[Congressional Record Volume 141, Number 110 (Monday, July 10, 1995)]
[Senate]
[Pages S9600-S9601]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         FEDERAL RESERVE BOARD

  Mr. DORGAN. Mr. President, last week the Congress was not in session, 
but the Federal Reserve Board met downtown in their marble building and 
took a baby step in rectifying the mistake it made on seven occasions 
last year when they increased interest rates in order to slow down the 
American economy.
  Last year, the Federal Reserve Board said it was combating inflation 
in our economy, so it desired to slow down the economy some and prevent 
a new wave of inflation. Now it appears the Federal Reserve Board has 
apparently won a fight without a foe. There was no wave of inflation 
across the horizon.
  Last week's announcement to decrease interest rates by one-quarter of 
1 percent made the stock market ecstatic. In fact, the Federal Reserve 
Board acted to ratchet down inflation marginally and the stock market 
reached record highs.
  In fact, if we look at the combination of economic news in the last 
week or two, it is quite interesting. The Federal Reserve Board says it 
has won a fight with a foe that did not exist. The stock market reached 
record highs. And corporate profits are at record levels.
  The question would be, if all of those pieces of economic news are so 
good for the American economy, if this is such wonderful economic news, 
then why are the Americans so displeased? Why are the American people 
not dancing in the streets about this economic news? Record profits 
should mean that businesses are doing well creating jobs, expanding, 
hiring. Record stock market levels should mean that the experts think 
the American economy is robust and growing.
  The simple answer is the people in this country are not satisfied 
because this economic news masks an important fact. The American people 
are not satisfied with this economic news for the same reason that the 
Federal Reserve Board's actions last year were a mistake. The fact is, 
and the reason is, we are now living in a global economy.
  That means that stellar economic numbers may not translate into 
economic opportunities here in our country. Surrounding all of the 
bright economic news that was trumpeted last week, there was one small 
but critically important fact: American wages are going down.
  Yes, corporate profits are at record levels. Yes, the stock market is 
ringing the bell. Stock market indexes have never been higher in their 
history. But the fact is, American wage earners, American workers, are 
doing worse. Investors do better; American workers lose ground. 
Corporations do better, American wage earners do worse. Wealth holders 
succeed; working families fail.
  There is no economic news that this administration, this Congress, 
the Federal Reserve Board, the captains of industry, or the investment 
moguls on Wall Street can give the American people that will make them 
feel better about this economy as long as their real wages are 
declining. Unless and until we stop a 20-year decline in American 
wages, the American people will not be satisfied.
  I always find it interesting that the press trumpets every month the 
report of how much we consumed. We measure economic health by 
consumption. But, of course, that is not economic health. It is what 
you produce that relates to whether you are healthy or not, not what 
you consume. But we trumpet, every month, all kinds of indices about 
economic performance and we see nothing--except maybe 2 column inches 
in the paper once every 6 months--about American wages. Yet every 
month, the indices show American wages are declining.
  Frankly, we have a circumstance today where corporate giants, led by 
U.S. corporations and followed by their international competitors, are 
constructing an economic model for the world that worries American 
workers. They have decided they want to produce where it is cheap and 
sell back into established marketplaces. That means corporations 
increasingly produce in Malaysia, Indonesia, Bangladesh, Singapore, 
Honduras, China--around the world--where they can hire cheap labor, 
often kids. They can pay dirt-cheap wages, they can dump their 
pollution in the air and in the water, make their product, and send it 
back to Pittsburgh for sale.
  That strategy of playing the American worker off against 1 or 2 
billion others in the world who are willing to work for pennies an hour 
is a strategy that might well lead to record corporate profits, but it 
also leads to declining U.S. wages. And that is the economic problem 
this country has to fix.
  The bottom line of economic progress in this country must be, ``Are 
we increasing the standard of living for the American worker?'' And the 
answer today, amidst all of the glory of the wonderful economic news 
trumpeted every day in recent weeks, is no. The standard living for the 
average American worker is not advancing. It has been declining.
  Our economic strategy for the 50 years following the Second World War 
was, for the first 25 years, a foreign policy disguised as economic 
strategy to try to help everybody else. We did that and it was fine. We 
could afford to do it because we were the biggest and the best and the 
strongest and the most. And even as we did that we progressed and so 
did the American worker. But for the last 20 to 25 years it has been 
different.
  Our trade policy is still largely a foreign policy. It does not work 
to support the interests of our country. And what we see as a result of 
it is that other countries are growing and advancing and our country, 
measured by standard 

[[Page S 9601]]
of living--the standard of living experienced by American workers--is 
not advancing.
  The American people are tired of that. They want a change in economic 
circumstances. And we, one day soon, must have a real, interesting, and 
thoughtful discussion about these economic policies. Now, more than 
ever, this country needs a full-scale policy debate about economic 
strategy and what kind of strategy, including trade strategy and other 
strategies, results in advancing America's economic interests--not just 
America's corporate interests, not just America's investors' interests, 
but the interests of all Americans.
  That is a debate we have not had. We did not have it during NAFTA. We 
did not have it during GATT. You could not have it, in fact. The major 
newspapers of this country--the Washington Post, the New York Times, 
the Los Angeles Times, the Wall Street Journal--would not even give you 
open access to an opportunity to discuss these things. It is 
interesting, with NAFTA, we counted the column inches on the editorial 
and op-ed pages ``pro'' and ``anti.'' It was 6 to 1 pro-NAFTA, pro-
GATT--6 to 1.
  These are areas where you ought to expect there to be freedom of 
speech and open debate. But it is not so. And the economic interests 
that propel that sort of imbalance in our major newspapers in our 
country, when we have these kinds of discussions, is the same economic 
interest that prevents the discussions even from getting any momentum 
in a Chamber like this. One day soon, I hope, that is going to change. 
And the sooner the better, if we are interested in providing some 
satisfaction for American workers whose only interest, it seems to me, 
is to work hard, have opportunity, and progress with an increased 
standard of living.

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