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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!

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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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The White House
Washington, D.C.

Dear Mr. President:

Despite America’s  huge jobs problem and trillions of dollars in trade deficits, some U.S. leaders want even more bad Free Trade Agreements! The results ofNAFTA have been disastrous, and it’s widely predicted our new agreement with South Korea will also be a big net loss for the U.S.

America must rebuild it’s devastated domestic industry to create millions of jobs and for national security, but we cannot do it under the weak trade policies of the backers of more one-sided giveaway deals like KORUS. With no apology due, let’s name those misguided current leaders here:

- Republican Senate Leader Mitch McConnell
- Republican House Speaker John Boehner
- Ohio Senator (R) and Former U.S. Trade Representative Rob Portman
- The U.S. Chamber of Commerce and the N.A.M.
- Multinational CEO’s like Jeff Immelt of GE, who’s also Chairman of your U.S. Jobs and Competitiveness Council
- Many more CEO’s of our biggest corporations.
- Plus Goldman Sachs, most of Wall Street, and our biggest banks

These folks are living in a selfish world where it’s O.K. for America’s future to be bleak, and for 99 % of our citizens  to be denied fruitful lives, while Washington serves only the top 1%. That’s got to stop now!  Listen to the people’s protests! (more…)

When President Obama released his plan for “the Buffett rule,” which involves closing tax loopholes and ensuring that millionaires pay their fair share in taxes, he explained that “middle-class families shouldn’t be paying higher taxes than millionaires and billionaires.” “Warren Buffett’s secretary shouldn’t pay a higher tax rate than Warren Buffett,” he said.

Ever since, Republicans have been attacking Obama for inciting “class warfare.” “It looks like the President wants to move down the class warfare path,” said House Budget Committee Chairman Paul Ryan (R-WI). “I don’t think I would describe class warfare as leadership,” agreed Speaker of the House John Boehner (R-OH).

However, if calling for an end to millionaires having lower tax rates than their secretaries is class warfare, Obama is only the latest class warrior to occupy the Oval Office. In a June 6, 1985 speech at Northside High School in Atlanta, Georgia, then President Ronald Reagan explained that tax loopholes allowing a millionaire to pay lower taxes that a bus driver were “crazy,” because they allowed the “truly wealthy to avoid paying their fair share”:

We’re going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share. In theory, some of those loopholes were understandable, but in practice they sometimes made it possible for millionaires to pay nothing, while a bus driver was paying ten percent of his salary, and that’s crazy. Do you think the millionaire ought to pay more in taxes than the bus driver or less?

(more…)

Warren Buffett doesn’t think his secretary should pay a higher percentage of income in taxes than he does, and most Americans agree. Tell Congress it’s time for millionaires and billionaires to pay their fair share!

Call 202-224-3121. It’s time millionaires pay the same percentage that working people do.

 

(more…)

By Robert Kuttner
Co-founder and co-editor of The American Prospect

As events in Egypt showed, you never know what will set off mass protest.

Here at home, over-reaching by a novice Republican governor of Wisconsin has finally triggered the protest marches that have been eerily missing during the more than three years of an economic crisis that has savaged the middle and bottom and rewarded the top.

It’s not as if we lack a politics of class. As mega-investor Warren Buffett famously said, there is plenty of class warfare in America, but the billionaire class is winning.

This economic crisis, after all, was brought on by excesses on Wall Street. Yet with the rest of the economy still mired in high unemployment and fiscal crises of public services, Wall Street was first to be bailed out, the first to return to exorbitant profitability, and the last to be held accountable.

Month after month, progressives have been asking each other, where are the mass protests?

You might expect popular indignation to be focused on the banks. Instead, the economic unease of ordinary people has been substantially captured by the Tea Party right and directed against government, while Beltway politicians of both parties are outdoing one another to vie for the role of more austere deficit hawk, which will hardly win back popular support for the public sector.

Then the newly energized Republicans made a couple of big mistakes. One was trying to cut too deep, on the heels of a massive tax cut for the rich. But the other miscalculation was to declare war on the one bastion of organized economic representation of regular people — the labor movement. (more…)

For the decade just ended on Dec. 31, 2009,  the U.S  total trade deficit with all nations totaled $6 trillion, by far the most in our history! Why is this figure important? Answer: it’s the best single measure of how well America is competing in its own domestic market, by far the largest and richest in the world. The huge, ever-growing trade debt says we’re losing badly in that competition. Every day, the United States must borrow $2 billion abroad to cover it. How did this happen? Who benefits and who is hurt by it? Most important, can it be stopped and turned around to our advantage? Who from business should take the lead with labor to get government action? Here are the blunt answers.

