Monday, November 28, 2011

Dream speech

Following is the Dream Speech that no American president will ever be brave enough to make.
(but see note below, after the end of the speech)

My fellow Americans:

I am speaking to you today to let you know that within the last few hours I have completed intensive discussions with the World Trade Organization (WTO) and with China and other countries. 

I have informed WTO that America has given the global free trade experiment a very fair and thorough trial over a number of decades.  We have found that the net result of the experiment is overwhelmingly negative for us.  We have 50 million people unemployed and our towns and cities are tragically diminished versions of what they were in the 1960s.  With so many people unemployed, tax revenue to all levels of government has almost disappeared.  

Therefore I have further informed WTO, China, and other countries, as follows:

+  Effective today, America will no longer obey or be bound by WTO or other international trade regulations or principles.

+  Effective today, a 15% tariff is placed on all imported manufactured goods.  This tariff will be increased to 20% six months from today, and 25% twelve months from today.

The object of the imposition of a tariff structure is to allow American manufacturing to begin to recover, and to give work to Americans, so that Americans can provide food, clothing, and shelter to their families, and can have the dignity that comes from a useful place in society.  

The tariff structure will provide flexibility in the following way.  If country X buys $1 billion/yr worth of manufactured goods from us, the first $1 billion/yr of manufactured goods imported from country X will be free of tariff.  In this way, America demonstrates its belief in trade. 

But America does not believe in a pathological situation where we buy $700 billion worth of goods from country Y while country Y buys only $175 billion worth from us.  This type of situation is not "trade". 

We note that China, in 2006, announced a long-term plan and strategy to make China self-sufficient in all manufactured goods.  The Chinese people have operated their country on an advanced level for 5000 years.  They know what they are doing.  If they are pursuing a policy of self-sufficiency in manufactured goods, it must be a good policy for ALL countries.  An old saying tells us "Sauce for the goose is sauce for the gander".  In other words, what is good for one is good for the other. 

America is ready to trade, as noted above, when other countries buy from us in approximately equal amounts.  But we can no longer submit to sheer exploitation and destruction of our economy and our nation.

In 2011, there was a global economic downturn.  China believed that it would not be spared from the effects, and therefore determined to turn more of its attention inward, to assist the people of China.

Again we follow the lead of China.  America for many decades has had a substantial military presence in numerous areas of the world, and has been involved in the affairs of many countries.  In view of the severe unemployment and economic problems here at home, this Administration will immediately work to greatly reduce our foreign involvements, so we can direct those resources to the home front.  In particular, the resources will be used to assist in the re-development of our manufacturing base, and to assist in returning all Americans to prosperity.  In keeping, I announce the end of the search for new international trade deals, and a very substantial cut in travel to international trade and economics meetings and summits.   

In conclusion, America has met and overcome severe challenges in the past.  From today we look forward to American hard work and initiative applied to the long road ahead to rebuild our manufacturing, rebuild the spirit of our people, and rebuild our nation. 

I thank all Americans for their attention to my statement today.

Comment by Ed Farkas

I say above that no American president will ever be brave enough to make this speech.  However, if nothing is done in the next five years along the lines presented in the speech, the economic situation of America will be much worse than now.

Therefore a future president may be FORCED to make this speech.  Maybe there will be Vietnam-type marches in Washington, of millions of people, with one emphatic message for the President, his or her Administration, the Senate, and the House:


Note: If the Dream Speech is ever given, it will be in the future.  Therefore I have put futuristic numbers into the speech!

I saw in a newspaper recently:

A commentator said:  "The economy stubbornly refuses to right itself".

Yes, correct statement, because there is nothing in the economy to allow it to "right itself".  The economy is so far gone that there is no "right itself" mechanism left.  The only way to get the economy going is to take PRO-ACTIVE, OVERT, EXPLICIT ACTION as described in the DREAM SPEECH!

Friday, November 18, 2011

A great sector

An amazing statement has appeared.  Here is the statement:

"We don't have a tax problem, we have a revenue problem.

We've told American workers they're not valuable anymore, that it's better to do it overseas than it is right here.  That's wrong.  We need to reinvest in people, reinvest in manufacturing.  That's how we're going to turn our economy around."

