FIXING THE ECONOMY WITH RULES BASED TRADE

                                                                         by Tom Neppl

Thought I might add my two cents on the Economy. Both candidates are advocating job growth as the remedy to growing back the economy. The manufacturing industry has been steadily losing jobs to the tune of over 4 million high-paying, benefits-earning, tax-generating jobs in the past 6 years, not to mention the 50,000 domestic manufacturers who have closed their doors to bankruptcy. Couple that with the ‘multiplier’ effect of a normal manufacturing job and you have closer to 10 million lost jobs. More on the way, now we are losing jobs to a bad economy.

It stands to reason that the people losing those jobs or their businesses are not happy, they will also most likely be voting for the candidate that promises to get those jobs back. The fact is that many of those jobs have been exported through multi-national corporations, NOT for cheap labor but due to currency manipulation, value-added taxes, subsidies and regulations. We’re in a trade war with mercantilist nation competitors and our government and Congress have disarmed unilaterally.  Domestic producers are being exploited by unfair trade agreements, conditions that Ronald Reagan recognized and addressed – like no administration since. It is simply inappropriate, for example, that China has given themselves a 40% advantage over U.S. produced goods.  Couple this with the tax differences and the advantage may be as high as 80%.

For the most part, people in the U.S. are either self employed, work for government, non-profits, or for business. The only jobs our government can create are government jobs; and we do not need any more of those. Another fact is that a large percentage of the displaced manufacturing workers are not skilled and undereducated, products of our culture and years of decay in our education system. The service industry has picked up a number of those workers, however, they are most likely in worse financial shape than they already were.

The production of tradable goods is the best solution to ‘creating wealth’ and providing good paying jobs with benefits. We have millions of people to take care of, and we need to provide them the opportunity to work. Until U.S. and multinational corporations have a good reason for creating or moving those jobs back to the U.S., our job growth is likely to remain weak at best. Our government’s role is to provide the environment for action, support business, and get out of the way.

Senator Obama has indicated that he will get the jobs back. Senator McCain has said he will create jobs through domestic energy production, including nuclear energy. Whatever we do, we need to remember that 95% of the population lies outside the borders of the U.S. and we need a reasonable trade strategy with a level playing field for domestic production. Protectionism could be disastrous.

Given the state of the world financial markets, we had better get this one right, we had also better focus on Country First. There is a growing world sentiment that would favor a partial or full collapse of the U.S., at least in terms of world dominance.

Tom Neppl
Springs Fabrication Inc.