[Congressional Record Volume 147, Number 132 (Thursday, October 4, 2001)]
[Senate]
[Pages S10261-S10262]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MILLIKEN JOINS HALL OF FAME FOR TEXTILES
Mr. HELMS. Madam President, on September 10, Roger Milliken, a
distinguished American, was inducted as a charter member of the Textile
Hall of Fame in Lowell, MA.
Roger Milliken has long been a leader in the textile industry and his
induction as a charter member of the Textile Hall of Fame was well-
deserved. But Roger Milliken is far more than an outstanding American
industry leader. He is a true patriot, and his love of country
constantly manifests itself in countless ways.
Roger Milliken's genuine commitment to the health of the American
economy is unfailing and unyielding. It is typical of his nature and
his fidelity to his country that he used the occasion of his induction
into the Textile Hall of Fame to sound a warning about the continuing
erosion of the U.S. manufacturing base--and the hollowing-out of the
U.S. economy--by the displacement of solid manufacturing jobs in
America to low-wage paying countries all over the world.
You see, Roger Milliken has steadfastly supported keeping American
manufacturing strong but too often, his wise counsel has gone unheeded
by the so-called ``trade experts.''
But make no mistake, in the name of globalization, our trade policy
is, in fact, encouraging overproduction, as subsidized foreign
industries flood the global market and bring prices in this country
below the cost of domestic production.
The economic threat has been eating away at our manufacturing base
slowly but surely. In this year alone, the malignancy will result in
the loss of 1 million American manufacturing jobs. In the U.S. textile
industry, more than 600,000 jobs have been lost since NAFTA and the
Uruguay Round's Agreement on Textiles and Clothing became effective in
1995.
Sadly, precious little attention is being paid to the real victims of
this trade policy: the small towns and medium-sized cities throughout
America devastated by plant closings and job losses. The textile and
apparel industry in the South is only one part of the tragedy. The same
can be said of the auto industry, the steel industry, and even the
high-tech semiconductor industry in California.
Roger Milliken's eloquent statement on behalf of American
manufacturing rings clear, and it merits the attention of the Senate. I
therefore ask that excerpts from the Milliken statement--entitled ``The
Wealth of Nations: U.S. Manufacturing in Serious Trouble'' be printed
in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
The Wealth of Nations: U.S. Manufacturing in Serious Trouble
(By Roger Milliken)
Today almost all of the manufacturing industries in the
United States are in serious trouble. I would like to take
this time and this place to light a fire of debate on the
serious consequences of that statement on the future of our
country. . . .
Thanks to Thomas Edison's invention of the electric light,
our industry learned in World War I that textile machinery
could run at night as well as during 12-hour daytime-only
shifts.
At the end of that war, we found ourselves with 18 million
spindles in place north of the Mason-Dixon line and 18
million spindles south of the Mason-Dixon line, all of which
could be run around the clock. Our production capacity had
been doubled.
Seventy years later, 1990, after a long period of fair
competition, we found ourselves with 18 million modernized,
surviving spindles in the South and 800,000 in the North,
producing more products and higher quality than the 36
million spindles after World War I.
Today we are told that during that period the U.S. went
from an agrarian economy to an industrial economy and that we
are now similarly transitioning to an information-based
economy.
As I see it, the main thing wrong with that comparison is
that in the first transition our country did not lose either
the farms or the products of those farms. In fact,
agricultural production increased as new technologies were
introduced. Today, our country continues to produce a surplus
of agricultural goods.
During the current transition, the U.S. is losing both its
manufacturing plants and the products manufactured in them,
as well as the jobs they provide--thus putting at risk our
leadership position as the strongest manufacturing economy in
the world.
globalization's fatal flaws
Our founding fathers, specifically Alexander Hamilton,
understood the importance of manufacturing. The second act of
the First Congress imposed tariffs on manufactured goods from
abroad. This encouraged our new nation, and its people, to
develop our own manufacturing base rather than merely
exporting low-value raw materials to our former colonial
masters and importing back from them the high value-added
finished goods. . . .
Now as our country stands alone as the world's last
remaining superpower, we in textiles and almost all of U.S.
manufacturing find ourselves at risk of losing what our
forefathers fought so hard to create. This is neither
necessary nor wise.
. . . At the current rate, we may end this decade with as
few as seven economically viable manufacturing industries
remaining in America.
A recent survey of manufacturing revealed that 36 of our 44
existing manufacturing industries had an adverse balance of
trade and had cut substantial numbers of jobs this year. The
hemorrhage continues.
All U.S. manufacturing employment is shrinking at a pace
which will eliminate 1 million high-paying, middle-class jobs
this year alone. This is four times what we lost in the year
2000. Actual employment levels in our vitally important
manufacturing sector have already fallen to levels last seen
in 1963.
We are in an era of so-called globalization, and everyone
talks about the new economy. We have been lured into thinking
that the negative aspects of these trends are both
unstoppable and inexorable.
Isn't it our leaders' responsibility to ensure that this
country and its people survive this period strong and
prosperous?
A fatal flaw of the current idea of globalization is the
lack of recognition that subsidized global production creates
a strong incentive to create overproduction that outstrips
global demand.
A further flaw is the lack of recognition that in emerging
economies the people and manufacturing production workers are
not paid enough to buy what they make. Instead, the fruits of
their labor are subsidized and shipped to the United States,
which serves as the market of first and last resort.
