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Ohio And China — One Side Promises While The Other Delivers

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Reposted from the Campaign for America’s Future blog

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Ohio And China — One Side Promises While The Other Delivers 

David Johnson  |  September 26, 2012  |  Campaign for America’s Future

Ohio is the center of the Presidential election, and the center of the fight over manufacturing policy and trade policy. Polls overwhelmingly show that the public gets it that the trade deal with China is the core of the problem. So both campaigns are making promises to fix the problem. One difference, though, is that one side just makes promises while the other side has actually delivered.

Promises

Mitt Romney is well aware that Ohio voters overwhelmingly want action on China and is promising that he will take action on China’s currency manipulation on the first day he is in office. However, he is not taking actions that he could take today– actions that would show the public that he means it and show that he is able to lead the Congress to get things done. He could today, right now, immediately ask House Republicans to bring the China Currency Bill up for a vote. The bill has more than 60 Republican co-sponsors, and passed the Senate 63-35, with 16 Republicans voting yes.

Mitt Romney could prove he means it, cold prove he can lead, and could make a difference for Ohio’s manufacturers right now. He could ask Speaker Boehner to allow this bill to come up for a vote, and if Boehner won’t do it he cold ask the 60+ Republican House co-sponsors of the bill to sign a discharge petition asking that the bill they co=sponsored be actually voted on. This would force a vote, and Mitt Romney would have proven to Ohio voters that me actually means it.

This was discussed on a call yesterday with Ohio Rep. Tim Ryan. Isaiah Poole reported on the call in his post, Romney’s Inaction On China Speaks Louder Than Words,

Ryan said in a call organized by the Alliance for American Manufacturing and the Campaign for America’s Future that Romney has done nothing to break the legislative logjam, which makes his criticism of President Obama “laughable,” he said. “They have zero credibility on this issue,” he said of Romney and House Republican leaders.

… Romney has said in campaign ads that he would name China a currency manipulator “on day one,” and on Monday campaign spokesman Andrea Saul underscored the pledge while accusing President Obama of “leading from behind on taking on China.”

Ryan, however, said that it’s Romney and House Republican leaders who are not leading at all. Ryan, who is one of the cosponsors of the bill with Rep. Sander Levin, D-Mich., said that if Romney was serious about the currency manipulation issue, “he should have been calling on Speaker [John] Boehner to bring up my bill, knowing that he would get 350 votes.”

Note – audio of the call can be heard by clicking through to Isaiah Poole’s post, Romney’s Inaction On China Speaks Louder Than Words.

Deliveries

Some of the reasons that Ohio is swinging toward Obama in the election polling were outlined in the call with Rep. Ryan. Marcy Wheeler reports, in her post, Congressman Tim Ryan’s 4 Reasons Obama Is Winning Ohio,

…I asked Ryan for the four top reasons why Obama is doing so well in OH.

He listed, in order:

1. The auto bailout (Ryan’s district also includes GM’s Lordstown Chevy Cruze plant)

2. Obama’s successful WTO trade complaint against China’s tire dumping (which affected Akron)

3. The Administration’s investment in education and research

4. Mitt’s campaigning against Proposal 2, which protected collective bargaining for OH’s public workers

Point 1: Ohio’s manufacturing economy – and American manufacturing generally – depends on the centuries-old ecosystem of suppliers, infrastructure, public schools, colleges and universities, tool-builders, designers, transportation systems, and the rest of the components that together enable manufacturing to occur and thrive. After the financial crisis both GM and Chrysler were having trouble getting the financial that would otherwise have been available to them, so the Obama administration stepped in and provided that financing. Had this not occurred that entire ecosystem would have collapsed. This would have meant that not only GM and Chrysler went under but all the of suppliers, etc., would have also gone under, and this would have cascaded into Ford and many other manufacturers collapsing as well.

