China as the Pandora’s box

This was the piece I alluded to in my odds and ends post that was promoted. As you’ll see, it’s more than a few paragraphs’ worth of thought.

A few weeks ago I was reminded of something by a familiar group, the Alliance for American Manufacturing. Their missive that day was that China was about to celebrate the 20th anniversary of its ascension into the World Trade Organization, and needless to say AAM didn’t see it as an occasion worth celebrating. Quoting their longtime President Scott Paul:

It’s pat nowadays to point out how badly America’s political elites got China’s entry into the WTO wrong. But it’s astounding to reflect on just how wrong they were.

We were told that China would open its market to U.S. companies to sell their products. Instead, China has largely left its market closed, and those who are able to do business there must hand over their intellectual property in return.

We were told that China would play by the rules of global trade. Instead, time and time again, China has broken those rules, largely without consequence, costing millions of American jobs.

We were told that China would liberalize, moving from a planned economy and authoritarian state to a free market and a democracy. Instead, China has used central economic planning to dominate global industries and is now exporting its totalitarian model around the world. People are arguably less free in China now than they were 20 years ago, something that is certainly true in places like Hong Kong and Xinjiang, where China’s government is overseeing a genocide. 

Yes, it was a mistake for the U.S. to vote to allow China to join the WTO. But, while we can’t go back to 2001, we can begin to right the wrongs of 20 years ago.

Scott Paul, President, Alliance for American Manufacturing

If you thought it was bad twenty years ago, imagine the fateful decision made fifty years ago to allow President Nixon to visit China. At the time, though, Nixon’s visit (the first by an American President to the People’s Republic of China) was more about keeping peace, since the Vietnam War was ongoing and Korean War wasn’t all that far in the rearview mirror.

Getting to know each other better will reduce the possibility of miscalculation and that we have established, because we do have an understanding. And I know them, and they know me. And, I hope that would be true of whoever happens to be sitting in this office in the future. That means that there will be talking and rather than having that, that, uh, inevitable road, uh, of suspicion and miscalculation, which could lead to war. A miscalculation which, incidentally, led to their intervention in Korea, which might have been avoided had there been this kind of contact at that time.

Richard Nixon, February 29, 1972

Somewhere in the next decade or so, though, China began to realize that one way of improving their standard of living (and keeping hundreds of millions of peasants out of starvation) was to adopt a limited amount of capitalism by becoming the world’s manufacturer. Their three key assets were very cheap labor, a willingness to build factories to suit overseas interests without the need to worry about those pesky domestic environmental laws, and reasonably-priced shipping to the American market. A few years later, the hollowing out of American manufacturing was well underway as a stream of manufacturing jobs flowed across the Pacific from Buffalo, Pittsburgh, Erie, Cleveland, Toledo, Detroit, Flint, Milwaukee, and other Rust Belt communities. In essence, Paul’s indictment of China is correct.

Yet while some amount of manufacturing has indeed left China for greener pastures around the globe, they remain the predominant widget maker for the world. You pretty much can’t shop for anything anywhere without running across a product bearing those three infamous words, “Made in China.” Not only that, they’re tightening the noose on the rest of us because they’ve cornered the market on a number of valuable rare earth commodities, including those we left behind in Afghanistan – they quickly filled that vacuum, as they have in a number of other places where they’ve taken advantage of Third World debtor nations. Just like when a Mafia don does a favor for you, someday that deed will have to be repaid with a lot of interest.

And since I have an aversion to dealing with nations that point missiles at us, I’ve made it a priority on this site to promote “made in America.” Why else would I keep tabs on a group backed by the steelworkers’ union?

(There’s a bit of good news on the “Made in America” front, though – we may have one of the world’s largest deposits of lithium within our shores, if the environmentalists don’t find a way to derail its mining. Battery manufacturers would like that.)

I used to be a free trader, and perhaps at some distant time I may become so again. But that day will only come when everyone plays by the same rules and can be trusted, and China fails both those tests. In short – and it’s definitely against my nature to think and say this, but it has to be said – they’re lying Communist sacks of shit who would like nothing better than to stab us in the back and should be treated accordingly.

Perhaps if we hadn’t opened that Pandora’s box a half-century ago, China would still be struggling to feed their hungry, we might not be dealing with the Wuhan flu, and there may still be thousands of American factories in operation. But short-sightedness and greed seems to have won the day, much to our detriment.

Odds and ends number 107

This will be a little shorter than some, but I thought it was a good time to clear out the mailbox and give you some good reading.

All solar and wind is all wrong

Recently I got an e-mail from the Caesar Rodney Institute that told me:

Proposed legislation nationally and in some states would establish a requirement 100% of electricity be generated from “renewable” sources such as wind and solar power. This policy will lead to unacceptable electric price increases and blackouts. 

100% Wind and Solar. 100% WRONG.” Caesar Rodney Institute, October 8, 2021.

This goes in the category of “duh” for me, but apparently some states are thinking they can pull this off – and in principle, perhaps they can. But there is a big problem with the reality, to wit:

When we look at states from Virginia to Maine, with some of the most aggressive requirements for wind and solar power along with taxes on emissions from power plants, we see two disturbing trends. One is more reliance on imported power. The Virginia plan drops reliable power generation from 95% now to 45% in 2035, and imports from other states grow from 25% to 40%. The RGGI states have increased imports from 5% in 2008 to 17% in 2019. Electricity exporting states are also under pressure to reduce conventional power generation. Pennsylvania’s Governor Wolf would like to cut generation by 30% by 2030, which would end exports. Massachusetts is importing 57% of its power, Delaware 50%. It is likely there will be very little export power available, requiring each state to generate 100% in state.

Ibid.

The second part is the government-created market for so-called “renewable energy credits” (read: mechanism for wealth transfer.) I like looking at farm fields, not 600-foot tall wind turbines (that would make all of us sick from the low-frequency noise) or acres of solar panels that might power a few hundred homes at peak efficiency, not twenty years down the line.

If I store a tankful of natural gas or a lump of coal for a time, it works pretty much as well as it would have when I put it there, at a cheaper price point. Let’s ditch these phony market mandates, shall we?

A Made in America call

My friends at the Alliance for American Manufacturing alerted me to this irony: those who created the CCP virus and allowed it to come to our shores are benefitting from dumping cheap N95 masks on our shores while American companies suffer.

At least that’s how James Wyner, the CEO of the Shawmut Corporation tells it. “We worked hard to create an American-made product that wasn’t dependent on foreign governments like China. We labored around-the-clock to get things up-and-running in 120 days, and created hundreds of new jobs in the process. Our masks received rave reviews for comfort and protection. Now Made in China imports are back.”

Interestingly, the tariff suspension was put in place by the Trump administration in March 2020 to deal with the spot shortage of PPE, but no one from the Biden regime has reinstated it. Wonder why?

One can say Wyner is living up to his name because there was always this risk, but we can substitute a lot of things for N95 masks that we should be making – including the aforementioned solar panels that are often made in China.

And since I’m talking about AAM, it’s worth reminding readers one of their annual programs is the Made in U.S.A. Holiday Gift Guide and it’s time for suggestions. Now that Halloween is just about in the rear view mirror, it’s time to start the stampede to Christmas. (Thanksgiving? What’s that?)

WTF is he thinking?

So did you know that AT&T is “by far the largest single funder of One America News”? Me neither. Just looking at it as an observer, maybe it has something to do with DirecTV, which AT&T owned until recently. And when I checked into the story, I found out it was true.

Okay, this is a problem why? (And full disclosure here: we are DirecTV subscribers and my package includes OANN. Can’t recall the last time I watched it, though – maybe immediately post-election?)

Well, the reason I bring this up is because Rick Weiland – miserably failed political candidate and my semi-correspondent loony leftist from the otherwise sane bastion known as South Dakota – sent me an e-mail demanding AT&T cut ties with OANN. Get a load of this rubbish:

Listen, the bottom line is clear: AT&T has not only been helping to spread disinformation about everything from the 2020 election to public safety during the pandemic, it’s also been instrumental in the success of Donald Trump’s favorite cable news channel while it continues to whitewash what happened on Jan. 6th.

