BUY, BUY MISS AMERICAN PIE! Drive Your Chevy to the Levee and Buy American!
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Wal-Mart expansion - Good News or Bad News?
We wrote in this column recently about how Americans had made the decision to buy foreign cars years ago, and now those chickens are really coming home to roost with grenades tied to their claws.
Wal-Mart, that some observers think is really an arm of the Chinese government, has become the world's largest corporation, surpassing General Motors.
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The most frightening scenario is that the Chinese are subsidizing their low wage, low cost industries just to destroy American jobs and solidify markets. The Bush Administration recently made a tentative move to limit some textile products, but it sounds like a a timorous attempt to control the flood of Chinese imports that may fade fast. We'll see.
Chinese industries that produce goods at below cost are financed by banks that fail at a high rate. American financial institutions have their hand in the pie by bailing out these banks, thus shooting the American economy in both feet but profiting anyway.
It seems as though the political trend has been to punish American workers for their brazen attempts to demand living wages and benefits. The punishment of choice is to ship the American jobs overseas, those advocating the off-shoring movement apparently failing to realize how destructive this is to our economy. Or maybe they just don't give a darn as long as they make a political point. Class warfare? Some might call it that.
Why Buy American? author Roger Simmermaker in his sensational new book "How Americans Can Buy American" says:
"Forty-percent of the world is in recession. New records have been set for both personal and corporate bankruptcies. America's trade deficit continues to escalate to historic levels. The savings rate has turned negative, as the average consumer spends $1.10 for every dollar they earn. Real wages for working Americans have plummeted 19 percent since 1972 - about the same time we entered into a so-called "global economy." We only vote for our representatives every two or four years, but we vote with our wallets and checkbooks every day!"
Michigan state government proposals cutting health care and pension benefits of teachers and other state workers will only add to the social problems Michigan already faces. Plus today's legislators will betray the promises made over decades and damage the shaky educational system even more by driving away prospective teachers with talent.
When GM and Ford stock hit "junk" status, according to stock market gurus, then factory towns like Bay City, Saginaw and Flint are really in trouble. The heady days of the 1950s and 1960s are long gone, taking thousands of jobs and a big chunk of our population base with them. Obviously, the time for talk is over; something needs to be done or our way of life will blow away completely.
There's just no way to continue to impoverish American workers through offering unwarranted advantages to foreign manufacturers and expect that our economy and society won'tcollapse of poverty. Blaming the unions and even non-union workers for wanting decent wages, health care and pensions seems to be the vogue. But how do these people on $6 per hour with no health care and no benefits participate in the American economy? If you sell real estate, insurance, cars, boats or furniture, these folks won't be your best customers because they'll have just enough money to subsist.
We need to revisit Henry Ford's decision to double the wages of his workers so they could buy his cars. Minimum wage workers won't support the kind of economy we have come to expect.
Of course the unions need to measure up; take the half-pints out of their lunch buckets and get motivated and up to speed on new technology. Both unionsand management need to look again at the Quality of Life movement that reinforced the idea that we're all in this together.
Author Simmermaker says Americans can help reverse the decline by grabbing the steering wheel of a U.S.-made car. We agree with his statements: "The time has come for ordinary Americans to take control of America's destiny. Regardless of how you may feel about the labor movement in general, the fact remains that foreign automakers producing in the U.S. predominantly assemble their automobiles in low-wage states like Alabama and Kentucky, where American-owned automakers (Ford and General Motors) predominantly produce in high-wage union states like Michigan." He points out that foreign-owned automakers have huge cost advantages over American-owned automakers. Many of the cost advantages come out of our own tax dollars. Consider the following statements by Simmermaker: "In 1997, the state of Alabama granted huge subsidies to Mercedes in exchange for a plant that would employ 1,500 people. What were the details of this huge incentive package? $300 million in tax breaks, $253 million in direct incentives, $60 million in Alabama taxpayer money to send fellow Alabamans to Germany for training, and a promise to buy 2,500 of the new Mercedes SUV's at $30,000 each. Based on just the initial $300 million grant alone, those 1,500 jobs will cost Alabama taxpayers $200,000 per job. Apparently Alabama, not Mercedes, will be paying those salaries for years to come. With dealslike these, it's no wonder foreign automakers have stepped up production in the U.S. We'll even pay their workers' salaries for them!
"In 1987, Toyota constructed an auto plant on part of the 1,500 acres of free land given to them in Georgetown, Kentucky. The auto plant was built by a Japanese steel company using Japanese steel. The U.S. government granted a "special trade zone" so that Toyota could import auto parts from Japan duty-free. Financing was handled by Mitsui Bank of Japan. Total federal and state grants and incentives exceeded $100 million. These subsidies, of course, were courtesy of your tax dollars.
"Tennessee gave Nissan $11,000 per job for their Smyrna plant built in 1980. South Carolina coughed up $79,000 per job to convince Germany's BMW to build their plant in Spartanburg in 1992. Were you aware that our government was using your money to create jobs? Or are these merely job announcements where you and I foot the bill? Job announcements do make for great rhetoric for state governors' re-election campaigns. How many years will it take a factory worker in Alabama to pay back the $200,000+ in tax money that the government gave away? A conservative answer would be "several."
"This is not to say that American companies are not granted incentives to build plants here. The most recent is $100 million in incentives for Cadillac to build theirnext plant in Michigan. It is my opinion that we should not be imitating the Third World by using public money to bid for jobs. But when given the choice between foreign investment (Toyota, Mercedes, Nissan) and American investment (General Motors and Ford), American investment is much better for America.
"The deal Alabama gave Mercedes makes the deal Michigan gave GM seem rather frugal. The point here is that these huge incentives that are offered to foreign companies are rarely offered to our own companies here at home. Such incentives allow foreign companies to save hundreds or even thousands of dollars in costs per automobile. And American companies acquire more of their parts from domestic sources, so more jobs are created in the automotive parts industry in America.
America needs more American investment, not more foreign investment."-- Roger Simmermaker
I agree, and that's why right here, right today, I'm launching my own campaign to be called "BUY, BUY MISS AMERICAN PIE!" Sure it's silly, but sillier stuff has caught on. Watch for a website and a flurry of "Buy American" publicity. Common sense is never out of style. ###
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