AUG. 6, 2014 -- Now we have it. I've been nagging the President and Congress that their foremost duty is to balance the budget and protect the economy - in short, protect the economy from closed markets and predatory practices, to create jobs.
The President and Congress keep describing programs as creating jobs but Senator Mitch McConnell, the Republican Leader, came clean. In The Hill newspaper (4/25/14) Leader McConnell was quoted as responding to a question: "What he would do to bring jobs to the county?" McConnell responded: "Economic development is a Frankfurt issue" McConnell said according to the paper: "That is not my job. It's the primary responsibility of the state Commerce Cabinet."
Apparently, Senator Harry Reid, the Democratic Leader of the Senate, President Obama and Congress agree that it is the State's responsibility. This morning on Morning Joe (8/6/14), Chris Matthews is explaining that: "We've got to protect our workers." Our workers have every protection. It's the economy that needs protection. The politicos and public also think that jobs are a state responsibility; that Congress and the President have no responsibility for jobs.
Blinder, the Princeton Economist estimated in December 2006, that in ten
years the U.S. will offshore 30-40 million jobs. We're still offshoring
jobs, payrolls, and the nation's economy while we are depleting ours.
The economists treat this offshoring of jobs "top secret". The
2008 recession has been over five years and we still have a lagged economy
because of offshoring payrolls - not lack of confidence but lack of money.
The United States was founded in a trade war - Boston Tea Party. Two years before the Constitution, the President and Congress assumed the duty of creating jobs by enacting the Tariff Act of 1787, which built the strongest America on protectionism. "Free trade" is the cry of Wall Street, the Big Banks and Corporate America.
But David Ricardo's Doctrine of Comparative Advantage still applies. China has the comparative advantage of closed markets, predatory practices, and a lower standard of living. The U.S. has the comparative advantage of an open market, higher standard of living, which is a disadvantage in globalization. Necessarily, Corporate America will continue to offshore the economy unless the President and Congress makes it profitable for Corporate America to invest and produce in America and have certainty that it's investment will be protected.
President Obama and Congress must replace the Corporate Tax that is full of loopholes with a Value Added Tax that has no loopholes. The VAT is self-enforcing and reaps billions more than the Corporate Income Tax. Then the President must enforce our trade laws against closed markets and predatory practices. I know. For 38 years in the United States Senate, I tried to protect the textile industry with five bills that were either blocked or vetoed by four Presidents. Now, Dan River, Stevens, Riegal, Springs, Cone, Burlington Textiles are gone. The same is happening to our steel, motor vehicle, computer and machine tool industries with the President and Congress acting like Mitch that "Economic development is not my job."
must catch on that economic development is a duty of the President and
Congress. What is happening is that the President and Congress are taking
the contributions from Wall Street, the Big Banks and Corporate America
so that offshoring continues, investors get richer and the country goes
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).
© 2014, Ernest F. Hollings. All rights reserved. Contact us for republication permission.
About Fritz Hollings
Receive commentary via The Huffington Post
The Hollings legacy
Read the new book