AT&T needs to take bold action and join the fight against deadly disinformation — by cutting all ties with OAN. And (sic) your name to demand action now!

Unless AT&T hears from us — it will continue to fund the network that has fueled an insurrection, dozens of voter suppression bills, and the proliferation of disinformation related to the COVID-19 pandemic.

“WTF is AT&T thinking?”, Rick Weiland, October 11, 2021.

Now I’m not crazy about DirecTV – it’s one of the few options I have for TV watching out here in God’s country – but when you consider the Reuters “investigation” comes down to a entrepreneur creating a product to address a market need, I shrug my shoulders on this one. I think Merrick Garland is doing far more to whitewash what happened on January 6th and Weiland isn’t asking us to kick him out of office.

And next week I expect an e-mail from Weiland condemning a recent attack on a federal building. Should I hold my breath for the call on people to drop their funding? Thought not.

If I want to watch the partisan media, my satellite brings me CNN, MSNBC, and so forth. Maybe we should do more to encourage a variety of viewpoints instead of shutting down those we don’t agree with. However, AT&T did hear from me recently: I sent in another month’s bill.

This one worries me a bit

I think this is more because I’m on a mailing list than being anything resembling a power blogger anymore, but I guess at least someone was thinking of me and it’s worth a few lines.

To avoid going all tl:dr on you, I’m just going to link to the Executive Summary of the 2022 Index of U.S. Military Strength from the Heritage Foundation. While I obviously have an interest in our nation remaining free and independent, I also have an interest in having several young men our stepdaughter knows from being classmates (in the same class as well as a few years ahead or behind) stay on this side of the grass as enlisted men. So judge this one for yourself.

Sunday evening reading

This is more for a particular author than for individual articles. And it all began with selling a book.

You may recall last year during the pandemic that I introduced people to a site called ammo.com. While they sell ammunition, I look at them now as a provider of a different kind of weaponry: potent arguments for limiting government and history you don’t find anywhere else. Where else can you find a retailer that sees deplatforming, righteousness, and the decline of civil society as topics worth discussing? (Being a former league bowler from a Rust Belt bowling town, the latter hit me where I live.)

It’s an alternate view of history and society complements of a writer named Sam Jacobs. If I were to bring back Ten Questions or do a podcast, he would be a subject because I’m curious how he got to a political point not all that far off of mine. They never told me how they liked Rise and Fall, but I do like hearing from their website each Friday.

Speaking of Friday, a programming note: I pushed it back a week because of website issues I was having, but the return of Weekend of Local Rock is now scheduled for the coming weekend. I may get a post in midweek if the mood strikes me (particularly with the offyear elections on Tuesday.) We will see.

But this should do for now, right? Mailbox is clean as a whistle.

A way to build Delaware manufacturing

I kept this article around for a potential upcoming “odds and ends” post, but the more I thought about it the more I believed it was enough for a standalone article. It’s a couple weeks old but certainly evergreen enough to be a timely piece.

Charlie Copeland, who used to be the Senate Minority Leader in Delaware once upon a time, is now the co-director of the Center for Analysis of Delaware’s Economy & Government Spending. (Yes, that’s a mouthful – so we’ll call it CADEGS.) So the CADEGS head wrote a post on the blog of the Caesar Rodney Institute that told me two things, one of which I knew and one I did not: number one, the one I knew, is that Delaware got a crapton of $ from the federal government thanks to Uncle Sam’s CCP virus spending spree – so much so that it’s remarkably not all been spent. But number two, which is the one I did not know, is that “Northern Delaware has over half a dozen former industrial sites waiting to be cleaned up and waiting for infrastructure upgrades.”

How does Charlie put one and one together? He adds, “By making a one-time investment from one-time federal funds into these sites, Delaware can create a magnet for private sector business investments in these locations. Imagine close to a dozen industrial sites ready for new, clean American manufacturing.” And this makes sense, since presumably these sites either already had the infrastructure needed onsite or it was there but needed a little updating and TLC. After all, if the company I work for can update a forty-odd year-old restaurant that had no grease interceptor (meaning it was dumping grease right into the system) I suspect piping at these sites which dates from the 1940s or 1950s can be replaced.

But the second part of Copeland’s wish list is just as important.

This true infrastructure investment would be a good start, and the next step will not cost any money. Delaware needs to dramatically improve its permitting process for business site investments. This requirement was made clear in a 2019 report released by the Delaware Business Roundtable on Delaware’s job-killing permitting process. 

As stated in the report, “The permitting process plays an important role within the site selection process. Site selectors and investors often view the process as a barometer for measuring how business-friendly or supportive a state or local community is to economic development and new investment.” And Delaware is viewed as unfriendly. As a matter of fact, one national manufacturing site selection expert stated that “Delaware is not on anyone’s list.” 

Adjacent states can often complete site and business permitting in six months. In Delaware, it can take as long as two years. Job creators have options, and they are opting to go to other states where they can get their businesses operating in one-quarter of the time than it takes in Delaware. The proof of Delaware’s failure is in the continued decline in our manufacturing employment, while nationally, manufacturing has been growing as the US continues to on-shore production from China.

Charlie Copeland, “Delaware Manufacturing Job Growth Opportunity“, Caesar Rodney Institute, June 30, 2021.

Having dealt with the First State for a few commercial projects, let me restate louder for those in the back, “Delaware needs to dramatically improve its permitting process for business site investments.” For example, we spent a ridiculous amount of time dealing with site improvements for a project on a rural corner that didn’t even see 1,000 cars a day and might only gain 50-100 because of the development. Business people who have borrowed thousands to make their dream a reality don’t want to wait an extra three months to open because state and county agencies can’t get their sh*t together.

What Charlie suggests is that the “site and business permitting process could be quickly streamlined by reassigning a few State employees into ‘permitting-process concierges’ who would keep track of the status of major projects (e.g., over $5 million in investment). At the same time, the State should create a government website ‘dashboard’ giving the status of all aspects of investments in the permitting process detailing when permits were submitted, the amount of time waiting for initial comments, and what agency is currently holding a permit (and for how long). These two steps – the concierge and the dashboard – would bring transparency and accountability to a very diffuse process.”

In other words, do what certain private-sector businesses do with high-profile clients who generally receive just one point of contact. That’s not to say that smaller guys should get a runaround, but if the red tape is pushed aside for the big guys, maybe that learning curve is made easier for the small fries.

I will say, though, that Copeland was thinking mostly about the northern part of the state. I would be curious to know if this same principle could apply to whatever portions of the old DuPont facility in Seaford remain unused now that Amazon has made plans to use part of it for a regional hub. Regardless, if gaining jobs in the Wilmington/NCC area makes them just that much more prosperous, then the burden on Sussex County taxpayers should be lightened too. As it is said, a rising tide lifts all boats – and this state could use a lift.

Odds and ends number 103

The e-mail box is filling up fast these days, so after just a month I felt the need to relieve some of that pressure, as it were. Plus I just felt like writing something over the weekend (how’s that for honesty?)

As I have said probably 100 times or so in the past, these are dollops of bloggy goodness which aren’t promoted to a post but deserve some sort of mention, whether a few sentences or a handful of paragraphs.

The protectionist racket

I’ve referred to this man and group many times in the past, but the Alliance for American Manufacturing and their president Scott Paul are nothing if not consistent. After the February job numbers came out, Paul had this to say:

It’s good to see factory job growth resume after January’s slump, but the pace must pick up. At this rate, recovering all the manufacturing jobs lost during the pandemic will take more than two years.

That’s why it is so important for Congress and the Biden administration to speedily complete the short-term COVID-19 rescue package, and then shift to work on a sustained, robust public investment in infrastructure, clean energy, and innovation.

One thing to point out here: January goods imports were the highest on record. Made in America procurement efforts and the rebuilding of domestic supply chains couldn’t come at a better time.

Alliance for American Manufacturing press release, March 5, 2021.

I always appreciate their perspective; Lord knows their hearts are in the right place. But what has always concerned me about the AAM’s steadfast support of protectionism is what I call the Trabant effect, named after the East German car that vanished once the Berlin Wall came down and former denizens of that communist regime could buy other cars that were thirty years more advanced.

