Harris: no more Ex-Im Bank

It’s been a topic of discussion on this website for about a year, but those who believe the Export-Import Bank of the United States is simply a hotbed for crony capitalism and a classic example of government picking winners and losers restored a supporter in Andy Harris.

From our friends at Heritage Action:

Over the past month, momentum has grown for allowing the Export-Import Bank to expire.  It is now clear the bank will not be reauthorized by June 30th.  Additionally, conservatives leaders and caucuses will fight any efforts to revive the bank, which is a slush fund for the government to pick favorites and give taxpayer dollars to a handful of well-connected special interests. Last month, the 170-member Republican Study Committee joined the 40-member House Freedom Caucus in official opposition to the bank.  They are joined by the House Majority Leader, Majority Whip and eight prominent chairmen.  What’s more, Senator Mike Lee made clear conservatives will (use the) procedural tools available to ensure a reauthorization effort is not on autopilot and will entail a lot of floor time.

Indeed, Harris is on the Heritage Action list. But his opposition is nothing new as he voted against Ex-Im’s last reauthorization in 2012. That was a rather lonely position as Andy was one of only 93 members (all Republicans) to say no to Ex-Im.

But that’s not to say that Ex-Im is dead by any means. Giving it new life could be one of those items attached to a “must-pass” bill, as Kathleen Miller at Bloomberg notes:

In the House, Paul Ryan, the Wisconsin Republican who is chairman of the Ways and Means Committee, said he won’t let the bank’s reauthorization be attached to a measure that would speed consideration of trade agreements.

“Ex-Im Bank will not be included in any of these trade deals,” Ryan, who opposes the bank, said last week. “We are not doing that.”

That leaves supporters searching for must-pass legislation to carry the reauthorization, something that Ex-Im opponents would be reluctant to vote against even if it means extending the bank’s charter.

Or the reauthorization may be used as a wedge issue by factions in either party to extract concessions. Like any government program, Ex-Im has had its demise predicted before only to survive unscathed, like a cockroach after nuclear holocaust.

I’ll believe it’s dead when I see its lifeless corpse.

By the way, I reached out to Harris’s primary opponent, former Delegate Mike Smigiel, but he did not reply to my inquiry.

186,000 reasons to smile (and one to worry about)

In the quest to get America back to making things, it was good news to find that manufacturers added 17,000 jobs in December. That brought the 2014 growth in that sector to 186,000, continuing the steady growth in that sector since the job market hit bottom there in 2009-10. When you consider that 2012 predictions saw the manufacturing sector losing jobs through this decade, having a very positive number nearly halfway through is a good sign.

Naturally Barack Obama tried to take some credit for this during a speech at a Ford plant near Detroit last week. As I noted in a piece I wrote for the Patriot Post, it’s ironic that the plant was idled due to slow sales of hybrids and small cars built there, but the auto industry has played a part in the resurgence of manufacturing jobs in America. This is particularly true in the construction and expansion of “transplant” auto plants in the South by a number of foreign automakers.

But there has been criticism of Obama from his political peers. As a carryover from my American Certified days I often quote Scott Paul, the president of the Alliance for American Manufacturing, because his organization is strongly influenced by Big Labor and presumably supported Obama in both his elections. Yet Paul is none too happy with Obama’s progress:

Manufacturing job growth slowed to 17,000 in December, which portends some of the challenges an overly strong dollar, weak global demand, and high goods trade deficits may bring in 2015. While President Obama is touting factory job gains and our Congressional leaders are looking for ways to rebuild the middle class, what’s missing for manufacturing is good policy.

Congress and the president need to hold China and Japan accountable for currency manipulation and mercantilism, and invest in our infrastructure. New innovation institutes are a good thing, but their presence alone won’t bring manufacturing back. And as the president enters the final half of his second term, he’s falling way behind his goal to create one million new manufacturing jobs.

The innovation institutes Paul refers to are public-private partnerships being created around the country in various fields, in the most recent case advanced composites. But Obama lags behind on his promised 1 million new manufacturing jobs for this term as it nears the halfway mark as he’s created just 283,000. It’s great if you’re one of those newly employed workers, but his policies are leaving a lot of chips on the table. In fact, National Association of Manufacturers economist Chad Moutray frets that:

…manufacturers still face a number of challenges, ranging from slowing global growth to a still-cautious consumer to the prospect of increased interest rates. With the start of the 114th Congress, manufacturers are optimistic that there will be positive developments on various critical pro-growth measures, including comprehensive tax reform, trade promotion authority and a long-term reauthorization of the Export-Import Bank, and focusing on important infrastructure priorities like building the Keystone XL pipeline and addressing the solvency of the Highway Trust Fund.

