Zero discretionary income means that you are not a participant in the economy any more than slaves in Alabama were in the 1850s. You're not just a wage slave, you're a slave slave. The genius of the New Deal was not in just creating jobs; any idiot can create jobs, but the trick is in creating good jobs.
Treasury Secretary Tim Geithner was quick to point out today that American exports to China have risen 50 percent this year. What Mr. Geithner is forgetting to mention, or just plain ignoring, is that all exports are not created equal. What China imports from the United States are raw materials and what it exports back to the US are finished goods.
We're picking the cotton and they are selling us back the finished shirts. But it's even worse than that because it's not cotton, it's coal that we are selling them, or what our government euphemistically calls "mineral fuels." Coal companies earn huge profits but for the economy overall it is meaningless and for the environment disastrous.
Here is how free trade actually operates: Whirlpool Corporation shifted production from its Indiana factory to its new factory in Mexico in 2009 and eliminated 1,100 full time jobs. That means 1,100 Mexican workers will begin paying taxes and 1,100 Americans will cease paying taxes, but it also means 1,100 Americans are no longer a part of the economy.
Want to buy a snowmobile factory? Polaris Industries plans to save $30 million annually by closing or selling its Osceola, Wisconsin factory and moving to Monterey, Mexico. Free traders will tell you that that means lower prices for the consumers but I doubt seriously that Polaris has any price cuts planned. Their concern is merely higher earnings.
The one-two punch of free trade is that the US government will not receive one penny in tariffs but it also loses the revenue from the unemployed workers who go from economic engine to economic liability. The monthly trade deficit for the United States economy is around $38 to $40 billion per month. So aside from the moral obligation of a society to its members, and aside from the damage caused by free trade to state and local governments, we have to understand that this is also an unsustainable business model.
Right-wingers and libertarians will argue that it's a corporation's right to move wherever production is cheapest and I won't argue with that one iota. The American market place, however, belongs to the American people and selling in that market is a taxable event. It is the government's sovereign obligation to protect the economy of the United States on political, economic and moral grounds.
This is not an issue to be divided by party or political philosophy; this is an issue of national sustainability. Immediately after the American Revolution the founding fathers put high import tariffs on manufactured goods in place and not because they were xenophobic or anti-trade. They feared that Great Britain would use her economic power to stunt and hobble the American economy. You see, the global economy idea is really nothing new. Great Britain invented the global economy and used it successfully to make herself rich at the expense of colonials for several hundred years.
Tariffs are taxes that you don't pay; they are the price of admission into the American economy. Tariffs both financed the post-Revolutionary War government and helped to spur America's industrialization. They are protectionist in the same way the Navy and Coast Guard are protectionist; they protect our economy and jobs.
FDR said in his "forgotten man" speech: "What we must do is this: To revise our tariff on the basis of a reciprocal exchange of goods, allowing other nations to buy and to pay for our goods by sending us such of their goods as will not seriously throw any of our industries out of balance, and, incidentally, making impossible in this county the continuance of pure monopolies which cause us to pay excessive prices for many of the necessities of life."
Today we have a situation where world corporations, both foreign and domestic, use free trade to enrich themselves by exploiting workers. They import components into Mexico for assembly then export them into the United State for sale. The city of Tijuana has grown, luring rural people to work in factories and because of that the city needs a new sewage treatment system but there is a problem. Because the corporations pay little or no taxes and the workers earn such small incomes, the World Bank estimates that it would be impossible to finance a new water treatment plant. Plus, factories like Samsung dump chemicals and solvents into the water supply which go to a treatment plant that was never designed to treat them. The untreated water is dumped into the Pacific Ocean and washes up on California beaches all courtesy of the free trade follies.
The American public is spoon-fed the lie that everyone is doing it when fifty percent of all outsourcing done on planet Earth is done from the United States.
"US business firms enjoy greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, to lay off surplus workers, and to develop new products. At the same time, they face higher barriers to enter their rivals' home markets than foreign firms face entering US markets." (CIA Factbook)
They use euphemisms like productivity, flexibility and cost savings but it is nothing less than the enslavement of the poor and working class by the rich corporations. Their control was apparent when 33 days after British Petroleum turned the Gulf of Mexico into a toxic waste dump, Interior Secretary Ken Salazar said, "If we find they're not doing what they're supposed to be doing, we'll push them out of the way appropriately." Salazar said that but he did not specify at what point this would occur or what might be the trigger for it.
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