I believe we have better workers than China could ever have, although it’s worth noting that China didn’t start eating our lunch until they adopted a hybrid mix of totalitarian government with just enough capitalism to keep people from starving. There are certainly some in the wealthy category in China, but they aren’t self-made – they have to have some connection to the ruling party in order to succeed.

Even without taxpayer “investment” in infrastructure we have enough of a market to create massive wealth, if the government would just get out of the way. That’s where I often part with the AAM, which is an extension of several steelworker unions.

Illustrating absurdity

We all know that Joe Biden has made a mockery of a situation that President Trump was quickly gaining control of: border security and illegal immigration. But when you see things in graphic form, as the Heritage Foundation has put together, the changes are brought into perspective.

It’s sad that, out of 22 policy areas the Heritage Foundation has identified, that Biden and his cronies have made changes to all but two, taking us in the wrong direction. Once upon a time America was supposed to have 11 million illegal immigrants, but I would posit that number is twice that now and may be triple or quadruple that by the time Biden is through.

The problem with strategists

I’ve liked Bobby Jindal for a long time, but I think he has a poor choice in writing partners sometimes.

Perhaps I should have had a clue when the piece appeared in Newsweek, which isn’t exactly a conservative publication, but he and a “Republican strategist” by the name of Alex Castellanos opined there on “Separating Trump from Trumpism.” I had not heard of the latter previously, so when it was noted in the bio that he had worked on four different Presidential campaigns, I was curious to know which four – turns out he was busy for awhile since the list was Bob Dole, George W. Bush, Mitt Romney, and Jeb! Bush. So we’re basically talking a classic #NeverTrump personality here along with a guy whose behind was kicked by The Donald in the 2016 campaign.

I sort of gleaned the direction they were heading when they warned, “Unless the GOP creates an alternative version of Trumpism, without Trump, he’ll be back.” However, there is a little wheat among the chaff here:

Republicans must jettison Trump’s demeanor, but pick up where Trump’s policies left off. They should fight the concentration of political and economic power that has benefitted technology and financial giants, gather allies to force China to compete economically on a level playing field and reshape the government’s spending, immigration, trade and tax policies to benefit the working class. They can show how an open economy, bottom-up growth and limited government can empower and enrich working-class Americans more than any old, top-down, artificial program. These policies will benefit working-class and all Americans willing to invest their labor and talents towards living even bigger American dreams.

Bobby Jindal and Alex Castellanos, “Separating Trump from Trumpism is Key to the GOP’s Future,” Newsweek, March 1, 2021.

There was a lot about Trumpism that I liked, including the unvarnished patriotism, the willingness to be pro-life, and the complete honesty in dealing with the elites and media. Those of us in the heartland didn’t like either of those groups, but we weren’t seeing any push back from the GOP despite its goading by the TEA Party, among others. It almost makes you wonder who wanted him out more – the Democrats or the elites who still count themselves Republicans in the same vein as Dole, the Bushes, and Mitt Romney.

Stick to writing your own stuff, Bobby – that is, if you want to keep the little bit of relevancy you have. You have the lanes figured out correctly, although in this case I hope you eventually choose the right path.

Although, on second thought, since you’re now pushing for a huge federal infrastructure bill like Joe Biden is, maybe it’s too late.

Placating Woke-O Haram

To Erick Erickson, there is a new religion:

Secularism is, in fact, a religion.  It has sacraments like support for abortion rights.  It has tithing in which secular adherents give money to various political and social causes.  It has liturgies in the new speak of wokeness.  It has theological tracts and church services as rally and protest and Episcopal mass.  It has even spurred the rise of terrorist zealots and the new censorious social justice warriors I have taken to calling Woke-O Haram.

Erick Erickson, “Secular Indulgences,” March 11, 2021.

The initial comparison Erickson makes is the Catholic Church at the time of Martin Luther, which is somewhat appropriate. But the indulgences once sold to pay for St. Peter’s Basilica are now being extorted from businesses in a perverse form of wealth redistribution from industrialized nations to those on the other end of the scale – that is, whatever’s left after those in charge of the redistribution take their cut.

And the funny thing about this whole climate change enigma is that there is no control mechanism. We cannot predict with certainty how the weather will be a month out, so who can believe that doing whatever job-killing, income-robbing scheme Radical Green dreams up will make a significant dent? And when it falls short of predictions – as it always does – then the problem will be that we didn’t do enough, not that the whole idea we could have an effect was bullshit from the start.

It’s like the cynical philosophy I’ve come to embrace in my adult life: government is not in the business of solving problems, for if the solutions they came up with worked, there wouldn’t be a need for them. For government, job preservation is the true Job One. Believers in Radical Green are the same way, so they come up with wilder schemes and excuses to justify their beliefs.

The national impact races

Had I thought more about the post I did on the Laurel school board election, I would have quoted an e-mail I received from iVoter Guide:

Many of the problems that threaten our nation today can be traced to years of misplaced priorities in our public schools. Our children are not learning how to become citizens who appreciate, defend, and cultivate the values and principles our nation was founded upon. This responsibility and power rests with our school boards—positions largely overlooked by the general public, but captured by Leftist organizations and special interest groups who have exercised their influence over our children for far too long.

The good news is, with relatively few votes compared to higher office elections, the trajectory of our school boards and the nation can start to change when principled candidates are elected. This is why iVoterGuide is launching a trial program to equip Christian and conservative voters to engage in these high-impact elections. (Link in original.)

Debbie Wuthnow, “From the Classroom to Congress: Your Schools Matter,” iVoterGuide e-mail, March 4, 2021.

In this case, they are doing a test run of 20 Texas school districts to see how well their voter information program translates to that level. Yet, bringing it back to my school district as an example, it’s hard to find much on these races because the participants (particularly the incumbents) know the race is more on name recognition and who you know rather than on particular issues the schools are dealing with. Most of what information I found the last time I went through this a year ago came from a lengthy profile on the race in the Laurel Star newspaper.

Common sense and sunshine in Delaware?

I suspect he’s lining himself up for bigger things down the road, and he’s not even my representative, but State Rep. Bryan Shupe has a good idea.

HCR10 would require the Delaware General Assembly to stream and videotape proceedings, to include committee meetings. That’s important because those meetings are where the sausage is ground – legislation is generally massaged at the committee level and the horsetrading to get things passed should be a matter of public record.

The fact that the bill has a “modest” amount of co-sponsors, however, tells me the state’s legislative body would rather keep things behind closed doors. (In reality, the bill has five Senate sponsors and co-sponsors along with 11 from the House. Among the group, three are Democrats and the rest Republican.)

I get that the behavior may change because legislators may play more to the camera, but subsequent elections can correct that problem. We should have more transparency in the First State, not less.

One final Palm Sunday item

My original story for this last slot was Delaware-related, but I decided to promote it to a full piece. Instead, as our church was retold today, Jesus had a tough week beginning on the first Palm Sunday.

As it turned out, Erick Erickson wrote on the subject today, so I’ll close with him.

Today is Palm Sunday, the day in which Christians remember Jesus’s final entry into Jerusalem. He entered as a king with people laying palm branches before him. Given the population of the day, it is very, very likely that many who hailed him as a king on Palm Sunday were yelling “crucify him” on Good Friday.

(…)

The moral laws of Christianity are not the laws you follow to get eternal life. They are the moral laws you follow out of love for Christ as you feel him transforming you. As you become more Christ like through the regeneration he sparks in you, you want to be more like Christ. You become more Christlike over time, but you know if you fail you are forgiven. If you fall short, you have grace. Your sin fights back against the regeneration but the regeneration continues.

Two thousand years ago today, Christ Jesus entered Jerusalem a conquering king. But he promised no revolution of strength. He said the strong would be weak and the weak would be strong. He upended the secular paradigms and, for that, the world killed him.

Erick Erickson, “Hail the King. Kill Him.” March 28, 2021.

You may have had a bad week at some point, but just bear in mind that our Lord made flesh knew how his week would end yet still went through with it. This is a good piece because it’s yet another reminder that God has this.

Time to indulge our ‘Made in the U.S.A.’ consumerism

This is the sixth annual edition put out by the folks at the Alliance for American Manufacturing.

