President, Economic Strategy Associates, Inc.
As year-end 2011 nears, the massive flow of imports into the United States. continues unabated. In the decade ended 12/31/2010, we lost 55,000 manufacturing facilities through closings or sale to foreign owners. The pace has continued this year at about 1,000 a month, and with it the loss of many thousand jobs.
The best long-term solution is for the United States to adopt a strong policy of balanced trade with the rest of the world, especially including China, which sends by far the most imports here. Very simply, balanced trade would limit our annual total imports to no more than our total exports. The idea was first proposed by Warren Buffet in Fortune Magazine in 2003. He said “Our trade deficits are selling America out from under us! Balanced trade is by far the best way to stop it !” Leaders in Washington yawned, and nothing was done while we wasted trillions of dollars on trade deficits and lost millions of good jobs.
This week, we made a bold proposal to top Presidential Economic Adviser Gene Sperling to start cutting the flow of imports to the U.S. as of January 1, 2012. A voluntary program would encourage major U.S. importers like Wal-Mart and Home Depot to cut their imports by 10% in 2012 while necessary permanent legislation is readied for our next president to adopt for 2013 and beyond.
This is a rare one-time opportunity for both government and business to learn how to best shift from importing to domestic production. It’s really a new variation on “Buy American,” and it will give voters a chance to express their support for the candidate who speaks out most strongly in favor of balanced trade and the implementation that’s already begun. It can save a whole year by acting now instead of waiting until after the November elections to get started!
Kenneth N, Davis, Jr. also is a former U.S. Assistant Secretary of Commerce/International and former IBM vice president and chief financial officer.
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