Monday, February 13, 2012

Letter From Langdon: In Omaha, a Call for Fair Trade That Would Save Both Agriculture and Industry

08/06/2007

Paul Revere, BostonOmaha, Nebraska, isn't quite at the geographical center of the U.S.A., but on Friday it was at the center of some serious debate about free trade.

The Revere Copper Co. recently closed a plant in Massachusetts because of unequal trade practices, according to the company's president. This a statue of Paul Revere in Boston. Photo: Edyment81

The Organization for Competitive Markets held its annual meeting in Omaha and, as always, the leaders of OCM continue to beat the drum on behalf of American livestock producers. But since OCM's inception, due to our government's lack of proactive enforcement of trade law, talk of livestock trade has broadened to include what remains of the country's domestic manufacturing industries.

For me, this gathering was reminiscent of a meeting I attended in Ames, Iowa, earlier in the summer. Then it was the Republican presidential candidate, Rep. Duncan Hunter, who stepped forward to point out that America had triumphed in its World War II struggle against Nazism, Fascism, and Imperialism through the amazing capacity of the country's industrial base.

In Omaha, speakers explained how this industrial base has been dangerously eroded by the anticompetitive practices of our worldwide trading partners. We are in a war, said Brian O'Shaughnessy, CEO of Revere Copper. There is, he said, a concerted effort by other countries to destroy the manufacturing base of the United States through the selective use of taxes and currency manipulation.

Even though the United States could even the score by levying taxes of its own, equalizing the tax burden between imported goods and those manufactured domestically, our leaders have failed to do so. Tax-phobic Americans are as much to blame as Congress. For too long we have allowed our leaders to cut taxes on businesses that use their political clout not to do something for America, but instead to do things for themselves at a cost to American jobs and American self-reliance. Our gullibility in accepting the rhetoric that all taxes are bad enables some big businesses to walk away from their responsibilities scot free.

Our industries constantly compete with governments like China that give special consideration to their own manufacturers with tax credits, artificially cheapening their goods. If these countries didn't levy taxes on our products, many of our exports would be more competitive, but as it stands today we have allowed heavy industry to become an endangered species in America. The Chinese Yuan should be valued at 5 to the dollar, but today because of government manipulation, it trades at 8. That valuation makes Chinese goods cheaper than a real world scenario should allow — a situation that also makes it possible for American businesses to import lead paint contaminated toys for our toddlers at a price so cheap that their profits are astronomical.

As much to blame as Congress are administration officials who take no action even though it is within their ability to act. As Rob Dumont of the Tooling Manufacturing Technologies Association told the conference, wealthy men have taken places in our government, and for wealthy men the single most important priority is to build their wealth to ever greater levels. It was just such wealth that patriots fought to overcome beginning in 1776. It was an effort to destroy America's power that patriots defeated beginning in 1941. So it seems today that American patriots must now triumph over both wealth and political ambition.

Patriotism in America has always had rural beginnings. Rural America does its share, and more. We should all be upset by the way many of our corporations have betrayed the national interest for profit. It isn't hard to identify them. They pull down the signs that say, "Buy American." They battle small agricultural producers who want to have their goods carry a label that tells their country of origin. They bank huge profits in overseas accounts as they pay top executives salaries that are hundreds of times the salaries paid to average company employees.

They refuse to pledge allegiance to our flag, even though it is the flag that has shielded them from harm. (Dumont pointed out that 99 of 100 US corporations declined to ask their employees to begin each workday with the Pledge of Allegiance.) They worship no God but the Euro, the Yuan, and the Yen.

Worst of all, according to Pat Choate, international trade expert and former vice presidential candidate, they depreciate America, betraying us quietly with false impressions and back room dealings on foreign shores.

It is pride in America that will turn the tide, and it is rural Americans who must wake the nation. Perhaps that first deep rumble came from Omaha, last Friday.