This is always a good post for Black Friday.

It’s been several years now since I scratched an itch to promote our American manufacturing by joining a (sadly ill-fated) venture called American Certified. One thing that short foray gave me, though, was a place on the mailing list of the Alliance for American Manufacturing, a union-backed promoter of (you guessed it) American manufacturing. Its president Scott Paul is perhaps among those I’ve most quoted on this site, and arguably first among non-Maryland non-politicians.

The AAM has, over the last several years, created what they call their “Made in America Gift Guide.” It actually worked well hand-in-hand with an effort by the Patriot Voices group (the people who keep two-time Presidential candidate and former Pennsylvania senator Rick Santorum in the news on occasion) called the Made in the U.S.A. Christmas Challenge, but that challenge has seemed to go by the wayside, leaving AAM as the sole purveyor and promoter of American-made Christmas gifts.

This is year 6 for AAM and they picked at least one item from each state – 83 overall by my count. I thought Delaware’s selected entry this year was a little bit off the wall, but then again RAPA ships its scrapple around the country during holiday time (November to February.) It may not be the gift for everyone on your list, but I’m sure there are some who now live in other regions of the country who wouldn’t mind a taste of home.

But in a neat piece of irony (and no pun intended) the selected Maryland gift comes from an Eastern Shore company called Butter Pat Industries. Their claim to fame? Hand-crafted cast iron skillets, which have drawn the attention and raves from cooking aficionados. (That’s why I’ve never heard of them, since I burn water.)

Since I quote him so often, here’s what AAM’s Scott Paul had to say:

Everything on this year’s list is new, and many of the ideas came from readers like you.

We think there’s something for everyone on your gift list. Our team made sure to include a mix of items at a variety of price points.

If everyone in the United States spent $64 of their holiday budget on American-made products, it would support 200,000 new factory jobs! But we know it can be hard to find Made in America goods in big box stores or at the local mall.

By putting together this list, we hope to shine a spotlight on some great companies who support local jobs and their communities — and make it easier for folks like you to find great American-made gifts during the busy holiday season.

Scott Paul, Alliance for American Manufacturing press release, November 26, 2019.

Of course, they also strive to not repeat gifts from year to year so Delaware’s list has varied nicely over the years: baby accessories, unglazed cookware, handcrafted gifts and furnishings, Jell-O mix (!), and – of course – Dogfish Head ales. (Too bad they didn’t give the late lamented 16 Mile brewery the same love.) The Eastern Shore has also been represented in Maryland’s selection on a couple previous occasions, including Paul Reed Smith guitars.

So if one of your Christmas goals is to shop local, this guide is a pretty good place to begin. And the job you save may be that of someone you know.

Odds and ends number 89

Call it the final culling of the election mailbox, and not a moment too soon. Yet again we dispatch with stuff in anything from a few sentences to a few paragraphs.

One effect of the Trump presidency has been a resurgence in manufacturing, which has pleased my old friends at the Alliance for American Manufacturing to no end. “Any job losses – and there have been very few actually documented – as a result of tariffs are being more than offset by the strength of the factory economy,” said AAM’s president Scott Paul in reaction to September’s job numbers. But with even better numbers in October (32,000 new jobs vs. 18,000 in September) Paul was a little more greedy:

It’s good news that factories hired 32,000 new workers in October. If there is any employment impact from tariffs or retaliation, it’s being more than washed away by the overall strength of the manufacturing economy. That said, tariffs alone aren’t going to keep manufacturing strong.

We need to see structural economic reforms in China, a better deal for workers through fairer trade agreements with Mexico, Canada, Japan and the European Union, as well as a renewed effort to crack down on exchange rate misalignment and manipulation.

It’s a start on the 3.4 million jobs claimed to be lost to China by the (left-leaning) Economic Policy Institute in a recent report.

But my question for Scott would be how much effect he believes the dismantling of the regulatory state on Trump’s watch has helped the situation. AAM seems to focus more on the aspect of trade and less on the other areas where we labored at a competitive disadvantage, but that could be a product of its union background. Interestingly enough, a recent survey AAM commissioned was bullish on President Trump and his effect on manufacturing in America – far more than Congressional Republicans or Democrats.

President Trump may have good reason to be bullish himself after what was described by my friend Rick Manning at The Daily Torch as “One of the best job reports imaginable.”

250,000 more jobs created in October alone, in spite of the impacts of two major hurricanes. The unemployment rate rests at 3.7 percent, the lowest rate since 1969, the year Neil Armstrong walked on the moon. More than 4 million jobs created since Donald Trump became President, with more than 1,000 manufacturing jobs created each day during October and nearly 300,000 overall in the Trump time in office. And when it comes to where the rubber meets the road – in the paycheck – America got a raise over the past year which exceeded the inflation rate.  That’s right, a real raise year-over-year for the first time in nine years.

Despite the Left’s insistence that this election is about the accused rapist Brett Kavanaugh, supposedly pro-Trump criminals who mail inert bomb-like devices or savagely butcher defenseless worshipers at a Pittsburgh synagogue, or the overreaction to the forthcoming caravasion, they are all desperate diversionary tactics to take the voters’ minds off of their fattened bank accounts since Trump took office.

And speaking of the caravasion, a little digging by Hayden Ludwig of the Capital Research Center has found one key American sponsor of the effort, the infamous “Puebla Sin Fronteras” (People Without Borders). That group is but a small part of a tangled web Ludwig details in his stateside investigation. On the other end, writer and former CIA operations officer Charles Faddis asserts:

Yet, already what has emerged shows that far from being a campaign for the rights of oppressed peoples (the caravan) is a deliberate, pre-planned effort on the part of socialist enemies of the United States to damage American prestige and to embarrass American allies.

Perhaps this is why the caravasion’s rumored arrival as a late “October surprise” has now been pushed back as the first wave has hit some turbulence.

A much earlier surprise was the arrival and successful ballot access of an unaffiliated candidate in our Maryland U.S. Senate race. Neal Simon continues to be on my radar as we reach the final day of the campaign.

It began in early October when a poll touted by his campaign came out, putting his support at 18 percent. See if you can follow this:

Despite common misconceptions from the press, including The Washington Post, about a lack of support for unaffiliated candidates, 54 percent of voters said they will consider an unaffiliated candidate for U.S. Senate; 56 percent of Democratic respondents also said they would consider an unaffiliated candidate; 30 percent of undecided voters lean to Simon. In comparison, only 4 percent of undecided voters are leaning towards Cardin and only 3 percent are leaning towards voting for Republican candidate Tony Campbell.

I actually asked the campaign for the crosstabs (since it was an unreleased part of the overall Gonzales Poll) and they never responded. I say unreleased because:

Neal Simon’s campaign purchased three rider questions on the Gonzales Maryland Survey conducted from October 1-6, 2018. The campaign purchased the questions because the polling firm had not planned on including the Maryland U.S. Senate race in its poll.

I’m certain they have had internal polling all along as well. The U.S. Senate race is definitely one of the topics I’m going to discuss in my postmortem, in part because of this claim:

Gov. Larry Hogan today announced that he has cast his vote for Maryland’s U.S. Senate seat for unaffiliated candidate Neal Simon.

To be quite honest, that would not surprise me. Maybe it’s a quid pro quo, as Simon earlier said:

I’m happy to announce my endorsement of Gov. Hogan today for another term as Maryland’s governor. From cutting taxes and fees, to investing in education and cleaning up the Chesapeake Bay, Gov. Hogan has accomplished a lot for Marylanders. And he’s done it by working across the aisle to find common ground. Instead of sowing divisiveness and conflict for cheap political points, Gov. Hogan has stayed true to his promise to govern from the center. He’s a true model for how to get things done.

Of course, according to the iVoter Guide, Neal Simon is a liberal.

It was a couple years ago that I first mentioned the group, which was asking for prayer:

Pray for unity and peace.  Our country is deeply divided. Christians must truly start loving our neighbors as ourselves so that there can be a spiritual awakening.  Now is not a time to gloat but to turn our hearts continually toward God so we can be examples of His love and work toward reconciliation and unity.  Pray for all nations, as a new stage is being set both nationally and internationally.

