Mr. Speaker, I thank the gentleman for yielding. This is a must read for every American who is concerned about the future of our country, whether we will continue to be the leading industrial power in the world, whether there will be a…
Mr. Speaker, I thank the gentleman for yielding. This is a must read for every American who is concerned about the future of our country, whether we will continue to be the leading industrial power in the world, whether there will be a future for Social Security, what will the rules of trade be and what are the objectives. This is the economic report of the President.
Now, we have to give the President's Chair of his Board of Economic Advisors, Council of Economic Advisors appointed by the President, full confidence of the President, we have to give him some credit, because he is distressingly honest. In this book on page 229, he talks about the fact that one of the great benefits of trade is that when a good or service is produced more cheaply abroad, it makes more sense to import it than to make or provide it domestically. Of course he does not deal with the fact that Chinese labor is oppressed and abused, that they have no protections in their workplace. Basically if someone gets their arm torn off operating a machine in China, they drag him away from the machine and put a new worker there, and then, after that, they might tend to some basic first aid before they send that person home or to the graveyard, but there are no benefits or significant health care provided. So they are recommending that the U.S. workers should somehow have to compete with this.
Now, it would be one thing if this was sort of a self-generated thing on the part of China or Mexico or any one of these other countries that are stealing our jobs. But guess what? It is being done with U.S. capital which are being subsidized with our tax cuts. Not only are we borrowing money from the Social Security Trust Fund to give to the wealthiest of Americans in tax cuts, we are also borrowing money, given our deficit situation, to subsidize the largest corporations in the world through OPIC, the Overseas Private Investment Council, and others, to export American jobs.
Now, I mean, I think that is one place where conservatives, who are against government subsidies, and progressives, who are against undermining the U.S. economy and the wage and labor standards of Americans and our standard of living as a whole and our industrial infrastructure, have some grounds for agreement. Let us at least repeal the taxpayer subsidies, the borrowed money that is subsidizing these corporations to export jobs overseas.
But again, Mr. Mankiw, the President's chief economic adviser, in his official report to the American people this year, the economic report of the President, he says, shipping jobs to low-cost countries is the latest manifestation of the gains from trade that economists have talked about for centuries.
Now, we have to wonder what that gain is, how illusory it is, when the American middle class is being devastated by these exports. A few years ago when the gentleman from Ohio (Mr. Brown) and I opposed NAFTA, they said, oh, you Congressmen, you are like dinosaurs. You want to protect those old, inefficient manufacturing jobs. Do not worry, it will just be the low-skilled jobs that go to Mexico. Well, of course, that was a lie, and what we found out was that most of the major U.S. auto manufacturers were willing to invest in state-of-the-art plants in Mexico to access that cheap labor, and then reimport those vehicles into the U.S. And guess what? The
price did not go down for U.S. consumers, but many U.S. families, those who used to be able to buy the product because they worked in the factories, could not afford to buy that product anymore.
But then as things evolved, and the trade deficit began to accelerate over this last decade; when I introduced legislation to establish the U.S. Trade Deficit Review Commission in 1997, the trade deficit was $111 billion. It is almost quaint today. We are talking about $500 billion. We are going to borrow a half a trillion dollars to finance the purchase of goods overseas by Americans. We are going to borrow another $700 billion to run the Government of the United States and to give tax cuts to the wealthiest of Americans. And a substantial amount of this money, almost all of the $500 billion and 40 percent of the $700 billion, is going to come from overseas. We are giving unbelievable leverage to those bastions of democracy like China, who is now the largest holder of U.S. debt, and others who may not have the best interests of the American workers or our economy in mind. But in any case, Mr. Mankiw thinks this is just fine.
Now, the President has tried to back away from this a little bit. He did that famous press event in front of a bunch of boxes which they had to repaint. Actually they said, oh, it was just an overzealous intern from the White House at one of his unbelievable staged press events that cost an average of $400,000 each paid for by the American taxpayers, of course; the boxes, when he went to this one particular plant, all said ``Made in China'' on them, but he wanted to talk about American jobs; a little embarrassing. So this, of course, intern, with no direction from the political staff at the White House or anybody else, somehow came up with all new labels to run through and label them all ``Made in the U.S.,'' of course another lie.
