Chinese outlet store in Albany known as Wal-Mart, Chinese tires have so successfully undercut U.S.-made tires that the Cooper Tire factory in that south Georgia town had to shut down.
Twenty-one hundred Georgians lost their jobs.
The tale of Cooper Tire and what it portends is told in last week’s Washington Post by Peter Whoriskey.
How could tires made on the other side of the world, then shipped to Albany, be sold for less than tires made in Albany?
Here’s how.
At Cooper Tire, the wages were $18 to $21 per hour. In China, they are a fraction of that. The Albany factory is subject to U.S. health-and-safety, wage-and-hour and civil rights laws from which Chinese plants are exempt. Environmental standards had to be met at Cooper Tire or the plant would have been closed. Chinese factories are notorious polluters.
China won the competition because the 14th Amendment’s “equal protection of the laws” does not apply to the People’s Republic. While free trade laws grant China free and equal access to the U.S. market, China can pay workers wages and force them to work hours that would violate U.S. law, and China can operate plants whose health, safety and environmental standards would have their U.S. competitors shut down as public nuisances.
Beijing also manipulates its currency to keep export prices low and grants a rebate on its value-added tax on exports to the U.S.A., while imposing a value-added tax on goods coming from the U.S.A.
Thus did China, from 2004 to 2008, triple her share of the U.S. tire market from 5 percent to 17 percent and take down Cooper Tire of Albany.
But not to worry. Cooper Tire has seen the light and is now opening and acquiring plants in China, and sending Albany workers over to train the Chinese who took their jobs.
Welcome to 21st century America, where globalism has replaced patriotism as the civil religion of our corporate elites. As Thomas Jefferson reminded us, “Merchants have no country.”
What has this meant to the republic that was once the most self-sufficient and independent in all of history?
Since 2001, when George Bush took the oath, the United States has run $3.8 trillion in trade deficits in manufactured goods, more than twice the $1.68 trillion in trade deficits we ran for imported oil and gas.
Our trade deficit with China in manufactured goods alone, $1.58 trillion over those eight years, roughly equals the entire U.S. trade deficit for oil and gas.
U.S. politicians never cease to wail of the need for “energy independence.” But why is our dependence on the oil of Saudi Arabia, the Gulf, Nigeria, Canada, Mexico and Venezuela a greater concern than our dependence on a non-democratic rival great power for computers and vital components of our weapons systems and high-tech industries?
As Executive Director Auggie Tantillo of the American Manufacturing Trade Action Committee compellingly argues:
“Running a trade deficit for natural resources that the United States lacks is something that cannot be helped, but running a massive deficit in manmade products that America easily could produce itself is a choice — a poor choice that is bankrupting the country and responsible for the loss of millions of jobs.”
How many millions of jobs?
In the George W. Bush years, we lost 5.3 million manufacturing jobs, one-fourth to one-third of all we had in 2001.
And our dependence on China is growing.
Where Beijing was responsible for 60 percent of the U.S. trade deficit in manufactured goods in 2008, in the first six months of 2009, China accounted for 79 percent of our trade deficit in manufactured goods.
How can we end this dependency and begin building factories and creating jobs here, rather than deepening our dependency on a China that seeks to take our place in the sun? The same way Alexander Hamilton did, when we Americans produced almost nothing and were even more dependent on Great Britain than we are on China today.
Let us do unto our trading partners as they have done unto us.
As they rebate value-added taxes on exports to us, and impose a value-added tax on our exports to them, let us reciprocate. Impose a border tax equal to a VAT on all their goods entering the United States, and use the hundreds of billions to cut corporate taxes on all manufacturing done here in the United States.
Where they have tilted the playing field against us, let us tilt it back again. Transnational companies are as amoral as sharks. What is needed is simply to cut their profits from moving factories and jobs abroad and increase their profits for bringing them back to the U.S.A.
It’s not rocket science. Hamilton, James Madison and Abraham Lincoln all did it. Obama’s tariffs on Chinese tires are a good start.
Patrick Buchanan is the author of the new book Churchill, Hitler, and ‘The Unnecessary War,’ now available in paperback.
