[Congressional Record Volume 154, Number 161 (Friday, October 3, 2008)]
[Extensions of Remarks]
[Pages E2227-E2228]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MANUFACTURERS KNOW ALL ABOUT ECONOMIC COLLAPSE
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HON. FRANK R. WOLF
of virginia
in the house of representatives
Friday, October 3, 2008
Mr. WOLF. Madam Speaker, I want to share with our colleagues a
commentary from the recent edition of Manufacturing & Technology News
by its editor Richard McCormack. He writes that manufacturers in this
country know about economic collapse because that sector of our economy
has been on the downward slide for years and that their experience
should be a lesson for this Nation's leaders who are trying to find a
way to turn around the economy. His article follows:
[From the Manufacturing & Technology News, Sept. 30, 2008]
Commentary: Manufacturers Know All About Economic Collapse
(By Richard McCormack)
It is sad what has happened to the United States.
For years, as editor of Manufacturing & Technology News, I
have heard dozens of domestic manufacturing company CEOs talk
about an impending ``collapse'' of the U.S. economy. These
were the men who were in the unenviable position of having to
close their companies or shut down factories and watch as
most all of their competitors did the same thing.
These were the men who implemented Six Sigma, lean, ISO
9000, and the Baldrige National Quality and Shingo Prize
criteria. They were leaders who agonized over having to move
the world's most efficient production capacity from the
United States to Mexico and China in order to stay in
business, because no matter how good they were, it wasn't
good enough to survive. They could compete with other
companies, but they could not compete against other
COUNTRIES--countries that cheated in every way imaginable.
These manufacturing company CEOs were men who loved their
employees. Who grew up with their employees. Who knew their
families. Who knew in their hearts the economic, cultural,
moral and physical destruction that was being wrought upon
their communities.
U.S. manufacturing company CEOs died many deaths, watching
as Wall Street mavericks and their economic ideological
apologists in the U.S. federal government, in Congress and
their high-paid agents in Washington, D.C., forced
hundreds of thousands of dedicated, hard-working Americans
into the street, to fend for themselves in a game that was
rigged against them.
Has the financial class driven through the heartland of
America lately? Have they not taken AMTRAK between New York
City and Washington, D.C., passing through the industrial
back lots of Baltimore, Wilmington, Philadelphia, Trenton and
Newark? Have they not seen an American landscape stretching
for thousands of square miles that looks like it has been
bombed out?
There are places in America that are ``healthy,'' but these
places are even worse: shopping and strip malls located on
the edges of America's deteriorating towns and cities, lined
with vast parking lots and national chain stores: Applebees,
Home Depot, Wal-Mart, Wendy's, Days Inn, Outback Steak House.
They are soul-less places--``Anywhere USA''--as depressing as
the crumbling inner city cores of hundreds of American cities
and towns. This is what has become of America. Wall Street
had a lot to do with this. As part of the financial bailout
bill, they needed to include a provision on teaching ethics
and civics.
The heroic men running companies that made durable goods
wept on the phone when I called to ask about why they closed
their factory after it had been in operation for 80 years or
more.
These people were not selling financial paper or making
products that were obsolete and no longer in demand, like
buggy whips. And yet when I speak with economists about
manufacturing, they invariably rationalize the loss of
America's wealth-generating sector by claiming the companies
that are dying are making ``buggy whips.'' It is wrong and it
is infuriating. We're talking about the United States
economy, which has just suffered a massive financial heart
attack.
I remember writing about the manufacturing job situation in
early 2004. It was the 35th consecutive month of
manufacturing employment layoffs, with the latest BLS figure
coming in at 135,000 production workers being told to go home
and not ever come back. This was a crisis. I wondered why in
the hell not a single person in the Bush administration and
only a handful of people in Congress cared about the collapse
of the wealth-generating sector of the American economy. As
is happening with the financial sector today, manufacturing
five years ago was being disassembled in front of their eyes.
