Truthout is hosting a chapter each week of Thom Hartmann’s new book, Rebooting the American Dream. In last week’s Sunday Roast, I summarized truthout’s overview of Thom’s book, letting you know what each of the eleven chapters contained.
This week, Chapter One: Bring My Job Home!
John Maynard Keynes, the British economist, believed in the private sector but also in a strong government role, especially during dire economic straits. Keynes
understood that demandfrom consumers drives an economy; and when consumers don’t have a job, an economy will stagnate or worse. So during a cyclical depression, the best response of government is to use government money—even borrowed government money if need be—to put people to work so they’ll have money to buy things.
Those expenditures by working-class people—on computers, television sets, clothes, toys, furniture, power tools, and so on—would help restart the economy, which would grow gross domestic product (GDP) and tax revenues, so government would be able to pay back the borrowed money and wean people off of government jobs as private industry picked up the load.
So, why didn’t the stimulus generate as many jobs as Franklin Roosevelt’s New Deal? What happened? According to Thom, first, the stimulus was about 1/3 the size it should have been; and second, the stimulus DID create millions of jobs — IN CHINA.
So here is the first big way we can reboot the economy: lose our recent fascination—obsession, really—with “free trade,” get back to protectionism, and impose tariffs (import taxes) on imported consumer goods as we used to do. Let’s apply the lessons that our own rich history teaches us. In other words, let’s resume the manufacture of consumer goods in the United States, protect these industries from cheap foreign labor, and bring all those jobs back home.
“Free Trade” isn’t free. The Founding Fathers, particularly Alexander Hamilton, knew it. Hell, he wasn’t even the first! Hamilton got the idea from King Henry VII, who got the idea from the Dutch, who got it from the Romans, who got the idea from the Greeks! Why did they keep using and building on the same strategy? Because tariffs and protectionism work!!
Exhibit A? The Reagan era through the present. So-called “free trade” is kicking our hineys big time.
The post-Reagan era has been particularly destructive to our economy because we not only mostly eliminated the tariffs but we also became “free trade” proponents on the international stage. After Reagan blew out our tariffs in the 1980s and Clinton kicked the door off the hinges with the General Agreement on Tariffs and Trade (GATT), North American Free Trade Agreement (NAFTA), and World Trade Organization (WTO), our average tariffs are now around 2 percent. The predictable result has been the hemorrhaging of American manufacturing capacity to those countries that do protect their industries through high import tariffs but allow exports on the cheap—particularly China and South Korea.
But hey, we’ve got a service economy and rocking consumer society, right? Thanks, Ronald Reagan, George H. W. Bush, Bill Clinton, and George W. Bush. At least the “have mores” are doing better than ever.
Thom has a few solutions for starters:
1. Charge a tariff on all good made overseas that give competition to domestic manufacturing, but keep those tariffs low on the raw materials we need.
2. Get us out of WTO, NAFTA, CAFTA, etc., and all purchases made with taxpayer money must be for American-made goods and services.
3. The government should support emerging industries with funding, grants, and tax policy.
4. Encourage Americans to set aside money in savings.
What we need in this country is for the President and Democrats to stand up for the American people — buck this insidious lie that “free trade” is the best thing for this country, because clearly, it is not.
Let me re-phrase that: ”Free trade” clearly is not good for our country as a whole, but it’s been absolutely fabulous for multi-national corporations whose bottom line is profits for themselves and the stock holders. While that may be very good for them, it’s breaking the back of Americans.
So on that note, just suck it up and go for it, Mr President and Democrats.
Get yourselves in front of the cameras every single day, and tell us in no uncertain terms exactly what is going on in this country, and how we got here. Show us you’re on the side of the American people 100%, and we will support you and your efforts. Not just the people who voted for you, but many of those who didn’t. Why? Because a lot of people out here are almost completely uninformed, and haven’t got a clue what’s really going on, except what somebody told them or what’s on Fox that night. People will recognize truth when it’s delivered properly and backed up with facts.
You have to do this, President Obama! Not just to get re-elected, but FOR THE GOOD OF THIS COUNTRY. The whole country. Sarah Palin (spit) likes to say you gave a good speech…once. Well, get yourself out there and give good speeches about what the hell is going on in this country!
On the other hand, if you extend tax cuts for the rich and let the sick and unemployed twist in the wind — we’re gone. We won’t all be gone for the same reasons, but we will be gone.
And on your way out the door, stick a fork in this country, because it’s done, too.
This is our daily open thread — discuss.