Read an Excerpt
A Star-spangled Rut
A poignant story is told about the sorrowful days following President Roosevelt's death in 1945.
In a long line of mourners waiting to pay their respects to the dead president lying in state at the U.S. Capitol was a fellow who had waited for hours.
A reporter, who was writing a story about the outpouring of love for FDR, saw this workingman standing quietly, holding his hat in his hands, with tears in his eyes.
The reporter, notebook in hand, asked, "Did you know President Roosevelt?'
"No," the man said through his tears. "But he knew me."
What a simple yet profound way of expressing that this was a president who truly cared about ordinary folks, about the working people of America.
So, who knows America's workers today?
Who is looking out for them now?
When their jobs are shipped overseas, who stands up for the American worker?
Who takes notice for example when the nine hundred Ohio workers lost their jobs because Huffy Bicycle Company decided to move those jobs to China, where they could pay Chinese workers thirty-three cents an hour to make bicycles?
Did anybody know that on the last day of work, as they drove out of the plant parking lot, in a quiet but powerful message, each of the Huffy employees left a pair of shoes in their empty parking space. It was their way of telling the company, "You can move our jobs to China, but you're not going to be able to fill our shoes."
So who knows those workers and millions like them? Our president? The Congress? Corporate executives? I don't think so.
If this is a nation experiencing a crisis of confidenceand I believe it isit is because these days many American workers feel ignored, abandoned, and vulnerable.
They feel so very alone because they know they are governed by the callously indifferent who not only don't "know them," but who really don't think workers matter much.
These days we are told to suck it up and stop complaining. Things are going fine here in the United States. The president says so. So do a lot of economists, columnists, and business leaders. The world is flat, we're told. It's a good thing. Who could argue otherwise?
"We're number one!" . . .
"Our biggest export is wastepaper!"
That's right. America's largest export (by volume) is now "wastepaper" mostly headed for China. And another big export of ours is good American jobs, also headed mostly to Asia.
If you're thinking that sending wastepaper and American jobsmillions of themoverseas isn't exactly a sign of robust economic health, you're right!
Moreover, we are ringing up a trade deficit of over $700 billion a year (highest in history). That means every single day we buy about $2 billion of foreign products more than we are able to sell to other countries. To pay for that, each day we sell some of our country to foreigners. It is a strategy I call "The Selling of America."
And in this new global economy, no one is more profoundly affected than American workers.
In 1970, the largest U.S. corporation was General Motors. Most people who went to work there stayed for all their working lives. They collectively bargained, were paid well, and received good retirement and health-care benefits.
Today, the largest U.S. corporation is Wal-Mart. According to published reports, the average salary is $18,000 a year. First-year employee turnover is reportedly near 70 percent. And a large number of their employees have neither health-care nor retirement benefits. Some progress!
Add to all of that, in the past five years we've lost over 3 million U.S. jobs that have been outsourced to other countries and millions more are poised to leave. The bulk of these are jobs producing goods abroad under conditions that would never be allowed in this country. These products are then shipped to be sold in the United States from countries that still have not opened their markets to us.
So the plain truth is, things aren't really going so well. More people are seeing their jobs sent overseas. We are sapping our manufacturing strength. Many of our corporations are stripping their workers' pensions and reducing salaries. Workers and families are losing confidence in the futurea future we are financing by selling part of our country every day.
Despite those who tell us everything is just great, many of us can sense we're headed in the wrong direction. And we need to take action before our economy implodes.
That's the purpose of this book. I want to both sound the alarm and offer some hope. We've faced big challenges in the past and overcome them once we understood them. And we will again!
It's not going to be easy. Those who have spent billions to pave the road that allows them to produce in low-wage countries and sell in our established markets without all the restrictions they face in our country will attack views like mine as uninformed. They love this nonsense about "the world is flat." Well, the world isn't flat. Not when our trade agreements aren't fair. We are up to our neck in debt. And we are on a course that is unsustainable. The question isn't whether it changes, but rather, when.
Some say that global trade is now an unstoppable force of nature, and those of us who rant about the unfairness and the mountain of trade debt are Luddites. But that ignores the reality of our current trade mess. I do support trade, and plenty of it, provided it is fair, free, and mutually beneficial to us and our trade partners. However, that's not the case today. And we do desperately need change.
Change doesn't mean closing our borders and retreating from the global economy. But it does mean standing up for our country's interests and establishing a set of rules for trade in the global economy that reflect our country's interests. It means establishing a trade strategy that is designed to lift others up without pushing American workers down. We can do that. But we need to start now.
And oh yes, one more thing. As I write this, Wham-o has just announced that it has been bought by the Chinese. You remember Wham-o. It gave us Hula Hoops, Frisbees, Silly String, Slip 'N Slide. I understand the Chinese wanting our textile jobs, technology jobs, and manufacturing jobs. But our Frisbees and Hula Hoops? We put Hula Hoops in the Smithsonian Institution, for God's sake. Is nothing sacred? Okay, I'll stop. Trade is truly a serious issue and deserves our serious attention.