While manufacturers would like to see these measures, attaining some of them may be tough sledding in a conservative Congress. There are a number of representatives and conservative groups who don’t want to give the President fast track trade authority, wish to see the Export-Import Bank mothballed out of existence, and will not consider increasing the federal gasoline tax – an action for which Moutray uses the euphemism “addressing the solvency of the Highway Trust Fund.” These actions may benefit the large manufacturers but won’t help the bread and butter industries solely serving the domestic market like the 24-employee machining shop or the plastics plant that employs 80.

Turning to the state level, our local manufacturing (so to speak) of poultry has a big week coming up. On Wednesday morning, the final deadline to submit new regulations to the Maryland Register for the January 23 printing will pass. You may recall that the December 1, 2014 Maryland Register featured the new Phosphorus Management Tool regulations as proposed (page 1432 overall, page 18 on the PDF file.) The new regulations were not in the January 9 edition, so January 23 may be the last chance to get these published under the O’Malley administration due to the deadline being set in MOM’s waning days.

Yet I’m hearing the rumors that a legislative bill is in the works, to be introduced in the coming days by liberal Democrats from across the bridge. Doing this legislatively would perhaps buy a few months for local farmers because such a bill would probably take effect in the first of October if not for the almost certain veto from Governor Hogan. If Democrats hold together, though, they would have enough votes to override the veto in January 2016, at which time the bill would belatedly take effect. Still, it will be difficult to stop such a bill given the lack of Republicans and common-sense Democrats in the General Assembly. To sustain a Hogan veto would take 57 House members and 19 Senators, necessitating seven Democrats in the House and five in the Senate to join all the Republicans.

We haven’t received the data yet to know whether the installation of Bob Culver as County Executive was enough to break an 11-month job losing streak year-over-year here in Wicomico County, but his task would be that much tougher with these regulations put in place.

AC Week in review – August 10, 2014

Thanks to a slow week a few days back I skipped an installment of my AC week in review – but I’ve come back with some new stuff.

On Friday I posted a piece about Andy Harris’s Salisbury town hall meeting. It was intended to be a followup of sorts to this piece I posted at the AC site regarding questions which should be asked at these gatherings – and as you hopefully read Friday, my question in that vein was indeed answered by the Congressman.

Oddly enough, the answer to my question at that town hall touched on a concern expressed by my AC blogmate Ed Braxton, who wrote about America’s high tax rates in a piece he did a week ago. But in a seeming contradiction, Ed penned a piece dealing with the decline in the necessity for manufacturing labor because workers today are much more productive than our forefathers were, while I noted that manufacturing employment was on the upswing last month.

One thing I didn’t ask Andy Harris about was his inclination to support the Ex-Im Bank, a saga which has played out over the last few months as some manufacturers would like to keep it going while conservatives consider it a piece of corporate cronyism. There aren’t too many session days left before the September 30 deadline, a fact I mentioned in this piece from last week.

There is one more item I wrote last week, and I’m hoping it gets on the site early next week because it looked at the recent EPA power plant emissions hearings in Pittsburgh. Regardless, it’s a topic which deserves comment and the opportunity is still there.

As I recall, there are a couple other stories I’ve been following which reach milestones as well. We may learn the fate of the OCTG complaint against South Korea this week, and there’s movement elsewhere on the trade front, too. I might see about writing a piece on something I learned Thursday night as well.

So hopefully my next installment will be chock full of good information. Generally I spend time on the weekends writing for AC so it’s ready early in the week. Looks like I may be busy.

June unemployment figure drops, but manufacturing jobs lag

Editor’s note: These were originally prepared for my American Certified Sausage Grinder blog as two different pieces but not used there. It’s a good opportunity to introduce readers who haven’t gone there to check it out (although I have to ask – why haven’t you already?) to the somewhat different style I employ there. Think of it as a sampler plate.

Last Thursday – a day early due to the Independence Day holiday – the Bureau of Labor Statistics announced the June unemployment rate had decreased to 6.1%, which is the lowest rate in nearly six years. A total of 288,000 jobs were added in June; in addition, an extra 29,000 jobs were added in adjustments to April and May’s figures.

