"The good life is one inspired by love and guided by knowledge."

Tuesday, August 16, 2011

Post Industrial America~ Where The Jobs Went

              The Devastating Truth

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The Trillion Dollar Gorilla in the room NO ONE in elected office will discuss, is about the failure of our Foreign Trade Policy and how it has fed our financial crisis, and how it has hastened the slow death of our
manufacturing sector.

Our Foreign Trade Policy, much like a cancer, has been killing the manufacturing sector and bleeding American jobs since the late 1940s.

The losses in manufacturing and jobs, are a direct result of businesses determining to flee offshore from high taxes, massive regulation, and wages at pennies on the dollar by our trading partners. The flight of manufacturing has devastated communities, impacted our revenue base and left million of Americans underemployed or terminally unemployed. The loss of our manufacturing sector is an existential threat to this Republic.

American industry, particularly the manufacturing sector has been in an offshore flight for decades.

America is on the brink of collapse, and Obama's only idea is to raise taxes to fix the revenue problem a result of a decline in manufacturing and the loss of jobs, and propose more infrastructure expenditures. And spend and borrow more money.  His agenda never addresses the systemic problems that have been created by Federal Government policy, law, regulations, fees and obstacles.  These obstacles set by the government and bureaucrats that make walking away from investment with factories in America by business less attractive than operating a business in a Communist society.  It cost less to manufacture and actually drives more money to the bottom line of business owners and corporations to ship millions of containers filled with goods across the vast expanse of the Pacific ocean than to conduct business in the United States.

Everyone elected official has avoided addressing the lousy trade agreements negotiated by officials only looking for a deal, with little concern about the nation breaking details which have  been signed by previous adminsitrations, and ]passed by previous Senates.  Many of these Trade Agreements are policies looking for friends where the enemy sleeps. At the same time in every instant trading away jobs and manufacturing for a partner who not only cannot dance and the tune and tempo are not made in America.

The Marshall Plan cost American Tax payers 22.4 billion US dollars  from 1947-1951.  Since 1947 and GATT (General Agreement on Tariff and Trade 1947, the precursor to both the WTO (World Trade Oganization and UN) America has signed one after another poorly negotiated Trade Treaty.  Current Renewal of treaties that the Obama Administration are reviewing can be found here .  Every one of these Treaties support an upside down unequal tariff basis and unfair economic practices by partner countries which leaves US manufacturers and products subject to discriminatory manufacturing practices, wages, and inbound tariffs with all of our trading partners.  A review of the what the Obama Administration may do regarding these polices can be found also here .

The argument being used by Obama to increase taxes and raise revenues with regards to this nation's national debt is a rouse, one that avoids the real discussion America should be having.

The discussion, "What happened to our Manufacturing Base and why we have lost millions and millions of private sector jobs".  Cannot be found anywhere in the American political dialogue.  The losses our economy have suffered have not only impacted our GDP, national employment and have placed America at risk.

Government policies under both parties have cost America millions and millions of jobs.

Free Trade is an oxymoron.  There is no Free Trade.  Not one agreement the United States has signed since GATT in 1947 has been anywhere near close to Free, or fair, or created any equal trading partners.  In every instance our trading partners ecomomy and standard of living has increased while ours has steadily declined.

After looking at dozens of sites it is obvious that administrations from both parties have willingly signed Trade Agreements that disadvantaged US made products and exports to all of our partners. 

One trade policy after another in support of globalization, combined with miles and miles of regulations, (at a cost of 1.7 trillion to US business ) and crony tax rates are the culprits.  Investors seeking and finding large profit margins, a result of pennies on the dollar labor and little if any regulation, while nice for share  holders is  BAD for American jobs.  Our tax code supports undermining our manufacturing and the flight offshore in support of Foreign policy is filled with loopholes that encourage offshore development in  60,000 page US tax code filled with Crony Tax breaks.

This information should give every American cause for real concern for this Republics recovery in both the long and short term   "...Manufacturing employment dropped to 11.7 million in October 2009, a loss of 5.5 million or 32 percent of all manufacturing jobs since October 2000. The last time fewer than 12 million people worked in the manufacturing sector was in 1941. In October 2009, more people were officially unemployed (15.7 million) than were working in manufacturing..."

This same above linked article further lists the damage and sectors devastated by Trade Agreements and flight of offshore manufacturing and jobs to nation's who if not our foes have barricades in tariffs to United States made products.

I urge you to read the article I have used as reference from American Prospect.

