Level playing field to create jobs
By ERNEST F. HOLLINGS, former U. S. senator
[first published in The (Charleston, S.C.) Post and Courier]
2008 -- The nation has been losing jobs for more than 50 years to imports
and off-shoring. As governor of South Carolina, I testified in 1960 before
the old International Tariff Commission against textile imports from Japan.
As a United States senator, my first bill to pass the Senate in 1968 was
a jobs-protection bill that received a 68 bi-partisan majority. We passed
four other job-protection bills through both Houses of Congress only to
The point is that the people of this country have been complaining about job losses to imports and off-shoring for years. Then with President Clinton's NAFTA and Permanent Normal Trade Relations with China job losses are now hemorrhaging.
Obama now plans to create 3 million jobs over two years with stimulation
and infrastructure spending. Stimulation will not work. We have kept the
government on steroids for eight years, deficit spending to the tune of
$5 trillion, and we are over-stimulated. And the Obama plan only addresses
the 20 percent job loss from the downturn in the economy but not the 80
percent job loss to imports and off-shoring.
economist Allen Blinder estimated two years ago that we would lose 40
million jobs in the next 10 years to off-shoring. The Obama plan will
be 5 million short. It's similar to the bailout for the Big Three in Detroit.
We ask the automobile manufacturers to come up with a plan to make a profit
and stay in business long range. But Detroit can only do so much. It can't
compete with imports sold at cost.
War II, Japan closed its domestic market, selling its exports at cost
and making up the profit in its closed domestic market. The United States
market remains open - $10 billion a month of foreign motor vehicle imports
for the past eight years.
Japan has 5 percent value-added tax (VAT) and China a 17 percent VAT,
rebated on its exports. When good Chinese cars start coming in next year,
17 percent cheaper than Detroit's cars, Detroit's bailout plan will be
Bottom line: The United States has got to start competing in globalization. It must engage in the trade war. We need to place quotas on foreign car imports, giving Detroit a chance to recover. Then we must put a tourniquet on the hemorrhage of job off-shoring with a value added tax.
take a year for the Internal Revenue Service and business to gear up for
this tax. In the meantime, we can put a 10 percent surcharge on imports
as President Nixon did so successfully in 1971.
argue that a VAT or import surcharge will cut off the stimulation can
forget about it. People are not consuming. They're desperately trying
to save. And we need the money from a surcharge and VAT.
find to his dismay in January that the $500 billion he wanted to spend
on health care for the country must be spent on nothing, which is the
interest costs on the national debt. We need to pay down the debt and
stop the waste of interest costs.
George Washington's first message to the first Congress, he stated: "A
free people should promote manufactories to render them independent of
essential, particularly military, supplies."
and blow as the world's superpower and yet can't go to war without the
help of the adversary. Defense manufacturers get their aircraft parts
from Turkey and India, and Ford gets its automobile parts in China. The
secretary of commerce should promulgate a list of those items of weaponry
necessary to our national security so that the United States can be assured
of domestic production and supply.
Kennedy used this provision to support his seven-point program to protect
the textile industry in 1961. Refurbishing our domestic production of
defense materiel will put America back to work.
Senator Hollings of South Carolina served 38 years in the United States Senate, and for many years was Chairman of the Commerce, Space, Science & Transportation Committee. He is the author of the newly published book, Making Government Work (University of South Carolina Press, 2008).
© 2008, Ernest F. Hollings. All rights reserved. Contact us for republication permission.
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