By Orion Karl Daley, Balacned Party, 2008 Presidential Candidate
'Original post - AFL-CIO Weblog | Trade policy affects every one ofus. What should ...
Today's World of Trade in the United States of America:
Trade, the exchange of goods, or goods for moneys is in our history books as to when culture has first been documented. In history, it iswhat distinguishes a culture such as in establishing trade routes.
- Simple examples are the Silk Route from China to Europe, and the Spice Routes later from the Americas to Europe; and as well as the Slave Trade routes to the Colonials.
When looking at my PC, television, appliance, or even my clothing, I ask myself, what was actually made in the United States ? When looking for a company's help desk for a product or service; one must realize also that the call is answered by one most likely in India. During Tax Time, these days we also have to realize that someone overseas will be more than likely preparing your returns.
Years ago I preferred a Japanese car over any other as getting more for the money and they were in fact then more reliable.
If you ask your self the question: 'What body of Congress is responsible for our position in World Trade, it is somewhat of a head scratch. When going to both the Senate and House web sites you will find committees where part of their mandate is US Labor, where another has sometimes deals with agriculture, and then there is the subcommittee on China.
When looking at the Department of Commerce Website one finds that focus is on exports, and not regulating imports. Consider, there are over 7,000 idle shipping containers on our shores from imported goods. They can also be used these days to build houses and structures, and/or to could sold at discount to the steal industry to recycle. But otherwise, due to trade imbalance, this idle count will just continue to grow.
- Bush Statement on Leveling the Playing Field
"When you hear me talk about negotiating trade agreements, really whatwe're doing is leveling the playing field. What we're really doing is making sure America has a chance to compete on the same terms that people can sell into our market. And if they don't respond . . .we'll use the tools necessary to make sure that the playing field is level."
President George W. Bush
March 30, 2004
One can spin the naive and the foolish, but facts are that we export raw materials that are imported more than a magnitude back to the US in finished Goods. What finished goods we could export would be too expensive for other 3Rd world economies.
- FDR noted in his "The Economic Bill of Rights" 'The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad'
Currently, about exports, If you are looking for a Job these days, more than likely it has been exported; or its being taken by a friendlyvisitor at half the expected wages and who is send this money back home where it can go a lot further than here.
On the up side, we can pat ourselves on the back in saying how we are really helping other countries in developing their economy, although it is at a cost to our own; and if looking at the down side, can say that philosophically, that manufacturing is tending to be more economically accomplished off shore, as well as everything else.
- For example: if we need to refurbish our military with equipment, would the Government based on the lowest bid, offshore this as currently how resilient is our steel and manufacturing industry when under demand when serving our nation ?
This is also all well and good for off shore entrepreneurs who have profited quite well in helping us out in providing inexpensive products for us to consume, and services for us to use. We could say that we are really saving money which we should do as in earning less these days due to this.
WalMart, as well as its suppliers have gone off shore in order to provide high volume imports at 'below market prices' in order to serve consumers better. We could say that it makes good business sense when looking at the books.
It is also unfair for anyone to 'have to buy American' in America when the off shore solution/alternative saves "us" serious money. As individuals, the consumer is not a philanthropist.
Given our eroding Manufacturing, Agriculture, and Service base; and given the unbending growth of debt in this country, the Question is Who is "us" as the consumer ? - as eventually our industries, and services will impact all of us when our job is replaced by an off shore alternative.
This means that eventually regardless of volume import at cheap prices, if you don't have the money for them, it won't matter really how cheap, or inexpensive they are. We could say that predatory lending in the Credit Card industry in the long run also won't help us out of the jam that we are getting ourselves in, but instead compound it further.
In a similar manner when hearing that automating will save on labor costs, one has to ask the obvious question, who will the Automation serve is we are all automated out of our jobs.
As this snake continues to eat its tail, more and more of us will wonder even how to afford a cup of coffee. We have to realize that this is a Gordian knot that we are all apart of and all will be eventually affected by before we can actually be willing to look at viable solutions.
- Vague solutions offered on podiums by politicians talk about 'new education' and training for the 'worker' ( whatever that might mean ?) while others talk about new industries. I believe that this is all well and great when wanting to blue sky for tomorrow's world, but the growing many of us are confronted with how to pay the rent or mortgage and put food on the table. Further, Why would it not occur to these speakers, that any new education is also something that others offshore from us also like ?
The most demonstrative action by government has been to place artificial price increases on some imports, which only lowers the price of offshore labor to make up the difference. Other US business that offshore everything but the 'home office' in the name of the 'freemarket economy' just cry fowl to Congress.
In affect, our Government is not providing a solution for 'Trade' that can really deal with our tomorrow; and more than likely our representatives are finding, in a similar manner to the clothes we have on, that most of the Lobbyists that are willing to pool towards the next campaign fund do represent offshore import interests, regardless if their official place of business is in the US.
Irony also is that The home office of many business's in making good business sense are also off shoring their home office for tax purposes.
The 'One for All, and All for One' viewpoint cannot grab a foothold in the changing playing field. That is unless we really examine the mechanics of Supply/Demand where it is from the standpoint ofvolume, instead of price; where in the case of volume we look at managing it from the standpoint of domestic, or import.
Trade can be balanced or imbalanced. But in general, trade regulated by volume, and not by price, enables trade to become economically balanced.
Artificial trade tariffs, which is the most we have been able to do is like trying to plug a dike.
Tax incentives for not out sourcing is also a long shot when considering that such incentives are overshadowed by manipulating the cost of offshore labor to make up the differences.
The volume of imports is not regulated, and when putting a higher price on foreign TV's ( as a example ) that are dumped on our shores, just means more compromise of foreign workers rights in order to realize the same profit for the foreign manufacturer.
By limiting import volume into the United States, the price of the import would increase due to level of availability and in order too btain a reasonable profit margin. This is simple supply and demand mechanics.
This in turn would additionally dampen volume; provide less incentive for moving manufacturing operations off shore; while not having to be compromised in back room negotiations on import price with foreign governments based on our debt obligations to them.
When volume is the gating factor, then the volume that is normally coming through our ports would have to go elsewhere to be sold.
If China cannot sell excessive volume to the US, as a simple example, China will have to eventually sell to China. This in turn would require their standards of wage to increase in order to afford their own TV's and other finished goods.
By loosing the offshore incentive, US manufactures would not need a domestic tax incentive, while also not needing to lose their workers. In fact if they choose to offshore, perhaps add an additional tax while regulating volume. By regulating their import volume, while making it costly to offshore their business offers two incentives to hire American labor.
The same principles of 'Trade Volume' in manufacturing and textiles, can be applied to agriculture, as well as the outsourcing of technology labor.
There are a multitude of work visa based visitors in the US, where in fact most institutional banks use them for their IT needs. They are cheap, and send their money home. This compromises free market trade in terms of pricing for the technical labor pool in this country. Any country that so wishes to import their labor force, should be required to not under price going rates for the standard of living in the United States, prove that an American cannot fill the job, and provide the US with an equal export monetary value. For those institutions which offshore their labor, such labor should be taxed in order to encourage such institutions to hire American labor.
Formation of the Trade Committee:
Congress will have to step up to the plate in terms of forming The Trade Committee,which in turn must include as its members those representatives that also sit on the Labor, Industry and Agriculture and Services committees. If there is no cross representation within the Trade Committee, the formation of such a committee will only serve for the purposes of Lip Services in its effectiveness in managing Trade.