In addition, American corporations with factories overseas increasingly sell overseas. GM now sells more cars in China than it does in the US.
Plus, they increasingly hire their top talent overseas: The Silicon Valley giant, Applied Materials is building its huge new research facility in China, not in Silicon Valley. Why? Because that's where there are vastly larger numbers of brilliant and very well educated engineers, all of whom are willing to work for a small fraction of what Silicon Valley engineers work for. And to the extent necessary, Applied Materials can ship its products back into the US without paying any kind of significant tariff -- just like the thousands of other American companies that have moved their manufacturing operations to China (and elsewhere overseas) over the last 30 years, ever since Reagan slashed import tariffs to a bare-bones 2%. [And what kind of tariff does China impose on any product the US wants to export into China? Twenty (20) percent. Ten times as much.]
The result of these low import tariffs for goods produced in US-owned factories overseas: American workers are in a world of hurt. And anyone who thinks that politicians can improve this sorry state of affairs by hacking away at Social Security, Medicare and the public schools is crazy. Yet, incredibly, these are the insane "solutions" that the Republicans, and even a few Democrats are now proposing!
New ideas on a grand scale are needed. Simply put, the United States cannot thrive with so many of its citizens condemned to shrunken standards of living because they can't find adequate employment. Long-term joblessness is a recipe for societal destabilization and worse. It should not be tolerated in a country with as much wealth as the United States. It's destructive, and it's morally wrong.
Congress needs to stop the hemorrhaging of American jobs to countries like China and Mexico. How? By simply raising import tariffs back up to what they were before Reagan took the White House! This one act would make members of Congress heroes to the American middle class, most of whom have had their wages reduced and/or good-paying jobs taken away ever since those tariffs were slashed by the Reagan administration, as an immense financial gift to corporate America (at huge cost to American workers). Plus, if Obama and the Dems could finally show these workers that their interests have finally been put in first place (instead of the interests of Wall Street, the big corporations and the bankers), it would be a great way of winning back a whole lot of political support that they will otherwise have lost for good.
Economist Mark Weisbrot has some additional ideas for how to fix the problems Bob Herbert points to.
Unemployment remains at 9.4% -- about double its pre-recession level. However, if all of the unemployed were accurately counted, according to the standards that applied before Reagan took the White House, the figure would be nearly twice that, somewhere close to 20%. This is a terrible punishment to inflict on millions of Americans who did nothing to deserve it. As Bob Herbert suggests, it will cause long-term and even permanent damage to many of the unemployed and their children.
So what can the government do to relieve this suffering?
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