First, our trade deficits needn’t have happened at all!  America’s multi-national companies were the main culprits. Until the mid-1970’s, the United States maintained total annual balance of payments surpluses with the rest of the world. But with globalization growing, those companies urged very open U.S. trade policies to gain easier access  to other countries’ markets. They went too far in attacking existing trade policies that had helped domestic industries like textiles, steel, and autos. They claimed that free trade would work wonders for America! They stand by that claim despite our ravaged domestic industry and millions of unemployed. It’s time we all face the damage and correct it for the good of our country.

Most important, where does patriotism come into play? Who should take the lead to stop this national tragedy. Answer: The same multi-nationals that caused the problem! They have the power! They’ll benefit too under the right policies. The best known solution is based on a 2003 idea by Warren Buffett, one of the wisest business leaders. He said, “Our trade deficits are selling America out from under us.” We’ve got to stop it now! We must return to balanced trade with the rest of the world! He explained what happens to any nation that doesn’t earn as much as it spends in trade with other nations – it loses its freedom of action and becomes poor. That’s the fate that patriotic Americans cannot permit happening.

A bill to implement this idea was drafted in 2006, but got nowhere under President Bush and has not been taken up by President Obama due to opposition by  some “free trade” economic advisors. An estimated 5 million jobs would be created within 2 years and without any deficit spending, just by passing and instituting the needed legislation.

Where do we stand with U.S. multinationals on this proposal? There’s been no open dialog with them. Recent confidential discussions with one leading multi-national that also has big domestic U.S. operations were disappointing.  They like free trade policies and don’t see the domestic economy as their responsibility. For now, the blunt answer is “We strongly believe there’s a balanced trade policy that’s the answer for America, but we haven’t won the multi-nationals yet.”

Will a bold leader please stand up!

Kenneth N. Davis, Jr.
President, Economic Strategy Associates, Inc.
Stamford, CT
Former U.S. Assistant Secretary of Commerce/International, IBM vice president and chief financial officer, and investment banker

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To submit a blog to Free Speech Zone, e-mail it to bstack@usw.org. Keep it to 250 words or fewer. You MUST include your full name, hometown, and state. You may attach a photograph of yourself. Please include a phone number. This WILL NOT be published. Posting any given blog is within the discretion of the USW.  No blog using foul language (this is a family site), false information (we don’t want to get sued), or unnecessary personal attacks (again, we don’t want to get sued) will be used. Wait a reasonable period of time, then blog again! This is a Free Speech Zone.

The fall elections are less than three months away, and the economy is signaling that America  is in deep trouble in earning its way in the world and providing jobs for our people. We’re piling up huge foreign debts but don’t have any plans for repaying them or putting people back to work.

I’ve been trying to present a proposal based on an idea from Warren Buffett in 2003. It became a Senate  bill, “The Balanced Trade Restoration Act of 2006.”  It could be updated and submitted to Congress in a few weeks.

It would create a system to assure that imports to our rich market will not exceed our exports. This balanced trade would strengthen U.S. industry, bring much  business back to American companies and provide millions of jobs for our workers. No deficit spending would be needed. It would also eliminate our ruinous trade deficits and related foreign borrowing. And it would be fully in accord with all GATT/WTO rules.

I am seeking reconsideration of this proposal by the Administration’s top trade executive. The goal is to get as fast a decision so that the plan can be presented to the public  before election day and ready for Congress soon after.

Kenneth N. Davis Jr.
President, Economic Strategy Associates, Inc.
Stamford, Conn.

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To submit a blog to Free Speech Zone, e-mail it to bstack@usw.org. Keep it to 250 words or fewer. You MUST include your full name, hometown, and state. You may attach a photograph of yourself. Please include a phone number. This WILL NOT be published. Posting any given blog is within the discretion of the USW.  No blog using foul language (this is a family site), false information (we don’t want to get sued), or unnecessary personal attacks (again, we don’t want to get sued) will be used. Wait a reasonable period of time, then blog again! This is a Free Speech Zone.