"...Long before the banking collapse of 2008, such important U.S. industries as machine tools, consumer electronics, auto parts, appliances, furniture, telecommunications equipment, and many others that had once dominated the global marketplace suffered their own economic collapse. Manufacturing employment dropped to 11.7 million in October 2009, a loss of 5.5 million or 32 percent of all manufacturing jobs since October 2000. The last time fewer than 12 million people worked in the manufacturing sector was in 1941. In October 2009, more people were officially unemployed (15.7 million) than were working in manufacturing..."

Here is the list from this site that the once great U.S. economy is being gutted, neutered, defanged, declawed and deindustrialized....
  •  1) The U.S. trade deficit with the rest of the world rose to 497.8 billion dollars in 2010. That represented a 32.8% increase from 2009.
  • 2) The U.S. trade deficit with China rose to an all-time record of 273.1 billion dollars in 2010. This is the largest trade deficit that one nation has had with another nation in the history of the world. 
  • 3) The U.S. trade deficit with China in 2010 was 27 times larger than it was back in 1990. 
  • 4) In the years since 1975, the United States had run a total trade deficit of 7.5 trillion dollars with the rest of the world.
  • 5) The United States spends more than 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.
  • 6) In 1959, manufacturing represented 28 percent of all U.S. economic output. In 2008, it represented only 11.5 percent and it continues to fall
  • 7) The number of net jobs gained by the U.S. economy during this past decade was smaller than during any other decade since World War 2. 
  • 8) The Bureau of Labor Statistics originally predicted that the U.S. economy would create approximately 22 million jobs during the decade of the 2000s, but it turns out that the U.S. economy only produced about 7 million jobs during that time period
  • 9) Japan now manufactures about 5 million more automobiles than the United States does. 
  • 10) China has now become the world's largest exporter of high technology products
  • 11) Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975. 
  • 12) The United States now has 10 percent fewer "middle class jobs" than it did just ten years ago. 
  • 13) According to Tax Notes, between 1999 and 2008 employment at the foreign affiliates of U.S. parent companies increased an astounding 30 percent to 10.1 million. During that exact same time period, U.S. employment at American multinational corporations declined 8 percent to 21.1 million. 
  • 14) Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs. 
  • 15) Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China's share had soared to 20 percent. 
  • 16) The number of Americans that have become so discouraged that they have given up searching for work completely now stands at an all-time high. 
  • 17) Half of all American workers now earn $505 or less per week. 
  • 18) The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000. 
  • 19) Since 2001, over 42,000 U.S. factories have closed down for good. 
  • 20) In 2008, 1.2 billion cellphones were sold worldwide. So how many of them were manufactured inside the United States? Zero. 
  • 21) Ten years ago, the "employment rate" in the United States was about 64%. Since then it has been constantly declining and now the "employment rate" in the United States is only about 58%. So where did all of those jobs go? 
The world is changing.

We are bleeding national wealth at a pace that is almost unimaginable."

The sad reality is that any jobs created in any state coaxed from one state to another is just moving the deck chairs on the Titanic.

The government is the only one that can create or save fake jobs (The Obama unemplyment fable) because it is the only part of the US Economy that has not been regulated away or closed down or shipped operating the Federal Goverment offshore. Once you take a serious look at globalization, our trade agreements and unbound regulation you can understand why the Democrats say Unemployment Compensation is creating jobs.

This is more than a nighmare it is an economic disaster, it is an existential threat every bit as damaging as a nuclear attack.


ADDENDUM 09/05/2011

While doing research for other articles I found this site, after this article was published.

Please take a few moments to look at America Wake Up. ''AmericaWakeup.net is dedicated to providing factual data on the current economic condition of the United States. The data provided on this Web site relays the number of U.S. companies being sold to foreign interests, the percentage of annual consumption spent on imports, the percentage of U.S. Corporations owned by foreign entities and foreign financing of U.S. government debt.

Each year the U.S. operates with a multi-billion dollar budget deficit. The U.S.' out-of-control spending and excessive tax breaks have led to the country being over 14 trillion dollars in the red. In order to finance its operations, the U.S. must borrow money from its economic competitors through the sale of Treasury Bonds.

The U.S. annually imports billions of dollars worth of foreign-made goods. Importing more than we export equates to lost industries and jobs in the U.S. Through Free Trade Agreements the U.S. has facilitated the exportation of American production to the lowest wage countries, resulting in the loss of American jobs, skills and wealth.