A couple weeks ago I found out they had expanded their iVoter Guide to Maryland – alas, this time only for federal races. But it’s a well-documented source to help you through the clutter, especially all the clutter caused by an estimated $5.2 billion in spending this time.

Yes, you read that correctly: five point two billion, with a “b” dollars. (I think half of that was spent on mailings to my house.) From OpenSecrets:

While Republican candidates are raising funds at record levels, the huge uptick in spending is driven primarily by unprecedented Democratic fundraising. Democratic candidates are projected to spend more than $2.5 billion this cycle, while Republicans are expected to spend approximately $2.2 billion.

Democratic House hopefuls have raised more than $951 million, crushing their Republican opponents’ $637 million haul. Things are closer in the Senate – $513 million to $361 million – but Democrats are still ahead.

Gee, do you think they’re a little upset that Hillary couldn’t close the deal?

Last but not least is something from a woman basically forgotten in the 2018 race. Available online election results for the Comptroller’s office over the last 32 years show that only one Republican has ever exceeded 40 percent of the vote: Anne McCarthy was the last woman to run as a Republican nominee back in 2006 and received 40.8% of the vote in the election that elevated Peter Franchot to the job. Twelve years later he faces another woman, but one who has been severely underfunded from the start because Franchot has the advantage of a healthy relationship across the aisle with Governor Hogan.

So when you receive an e-mail appeal from Anjali Phukan saying “Franchot is in the pocket of special interests and here’s proof!” you think to yourself, that’s nice, but perhaps that vein should have been mined back in March. And it’s too bad because this is interesting:

I believe at least 29 entities overcontributed (to Franchot), questioning the validity of over $354,000 in donations. The biggest overcontributor gave about $140,500 (David Trone via RSSI, Total Wine, and other related entities). There was a court case in September 2016 for this matter, but Franchot only returned $62,000. Other overcontributors looked like the entity name was typed slightly different to be perceived as a different person for donating over the limit without triggering reporting system red flags, others looked like a primary entity was using small business(es) owned by a donor, for donating over the limit without triggering reporting system red flags.

I have noticed this on a number of financial reports over the years: a donor name may be typed in slightly differently or the address is incorrect – a case in point: there are campaign finance reports out there which have my address in Ocean Pines for some strange reason, perhaps because someone read a long list of names and addresses incorrectly and put line 62’s name with line 63’s address and never bothered to change it in the system for awhile afterward until it was pointed out. It happens.

But the system is only as good as its reporting because the software appears to keep a running total for each contributor. If a name is spelled differently that resets the system, so let’s say I wanted to be devious and donate $12,000 (twice the legal limit) to a candidate. If I found an old check at an old address and told the treasurer to spell my name “Schwartz” (a common error, trust me) I just might be able to get away with it unless someone audited the account later. And then I could say it was an honest mistake – I just forgot I maxed out to the candidate already. (Either that or I can just set up multiple LLCs, which seems to be a time-honored avoidance technique, too.)

Anyhow, it’s a good point but unfortunately far too little and far too late. Phukan will be hard-pressed to beat 30% today, and it may be a good test to see how loyal Republicans are to their straight ticket. I can tell you that I will not be, but where I depart is for me to know and you to maybe find out at some later time.

Let’s put this election cycle to bed. Pray for the best possible results.

More laborers to celebrate Labor Day

I wasn’t necessarily going to write about this, but as it turns out Labor Day is a pretty good time to make this point.

When the unemployment numbers came out last Friday, it turned out that manufacturing jobs were one of the star performers as the sector gained 36,000 jobs in August – almost 1/4 of the total gain.

You may recall that for most of Barack Obama’s term I often referenced a union-backed organization called the Alliance for American Manufacturing, generally quoting their president, Scott Paul. He’s still there, and while he seemed to be pleased with the August results he’s still singing his protectionist song:

Did the robot revolution take the month off?

Adding 36,000 new factory jobs in August is good news for American workers. For the first time in a long time, manufacturing punched above its weight in the job market, accounting for 23 percent of total job growth. There’s great potential for continued manufacturing job growth – but only if we get the policy right.

How can we keep up the momentum? Pass an infrastructure bill with strong Buy America preferences to put more people back to work. The administration must also invest in training the workers of the future, move forward with rebalancing trade, and hold China accountable.

One facet of the AAM that interested me early on was their tracking of an Obama promise to create 1,000,000 manufacturing jobs – a pledge for which he fell far short by a factor of over 2/3. (Color me surprised </sarc>.) So it’s very intriguing to me that, through just eight months this year, the Trump score is already at 137,000. (Granted, there’s a slight bit of overlap from the Obama administration, but whatever bit of momentum began there may have come once it was assured Trump would be the victor in 2016.) On that pace, Trump would be in the 600 to 700 thousand range in his term.

I also think it’s fascinating that Paul talks about the “robot revolution” taking the month off but in the same statement beseeches the Trump administration to “invest in training the workers of the future.” As wage pressure is placed on the job market through misguided local and state government policies, such as the $15 minimum wage, tasks as mundane as attaching fenders on the assembly line or asking “do you want fries with that?” are going the way of the buggy whip, yielding to more skilled occupations such as working on those robots which make up the revolution. If you’ve seen pictures of modern assembly lines, automobiles and other large objects are put together more and more by mechanized means rather than a worker doing the same task of fastening rivets for eight long hours – a time when he could get tired, be less than at his best thanks to hard partying the night before, or just not trained up to the quality required for the task.

It’s true that unfair labor practices and currency manipulation have been factors in the decline of American manufacturing, but there were other processes that have affected all domestic businesses. Just ask yourself: how else would it be logical that an American manufacturer relocate to China when you consider the shipping time and costs and the learning curve needed to train hundreds of employees who may not be familiar with what the American market desires? Obviously those expenses were outweighed by the far lower wages they could pay Chinese workers, the removal of stringent regulations (not just environmental, but dealing with workers as well), and the lower tax costs. Over a 30-year period, “Made in America” became “Made in China,” and that’s often still the case today.

But I don’t think we have to be protectionist if we can create the conditions that cancel out several of the factors that drove manufacturing overseas. We already have a head start if we can keep our energy costs down by employing the resources we were blessed with instead of pie-in-the-sky schemes like dependence on unreliable wind or solar power. Add to this a corporate tax rate that is fair and not confiscatory – losing almost 4 out of every 10 dollars of corporate income seems to me a much larger piece of the pie than government needs or deserves – and a predictable regulatory regime based on common sense rather than being capricious and arbitrary, and much of the issue will be solved. At that point it’s up to the good old American worker to do the jobs Americans will do if given a shot. For example, someone has to know how to fix those machines that weld together automotive parts, and they probably won’t need a college degree to do it.

My father, who Lord willing will turn 82 in a month and has probably never turned on a computer, grew up in an era where he could finish high school and find a job at a concrete block plant doing maintenance. It was a union shop and gave him a good living, although he was unhappy at times with the union because it treated everyone equally whether they pulled their weight or not. Thousands of men around my hometown of Toledo who grew up in that era could tell a similar story as they got out of high school and went to work at a number of automotive (and other) manufacturing plants: Willys Jeep, GM Hydra-Matic transmission, Ford Stamping, Toledo Scale, Libbey Glass, and so forth – all union shops, and all providing a good middle-class income.

Kids graduating from high school now, though, are seemingly consigned to dead-end service jobs, as the days of your uncle getting you in at the Jeep plant are pretty much gone. But America needs to get back to making things, young men (and women) need jobs that can support a family, and the academic world needs a shakeout to a point where college is geared more toward the students who have the academic chops to succeed there. (Not everyone is college material in the traditional sense – some people just are geared toward and have the aptitude for working with their hands rather than sitting through a freshman English class.) A rebirth in American manufacturing can accomplish all of these goals.

So on this Labor Day and its implied salute to the American worker, consider what could be done to improve his or her lot. Lightening government’s load on industry seems to me a key step in making us the place that makes things again.

A more agreeable tone?

