ERNEST F. HOLLINGS, former U. S. senator
2010 -- Every Southern Governor knows how to create jobs. Luther Hodges
of North Carolina set the pace, and I followed in competition. We both
went to Europe, and I went to Latin America for industry and our ports'
business. We now have over 100 German industries in South Carolina. I
learned early on to give extra attention to the number six man, who was
charged with developing industry's investment. If you didn't have good
schools for that man's children and his team's children, you knew he would
flyblow South Carolina and industry would never come. Luther and I both
instituted the finest skilled training, which now produces in South Carolina
the "ultimate driving machine" for BMW and Boeing's Dreamliner.
taxes and obtained for South Carolina the first Triple A credit rating
of any Southern state. Thank heavens we didn't have economists with a
plan to reduce our deficit as a certain percentage of the GDP. We paid
the bill for each year's government to maintain our Triple A credit rating.
As a result, I attracted five GEs, four Westinghouses, four Duponts, Timpken
Roller Bearing, etc., and we proudly announced the multiplying factor
of job creation for each industry. I would have been embarrassed to announce
the multiplying factor for a small business like a furniture store or
a McDonald's. Small business doesn't create jobs. Manufacture creates
jobs and is the engine of growth. And we fought in the trade war.
After World War II, Japan started a trade war by closing its market, subsidizing
its manufacture, selling its export at cost, and making up the profit
in the closed market. In 1960, I was drafted in the trade war to testify
before the old Tariff Commission against Japan's cheating, and in 1961
President Kennedy enforced our trade laws against Japan, saving thousands
of textile jobs. President Reagan enforced our trade laws saving Harley-Davidson
and obtained voluntary restraint agreements on steel, automobiles, computers
and machine tools from Japan. In the United States Senate we worked side-by-side
with Corporate America to protect its production and jobs, passing trade
measures through both Houses of Congress. But Presidents Johnson, Carter,
Reagan and "Papa" Bush, yielding to the Cold War, vetoed our
efforts. When the Cold War ended, President Clinton sold out the country's
production and jobs with NAFTA with Mexico and led the way for China's
entry into the World Trade Organization. Off-shoring jobs began in earnest
under Clinton and hemorrhaged under Bush and Obama.
Corporate America has now joined China in the trade war calling for free
trade. Ridiculous! There is no chance of free trade with China's communist
control of its financing, labor, and market. China sets the competition
in this trade war as it violates every tenet of free trade. Providing
China the technology and expertise, Corporate America has moved the country's
research and production to China. As a result, China had made manufacture
in the United States no longer profitable.
"The 112 filibusters
in the 110th Congress were all a charade. The Senate never follows
through by bringing out the cots, debating around the clock until
there is a compromise. In a charade, a Republican Senator holds
the Republican floor, a Democratic Senator holds the Democratic
side, and the rest of the Senators go to New York or California
for fund raisers."
President tries to make manufacture profitable by enforcing our trade
laws or a member of Congress introduces a trade bill, coming down on their
heads with contributions for their defeat will be Wall Street, Corporate
America, and Tom Donahue of the United States Chamber of Commerce. Wall
Street and Corporate America want to keep the off-shore profits flowing,
and the President and Congress want to keep the campaign contributions
flowing. Washington puts on an act of creating jobs with stimulation and
freebies for small business but refuses to get in the trade war and is
not serious about the economy and jobs. The President and Congress are
paid to do nothing, and they do nothing.
Politicians constantly cry: "Government doesn't create jobs."
In this trade war with China, the United States government is the principal
protector of our economy and creator of jobs. Government can jump-start
the economy by eliminating the corporate income tax and replace it with
a 5% value added tax. The 2010 estimate for corporate income tax is $156.7
billion, whereas a 5% value added tax raises $600 billion. More money
is raised by cutting taxes. VAT exemptions for food, health and housing
for the low income still leaves $350 billion to pay down the debt. The
VAT eliminates the biggest incentive to off-shore jobs and, rebated on
exports, it promotes the President's plan to boost exports. Eliminating
the corporate tax frees the trillions in off-shore profits held by Corporate
America to invest in domestic production and jobs. The VAT law should
prohibit off-shore profits being used for bonuses and excess profits.
If the debt is paid down, the VAT will allow us to lower personal income
taxes. Now Corporate America can produce for a profit in the United States.
But government still has to enforce the trade laws to protect Corporate
America's domestic investment and production.
Rather than performing its duty under the Constitution to regulate foreign
commerce and enforce our trade laws, the Congress and President have turned
Washington into the best off-Broadway show. When the President offers
a budget for deficits in excess of a trillion dollars each year, every
year, for ten years, Congress engages in a charade of hearings and deliberations,
knowing that the budget will never be called for debate in either House.
The 112 filibusters in the 110th Congress were all a charade. The Senate
never follows through by bringing out the cots, debating around the clock
until there is a compromise. In a charade, a Republican Senator holds
the Republican floor, a Democratic Senator holds the Democratic side,
and the rest of the Senators go to New York or California for fund raisers.
The Social Security Trust Funds shows a surplus of $2.586 trillion. But
Washington acts like Social Security is in crisis because we've spent
the Social Security Trust Funds for everything but Social Security.
Then they act like increasing the age for Social Security seventy-five
years from now is a tough decision. Congress has no idea of putting the
government on a pay-as-you-go basis. The proposal to cut spending to the
2008 level still leaves a deficit of $641 billion and requires borrowing
$641 billion from China. Paying a billion dollars a day interest costs
for nothing, the recommendation of Alan Greenspan and Paul Volcker to
let the Bush tax cuts lapse and start paying down the debt is not even
discussed. The debate is whether to increase the debt by borrowing $3.5
trillion from China or an additional $700 billion for the idle rich. Even
the hard work and conscientious endeavors of Erskine
Bowles and Alan Simpson of the Debt Commission is turning into a charade.
On 9/11, the State Department reported that al Qaeda was in forty-five
countries - but not in Iraq, but in the United States. The staff checked
with the FBI and it reported we had seventeen al Qaeda cells in the United
States that we were watching. We cleaned out al Qaeda from Afghanistan
in four weeks but continue in a ten year charade of eliminating al Qaeda
from Afghanistan so that al Qaeda can no longer be a threat to our security.
According to the State Department report, we have forty-four other countries
to conquer, including the United States. One would think the rampant corruption
in Afghanistan would sober us up. We have yet to heed the lesson of Vietnam:
more people are willing to die for a government other than democracy.
Afghanistan has become a test of the political partys' will on defense.
Democracy comes from within, but President Obama's announcement of four
more years of force feeding democracy is greeted with approval. No one
seems to care that this charade is costing us legs and arms and lives.
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 recently published book,
Government Work (University of South Carolina Press, 2008).
Ernest F. Hollings. All rights reserved. Contact
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Ernest F. Hollings served
the public for 56 years -- 38 years in the United States Senate and as South
Carolina's governor, lieutenant governor and a member of the S.C. House of
Today, Hollings continues
to be influential in public affairs and offers this Web site as a compendium
of current and past positions on public issues. Learn
more about Fritz Hollings.
Hollings receives French honor
France honored retired
U.S. Sen. Fritz Hollings on in 2013 by awarding him the Legion of Honor for
his World War II service. More.
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