In the process, our standard of living is undermined, and
both political and economic instability is increased. . . .
Mounting consumer debt helped fuel the boom of the 1990s.
Despite strong productivity growth, the 80 percent of our
country's wage earners and their families who work for others
have not seen an increase in their real income over the past
20 years.
As increase in purchasing power stagnated because of the
massive shifts of good, well-paying jobs to low-cost emerging
economies, we continued our growth of consumer spending, but
we did it on credit. Consequently, the American consumers
have been spending more than their earnings at the expense of
savings. The result is that we are consuming a billion
dollars more in manufactured goods each day than we produce.
These facts are a prescription for social, political and
economic unrest.
Our manufacturing base is being eroded as dollars are
diverted from wealth creation to wealth consumption. If
economic history has
[[Page S10262]]
any lesson for us, it is that a nation's well-being is
determined by what it produces, not by how much it consumes.
altar of free and unfettered trade
While technologies always present new opportunities and
challenges, globalism is not a new idea. It was born around
the time of Columbus, and most of world politics has been
about how to control it ever since. Past and present
administrations in Washington seem to think globalization is
something new for which the lessons of history are
irrelevant.
George Santayana is quoted as saying, ``Those who can't
remember the past are condemned to repeat it.''
A Spanish leader in 1675 bragged about Spain's trade
deficit, asserting ``all the world's manufacturing serves her
and she serves nobody.'' However, when its gold and silver
ran out, Spain found that its industrial development had
withered; it had only debts to show for its orgy of
manufactured imports and consumption. That Spanish empire
collapsed, and those countries who had expanded their
manufacturing capabilities by selling to Spain were the new
world powers.
Thus it also was with the later demise of the Dutch empire
and subsequently the great British Empire, ``upon which the
sun never set.''
Beguiled by the siren songs of banking, insurance, shipping
and services, they ultimately surrendered their world pre-
eminence as nations. The Spanish, Dutch and British had all
neglected their nations' manufacturing bases.
Could this happen to the U.S.A.? Or more to the point, is
it happening?
I believe the process is already under way, and if we
continue sacrificing our manufacturing base on the altar of
free and unfettered trade, we will go the way of others.
I believe it is happening because our leaders in Washington
remain unconcerned about our near three trillion dollars of
accumulated debt flowing from the dramatic growth of our
adverse balance of trade. In the span of the last dozen
years, we have gone from being the world's largest creditor
nation to being its largest debtor nation. And no end and no
limits are in sight. . . .
Lester Thurow, of MIT fame, in his book ``The Future of
Capitalism'' (1996) said: ``If there is one rule of
international economics, it is that no country can run a
large trade deficit forever. Trade deficits need to be
financed, and it is simply impossible to borrow enough to
keep up with the compound interest. Yet all the world trade,
especially that on the Pacific Rim, depends upon most of this
world being able to run trade surpluses with the United
States that will allow them to pay for their trade deficits
with Japan. When the lending to America stops, and it will
stop, what happens to current world trade flows?''
bankrupting race to the bottom
I believe that in a world where the American standard of
living, as well as power, is being daily challenged, our
political leaders in Washington must defend the economic base
upon which Americans depend for their security and their
livelihoods.
Our leaders cannot expect to keep the public trust if they
abdicate their responsibilities to the electorate by making
decisions to placate bankers and Wall Street-pressured
corporate managers who exhibit diminishing national concerns.
Everyone forgets that when Adam Smith called his seminal
work on economics ``The Wealth of Nations,'' he was arguing
against the notion that trade was the source of national
wealth when, to the contrary, he was arguing that domestic
manufacturing was the true source of national wealth.
In his hierarchy of economic activity, agriculture came
first because of the need to feed the people; a strong
domestic manufacturing base was second as the core of
national growth; trade was rated third in importance, and was
to be used only to acquire resources or luxuries not
available at home.
Smith understood that those nations who focus on trade to
the neglect of domestic manufacturing industry may be
enriching themselves but may also be doing the country great
harm.
``The beginning of wisdom on trade, and indeed all economic
policy, is to understand that the purposes of a national
economy are to enrich all its people, to strengthen its
families, its communities and thereby stabilize society. The
economy should serve us, not the other way around.''
My friend the late Sir James Goldsmith understood this
imperative. He also understood that the U.S. economy--and the
world economy itself--cannot be returned to a sustainable
course unless we redress the recent massive global imbalances
between consumption and growing overproduction. He recognized
that only one basic approach to globalization could
accomplish this goal.
He proposed that the United States make clear to its
trading partners, and its own multinational companies, that
if their products are to be sold in the United States, they
must be made substantially in the United States.
As Sir James argued: ``America should use its matchless
market power to ensure that foreign and American corporations
become good corporate citizens of the United States. They
should bring us their capital and their technologies and
invest in the U.S.A. This would require them to hire workers
in the U.S., pay American wages, pay U.S. taxes, preserve the
environment, ensure human rights, and compete on the level
playing field that does exist among the 50 states. . . .''
They should be reminded that since the American market is
by far the most important in the world, entry is not a right,
but a privilege. In other words, there should be a price and
a reward for doing business in the United States--making
meaningful, long-term contributions to America's continued
security and prosperity, and preserving the global
environment.
Only then can we make sure we are engaging our people in a
race to the top, in living standards; economic stability;
quality of life; and personal security--not in a bankrupting
race to the bottom. . . .
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