The election of Donald Trump was a surprise to most pundits, who were expecting Hillary Clinton to win both the popular vote and the Electoral College. But her plans were spoiled when she lost three states she expected would be her “blue firewall” even if she lost in Florida: Michigan, Pennsylvania, and Wisconsin. Those 46 electoral votes assured her defeat when they accrued to Trump’s column (although Michigan may still switch as a recount is likely required.) Add in a surprisingly lopsided win in Ohio for Trump as well as the expected blowout in Indiana, and the Rust Belt was pretty solidly in Donald Trump’s corner.

Much has been made about the droves of working-class voters that seemingly came out of nowhere to propel Trump over the finish line, and a survey released by the Alliance for American Manufacturing bears this out:

The national survey, conducted by The Mellman Group and North Star Opinion Research (firms that poll for Democratic and Republican candidates respectively) found that 85 percent of those surveyed support a national manufacturing strategy. Support for a manufacturing strategy is robust among both Trump voters (89 percent) and Clinton voters (83 percent).

Manufacturing may have been an election-determining issue, as Trump won manufacturing households by 18 points with Clinton winning non-manufacturing households by 4 points.

It comes as no surprise that by more than a two-to-one margin voters believe manufacturing is critical to our future and reject the notion that high-tech or services could take its place.

“The biggest surprise on election night came from the Industrial Heartland,” (AAM President Scott) Paul said. “Manufacturing is the engine that drives the heartland’s economy. The good news is that Trump and Clinton voters alike want to get it back on track.” (Link added.)

Unfortunately, the survey doesn’t cite the evidence ascertaining the voting patterns of manufacturing and non-manufacturing households, but my presumption would be that a “manufacturing” household is one where a family member either currently works in the sector, is retired from it, or was previously in the sector but lost his or her job. Thousands of voters fit in this category: using my native Ohio as an example, Trump did far better overall than Mitt Romney did in key manufacturing centers like Toledo (Lucas County), Lorain (Lorain County), Cleveland (Cuyahoga County), Akron (Summit County), Canton (Stark County), and Youngstown (Mahoning County).

  • Lucas County: Romney 68,100 (33.9%), Trump 74,102 (38.7%)
  • Lorain County: Romney 58,095 (41.9%), Trump 65,346 (47.8%)*
  • Cuyahoga County: Romney 184,475 (30.2%), Trump 179,894 (30.8%)
  • Summit County: Romney 111,001 (41.4%), Trump 109,531 (43.8%)
  • Stark County: Romney 86,958 (49.2%)*, Trump 96,345 (56.4%)*
  • Mahoning County: Romney 41,702 (35.5%), Trump 52,808 (46.8%)

*winner in county.

In total, Trump amassed 27,695 more votes in these industrial counties, and while he only won 2 of the 6, he averaged a 5.4% improvement overall. Having a little residual knowledge of how Ohio politics works, seeing how Trump was close in the initial count was a good sign for him – oftentimes in the urban counties the closer election districts report first (they are more heavily minority) so a Republican almost always starts out behind. It’s a matter of whether they get too far back to reel in the leader as the suburban and rural precincts begin to come in. And like the Eastern Shore of Maryland, the rural areas of Ohio are also an indicator for GOP candidates who need to rack up totals in the 65 to 75 percent range to make up for the losses in urban counties. Trump did this in spades, garnering an astounding 80.7% in Mercer County along the Indiana border – part of a group of adjacent western Ohio counties where over 3 out of 4 voters were Trump backers. (Of the few Ohio counties that went for Hillary Clinton, just one was a non-urban county and that comes with a caveat – Athens County is the home of Ohio University. Somehow, as a Miami graduate, I’m not surprised.)

It would be my guess that the AAM will be much more Trump-friendly than they may have appeared at first glance as a union-backed creation. The President-elect is promising heavy investment in infrastructure (a priority of theirs) and has a view on trade much more in line with the protectionist playbook the group has created.

And certainly I don’t want to say the manufacturing jobs are gone for good; however, those workers who are of a certain age (basically my age or older) may not share in the rebirth of manufacturing like they hope they might, if only because the ship of state which has sailed since the days of NAFTA and the rampant offshoring of the era will be difficult to turn around right away. Not only are trade and infrastructure key factors, but so is reducing the tax burden on American companies. On the other hand, the prospect of punishing American companies that move offshore may hasten their plans and create more headaches in the short run.

Donald Trump won his electoral votes in the Midwest by promising a return to the good times of a half-century ago, when it was possible for a guy to graduate high school and get a job through family or friends with a union shop that would keep him employed for the next forty years or until he decided to take his pension and retire. Those days are a memory. But we can still be a nation that makes stuff, and it would be to our advantage to become that nation as the world becomes a more competitive place.

America needs to use more energy, not less

Commentary by Marita Noon

During the 2016 election, both candidates promised to bring manufacturing back to the U.S. Donald Trump made the recovery of jobs lost to China and Mexico a cornerstone of his campaign. Hillary Clinton’s website states: “While too many politicians and experts in Washington gave up on American manufacturing, Hillary never did.”

“The rhetoric,” reports US News, “has struck home with Americans across the country – particularly those currently or formerly employed in the embattled U.S. goods-producing and manufacturing sectors, who have repeatedly borne the brunt of corporate efforts to move work overseas.”

Because many of the lost jobs are due to automation and technological improvements – which have enabled more production from fewer workers – there is skepticism on both sides of the aisle as to whether these lost jobs can actually come back. However, I believe, most Americans don’t want to see more of our jobs disappear. Harry Moser, founder and president of the Reshoring Initiative, which aims to bring manufacturing back home, is optimistic. He told me that we are now losing about as many jobs to offshoring, as we are recovering: “We’ve gone from losing somewhere around 200,000 manufacturing jobs a year in 2000 to 2003 to net breaking even. Balancing the trade deficit will increase U.S. manufacturing by about four million jobs at current levels of productivity.”

According to MarketWatch.com, the percentage of people who work in manufacturing is at a record low of 8.5% – which compares to “20% in 1980, 30% in 1960 and a record 39% during World War Two.”

While there are many factors driving offshoring, lower wages give countries like China and Mexico a competitive advantage. Energy costs, however, give the U.S. an advantage as “manufacturers need a lot of energy to make their processes work,” stated Gary Marmo, director of sales for New Jersey’s Elizabethtown Gas. He says: “A typical office building will use 5,000, 10,000, 20,000 therms a year. A good sized manufacturing plant will probably use that same amount in just a couple of days.” Electricity frequently represents one of the top operating costs for energy intensive industries such as plastics, metals, chemicals, and pharmaceuticals – and, according to a recent study comparing costs in the U.S. and China, electricity is about 50 percent higher in China.

Because manufacturing is energy intensive, bringing industry back to the U.S. and/or attracting businesses to relocate here, will increase our energy consumption. As my column last week on the Clinton Foundation and Haiti makes clear, industry needs energy.

President Obama has derided U.S, energy use: “The U.S. uses far more electricity than its North American neighbors combined,” but the U.S. also does more with our energy. Comparing the Gross Domestic Product (GDP) and energy consumption numbers for the U.S. and Canada, for example, both use a similar volume of energy but the U.S. has substantially higher GDP. A study of global energy consumption versus GDP found: “energy is so intrinsically linked to GDP that energy policy more or less dictates how our economy performs.”

Mike Haseler, the study’s author, explains: “rising GDP is an indication of a prosperous economy” – which is why economic commentators cite GDP numbers when they say: “President Barack Obama may become the first president since Herbert Hoover not to serve during a year in which the growth in real GDP was at least 3 percent.”  Yet, in the name of climate change, through government policy, many countries are trying to discourage energy use by forcing costs up. Haseler states: “They are cutting energy use as the economy of Europe collapses because European industry can no longer compete with countries where energy prices are not artificially raised by senseless ‘green’ policies.”

