Ernest F. “Fritz” Hollings

Fifteen years ago, I called my friend Walter in California to ask that his next expansion be in South Carolina. Walter responded: “I don’t produce anything in the United States. It’s all in China. I lease the plant for a year. They provide the workers, and I put a quality control man in charge, keeping up with him on the Internet. If I make a profit, I don’t have to pay any taxes. I just invest in another plant and expand. If business has a downturn, I just walk away. I haven’t lost any capital investment or incurred any legacy costs.”

The conspiracy has four components. The first begins with business keeping this deal quiet. It is globalization. Nothing you can do about it. If one tries to address the issue, it is called “protectionism,” and they are told “don’t start a trade war.” Instead of leading the way in Congress for a strong economy, they remain hushed! Thus, business began the conspiracy of silence on the Trade War that rages in globalization. Globalization is nothing more than a Trade War with production looking for a cheaper country to produce. When producing offshore one doesn’t have to bother with health care, labor laws, protecting the environment, OSHA’s safety rules and anti-trust provisions.

Second in the conspiracy is Wall Street, which is interested in offshore profits, banks and investment houses like Goldman-Sachs finance offshore production.

Then third is the conspiracy of silence on the Trade War by the president and Congress. Both go along with the charade because Wall Street, the financial crowd, and Corporate America furnish the contributions for the campaigns.

The fourth and most cancerous part of the conspiracy are the economists and free press. They give credibility to the charade of silence on a Trade War. The economists follow the adage: “Whose bread I eat, his song I sing.” The best of the best, Paul Krugman, recommends more stimulation, “New-Deal-style employment programs,” such as the WPA and the CCC, and Germany’s reducing “workers’ hours rather than laying them off” --everything about creating jobs, but nothing about stopping the loss of jobs in the Trade War. Krugman has to know that offshoring our production and jobs at the present rate will soon put the economy beyond repair. The media avoids mentioning the Trade War like the plague. Last week’s Time magazine lists “5 Things We Can Learn From China.” (1) “Be ambitious;” (2) “Education matters;” (3) “Look after the elderly;” (4) “Save more;” (5) “Look over the horizon.” Time ignores China’s lesson that government is the “comparative advantage” in the Trade War.

I was drafted in this Trade War by the northern and southern textile industries to testify before the old U. S. Tariff Commission in 1960. I told them how we were losing textile production and jobs because Japan was dumping its textile exports at less than cost into the U. S. market. John Kenneth Galbraith later helped draw up President John Kennedy’s seven-point program in 1961 to protect textiles from Japan’s trade practices. But Japan continued building plants around the Pacific Rim and transshipping in violation of its trade agreements into the United States. Twenty-five years ago, U. S. Customs estimated that the textile industry was suffering from $5 billion in textile transshipments. We were receiving textiles from Matsui that didn’t even have a textile plant.

In 1968 we passed five bills to counter this conduct and have the president enforce our trade agreements, but President Lyndon Johnson blocked one in the House of Representatives, President Carter vetoed one, President Reagan vetoed two, and President George H. W. Bush vetoed one. In passing bills through both Houses of Congress, we proved the textile industry was the most productive in the world -- investing $2 billion a year in new machinery, downsizing the card room from 25 employees to none, downsizing the weave room from 112 to 12.

Zenith spent three years and $3 million going through the courts to protect its production and finally won before the U. S. Supreme Court. But President Ronald Reagan said we had to help his friend, Nakasone, in Japan and overrode the Supreme Court decision. Industry, seeing it could get no relief in the courts or from the Congress, started offshoring in earnest. And under President Clinton’s and George W. Bush’s free trade policies offshoring hemorrhaged. Milliken Textiles, that launched the program “Crafted with Pride in the USA,” had to move its carpet production to Beijing in order to sell the carpet for the Chinese Olympics’ Bird Nest. In the last ten years, the United States has lost one-third of its manufacturing and now imports a majority of what we consume. Long before today’s recession, the United States lost a substantial portion of its production of textiles, shoes, watches, radios, TVs, steel, electronics, computers, machine tools, robots, communications equipment, automobiles, advanced technology and now research. But Corporate America, the financial interests, the government in Washington, the economists and media, act as if there is no Trade War.

¤ ¤ ¤ ¤ ¤

Source: http://www.economyincrisis.org/articles/show/3681
Illustration: http://www.karenceliafox.com/Traveling/China/uploaded_images/image_china_factory-788572.jpg