Your Government . . . My View 04/17/2008

By Ernie Padgett
As Americans we better wake up and try to fully comprehend what is happening to our country. Millions and millions of jobs are being "shipped" overseas to various countries. It started as lost manufacturing jobs but now has evolved to the high tech industry.

We are becoming increasingly dependent on other countries. We buy their products in mass and we borrow money from them to keep our economy going. Just look at the U.S. trade deficit (hundreds of billions of dollars annually) and our national debt (in the trillions of dollars).

If you as an individual depend on someone for the commodities you have to buy and also depend on them to loan you money, your ability to influence them in any way is all but gone. Hence, how can the U.S. influence world affairs when we are a debtor nation?

How long has this been a concern in America? Actually our forefathers warned us. Thomas Jefferson said, "He, therefore, who is now against domestic manufacture, must be for reducing us either to dependence on that foreign nation, or to be clothed in skins, and live like beasts in dens and caverns. I am not one of these." Abraham Lincoln summed up the sentiment especially well when deciding to purchase railroad tracks. "If we buy the steel from Britain, we have the steel but the money is gone. If we buy the steel in the United States, we have the steel and the money too. Such an advantage far outweighs a lower price for imported steel."

What can an individual like you or I do in 2008? A lot. It will not be easy nor will it be without some costs to us. We can all start to be much more sensitive in support of American made goods. These goods may not always be cheaper, but the purchase of them will help keep people working here in the United States and it’s the right thing to do.

I think America is like a boat load of people shooting down the rapids and about to go over a treacherous water fall. It is going to be nip and tuck whether the boat and its occupants are going to survive. If they do, what condition will they (our country) be in? What will be left for the American families of the future?

I personally have not been nearly as sensitive to buying American products as I should have. I am determined to start. Its not too late to try and avoid going over the waterfall.

I recently read an article titled "Why Offshoring is Economically Unsustainable" by Bob Powell, Ph.D., MBA. I have been increasingly concerned over the years about the millions of manufacturing jobs our country is outsourcing (losing) to various foreign countries.
Powell puts forth several comparisons that are simple to understand and are thought provoking. He says, "A sports spectator logically decides to stand to get a better view of the action. If only one spectator stands, this action is effective. But one spectator standing can prompt an escalation that leads others to stand. And when every spectator stands, no one can see any better than before (and short people can not see as well). He concludes that the system that developed is less efficient, because the spectators expend more energy when standing.

Another example he gives is ocean fishing. "A fisherman logically decides to put out more boats to catch more fish. If only one fisherman does this, the action is effective. But one fisherman putting out more boats can prompt an escalation that leads other fisherman to compete by putting out more boats. The irony is that as fish become more scarce, the price goes up prompting even more over fishing."

At this point, one might be thinking what do these two examples have to do with American job loss through offshore outsourcing. The analogy is direct and accurate. A company logically decides to outsource labor offshore to reduce costs, gain competitive advantage and increase profits because the benefits are substantial.

See the problem coming? When the outsourcing (job loss) starts, it continues.
Another supporting article that continues this school of thought was written by Daryll Ray, University of Tennessee. His article discusses the exporting of American jobs and the jobless recovery. "In a competitive environment, the manufacturer of any given product has an incentive to reduce costs to increase profits and price competitiveness. Often one of the biggest cost is labor. One sure fire way to reduce costs is to export jobs. Labor costs in Mexico and the shops of China and Southeast Asia are a fraction of what they are in the U.S.

Ray makes the point that in the past most of the jobs leaving the U.S. have been in textiles, shoes, and heavy manufacturing. He states, "We have been told that this is ok because America will convert its workforce to take the high-end skilled technical and software jobs, leaving the U.S. better off. But now the jobs that are leaving are high tech and back office support jobs."
One firm at a time it all make sense. They can lower costs, increase profits and watch stock prices rise. BUT what happens as more and more firms begin to do that? Isn’t it the same as spectators standing for a better view or fishermen putting more and more boats in the water?
The end result for America is fewer jobs for our people resulting in a lower standard of living for the future.

Let’s look at what several well known people are saying about this issue.
* Lou Dobbs, CNN Commentator, "Corporate greed is shipping American jobs overseas."
* Pat Buchanan, writer, economist, "Free trade is the serial killer of American manufacturing and the Trojan horse of world government. It is the path to the loss of economic independence and national sovereignty. Free trade is a bright and shining lie."
* Warren Buffett, second wealthiest man in the U.S., "America’s growing free trade deficit is selling the nation out from under us."

In conclusion, let me share two more quotes I have read, one very disturbing, one very good advice.

Karl Marx, the avid Socialist ,had something to say about free trade, "Free trade breaks up old nationalities…..In a word, the free trade system hastens the social revolution. Gentlemen, I am in favor of free trade."

Now for the very positive and accurate quote from Justice Robert Jackson, Former U.S. Supreme Court Justice, "It is not the function of the government to keep the citizen from falling into error, it is the function of the citizen to keep the government from falling into error."