For ostensibly being something of a political junkie, I'm a little embarrassed that I didn't know Byron Dorgan's name when he appeared on the NewsHour tonight:
Wages and salaries, as a percent of our GDP, is at its lowest level since they started measuring in 1947. That's probably not true for journalists or politicians; it's true for American families.
And this notion all these statistics people use -- I know the story about the nine guys sitting on a barstool, and Bill Gates walks in. On average, they're all now wealthy.
The fact is: There's a lot of trouble in this economy. You can't escape the fact that $2 billion a day in trade deficit we're ringing up every single day, the highest in history. It is not capitalism when we decide that we're going to have a product produced in China, with people living 100 to a room, in big, cinder brick rooms, and then working for $50 a month.
And, by the way, that's what's happening for the production of the iPod. We engineered iPod in this country; now, it's being produced for $50-a-month labor in rooms that house 100 people to sleep at night.
That's not capitalism; that's labor exploitation. And it's going on, not just with respect to textiles, not just manufacturing, it's going on in high tech. And that is not, in my judgment, what we fought for a century in this country to create.
He speaks to something of the false premise from which NY Times columnist Thomas Friedman argues when he says "the world is flat."
Labor exploitation. Not only are American workers suffering while jobs go overseas, but we're enabling the exploitation of workers in China, Malaysia, Indonesia and elsewhere.
There's an expression in the media business for people (who are mostly kids) who enter the media business willing to work for peanuts: grinders. Grinders are people who will work for beer money because they're so desperate to do the work. The professionals end up being undercut in the market and go out of business.
Okay, so that's the free market. What of it?
Well, the problem is that these grinders are working at a level that is not sustainable. Some may try raising prices, but they end up pricing themselves out of business, losing to other grinders. This isn't putting the nose to the grindstone. They grind themselves right into the grindstone.
It's not sustainable. In the end, fewer people are in business. Some well-to-do buyers then go into the underserved competent marketplace, while everyone else is left forced to go to the grinders, where if they're lucky they'll get something adequate, but more often end up with crap.
The right-wing ideologue will argue that this is as it's should be. But their religion doesn't make rational sense. It's just religion. The free market is a wild, volatile place, and embracing its outcome as somehow being a grand destiny is mere fatalism at its worst.
What I find refreshing about Senator Dorgan is that he avoids the precious-but-false Democratic rhetoric about "protecting jobs" -- another religious argument -- and he stays away from the tired Marxist arguments about class struggle. He's more clear-sighted than that, and more common sense in approach.
Next year, Americans will be driving some Chinese cars, because China's doing an automobile export industry. They're going to ship cars here. You know what? When their cars come to this country, they'll find a 2.5 percent tariff attached to their cars. By agreement, we've said any cars we sell in China, you can impose a 25 percent tariff.
A country with whom we have $200 billion trade deficit, we said, "You can apply a tariff that is 10 times that which we will apply." That is ignorant; it's destructive of our interest; it has nothing to do with protecting our country. And it seems to me denying those things is ignoring the obvious.
Let's decide how we raise America up. I'm not interested in building someone else's house with bricks from our foundation. Let's defend this country's interests and be a part of the global economy, yes, but defending our interests first.
If you want tired rhetoric, listen to more of Thomas Friedman.
Look, if horses could vote, we never would have had cars, all right?
Hmmm, actually I doubt horses loved being beasts of burden.
OK, you've got -- if you look at companies that outsource today -- and I'm sure there's exceptions either way -- companies that outsource, outsource to win. They outsource to beat their competition so they can grow and actually offer more better jobs here.
Sure, these sweat-shop owners are just dying to pay more money to Americans. Right.
If the world were as ugly and as bad, I think as the senator suggests, for us as Americans, how could our unemployment rate be only 5 percent, OK?
This gets back to the ridicious assertion by George Will that American workers' desperation for below-poverty-level jobs is a good thing.
've heard the diagnosis from the senator, but I haven't heard the prescription, OK, because I'm telling you, you put up walls -- we tried that before. It's called Smoot-Hawley, OK? That led to World War I.
Funny. I didn't learn that theory in my Modern European History class.
No wonder conservatives hate the New York Times. Between David Brooks and Thomas Friedman, the conservative voice there is an embarrassment.
Update: Thomas Friedman seems to be a little mixed up. Smoot-Hawley was passed in 1930, more than a decade after World War I. Says the State Department:
The Smoot-Hawley Tariff Act of June 1930 raised U.S. tariffs to historically high levels. The original intention behind the legislation was to increase the protection afforded domestic farmers against foreign agricultural imports. Massive expansion in the agricultural production sector outside of Europe during World War I led, with the postwar recovery of European producers, to massive agricultural overproduction during the 1920s. This in turn led to declining farm prices during the second half of the decade. During the 1928 election campaign, Republican Presidential candidate Herbert Hoover pledged to help the beleaguered farmer by, among other things, raising tariff levels on agricultural products. But once the tariff schedule revision process got started, it proved impossible to stop. Calls for increased protection flooded in from industrial sector special interest groups and soon a bill meant to provide relief for farmers became a means to raise tariffs in all sectors of the economy. When the dust had settled, Congress had agreed to tariff levels that exceeded the already high rates established by the 1922 Fordney-McCumber Act and represented among the most protectionist tariffs in U.S. history.
The Smoot-Hawley Tariff was more a consequence of the onset of the Great Depression than an initial cause. But while the tariff might not have caused the Depression, it certainly did not make it any better. It provoked a storm of foreign retaliatory measures and came to stand as a symbol of the ‘beggar-thy-neighbor’ policies (policies designed to improve one’s own lot at the expense of that of others) of the 1930s. Such policies contributed to a drastic decline in international trade. For example, U.S. imports from Europe declined from a 1929 high of $1,334 million to just $390 million in 1932, while U.S. exports to Europe fell from $2,341 million in 1929 to $784 million in 1932. Overall, world trade declined by some 66% between 1929 and 1934. More generally, Smoot-Hawley did nothing to foster trust and cooperation among nations in either the political or economic realm during a perilous era in international relations.
Mr. Friedman, you're offering a false argument -- assuming you even have an inkling what you're talking about when you invoke Smoot-Hawley. We're talking about things like redressing grossly imbalanced trade tariffs (2.5% vs. 25%? That's a "flat world"? Bulloney!) and stopping the endorsement of sweat-shop and slave labor. And you say that evening out trade tariffs when we're a debtor nation is in any way akin to record-high trade tariffs established over 75 years ago (by a Republican president, no less) when America was an exporting nation? Huh?
Yes, let the world be flat! It sure as hell isn't right now.