The following appeared in the Denver Business Journal on October 30, 2009 and was written by Asa Beck, the President of Cogent Strategies LLC. Mr. Beck is also a member of the Colorado Chapter of the Coalition for a Prosperous America.
We’ve just gone through a very tough period for our economy, and it’s not over yet. Banks are burdened with high loan defaults of more than 6 percent. Underemployment is very high, at 17 percent, according to the unemployment rate from the Bureau of Labor Statistics, which includes those who have given up in the past four weeks and those working part time. We’ve lost 5.7 million manufacturing jobs in 10 years and 11.2 million total jobs since July 2007. The trade deficit is better but still tracking at more than $300 billion, and the federal budget deficit was more than $1.4 trillion — for a combined total of more than $1.7 trillion this year alone. Total net worth dropped $10.8 trillion from the end of 2007 to June 2009. The combined effect is a weakening of the dollar, which will only get worse until we take action.
The Chinese government has
undervalued its currency, in relation to the dollar, for years. The effect is a 35% Chinese export
subsidy which is leading to the deindustrialization of America, which must be
reversed. We need to push Congress
to pass the Currency Reform for Fair Trade Act (S. 1027 and H.R. 2378) to
neutralize this large and unfair subsidy. China is not alone. Other countries undervalue their currencies as well. Most of the world taxes business
through a value added tax and they use border adjustments to these taxes to
make our exports more expensive to them and imports to our country less
expensive. We must change our tax
code to be similar or continue to suffer the consequences. We have no real quality controls over
imported food and goods. The
stories are common, lead paint on toys, polluted drywall, and other inferior
products, producing huge amounts of pollution in our world. We need to demand, at all levels, that
the products coming into this country meet the same standards that domestic
products must meet. Tell your
federal, state, county, and city representatives that the economy is suffering,
your ability to pay is down, and you expect them to have a balanced budget and
shrink the size of government overall. Make the tough choices, do their job, or be prepared to be sent home
after the next election. Whatever
you do, be vocal, politicians consider silence to mean approval, no matter what
your beliefs, talk to your representatives monthly.
Policy change requests are
fine, but as many have proven, the policy makers do not need to listen to
us. So what actions can we take
that will guarantee our economy is on track within a year. Let me tell you. Take all off shoring you have done
within your organization and bring those jobs home. Labor is plentiful in this market. There is not a better time to do it. Find a domestic source for your
materials/products and buy everything from them. With the weakening dollar this will be easier than when the
dollar was strong and in a couple of years you will look like the smartest one
on the block. This is not
simple. Not everything you want
and need is available domestically anymore. So if you only have a foreign source for it, tell them
you’re not happy about it and buy only what you absolutely have to. Particularly when it comes to plant and
equipment you can put off almost anything for a year or two.
As a consumer, buy only what
you can find domestically manufactured. Clothes, electronics, appliances, automobiles, trucks, furniture,
computers, or anything else for that matter that you cannot find made in the U.S. Simply do not buy them. Every product must state where it is
made. Inspect the box and know
where you are spending your dollars. All automobiles must have the domestic content shown on the car. If it is not at least 80%, walk
away. There are a number of
foreign companies that manufacture here already. Know who they are. Any foreign manufacturer who sees their sales fall off significantly,
with no hope of recovery, will react by building manufacturing capacity here. Let the Chinese take the nearly $3
trillion they have accumulated and use it to build factories in the US. If we refuse to buy imported products,
within a year we will see factories opening seemingly everywhere. Foreign companies will realize that
if they want to sell it here, they need to make it here.
The economy is still going to
have a bumpy ride for a while. How
long and how bumpy the ride is completely within our control. Take all that money you do not spend on
imported products and put it in the bank, not stocks, the bank. Save until you have a reserve of 1 to 3
months sales for your business and 6 to 12 months income personally. This is important. The regulators have already done
all they can with the economy. If
it takes another downturn you may need it. What I can guarantee you is this. If we all buy absolutely no imported goods and we get our
representatives to balance the budget while decreasing the size of government,
by this time next year we will be well on our way to a strong and sustained
economic recovery.
Great Ideas - Fuel to Fire written by Paul T. Reagan , November 03, 2009
Mr. Beck is right on.
The disconnect to Washington is scary - and the fact that the majority of engineers rely on the government for their employment now (directly or working for defense contractors), complicates the move back to a sustainable balanced economy.
A couple other points:
1) When someone accuses you of being a 'protectionist' - pull out the crumpled up graph of our trade deficit over the last 30 years, and real income trends over the same period. Or pull the latest back page of the Economist and look at all the latest trade balance data with our 'partners' in the WTO. Can the US REALLY ever be accused of being protectionist relative to ANY OTHER NATION? Please. If we were protectionist would we really owe the rest of the world the future incomes of several generations?