So what they are doing, Mr. Mankiw is an unbelievably honest man, because he admits that they are exporting jobs, and they think that is good because it makes a few people rich and just impoverishes a majority of the people in this country, and deprives them of their livelihoods, and undermines the industrial and economic might of our country; but the President is trying to pretend that he does not really believe in this stuff, but I guess why is his signature on page 4 if he does not really believe in it? There it is, the President's signature on this report, basically endorsing these policies.
We cannot continue this way. Do we know what that means? Let us break it down a little bit, and then I will yield back to the gentleman. Our current trade deficit, that is the amount of money we are borrowing from overseas to finance the purchase of goods, many of those goods manufactured by formerly U.S.-based corporations that have now seen fit to chase cheap labor and lack of environmental standards and other things overseas, is $1.5 billion a day. Mr. Speaker, $1.5 thousand million a day.
Now, how is that sustainable? That is $1 million per minute of U.S. wealth that is flooding overseas, giving unbelievable leverage to foreign governments over the U.S. dollar.
Just one last point on this, and then I am certain we will get on to other things. What do the economists say? Oh, do not worry, it has always been this way. What will happen is the U.S. dollar will decline, our goods will become cheaper, and then we will begin exporting again. But as I said to a number of these economists, none of whom can answer this question, I said, I understand how that used to work when we made things, but when we do not make things anymore, how does that work? If the dollar gets cheaper, then all of those imported goods we are buying become more expensive. We will see inflation in the United States. We will see the dollar continue to drop. We will see higher interest rates in the United States. We will see the dollar continue to drop.
We are headed toward an incredible economic train wreck here. And the chief engineer, George Bush, who signed this report, thinks it is just fine. Because guess what? A few tens of thousands of people, CEOs, his buddies, his principal campaign contributors, they are all going to make out like bandits. The profits are up. Wall Street's profits are up. We are just having this little problem called a jobless recovery; jobless because those jobs have been exported. The means of the production has been exported. The industrial might of this country has been exported. And I would say to the hawks on that side of the aisle, in fact, you are exporting the capability of defending the United States in the future against adversaries around the world.
With that, I am happy to yield back to the gentleman for a little further discourse on this.
Mr. Speaker, if the gentleman will yield, people are going to think we are making this up. I am not making this up. But let us go to the source. Economic Report of the President, signed on page 4 by President George Bush and endorsed by all of his economic advisers, and it says right here: ``When a fast food restaurant,'' this is page 73, chapter 2, halfway down the page, ``When a fast food restaurant sells a hamburger, for example, is it providing a service, or is it combining inputs to manufacture a product?'' Well, we can erase that very embarrassing manufacturing job loss that George Bush has provided, the largest manufacturing job loss in the history of the United States, worse than the Great Depression, we can erase that in one fell swoop. All we have to do is turn to page 73 and say, well, of course, as the President's chief economic adviser says, that is manufacturing a product. That is not a service.
Mr. Speaker, if the gentleman would yield, do not forget the farmers and ranchers. I had some cattlemen come to my town hall last week who say, hey, we are next. Not only was Canada a huge threat to our industry and not only are they bringing in stuff that might kill the American people with mad cow disease, but the so-called free trade agreement with Australia, Argentina, other target countries in CAFTA, that is going to kill off the U.S. agriculture people. So we will import the beef that will be probably ground up overseas because that is value added, but then when the frozen patties get here, we will still manufacture them into a finished device which is, i.e., a Big Mac or a Whopper, we do not want to shortchange Burger King here and/or whatever you want to call it, and somehow we will prosper as a Nation by doing this.
I thank the gentleman.
Mr. Speaker, the gentleman is making an excellent point; but of course, they are following exactly the same rules, are they not? Do we not have a level playing field? Are they not required to provide health and safety, environmental protections, child labor protections? Are we not competing on a level playing field here?
Mr. Speaker, I come from a State that back when we were fighting NAFTA, I was pretty lonely up there in the Pacific Northwest, and we were told, what is wrong with you, you are going to be a major beneficiary. The State of Oregon on the Pacific Rim, strategically perched just north of Mexico and south of Canada, your State, your people are going to be a big winner, but it turns out that we are one of the top 10 losers under NAFTA.
As the gentleman alluded earlier, lumber and wood products are suffering because of subsidized Canadian lumber and wood products. The paper industry is seeing paper flee overseas to countries that do not observe any environmental practices or controls, and then a number of other more high-tech industries have gone elsewhere.