The energy advantage is not just an issue between countries, it is a factor in where companies locate within the U.S. “High electricity bills are a strong disincentive to create new jobs associated with a new or expanded product line,” writes Don Welch, president of New Hampshire based Globe Manufacturing Co, LLC. New Hampshire’s electric prices are 55.6 percent higher than the national average. Welch’s company is the leading producer of firefighting turnout gear. He explains: “higher electricity costs not only add hundreds of thousands of dollars to the cost of making our products – firefighting suits and equipment – but it’s money we could otherwise re-invest in the business, including creating new jobs here in New Hampshire. New Hampshire’s high electricity prices are a drag on our economy. It puts New Hampshire companies like mine at a competitive disadvantage compared to companies in other parts of the country.” Because Globe also has plants in three different states, he clearly sees the difference energy costs make in doing business. Welch says: “I already know that the electric bill I am paying at my facility in Oklahoma is half of what I pay in New Hampshire.” If he is going to add a product line, energy costs are a big factor in deciding where to expand.

John F. Olson, president and CEO of Whelen Engineering Company, of Charlestown, NH, and Chester, CT agrees. In a letter to the editor, Olson wrote: “Manufacturers are in competition with other U.S. manufacturers, or even worse, offshore competition in China. New Hampshire manufacturers have the most expensive electricity in the country.”

If we can bring back manufacturing jobs – or at least stem the flow of them from our country – we need to be encouraging low-cost energy and making more of it available. Moser believes: “balancing the trade deficit should be the number 1 national priority.” He told me that would take a 25 percent increase in manufacturing – which would require about a 10 percent increase in energy usage. Yet, climate change policies demand that we take greater cuts than the developing countries like China and India. If our energy costs continue to go up, as they have in New Hampshire, we’ll lose the best competitive advantage we have.

Moser explains: “Manufacturing has the highest multiplier effect among the major sectors. Every job created in manufacturing creates additional jobs in other sectors that supply, support and service manufacturers.”

To bring manufacturing back to the U.S., or encourage expansion, we need energy that is abundant, available and affordable – and we’ll need to use more, not less. If we want to balance our trade deficit, boost GDP, and have a prosperous economy, energy is the key. As I am known for saying: “energy makes America great!”

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy – which expands on the content of her weekly column. Follow her @EnergyRabbit.

Compare and contrast: government vs. the private sector

A few days ago I mentioned the manufacturing advocates the Alliance for American Manufacturing (AAM) in a post regarding their convention plans. I wasn’t surprised to see they were very pleased with Hillary Clinton’s remarks, including a plan to “pass the biggest investment in new, good-paying jobs since World War II.” Ah yes, the old “investment” in infrastructure, where taxpayer money will be shoveled to cronies and unions in an effort to build things we may not need or use (like facilities for public transit, bike paths, and so forth) at the artificial “prevailing” wage. Spend five dollars, waste two or three more – they don’t care because it’s all on the credit card anyway.

It sounds to me just like the promises regarding the “stimulus” package from Barack Obama, officially known as the American Recovery and Reinvestment Act (ARRA) of 2009. Those “shovel-ready” jobs actually turned out to be, among other things, government backstopping certain public-sector jobs that may have been destined for the chopping block. Only a small portion of the over $800 billion spent actually went to infrastructure, but ARRA was sold as an investment in infrastructure. So pardon me if I expect little good to come from Hillary’s plan.

Anyway, last night I read a contention that was more interesting (and realistic) from American Enterprise Institute scholar (as well as professor of economics and finance) Mark J. Perry. Here is the money line:

The bottom line is that America’s abundant and low-cost natural gas and electricity have more than offset higher labor costs in the U.S. and have contributed to the strongest profitability in a generation or more for U.S. manufacturers. Within three years, and possibly even sooner, it will be cheaper for most U.S. companies to manufacture goods for the American market at home, compared to producing those same goods in Asia. (Emphasis mine.)

Of course, that prediction is fraught with peril. We could regulate our way out of the energy boom by continuing to mandate the use of expensive, inefficient renewable energy sources (or, in lieu of that, transfer payments from utility providers), we can maintain the oppressive tax climate that has been one of many reasons companies are choosing to go offshore – any bean counter will tell you it’s better to pay 15% tax than 35% – or actually enact the increasing minimum wage that unfortunately Donald Trump is now supporting. Any or all of these are possible regardless of who wins the Oval Office.

And that’s the shame of it all. Over the course of the nation’s history, we have seen America become a great industrial power only to lose its advantage to upstarts like Japan and China. (Then again, we wrested the title from the British in the 1800s so things are always fluid.) These Asian nations took advantage of newer technology and less expensive labor to attract American manufacturing jobs that were in older, less efficient unionized plants, despite the fact these items would have to shipped back thousands of miles to their primary market.

But here we have the chance to get some of this back, and my fear is that too many people want to keep the status quo in place as a political issue rather than solve the problem. We talk about being a free market insofar as trade is concerned, but I contend that we need to work on freeing our own market:

  • Toss out these federal and state regulations and carveouts that only benefit special interests or large, established competitors trying to corner their respective markets.
  • Encourage the adoption of right-to-work laws so unions are forced to compete and sell the benefits they provide for the cost to workers.
  • Instead of debating whether the minimum wage should be increased or not, we should be debating how quickly we phase it out. The true minimum wage is zero, which is what workers who are tossed out of a job when companies can’t afford the increased labor costs will earn.

In reading the GOP platform (and I’m just going to ignore the Democrats on this one, since they aren’t selling themselves as free-market, limited-government types) I saw some attention paid to these issues, although their approach seems to be more of just controlling growth and pruning around the edges than a wholesale reduction. Needless to say, that platform could be completely ignored by the elected members of the party from Donald Trump on down if the idea of enriching their friends, rather than the supporters of the other side that have engorged themselves over the last eight years, remains in place.

Sadly, over most of the last century it hasn’t really mattered which side was in power because government has grown regardless of who was in charge. (The one exception: the Harding-Coolidge era of the 1920s, when the federal budget was drastically reduced – and annually balanced – after World War I. In a time where we are stuck with Trump, Clinton, or maybe Gary Johnson, what we really needed was a Coolidge. Bobby Jindal was probably the closest we had in the GOP field.)

I began this whole process by talking about infrastructure, and there’s a legitimate need for prudent spending on upgrades where it is appropriate. Sometimes there is a need for a new federal or state facility. But I have also seen how the government uses infrastructure to maintain a cash cow, with my favorite example being the Ohio Turnpike I grew up close by.

You see, the original plan was to eliminate the tolls once the bonds to construct the road were paid off in the 1980s. (This was promised when the highway was built in the early 1950s – my dad remembers them staking it out a few miles from his house.) But then they decided that some new exits were necessary (which they were) so they decided to build those. Then it was adding a third lane in each direction between Youngstown and Toledo (a process still going insofar as I know, since I haven’t been that way in a couple years), then renovating all the rest areas (twice in thirty years, and ditto), and so on and so forth. Forget the promise to remove the tolls once the highway was paid off – they constantly spend money on projects that weren’t within the original scope, perpetuating the agency that runs the Turnpike.

In theory, we could spend money from now until doomsday on government-sponsored projects. Some contractors would benefit, but others would be left out in the cold because there’s a certain procedure required to bid on and win public works contracts. But it wouldn’t necessarily be the best use of our funds – and by that I don’t mean the money in the public till but the money that we earn for our collective pockets. If we really want to get manufacturing going and bring it back to America, we need to maximize their potential for meeting our marketplace. They may make mistakes, but that should be up to the market to pick winners and not the government.

Out to build a state (and a nation)

Originally I was going to add some of these items to my “odds and ends” post but decided to promote the idea to a post of its own. I have a lot of things which I can neatly tie together.

It’s now been a decade since America’s economy even grew at a 3% rate, as Rick Manning pointed out a few weeks ago. While he lays a lot of the blame for what he later termed an 8.9% “real” unemployment rate on government regulation and policy, other industry groups like the U.S. Business & Industry Council (USBIC) and Alliance for American Manufacturing (AAM) point the blame squarely at China. First is USBIC President Kevin Kearns:

Can anyone doubt that America’s trading relationship with Beijing is a one-sided, one-way catastrophe for the American economy? Our massive trade deficit with China represents a constant outflow of jobs and productive capacity to a country that refuses to play by the rules of world trade. It’s been 15 years since China joined the World Trade Organization. There can be no doubt that America’s experiment in so-called ‘free trade’ with China is a miserable failure.