2. Why doesn't monetary policy have any impact on employment in the US anymore? The current financial crisis has other causes of course, but Federeal reserve monetary policy over th last 10 years cannot impact employment here anymore because the money flows directly to Asia - it never gets into the US economy. Therefore inflation is muted at home and we don't get the 'signal' to borrow less (i.e. interest rates remain lower than supply/demand should warrant). The Chinese suck up the extra dollars and hurth their own citizens wealth creation - to achieve their national goals.
3. Does the WTO even remain relevant if it can't figure out the distortions of currency manipulation? How can the WTO or it's members demand that the US drop subsidies for US agriculture?
4. Global warming taxes. We should reduce pollution and increase efficiency with the right incentives. We should legislate it at home and impose fees on polluters imports if we care about it. Or we can debate the impact and decide to just pollute less and tax imports from the big polluters.
Global capital flow distortions have been explained for at least 10 years by supposed protectionists
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How to repair the economy written by Steve , November 03, 2009
Well first off we have a Congress over half educated in law that sign bills they don't read like giving tax breaks to outsource instead of giving tax breaks for US companies staying to produce. A sunshine act that Ron Paul introduced is vital because it would allow Congress time to actually read the bills they sign.
Second does it make sense that we allow foreign goods to come in free from Protectionist countries that have a specified agenda from their governments to put US companies out of business while Americans trying to make a living and produce have to pay high personal income taxes and high corporate income taxes?
A better ideal would be to reduce corporate income taxes down to 5% to encourage as many corporations to produce here, second reduce US income taxes so that Americans can keep more of their income and impose VAT taxes on imports from Protectionist countries. Id rather be taxed to consume from a Protectionist country that charges VAT taxes on US exports, keeps their exchange rate undervalued by money printing and requires that export in their country you have to setup a joint venture with local partners so your technology can be copied then to have high personal income taxes and allow the thousands of small manufacturers that want to stay in US pay such high corporate income taxes.
CPA will hold its Second Annual Legislative Fly-In on
March 2-4, 2010. This is a powerful opportunity for us to work
together to advance trade reform in the halls of Congress. We need to
bring the concerns of the grass roots to our legislators.
This is efficient advocacy, well worth your time. We make all the
meeting arrangements with legislators or their staff, we put together
materials, we plan a message, and we pack meetings together in a
concentrated period of time. You make a bigger impact with your time
using only three of the 365 days in the year. Click here to sign up for the CPA Fly In.
CPA has a special offer--limited time only: the first 50 registrants
get a free copy of Ian Fletcher's new book: Free Trade Doesn't Work.
This is a highly acclaimed book about trade policy and the needed
changes therein.
Agenda:
March 2, 2010: 2p to 6p - Group meeting for training, talking points and team assignments
March 3-4, 2010: Hill visits
Place: Capitol Skyline Hotel, 10 I ("Eye") Street SW, Washington, DC 20024
Once you sign up with CPA, reserve your room at the Capitol Skyline
Hotel by calling 202.488.7500. You should book for the evenings of
March 2 and March 3.
If you have questions about the events, please call Sara Haimowitz,
Development Coordinator, at 413-203-1410 or email at
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The disconnect to Washington is scary - and the fact that the majority of engineers rely on the government for their employment now (directly or working for defense contractors), complicates the move back to a sustainable balanced economy.
A couple other points:
1) When someone accuses you of being a 'protectionist' - pull out the crumpled up graph of our trade deficit over the last 30 years, and real income trends over the same period. Or pull the latest back page of the Economist and look at all the latest trade balance data with our 'partners' in the WTO. Can the US REALLY ever be accused of being protectionist relative to ANY OTHER NATION? Please. If we were protectionist would we really owe the rest of the world the future incomes of several generations?
2. Why doesn't monetary policy have any impact on employment in the US anymore? The current financial crisis has other causes of course, but Federeal reserve monetary policy over th last 10 years cannot impact employment here anymore because the money flows directly to Asia - it never gets into the US economy. Therefore inflation is muted at home and we don't get the 'signal' to borrow less (i.e. interest rates remain lower than supply/demand should warrant). The Chinese suck up the extra dollars and hurth their own citizens wealth creation - to achieve their national goals.
3. Does the WTO even remain relevant if it can't figure out the distortions of currency manipulation? How can the WTO or it's members demand that the US drop subsidies for US agriculture?
4. Global warming taxes. We should reduce pollution and increase efficiency with the right incentives. We should legislate it at home and impose fees on polluters imports if we care about it. Or we can debate the impact and decide to just pollute less and tax imports from the big polluters.
Global capital flow distortions have been explained for at least 10 years by supposed protectionists