Statement made by Mr. Ed Schultz, of MSNBC.
Statement appeared in "The New Yorker" magazine, October 31, 2011, page 35

Comment by Ed Farkas:
I could write 10,000 words and not say it better than Mr. Schultz.  There is censorship in effect aimed at preventing people from saying what Mr. Schultz has said.  So it is apparent that the censorship is breaking down.  Obviously Mr. Schultz and MSNBC are not afraid to make the above statement.   This is the first time I have seen a public figure make a statement similar to the statement made by Mr. Schultz.

Further commentary by Ed Farkas:

Here in the United States we have a great manufacturing sector.

But, we have a manufactured goods trade deficit of over $500 billion per year with all foreign countries.

The meaning of "manufactured goods trade deficit" is that we are sending a net amount of over $500 billion per year to foreign countries to buy manufactured goods that we don't have the capacity to manufacture for ourselves here at home.  Part of this money pays foreign workers to do our manufacturing for us.

(Why don't we have the manufacturing capacity?  Because we voluntarily and on our own initiative shut down our capacity and laid off our workers!)

There are hidden costs associated with sending $500 billion per year out of our country.  For example, a foreign expenditure is a much greater burden on a national economy, in comparison with a domestic expenditure.

The above amount is equal to over $1500 per year for each man, woman, and child in USA.  This is real physical wealth going out of our country, never to be seen again.

Another hidden cost is that $500 billion per year could support millions of Americans working in manufacturing, including wages, factory equipment, and overhead.  Instead, these Americans are unemployed, in despair, unable to properly support their families, standing in line at unemployment and welfare offices.

So all in all it is completely insane to be sending $500 billion per year to foreign countries.

50 years of history

American companies started sending manufacturing jobs to foreign countries in the early 1960s.  I was there. I remember hearing about S_____ Company sending jobs overseas.  It was the first time I had heard of this step being taken. I knew immediately that the result would be disaster, and I have been proven correct!  (Unfortunately!)

I had just graduated from college.  I did not major in economics.  However I took enough courses in economics to have some understanding of the importance of manufacturing to any economy, and the predictable result of not having an adequate level of manufacturing.

Fast forward to today

Now I am saying that the only way to save the American economy, and the only way to solve our massive unemployment problem, is to get our manufacturing jobs back from overseas.

But today there are many politically correct people running around.  People are telling me I should not use the words “get our manufacturing jobs back from overseas”.  People are telling me that this wording implies that we are stealing the jobs.

In response I say that it is perfectly permissible to say “get our jobs back from overseas”.  Very stupidly and short-sightedly we sent our jobs overseas, of our own volition and on our own initiative.  So why can’t we say we made a huge mistake and now we want our jobs back?

However, I am flexible!  I can change!  I will change my wording.  Here is the new wording:

We have to re-create domestic manufacturing of thousands of consumer, commercial and industrial items, and reduce or end importation of these items.


Now I have heard the most complete nonsense, since the last complete nonsense I heard.
There was a news item in Canadian Press, November 16, 2011.  How Canadian Press got this story or found it interesting I do not know.

According to this news item, the U.S. government had or possibly still has a program of giving money to American companies to help them get going in doing business in China.

The Republicans are currently blaming President Obama for this situation.  However the fact is that this program started when the Republicans were in control of Senate and House.

But in trading blame back and forth, our “leaders” are missing the real point.  Instead of giving money to help American companies get going in China, we should be giving money to help American companies get manufacturing going in USA!

The money came from the American government agency that handles foreign aid.  The total budget of this agency is $20 billion per year.  Now here is an agency that should be shut down!  I am sure Republicans and Democrats can agree on this one.

If nothing else, here is another foreign expenditure burden, placing an extra burden on our economy, as discussed above.


Here is a bit of good news.  There was a news item on November 17, 2011, stating that Chrysler will invest $1.7 billion in a manufacturing facility in Toledo, Ohio. The facility will employ 1100.

Is there understanding at Chrysler that Americans want to buy American-made products, and is Chrysler prepared to provide American-made products?

Maybe the answer to both questions is "yes"!