Comments

Organization for Competitive Markets meeting

The Organization for Competitive Markets describes itself as an advocate for fair trade for food producers, consumers, and rural communities. You note that their agenda has broadened to include manufacturing, and on that topic it seems that this event really got you fired up. Unlike most of your previous insightful writing here, after a few paragraphs the tone in this article is strident, as in a polemic worthy of Huey Long. That approach is almost impossible to comment on, but some of your phrases describing corporate America, such as worshiping "no God but the Euro, the Yuan, and the Yen", are sort of extreme. As a starting point it seems that corporate America and rural America are all in this together, or should be. Industrial companies like GE, Boeing, Caterpillar, DuPont, ExxonMobil and Honeywell and technology companies like IBM, Microsoft, and Texas Instruments among others are American born and bred and remain strong, even robust. They are of course multinational as their products are in demand across the globe, and therefore so is some of their manufacturing and they do get paid in euros, yuan, yen and quite a few other currencies, as well as dollars. These companies are products of our free enterprise system and I'm not saying that they're perfect. I would venture, however, that if most managers and workers alike at these companies read your words, they would disagree with and perhaps be insulted by some of them. You raise many issues of concern, and most are issues that have been building for a long time under multiple political administrations. They will take time, patience, tenacity, intelligence and unity to solve, and heck, I don't know if all of that will be enough. In fact, I don't think it will be if we don't stop pointing fingers and start focusing on rebuilding infrastructure right here: that's everything from bridges and roads; to health and educational facilities and programs; rail systems and mass transit; humane prison systems; and even something as possibly intangible as the social fabric of our communities where rural areas can perhaps set an example. Tax policy will always be an issue that ebbs and flows but if Americans would begin to see the politicians spend their tax dollars wisely on the needs mentioned above, even those new gilded agers that annoy most everyone might even not mind pitching in. Then that new infrastructure that gets built can set the table for our children to see whatever the new industrial model becomes get built right here in the U.S.A. I suggest that this evolution into a stronger country would be good for rural America as well.

John's comment

I confess to being 'fired up'. What I see as being the best of what we are is the fact that we can say what we think without being imprisoned, shot, or hung. So occasionally I get fired up just to be sure it's still OK to do that here! We sell corn to an industrial user. Over the years I've gotten to know many of the workers employed by our buyer. Some of the oldest tell me that the current owner is their third employer even though they've never worked anywhere else. Some of them are looking at 40 years at the same job location. What is distressing is that they all tell the same story. Each time their workplace changes hands, they've lost all their accumulated retirement. If there's any good news in that, then it is that at least they continued to have a job and the opportunity to begin again with a retirement plan, but the way SOME (I readily concede not all) big business interests treat employees just isn't fair or moral. Pension plans should be the property of the people they are meant to benefit. No matter what happens to the company, those pension funds should go with their owners. The government could approach things a little differently, like using VAT taxes against trading partners that use them against us. They could stand up for workers more. In the end, complacency to broad injustice will be what does our nation in. I'd rather risk overstatement of my beliefs in order to promote thoughtful debate, than be found guilty of not caring.

Follow up to Rick

There's no way that I can disagree your comment. An editorial in Friday's NYT reminded me of what you are writing about, or up against. The last sentence of that editorial was "What we may be witnessing is the beginning of the tragic moment in which ownership of America's farmland passes from the farmer to the industrial giants of energy and agricultural production". At least they said "may be" instead of "are". I hope that this is not too tedious, but I went back to the writings of Carroll Quigley, my long departed history professor at Georgetown, and found this quote which is hopefully not too prescient. This is from his last set of lectures in 1976(maybe now a little dated in some aspects), a series of admonitions to his former students. It is as follows: "The area of political action in our society is a circle in which at least four actors may intervene: the government, individuals, communities, and voluntary associations, especially corporations. Yet, for the last century, discussion of political actions have been carried on in terms of only two actors, the government and the individual. Nineteenth century books often assumed a polarization of the individual versus the state, while many twentieth century books seek to portray the state as the solution to most individuals' problems. Conservatives, from von Hayek to Ayn Rand, now try to curtail government on the excuse that this will give more freedom to individuals, while liberals try to destroy communities with the aim of making all individuals identical. And since what we get in history is never what any one individual or group is struggling for, but is the resultant of diverse groups struggling, the area of political action will be increasingly reduced to an arena where the individual, detached from any sustaining community, is faced by gigantic and irresponsible corporations." My view as evidenced by my prior comment is that large corporations are not inherently "irresponsible", any more than small businesses. When they are, however, and some certainly are, they can do incomparably more damage than our local car dealer or mortgage broker(well maybe not the mortgage broker). And just one more thing---my friends know that my reference to Huey Long should be taken as much as a compliment as it is any kind of criticism.