As jobs have fled the country, so too has ownership of American corporations. Over the past several decades thousands of American companies have been purchased by overseas conglomerates. These companies once produced wealth and innovation within the United States, but now the wealth, profits, and innovations flow out of the U.S. Through the purchase of important and strategic American corporations, and from insourced intrusion into the American domestic markets, foreign-based companies have built up a huge influence over entire industries.

According to data collected from the Internal Revenue Service certain industries have become completely monopolized by interests overseas...".


I just received this link from a Twitter Friend, According to Forbes "Last week, the federal government reported that the U.S. trade deficit grew by 33 percent in 2010 to nearly half a trillion dollars. Most of the gap resulted from an imbalance in trade with China, which shipped $365 billion in goods to America but only bought $92 billion in U.S. goods. The resulting U.S. deficit of $273 billion in bilateral trade with Beijing reflects a persistent feature of the Sino-American relationship since China joined the World Trade Organization in 2001. Over the last ten years, China has mounted the biggest challenge to the U.S. manufacturing sector ever seen, threatening producers of steel, chemicals, glass, paper, drugs and any number of other items with prices they cannot match. Not coincidentally, the United States has lost an average of 50,000 manufacturing jobs every month during the same period..."


  1. I agree we need lower taxes and less regulation and a policy that encourages businesses to expand here and not ship jobs overseas but I do think trade agreements expand our economy. Lowering trade barriers helps all countries involved.

  2. We agree on some things, and disagree on others. I think the Marshall Plan was wonderful. I agree, though, that we've driven business away from America.

    On the other hand, few people know that we are still number one in manufacturing. It's just that our manufacturing is entirely automated now, requiring millions fewer workers. This is a structural problem we will have to address.

  3. We are in hours of labor units in production, (which proves the excellence of American workers 2 can perform what it takes 12 Chinese to do, I cannot recall where in the 50 or so links I found that statistic)but it does not enhance unemployment nor does it increase it. We are not however increasing in number of manufacturing facilities, and some 90,000 plants may soon close.

  4. Kevin, That's how we're told trade agreements work.. The reality is they make it attractive to move manufacturing to countries with low labor costs and minimal regulation.

    Melody, you did a tremendous job, great reseach, and very well written.

  5. I just re-read & tweeted this. Loved it. I did write/gave a speech on this in 1986 as Exec. Dir., OK Dept. of Economic Development. The bleeding continues.

  6. Subject: China and Free Markets

    The standard reasons given for the transfer of manufacturing jobs to China is usually given as over-regulation and taxes. Of course we levy import duties of 0% - 3% on Chinese imports and China levies import duties of approximately 25% on U.S. manufactured goods (if they even allow the importation into China). We all know how clean the air is in China as well as the safety standards in buildings, coal mines, and rail systems.

    And of course, the Chinese represent the ultimate free market, other than massive subsidies of the export products using the excess trade balances from their trading partners and the Chinese refusal to let the Chinese currency float in the same manner as the currencies of all other major trading countries belonging to the World Trade Organization (WTO).

    The reason companies including Boeing, GE, GM, Loral, BAE, HP, Dell, IBM, etc. move jobs to China is a combination of trying to gain an entrance into the Chinese markets and greed. While these corporations are headquartered in the U.S. and want to sell products in the U.S., they see no need to pay the taxes that enable the U.S. to provide the diplomatic, legal, and military might to provide for the security of the U.S. and protect Liberty.

    While these companies are quick to demand protection from the theft of intellectual property, including technology and patents within the U.S. and the E.U., they willingly look the other way and allow their Chinese partners to acquire the latest technology design, product information, and manufacturing techniques.

    Of course, they then appeal to the U.S. State Department when the Chinese then start marketing and distributing the aerospace, military, and aviation products using U.S. and EU product trade secrets and manufacturing methodologies and tooling that were "shared" with their U.S. and EU "partners".

    The largest manufacturers of long-range commercial aircraft used for international flights are Boeing and BAE using lots of Chinese technology and Chinese-manufactured content. The country that meets the global needs for the manufacture and marketing of mid-range commercial aircraft is now China, not the U.S. or Canada, providing aircraft with almost 100% Chinese technology and design and Chinese-manufactured content. The Chinese are currently either number one of number two in offering rocket launch services within ten years of a joint U.S. - China venture to manufacture avionics and command and control systems with Loral (just a coincidence).

    American corporations did not lose the trade and product war with China, they were willing partners in surrendering from Day One. And of course; they decry the need to pay taxes and expect the U.S. to use all necessary diplomatic and military resources to assist them when needed.