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Trading Seabiscuit For A Rabbit

August 4  2003

If you wish to understand why U.S. manufacturing is in a death spiral, read last week's editorial in the Wall Street Journal.

When the GOP House voted 270 to 156 for President Bush's free-trade deal with Chile, the Journal leapt with joy. "All in all, a good show, and an optimistic portent for the ... global trade pacts to come."

Now consider what we got in this deal and what we gave up.

Chile's GDP of $70 billion is not even 1 percent of ours. Her per-capita GDP of $4,400 is one-eighth of ours. We have thus gained access to a tiny Latin market, while Chilean manufacturers just gained privileged access to the $10 trillion U.S. market, where consumers have a per-capita GDP of around $37,000.

We just swapped Seabiscuit for a rabbit, and the Wall Street Journal is popping the champagne corks.

Moreover, to give the president his victory, Republicans had to put party interests on the shelf. For Democrats have lately begun to notice that under President Bush, one in every seven U.S. manufacturing jobs has vanished. U.S. manufacturing jobs have been disappearing at the rate of 75,000 a month for 34 months. U.S. workers in manufacturing are now fewer in number than in the 1950s and the smallest share of the labor force since the early 1800s.

Why? Simple. As we import the products of foreign factories in record volume, we close our own factories and ship our jobs, our technology and our future abroad. In May, the U.S. trade deficit in goods was running at the astronomical rate of $562 billion a year. Because of that deficit, since Bush took office, the dollar has lost one-fourth of its value against the euro.

And who has been the big winner from the trade deals the Wall Street Journal has been celebrating since NAFTA converted our trade surplus with Mexico into a $40 billion trade deficit?

No question about it. Beijing. Last year, China ran a $103 billion trade surplus with the United States. This year, her trade surplus is running at $120 billion, and China has surpassed America as the world's premier recipient of foreign investment.

Her trade surplus with America now accounts for 100 percent of China's economic growth. Thus, it is unfair to say the president has not created any jobs. He has created millions of jobs in China, as he has presided over the loss of 2.6 million manufacturing jobs in the United States. A triumph of free trade.

In the United States, however, the president has presided over the loss of 2.6 million manufacturing jobs. But to the editors of the Journal, it does not matter who produces what, where.

And what wonderful things have the Chinese been up to with the $360 billion in foreign reserves, including an immense hoard of U.S. Treasury bonds and T-bills that they have piled up from their trade surpluses with America in the Bush-Clinton-Bush era?

According to a Pentagon report this week, China last year deployed and targeted 100 new missiles on Taiwan for a total of 450 and has begun a crash program to build longer-range missiles to strike and paralyze U.S. bases on Okinawa, Guam and South Korea.

China's buildup now includes home production of the Russian Su-27 and Su-30 fighter-bomber, eight new Kilo submarines with anti-ship cruise missiles and Sovremeny destroyers with supersonic Sunburn missiles, originally designed by Moscow to sink aircraft carriers. These missiles are being purchased with the Nimitz, the Truman, the Kennedy, the Lincoln and the Ronald Reagan in mind.

In its editorial, the Journal reassured nervous Nellie globalists that the "number of genuine GOP protectionists of the Pat Buchanan stripe could fit into a phone booth."

"Protectionist" is, of course, a dirty word among neocons and New World Order acolytes. Yet, it was not always so. In the Grand Old Party of Lincoln, T.R. and Cal Coolidge that dominated U.S. politics for seven decades and converted America into the greatest industrial power the world had ever seen with the highest wages and standard of living on earth, Republicans proudly called themselves protectionist in every party platform.

They believed, as did Washington, Hamilton, Madison, Clay and Jackson, that trade laws should be crafted with the vital strategic interests of the republic always in mind, not the whimsical desires of fickle consumers. They believed trade laws should be written to prosper America first, and protect the industrial base of the nation and the independence and sovereignty of the republic.

The Wall Street Journal, however, has a different agenda.

Open borders, boundless immigration from every country and continent on earth, global free trade, moral interventionism and Woodrow Wilson Bush is following its lead. Let's see how it all pans out.


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