AAM’s President Scott Paul:

Now we have even more evidence as to why voters are deeply concerned about China and its impact on the American economy. Our trade deficit with China in 2015 again surged to record levels, and that helps explain the struggles we’ve seen in manufacturing recently – particularly in critical sectors like the steel industry.

The 29,000 factory jobs gained in January is good news, but it’s certainly no indication of an upward trend. Many dangers persist, including a strong dollar, China’s economic weakness, and its massive industrial overcapacity. It strikes me as an inopportune time to be pushing a Trans-Pacific Partnership that is projected to cost America more than 121,000 factory jobs, according to the Peterson Institute of International Economics.

So just how do we compete? There’s no question that 40 years of buildup and advantages accrued by foreign competitors in the areas of lower wages, lack of regulation, and outright cheating more than make up for the millions of dollars in shipping costs required to ship cargo across the Pacific to the American consumer market. The relics and ruins of our Rust Belt convey the depth of the opportunities squandered. If we can’t beat them on price, we have to beat them on quality and be smarter than they are.

One thing I’ve noticed about the Senate race is that several GOP candidates are focusing on the manufacturing sector as a ticket to the state’s prosperity. For example, Rich Douglas had this to say the exodus of jobs to Mexico and about his platform:

Ten thousand jobs lost in Maryland alone.  That’s what Texas businessman Ross Perot meant when he predicted a “giant sucking sound” of U.S. factories moving to Mexico after Congress approved the North American Free Trade Agreement (NAFTA).  If elected to the U.S. Senate from Maryland in November, I will work to bring them back.

The “sucking sound” was real.  In the mid-1980s I lived and worked in Ciudad Juarez, Mexico, across the river from El Paso, Texas.  The Juarez of my memory is a vast collection of big-box factories in the desert, bearing well-known U.S. names.  Jobs lost from the U.S.

(snip)

Citizens with a path forward to jobs, homes, and a future remain in school, avoid drugs, do not riot, and keep their unborn children.  Maryland needs factories and jobs.  A way to attract them is to send the right people to Congress.  What sets me apart from the rest of the Senate field?  Experience and scars earned in markets where U.S. ethics are mocked.  Experience with U.S.-imposed hurdles to U.S. exports.  Experience with the human cost of free trade.

But Douglas is not alone. It turns out fellow candidate Chrys Kefalas is a vice-president at the National Association of Manufacturers, which again is urging people to be manufacturing voters:

Notes Kefalas on his social media page:

I’m all about manufacturing more jobs in Maryland and the U.S. And that means fighting so that companies like Under Armour and small businesses can bring more jobs to Maryland. I will.

Adds yet another Senate hopeful, Dave Wallace:

Many will remember when Marylanders proudly made steel, Chevys and many other quality products and enjoyed a prosperous life. Today our infrastructure and job prospect are crumbling, and high taxes and regulations are driving away the jobs and investments we need.

While this is a promising beginning, Wallace remains short on details. But it’s better than nothing, as I’m not finding where the other major candidate, Kathy Szeliga, addresses manufacturing at all.

Actually, I take that back. Nothing is better than this mess that punishes achieving businesses and expands the government’s role at a time when they need to stand down and let the market grow. Remember, doing it this way has led to a “lost decade” of slow-to-no economic growth.

Since this part of the state isn’t dependent on government jobs to survive – but could use an economic shot in the arm to diversify from the poultry and tourism industries – it seems like we would be an ideal location to be the place to make things. The cost of living is fairly decent, the area is nice, and there are a lot of people who are willing to put in a little bit of elbow grease to get things moving. All they need is for the state to let them compete, and even though a Senator doesn’t necessarily guide state policy he or she can lead by example.

Report: High wages aren’t the issue with manufacturing

As you surely know, I have taken an interest in rebuilding manufacturing within our nation in general and this region in particular. While much of our local economy takes the form of manufacturing in an agricultural sense, either through grain farming or its primary purpose of assisting in the raising and processing of chickens, the advantages to the local and national economy if America began to make things again is beyond dispute.

So when I was sent a link to a manufacturing report by the union-led Alliance for American Manufacturing (AAM), I wanted to see what the perspective would be. Up front, it was clear that the AAM had their eggs in one basket.

“American factory workers are the solution, not the problem,” said Alliance for American Manufacturing President Scott Paul. “Instead of scapegoats, America needs a manufacturing strategy. That strategy should be built on balancing trade, investing in our infrastructure, enhancing our training programs, and rebuilding our innovation base.”

This report, with the lengthy title “Exchange rate policies, not high wages, are why U.S. lags China and Germany in export performance,” comes from the liberal Economic Policy Institute (EPI). Paul’s interpretation of the report:

“The idea that high wages in the manufacturing industry are causing job losses is common, but incorrect,” (report author Robert E.) Scott said. “Pushing manufacturing jobs into the low-wage, non-union south is a race-to-the-bottom strategy that should be rejected. Instead, we need to fight currency manipulation by countries like China and take a page from Germany and Europe to rebuild American manufacturing.”

His is a truncated summary of the last bullet point solution offered in the EPI report:

The strategy of pushing manufacturing into the low-wage, nonunion southern states is a race-to-the-bottom strategy that should be rejected in favor of high-road strategies: fighting currency manipulation and doing more to rebuild American manufacturing, taking a page from the German and European models (with supply-side policies that benefit and support the manufacturing sector, including increased spending on research and development as a share of gross domestic product; support for “stakeholder capitalism” in which boards of directors include an equal number of representatives of workers and managers; and heavy investment in training and job creation).

Obviously there is a certain appeal to some of getting back to the conditions we had circa 1960, when American manufacturing was the undisputed heavyweight champion of the world, workers brought home a salary that could support a family while Mom stayed home to take care of the kids, and Big Labor had its own corner of the political table. Five decades later, we have ceded that crown to China for a number of reasons. But I don’t think currency manipulation is the primary reason.

The EPI’s worry that manufacturing jobs are flocking to the “low-wage, non-union south” is in and of itself a tacit admission that wages and benefits are an important factor in site selection. China got to be a manufacturing leader because they have a very inexpensive workforce of semi-skilled laborers – the same sort of workforce that illegal aliens bring to the table in this country, although it depresses wages here in a different manner. Given the equality of other factors nationwide such as the federal regulatory regime and abundant cheap energy, those who do site selection tend to choose the places where they can get the biggest bang for their buck.

By the same token, willing local governments which assist these manufacturers with providing new infrastructure and greenfields for development tend to have more success than those urban areas with problematic old systems and brownfields that require remediation. But that’s not the only reason nice plots of available land sit empty in regions of the country outside the South.

Here in Maryland, we are saddled with a state government that refuses to even consider right-to-work legislation and has gone out of its way to punish large non-union employers. A decade ago when I began this site, the largest state issue was the (so-called) Fair Share Health Care Act and whether the Maryland General Assembly would override Governor Bob Ehrlich’s veto, which they did. The bill was narrowly tailored to affect just one employer: Walmart. And while correlation is not causation, the fact a proposed Walmart distribution center in Somerset County was placed on a continuing hold was blamed on the unfriendly climate for non-union businesses in Maryland. (The bill itself was later struck down in court as an ERISA violation, something I thought improper at the time.)

If you assume my overall argument is in favor of this “race to the bottom,” you’re forgetting a simple fact: a little bit of something is better than a whole lot of nothing. There are many paths to prosperity our nation, state, and city have available to us but it seems to me the best one is where we add value to the goods and services everyone needs. This is why our chicken industry succeeds, since we take that which is available to us to raise and process chicken for a world market and have developed an expertise that competitors have a hard time matching. Granted, not everyone in the industry makes a ton of money but that’s a function of the value placed on chicken by the market. Chicken is a very useful food product but people also like and can choose beef, pork, seafood, or vegan as well. On the other hand, there’s a reason oil is called “black gold,” to use another useful commodity for an example. The resource has a very high value thanks to its functionality, relative scarcity, and lack of alternative products.

America as a whole needs to again become the place where the most value is added, and once we get there we will all succeed because of it. (That will be the point where trade takes care of itself as well.) Back in 1960 we were the leaders in adding value, but now we’re not because we let others take our place. Re-establishing our manufacturing base will help us get that crown back, even if some parts of the country do more to help themselves in improving their economic state.