Sunday, May 13, 2012

Only way to save America


When asked about the damaged cherry tree, young George Washington said "I cannot tell a lie; I did it with my little hatchet."

Legend or fact, this story has been an important symbol to Americans for over 200 years.

In the last 50 years, our business and political leaders created one of the biggest voluntary disasters in world history. They sent/allowed the sending of manufacturing jobs overseas. They created a lethal competitor, China, that did not exist before, by handing China on a silver platter the jobs, the technology, and the trillions of dollars.

Huge unemployment and huge deficits in America today prove that an economy and a nation cannot survive without a high level of manufacturing activity.

The reaction of our leaders has not been "We cannot tell a lie; we made a big mistake and we must begin immediately to re-establish our former strength in manufacturing".

Instead, through servile columnists, commentators, and analysts, our leaders are telling us lies, trying to hide what really happened, like a child hiding a broken lamp or cookie jar. The lies are both childish and outrageous; the mystery is how anyone can recite them with a straight face.

Tragically, every day of lies and cover-up is another day of suffering for the unemployed, and another day of damage to our economy and to our nation.

The entirely predictable result of sending our manufacturing jobs away is an impoverished America suffering

+  a net hemorrhage of over $500 billion per year to pay foreign countries to do our manufacturing for us;

+  a hemorrhage of interest payments on trillions of dollars’ worth of U.S. Treasury securities held by foreign countries;

+ a hemorrhage of profits on substantial chunks of our economy owned by foreign companies.

How much longer can we go on in this way before we are overtaken by the complete governmental and financial chaos we see now in Greece?

If every year a family sends out much more money than it takes in, that family will be broke very soon.  A nation is no different.  Truthfully, America is already there.

We have to set aside the lies and the cover-up and take immediate action, showing the forthrightness and initiative that has always been an American characteristic.

I propose a simple and practical solution: balanced free trade in which the total value of manufactured goods imported in a year from each foreign country is limited to the total value of manufactured goods that country purchased from us in the previous year.  This policy would be implemented step-wise over three years, starting immediately.

A resolute president putting this new trade policy into effect would signal a level playing field and breathing space for domestic manufacturing. Seeing a huge opportunity, entrepreneurs would rush to ramp up or re-start existing manufacturing facilities, and create new facilities.

An immediate benefit to America would be the end of our net manufactured goods hemorrhage of over $500 billion per year.

Due to balanced free trade, giant chain stores and small stores would no longer be able to obtain enough foreign-made goods to completely fill their shelves.  They would have to carry and display American goods along with foreign goods.  Consumers could pursue the “Buy American” option, largely not available now.

Yes, to accomplish all this we would have to abrogate and refuse to abide by a raft of trade treaties and other paperwork.  The fury of China would know no bounds.  We face two choices:

+  Sacrifice America on the altar of paperwork,


+  Break the chains of paperwork and the chains of China, in order to save and rebuild America.

I know which choice I prefer!

America has 57 cities with population over 320,000, the population of Iceland.  Following the financial crash in Fall 2008, Iceland’s banks, holding extensive deposits from UK and Netherlands, were allowed to fail. Iceland has not caved in to demands from international trade bodies, UK and Netherlands for compensation. Iceland is now recovering well.

Can America be as brave as Iceland?  Yes, it can!


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