So, this book is about what's wrong and how to fix it. It is about summoning that can-do American spirit to force change and reform and grow our economy in the right way.
FDROffering Hope to a Nation
During the Great Depression and the beginning of World War II, FDR's infectious confidence taught an entire country how to believe again, to endure, and to triumph.
He gave Americans a sense of self-worth and a sense of purpose. He made us believe in ourselves and in our country, to realize our American Dream.
It was rooted in family, faith, and a good job. It was about the confidence in the future to build schools, roads, communities, and churches. This was a country at work, a country of builders.
Our history is both an anchor and a teacher. The place where I grew up still reminds me of the commonsense lessons I learned there. About work and about community. My hometown in southwestern North Dakota is a small farming communityonly about three hundred peoplebut like most small towns, what it lacks in population it makes up for in heart.
I learned a lot in Regentas much from the hardworking farmers who congregated there as I did in school. I tell people I graduated in the top ten of my senior high school class. There were nine of us. You see, in a small town you're never very far from the top or the bottom.
In my hometown, pride was not the sin of vanity but rather was born of the satisfaction that comes with a job well done. It was a community that rose from the prairies and was still barely two generations old when I was a kid. From crude shacks and some sod houses in those early years there evolved a thriving, bustling Main Streethard work and values had built something special.
On the Saturday nights of my youth, I remember a small-town Main Street that was full of cars and trucks when farmers came to town at the end of a long week. The barber cut hair until midnight on Saturday nights. The two bars and the single café were epicenters of conversation and news as friends gathered in town after a hard week's work to talk about the weather, the crops, and the kids.
In those days, no politician would have presumed to lecture about values to the folks in my hometown. They lived their values every day. They honored family, faith, and hard work. When there was a job to do, they did it. When the town needed volunteers, they pitched in. They looked out for one another.
These are the lessons of my past. And the lessons from my small hometown, repeated all across America in the twentieth century, were the building blocks that created the greatest nation on earth. These lessons of greatness were gained through struggle.
During the post-Second World War period, we saw an America propelled ahead by the GI Bill, by a growing manufacturing industry that produced good jobs that were protected by the strength of unions organizing for good pay, benefits, and worker protections. All of this produced strong families and built the world's economic superpower.
Work was valued.
There was no social program as important as a good job that paid well.
All of this paved the way for the development of a broad middle class. Wage earners became the consumers and supported a strong, vibrant manufacturing sector that, in turn, produced good jobs with good benefits.
In short, the economy worked.
It became the major difference between our country and so many others.
I watched as many of the soldiers returned to our small town after the Second World War, got married, got a job, built a home, and raised a family. Even in that small town we were part of the great American experiment, engaged in a democratic debate about how to improve life in our country.
They, and others, decided that workers have rights: the right to labor in a safe workplace, the right to organize and bargain collectively, the right to a minimum wage, the right not to have to compete with child labor working in the mines or the factories. All of these rights were the result of great struggles over the past century. And they have roots in America's hometowns.
Times Have Changed
Fast-forward to 2006 and try to explain to the folks in Regent how those things have changed. The good jobs American families relied on are evaporating. The giant corporations have discovered more than a billion people around the rest of the world they can employ for pennies an hour, and if these poorly paid foreign workers dare try to organize a labor union, they can be fired or even jailed. In some cases these companies can hire children and work them twelve hours a day, seven days a week in unsafe, often harrowing conditions. Bad for the children, but great for the bottom line, and that's all that matters, isn't it?
The practical folks in my hometown would say, "Are you nuts? We Americans are being asked to compete against Chinese or Indonesian workers who make thirty cents an hour? We can't compete with that, and we shouldn't have to!" Yet that is exactly what is happening in this country, and few people seem interested in sounding the alarm. American families are taking it on the chin while the big corporate interests are raking in the big profits.
In my small town, dignity and respect were earned by one's labors. Farmers, mechanics, and businessmen stood as relative equals, but a man without a job never stood as tall.
As a young boy, I used to watch our local blacksmith, Adam Krebs. He would heat iron in the forge, then pound the metal into the shape he wanted. I learned that the way you bend metal is to heat it, then pound it. American politics is a bit like that, and that is the purpose of this book. I want to apply some heat to our present trade policy. I want to pound it, bend it, shape it, and fix it. With a trade deficit of over $700 billion a year, millions of lost jobs, and millions of families who have seen their American dreams shattered, it's long past the time to question those who claim everything will work out just fine. In fact, it's time to wake up and take action.
There is little evidence that this president or this Congress understands the grave danger to our economy. This awakening must begin with the American peoplewith you.
These are dangerous times. We have built the strongest economy in the world. We have one of the highest standards of living, and yet both our fiscal policy and our trade policy have almost overnight made us the world's biggest debtor nation, and that threatens America's future.
Budget deficits in the 400-to-500-billion-dollar-a-year range, coupled with trade deficits over $700 billion a year, are rapidly sapping America's strength. The budget deficit is financed entirely by borrowing, and the trade deficit is financed by foreign capital purchases of our bonds, stocks, real estate, and other assets. The combined $1.2 trillion deficit in one year is a sign of real trouble. Even in a country as rich as ours, that's one hell of a lot of money, and things aren't getting better.