COPYRIGHT 2009 CREATORS.COM
Filed under: Economics, Politics
HEAR, HEAR!!!
Pat Buchanan: for expensive tires.
Rake a pile of money together, whether it is taxes, or “protection money”, or whatever it’s source, and hand it to politicians, much of it will disappear.
True of BUSH, more true of OBAMA.
True of 2006 republican congress, true of democrat congress since then.
Until you fix the mess in Washington, these people will continue to write the chinese IOUs binding our grandchildren.
With that going on, any such plan as you have outlined, is nonsense, and will reinforce the status quo.
Another example of “free trade” in action.
Pondering the demand curve it strikes me that it really is a sort of barometer of the net or average morality of the population. Of course there is also imperfect information – most buyers of chinese tires are not aware of conditions in China.
If we were a moral people there would be no demand for Chinese goods until conditions for workers and the environment were on par with the US – regardless of government action. We do this to ourselves.
Also: ‘when they came for the tiremaker’s jobs, I said nothing. when they came for me (my job), no one was working anymore’ – a spin on the old cautionary tale.
I think people are aware of the Chinese labor practices. But lower prices are more important to us. I try to buy American but my girls crave the Made In China crap that oozes out of every Toys R Us and Target shelf.
“our dependence on a non-democratic rival great power for computers and vital components of our weapons systems and high-tech industries”
You’re talking about Japan, now right? Wasn’t this about Chinese tires?
Do you know how many manufacturing jobs were lost to automation during the Bush years?
“Impose a border tax equal to a VAT on all their goods entering the United States, and use the hundreds of billions to cut corporate taxes on all manufacturing done here in the United States.”
Your solution is a direct transfer from consumers to American manufacturing corporations? You think this will create jobs? And why would these national companies be any more moral that transnational ones?
“What is needed is simply to cut their profits from moving factories and jobs abroad and increase their profits for bringing them back to the U.S.A.”
How do we do this?
I wonder how many people are submitting comments through computers made in China (or other nations in Asia with lower standards of living than the US).
So, John Smithson, how moral is *your* demand curve?
Mad Doc MacRae: For cheap Chinese tires to put on his Korean Hyundai Genesis as he rolls up the window while passing you penniless, unemployed Americans. That is until his job is outsourced to India and he has to either learn Hindi and move to Bangalore or get a job a t Wal-Mart selling cheap Chinese Tires for $7.00/hr.
Why are tariffs or VAT worse than income taxes, payroll taxes, sales taxes. property taxes and de facto taxes like OSHA regulations, race and ethnic quotas and big payouts to trial lawyers?
American Musashi: For a mercantilist understanding of economics.
icr – aren’t they *all* bad?
Ironic – we’ve been shipping so many formerly-American manufacturing jobs overseas for so long, and now, between the recession, high unemloyment and overall downward pressure on wages, even many of us who PREFER to buy American-made products can no longer afford to.
For many foks who are struggling to stay afloat in this economy, their choice of a say, $35 PRC tire over an $85 US tire, is going to be one dictated almost purely by pragmatism
resulting from economic pressure – any thoughts about the morality of supporting Chinese sweatshops or the notion that buying the PRC tire is not a very patriotic purchase, goes right out the window, when you’re struggling to pay the rent, keep food on the table, and keep current on your bills.
Pat Buchanan is right on this one. If one-way “free trade” works so well, then why is the consuming nation (U.S.) having to borrow money from the producing nation (China) ?
Great nations continue to manufacture goods.
I read a book by Lloyd Lofthouse that taught me about Chinese Morality called ‘My Splendid Concubine’. It shows how Chinese morality is similar to Christian morality. However Chinese morality is not based on the worship of one God and the study of a Bible or Koran but on Confucius Taoist philosophy that goes back several thousand years forming the foundation of the most populous nation on the earth, a foundation that still influences the behavior and actions of 1.3 billion people. Confucianism is based on relationships and a mutual respect between emperors and peasants, fathers and children, husbands and wives, older brothers with younger brothers, etc.
Mad Doc MacRae: Against true Capitalism and for Communist Command Economies.