All this should be good news, but manufacturing jobs only increased by 16,000 over the period. This brought the ire of Alliance for American Manufacturing president Scott Paul, who complained that:

While the low-wage recovery progresses full bore, the June jobs report shows that high-wage job growth is at a standstill. Manufacturing accounted for only 5.6 percent of job growth in June, far below its weight in the wider economy. Construction job growth was even slower.

Looking for a reason why? It’s all about public policy. Our growing trade deficit with China, currency manipulation by overseas competitors, and a paucity of investment in infrastructure are leaving factory jobs at a virtual standstill. President Obama’s vision of creating 1 million new manufacturing job during his second term is way off track.

According to AAM, the total manufacturing job growth over Obama’s second term stands at 156,000 – far short of the pace necessary to achieve a million new jobs before 2017. That pessimism extends to the public at large, as a Rasmussen Poll indicated just 23% of Americans believed the unemployment rate will be lower next year.

On the other hand, writing at the Shopfloor blog, economist Chad Mowtray of the National Association of Manufacturers took a more optimistic view, calling the report “mostly positive news.” And while he stressed that wages were increasing at a solid clip, he also pointed out that labor force participation rates were still a source of worry.

Strangely enough, a report on exports for May also came out Thursday, as the Commerce Department announced U.S. exports of goods and services hit a record $195.5 billion high. Many in the steel industry – as well as dozens in Congress – are awaiting next week’s determination on possible dumping penalties against South Korea, while other exporters are lobbying for Congress to act on re-authorization of the Export-Import Bank before the September 30 deadline. Going forward, these determinations could affect future unemployment numbers as well as prospects for those who want to make things in America.

On a state level, though, the news was better.

In order to make things in America, workers are needed. And recently released employment data from the Bureau of Labor Statistics shows manufacturing employment was up year-over-year in May in 44 of the 50 states. (Page 17 here.)

With all the winners, though, it may be time to ask about the losers. The six laggards in the field were Alaska (down 1,800 jobs), California (down 1,400 jobs), Georgia (down 900 jobs), Kansas (down 1,700 jobs), Maryland (down 600 jobs), and North Carolina (down 300 jobs).

Alaska is an interesting case as it reflects in part the fortunes of its oil industry – just a few short years ago it was the only state gaining manufacturing jobs long-term over the decade from 2001-11. But a steady decline in oil production has hampered its local economy, and the state lost nearly 13% of its manufacturing jobs over the last year.

The other significant loser is Kansas, but a regional university’s study predicts an upswing in manufacturing employment over the next three months.

Out of the six where manufacturing employment declined, there is no clear political or labor pattern which can be discerned. Four of the six states have legislatures controlled by Republicans, but that’s fairly proportionate to the 28-17 advantage Republicans have overall. Three of the six are right-to-work states, which also reflects the close 24-26 split between our national composition of right-to-work vs. forced unionism states.

Conversely, the states which did quite well over the last year tended to be the ones bordering the Great Lakes. Minnesota (up 4,400 jobs), Wisconsin (up 1,400 jobs), Illinois (up 900 jobs), Indiana (up 2,900 jobs), Michigan (up 8,500 jobs), Ohio (up 5,800 jobs), Pennsylvania (up 3,100 jobs), and New York (up 600 jobs) all benefited, with Michigan’s first-in-the-nation increase by itself making up for the six states which lost workers. It appears a healthier auto industry is leading the charge.

AC Week in review: June 29, 2014

I knew this would be a slow week for me because of the election, so I only had a couple posts for American Certified this week. But they were important because they were on a subject near and dear to manufacturers’ hearts – financing.

First, though, I want to point out something my AC colleague Ed Braxton put together on high tax rates and how they affect us on a global scale. Ed points out that many of our competitors across the globe have relented on corporate taxation, a practice which encourages multinational corporations to park their profits elsewhere.

As I promised a week ago, my two-part series on the Ex-Im Bank’s fate was put up over the last week. I decided to devote part one to what its proponents have to say, with the opponents’ case discussed in part two. Personally, I’m not convinced that we need to reauthorize the institution, particularly in an era where government is already trying to get its tentacles into myriad areas of financing.

One product already made in America, and probably getting its financing from private sources, is the Clif bar. These energy bars got a glowing review from my AC cohort George Pitsakis in his latest piece. However, I have one bone to pick with George – he notes how the company has gone green but I’m wondering how much was on their own and how much incentive was dangled in front of them. If they can make a superior American-made product in a competitive marketplace, though, more power to them.

I’ve already put a couple items in the pipeline for next week and will work on more in the next few days.