We hear platitudes and wishful theories, including a new mantra from some conservative circles that deficits don't matter. Nonsense. Any working person with a checkbook can tell you that deficits matter. And if they won't, their banker will! Yet, in both Washington, D.C., and on Wall Street these days, up is down, black is white, greed is good, and deficits don't matter.
Somehow they think we can remain great as a nation of consumers, not as producers.
Folks in my hometown know better.
Wealth is measured by what you produce, not what you consume. America is a nation of builders, a nation of innovators, inventors, and creators, and driving that great engine of commerce is the American worker. Take those things from us, and you strip the country of its greatness. Whose self-destructive idea is this, anyway?
Well, for the past thirty years, America's largest corporationsalong with the think tanks and the politicians who parrot their viewshave shaped American trade policy for their own interests. They tell us that we now live in a global economy and our goal is to push for "free trade" policies. But as the globalization has galloped forward, and new trade agreements are negotiated, our trade deficit grows larger and larger, and more and more American firms move U.S. jobs overseas in search of lower wages and lower costs. The danger this poses to the American economy should be self-evident. But blithely they carry on, oblivious to the obvious.
Corporations are too busy counting their profits, politicians are too busy collecting their campaign contributions from those same corporations, and consumers are too distracted rushing to Wal-Mart and Target to buy their imported products. We American consumers watch our Japanese television set, wearing our Chinese T-shirts, Taiwanese trousers, Mexican shorts, and Italian shoes. We drive a Korean car to the store to pick up our Mexican vegetables, Australian beef, and a six-pack of Heineken.
And then we wonder what happened to all of the good jobs here at home.
The Insanity of Self-Extinction
One man who is greatly concerned by this downward spiral is Warren Buffett, one of America's most successful businessmen and investors. When I visited with him recently, he told me that he believes our fiscal and trade policies, left unchecked, pose a real danger for our economy. He has made the same emphatic points in his letter to the Berkshire Hathaway shareholders. Looking at Warren's success over the past thirty years, we might want to start paying some attention. Warren is our country's second-richest man. But he lives simply in Omaha, Nebraska, and over the past three decades he has, by all accounts, been uniquely successful in predicting future economic trends in America. And today, as he looks forward, he sees trouble with these trade and fiscal policies.
Yet there seems to be little sense of urgency in most of Corporate America and none in the White House or Congress. Part of it might be that there is no politician, lobbyist, or journalist who is losing his or her job to outsourcing. It's the other folks who pay the price.
Self-extinction never makes sense, yet in today's economy, the role of the corporation (one of the dominant forces in our lives) has changed. Corporations today, larger and stronger as a result of mergers, have more economic muscle. And many think of themselves as international citizens, no longer uniquely interested in the impact their decisions have on the American economy. And none are raising their heads long enough during the hunt for profits to see the big picture.
The big picture is this: Slowly but surely, in the race for short-term profits, America's manufacturing base is being dismantled. Manufacturing is the backbone of a great nation. It's the manufacturing base that allowed America to retool swiftly and defeat Germany and Japan in the Second World War. Shipyards and foundries helped defeat fascism. They employed Americans who bettered their lives and created an economic juggernaut. Today, that economic strength is facing destruction in the name of globalism and in the search for high profits under the mantra of "free trade."
I admit "free trade" has a marvelous sound to it. It sounds distinctly "American." Give us a wide-open marketplace, and with American ingenuity and hard work, we'll triumph. That's the mantra. In fact, trade, as I will describe in greater detail later, can indeed provide great benefits to all of us. It can spur competition and innovation and provide new products for the marketplace. All of that is true.
The thing is, though, free trade must be fair trade, and these days it is not, and we in the United States are paying a huge price.
Our own negotiators have agreed to trade pacts that are decimating the bedrock of Americathe middle-class workers whose sweat and brawn and toil built this country. The steelworker in Pittsburgh, the coal miner in West Virginia, the craftsman in Minnesota, the textile worker in Georgia, the metal fabricator in Ohio, and yes, the American farmer. Those good jobs are leaving America at a dizzying pace. And yes, some of them are being replacedthough with jobs that pay less and require less skill.
If you think that the worry about exporting American jobs is sheer nonsense, consider the recent article in Foreign Affairs by Princeton economist Alan Blinder, a former vice chairman of the Federal Reserve Board who is considered a mainstream economist.
Blinder says that in the new global economy it is not just manufacturing jobs that are at risk. His calculations are that "the total number of current U.S. service-sector jobs that will be susceptible to offshoring in the electronic future is two to three times the total number of current manufacturing jobs (which is about 14 million)." In short, Blinder calculates that between 42 and 56 million jobs could be sent abroad. And even if the jobs remain here, those who perform them will be competing with those in foreign lands doing the same work for far less money. That means a future with downward pressure on wages for those Americans whose jobs aren't sent offshore.
That's a sober warning from a highly reputable economist. And that is why we must begin to take this seriously.
Copyright © 2006 by Byron L. Dorgan. All rights reserved.