Conspiracy

By ERNEST F. HOLLINGS, former U. S. senator

MAY 20, 2013 -- China's Central Committee can best be called a conspiracy to control its people and take over the world economically. This conspiracy controls China's government, market, production, jobs, currency, trade, communications, environment, health, domestic and foreign policy.


Hollings

China subsidizes its production and, to sell in China, you must produce in China and surrender your technology to China. China devalues its currency, controls imports and exports, steals research, ignores WTO rulings and engages in every predatory practice imaginable.

China sets the competition in globalization and China's conspiracy receives its best support from Corporate America. Understandable. Since globalization is nothing more than a trade or economy war with production looking for a country cheaper to produce, Corporate America looks to China's mammoth market to survive in globalization. The United States has the wrong business tax and Presidents Bush and Obama have not enforced our trade laws for the past twelve years. As a result, the Princeton economist Alan Blinder in December 2006 estimated that in ten years the U.S. would offshore 30-40 million jobs.

The Economist Special Report on Offshoring (1/25/13) cites a Harvard Business School survey that finds: "Many firms are still deciding against basing activities in America" and reasons that "America's government is not making the country's business environment attractive enough for companies to want to come back." Corporate America is forced to offshore. Instead of calling on our government to protect the economy, the U.S. Council on Foreign Relations, the Trilateral Commission and the U.S. Chamber of Commerce join China's conspiracy - calling for free trade and against protectionism. Wall Street, the big banks and the economists for the Universities and Corporate America join in the chorus.

The worst part of China's conspiracy is the President and Congress. Necessarily political jobs depend upon contributions; but the primary duty of the President and Congress is not for contributions but to do a good job for the country.

"The President and Congress act like they are doing something, but do nothing."

-- Hollings

The United States, as a world leader, has to have a strong economy and the President and Congress are charged with developing and maintaining a strong economy. The President and Congress put on a big charade, acting like they are for jobs with aid for research, development, skills, policeman, firemen and teachers, etc. The President and Congress could make "the country's business environment attractive" by eliminating the 35 percent Corporate Income Tax and replacing it with a 7 percent Value Added Tax. This VAT tax cut immediately releases $2 trillion in offshore profits for Corporate America to repatriate tax free, invest in the United States, create millions of jobs and start rebuilding the economy. Moreover, this VAT tax cut produces billions to pay down the debt in two years rather than ten.

One hundred fifty countries compete in globalization with a VAT that's rebated on exports. The Corporate Tax is not rebated. An entrepreneur can develop a business, be making a profit, but has to pay the 35 percent Corporate Tax and is levied a 17 percent VAT when his exports reach China. A competitor can produce the same product in China, import it tax free into the U.S. and put the entrepreneur out of business. This 52 percent difference is killing manufacture in the United States. Moreover, the VAT supports foreign investment in the U.S; to unfairly compete with U.S. production.

Rather than going to Texas and Maryland and talk "jobs" President Obama can create jobs by enforcing our trade laws. If President Bush and Obama had enforced the Defense Production Act of 1950, the Detroit bailout would not have been necessary. We wouldn't be begging Russia for helicopters for Afghanistan. If President Obama would protect steel, motor vehicles, computers and machine tools like President Reagan in 1984, we could have a strong economy. President Obama has the authority to act against China's devaluing its currency but he refuses to act.

Wall Street, the big banks and Corporate America want to keep the China profits flowing so they contribute to the President and Congress to do nothing. The President and Congress act like they are doing something, but do nothing.

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 Making Government Work (University of South Carolina Press, 2008).

© 2013, Ernest F. Hollings. All rights reserved. Contact us for republication permission.

About Fritz Hollings

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 Representatives.

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.

NEWS: 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.

Receive commentary via The Huffington Post

Please visit Sen. Hollings' section of The Huffington Post where you can get an RSS of his columns, subscribe by email or use social media.

The Hollings legacy

Click here to learn more about Hollings' impressive and distinguished record of public service.

2014 commentaries

Previous commentaries

Read the new book

The University of South Carolina Press in 2008 published Making Government Work, a new book by Sen. Hollings. Learn more.