Point 2: The tire industry is very important to Ohio. China was attempting to take over this industry by selling tires below cost. If they had succeeded in this tens of thousands of jobs, and many factories and their suppliers would have gone under. The Bush administration refused to file even a single trade complaint against China, and we lost over 50,000 factories and several million direct manufacturing jobs, along with their supply chains and corresponding jobs.

More Actions

The Obama administration recently filed a trade case against China for government subsidies of auto parts that are sold in the US. China is trying to seize the auto industry in the same way they were allowed to seize the steel and other industries. As described above, the auto industry is central to the American manufacturing ecosystem, and it is crucial to our future competitiveness that we maintain a level playing field, where American companies can fairly compete.

In the post, Why The Latest Trade Complaint Against China Matters, I explained,

Why This Matters

The auto industry is targeted for takeover by China because it is seen as a(nother) key provider of high-paying jobs, export revenue and therefore national economic strength. The Seattle Times explains, in WHY IT MATTERS: China’s auto parts industry.

The United States, China and other governments see the auto industry as an important source of higher-paid jobs and export revenue. The 2008 global crisis fueled complaints in the West that Chinese policies on a wide range of industries might be wiping out jobs abroad.

Chinese automakers exported only about 500,000 autos last year, mostly to the Middle East, Southeast Asia and other developing markets. But its producers of tires, aluminum wheels, radios and other components are making inroads in U.S., European and Japanese markets. They have yet to break into the top ranks of suppliers along with companies such as Delphi, Visteon or Europe’s Michelin and Bosch. At the lower end of the market, Chinese suppliers are increasing their global share, putting pressure on smaller Western competitors.

China’s strategies, from the same article,

Beijing has an array of strategies to support industries targeted for development, ranging from clean energy to mobile phones to autos. Companies can receive tax breaks and low-cost bank loans, energy and land.

The WTO allows research grants and some other aid, but critics say China violates rules that prohibit making exports a condition of support. They say Chinese policies have encouraged auto parts manufacturers to shift production to China, hurting employment abroad.

The key:

Employment in the U.S. auto parts sector shrank by roughly half between 2001 and 2010, while U.S. imports of auto parts from China have increased seven-fold, according to the Obama administration.

Enough Ohio voters understand just how important auto, tire and other manufacturing jobs are to the state’s economy, and the economy of the entire region and our country. Mitt Romney opposed the auto bailout, saying that the companies, their suppliers, their workers, the small businesses that depend on their workers, the communities where those workers and businesses reside, and the states the depend on those factories, suppliers, jobs and communities should all just be left to fend for themselves.

This election is a battle over whether we will be a fend-for-yourself economy — or a we-are-in-this-together economy that understands ourselves as a country and understands manufacturing as an ecosystem of vital components. History — and China and even evolution — prove that nurturing ecosystems is what makes an economy function. Isolated individuals bravely striving on their own against mighty and powerful forces might sound great to the teenagers who worship Ayn Rand novels, but it just doesn’t work in the real world.

One Response to “Ohio And China — One Side Promises While The Other Delivers”

  1. Mo says:

    To see how unsound money distorts trade and living standards. Read the article below about Bain Capital planning to send factory over to China. The article mentions how private equity companies borrow money that is most likely created out of thin air to buy up companies and then they ship the capital to countries like China. Because Washington is just interested in printing money out of thin air to fund wars, overseas military bases, financial speculation, and consumption with debt; other countries are adjusting their monetary policies to implement industrialization which means they can offer lower wages and other setup costs. Other countires are able to do this because they are not printing money for wars. Washington likes this arrangement because it can export inflation which explains why so many countries today have hundreds of billions if not trillions in US dollar reserve assets and it allows the multinationals to earn higher profits in countries that subsidize production.

    Bain Closes US Plant, Forces Workers to Train Replacements
    http://www.dailyfinance.com/2012/08/17/romney-bain-closes-us-plant-workers-train-chinese-replacements/

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