I sat next to a fellow who worked for Hewlett-Packard on the plane flying home a week ago, Hewlett-Packard in Corvallis. I said, what do you do? He said, I work in the ink jet division. I do engineering, design, and development. I said, God, that is really great. I am glad to see you are still working there. I was worried about those jobs. He said, well, no, actually, he said, my entire division was exported to Bangalore, India, last year. I am just working on a special project here in the United States, but my division is gone. The next design development, the next ink jet technology is going to come from Bangalore, India. He said they can get an engineer there for 8 to $10,000 bucks a year.
Are we telling Americans they should go to college for 4 years, incur $50,000 of debt to get a degree in engineering technology or whatever it is going to cost them to do it, and then they are going to work for $8,000 a year, raise a family, buy a home and all the other things that are a part of the American Dream? These people are killing the American Dream. That is what they are doing.
There are a few people who are going to profit from it, and those are the people that support them; and they are so insulated from it some of them do not even realize what they are doing to destroy our country.
One other point. Sometimes that is not even enough to say to an American, 4-year, 6-year degree, you are going to compete with some guy or woman from Indian who worked for $8,000. Sometimes it is not enought. You know what we also do? We are subsidizing, the American taxpayers, through our taxes, are subsidizing the export of these jobs. Here is a short list:
Motorola laid off 42,900 workers while investing $3.4 billion in China with a $190 million taxpayers subsidy.
In General Electric, 260,000 U.S. workers, while investing $1.5 billion in China, $2.5 billion in corporate subsidies paid for by U.S. taxpayers. Insult to injury. Steal their jobs, destroy the economic future of our country, our kids and our grandkids, and charge us to do it. That is what they are doing to
average wage-earning Americans, because most of this is coming out of Social Security wages, out of payroll taxes.
To buy the products.
Mr. Speaker, if the gentleman will yield, when I lay this out to my constituents, they say, well, certainly the CEOs and others could not support that; they would not want to live in those communities or under those conditions or see those things happen. Well, the fact is today's CEOs,
where there is still a manufacturing job, earns 500 times what a worker earns. It is only a couple of decades since the ratio was only 20. They do not live in the same communities. They do not live in the same world. They live on a different planet.
They live behind gates in their mansions with their servants. Now there will be a lot more servants out there for them, and probably the cost of servants will go down, so this will be a great benefit to them. Of course, under Bush we can import those, too, or maybe Americans can work for those low wages. Their kids go to private schools, so they are not worried about what the gentleman from Ohio was talking about, the support for our societal infrastructure, schools and those sorts of things.
They do not really need the police. I guess we have not gone back to private for-profit fire departments yet, that is probably not far away, but they have private security so that we do not find a lot of support from them for police infrastructure or first responders, particularly not with the administration cutting their budgets under the homeland security proposal.
And then when they want to go somewhere, they go to the private country club in their chauffeur-driven limousines. Or if they go further away, they go in private executive jets so they do not even have to deal with the deregulation of the airline industry, the overcrowding and all those sorts of things. But these are true international folks. They are talking about globalization and international trade and all the benefits. There are benefits for them, just not for the masses of America.
Whatever happened to Henry Ford? ``My workers are going to be able to afford the product they make.'' We all did better under that system. We created the envy of the world here in the United States. We created the largest middle class. Everybody did better together. But a few people got greedy, and now they have got their hands on the levers of power, and they simply do not care about the majority. But they might find ways to distract them with wedge issues, social issues, or something else to distract them from the loss of their jobs, the opportunity for their kids, the lack of educational opportunities, or the future of this country.
I do not think the American people are going to be fooled for very long. They are going to demand changes, and we have to bring about changes. This trade policy is one of the most devastating levers of power that they have to wield against the American system, against American workers, and against the wealth of this country, and they are using it ruthlessly.
Mr. Speaker, there is one exception to free trade. People have to realize who runs this administration. There is one exception to free trade, and it is for the first time in a trade agreement with Australia. It is a prohibition on the importation or the reimportation of FDA-approved, U.S.-manufactured pharmaceuticals from Australia, not because they are unsafe like the phony baloney they are giving us about Canada, but because they are cheaper there. That is in the trade agreement. What is that doing in the trade agreement if this is not all about big business and multinational corporations? It is not about making things cheaper for American consumers. If it was, why did President Bush insist on prohibiting the reimportation of FDA-approved, U.S.-manufactured drugs from Australia at half the price? It is not about making things less expensive and benefiting our consumers and our society. It is all about benefiting a very privileged few.