There were no bailouts--manufacturers weren't looking for
them--there weren't even bromides.
I remember thinking as Bush invaded Iraq that it was
America's last great hurrah. As America's military hardware
was being shipped to the Middle East, America's industrial
base was being shipped in the opposite direction to China.
The war was happening at the same time that ``outsourcing''
became a big story in the media. But the business press got
bored and started covering the incredible run-up of housing
prices. ``Whoopee,'' said all the journalists and economists.
``Who needs industry when we've got finance and housing!''
But the manufacturing industry's plight continued. I wanted
to rename my publication ``One Outrage After Another.'' I was
constantly questioning whether I should continue writing all
the stories of companies dying, of industries leaving, of
workers being laid off, of trade deficits skyrocketing, of
China cheating, of the perverse reaction among Washington
elites to rationalize the destruction. I wondered if I was
the problem. If being Irish meant fixating on the negative.
But I had covered manufacturing through the 1990s, and the
story wasn't depressing. I even wrote a book about U.S.
companies' adoption of the Toyota Production System and lean
manufacturing and the good it was doing. It was not me. It
was the story that could not be ignored.
I got to know other people who couldn't sleep at night
fretting over what was happening to the United States
industrial base. These were patriotic people who started to
coalesce around these issues, who were utterly perplexed by
the federal government's total unwillingness to act on behalf
of American producers and their workers.
The government knew what was going on. But its political
appointees made nonsensical ideological arguments concerning
``free trade'' and ``free markets.'' ``We've got a war going
on, we can't support U.S. manufacturing'' was a refrain I
heard over and again by political appointees at the
``Commerce'' Department and White House.
Manufacturers weren't looking for a hand out or a bailout.
They only wanted one thing: for the United States government
to put the interests of American producers
[[Page E2228]]
above the interests of foreign countries, foreign producers,
importers and the multinational companies that were taking
advantage of mercantilist practices in China. American
manufacturers wanted the U.S. government to put the interests
of American producers ahead of the law firms representing
foreign shipping companies, the lobbyists representing Wall
Street and, again, the multinational companies that were
swimming in record profits by sending their production
offshore; all while the critical manufacturing sector was
left for dead. ``Good riddance,'' said the financial elite
and its power structure: ``those jobs sucked anyway.''
Those same free-market, capitalist, anti-government, anti-
regulation ideological zealots are now begging--demanding--
that taxpayers give them a trillion dollars for destroying
the American economy.
I never once reported about the dire warnings of an
economic meltdown--about the inevitable financial catastrophe
being caused by the asymmetrical global trade imbalances that
were mounting by the day. I had my own 401k to worry about
along with three older children, and I was not going to be a
reporter who stoked the possibility of economic Armageddon.
I guess I was wrong. I guess I should have been reporting
on the impending collapse because President George Bush,
Treasury Secretary Hank Paulson and Federal Reserve Chairman
Ben Bernanke sure haven't had any such reservations about
scaring the bejesus out of us.
What strikes me as particularly sad, however, is the clear
FACT that in all of the discussion about bailing out the
financiers and their agents who killed the American economy,
there has not been one mention of the real reason for
America's collapse, nor of what is needed to start the long
process of restoring the country back to some semblance of
economic health.
The housing bubble and sub-prime loans are only part of the
problem.
The real culprit is the fact that almost everything
Americans buy is made somewhere else. The country continues
to ship all of its wealth overseas. Did the economic policy
makers not watch the opening ceremony of the Olympic Games in
Beijing? Have they not seen the 200-story skyscrapers going
up in Dubai?
The core of America's economic problems stem from the trade
deficit and the elimination of tens of thousands of factories
and millions of jobs that were creating the wealth the
country needed to pay for everything. Without that wealth,
the financial sector invented playthings and the nation
borrowed until it could borrow no more.
Oh, but wait! The answer to the problem is to borrow more
to bailout the people who over borrowed. The Paulson
proposal, unexpectedly defeated on Monday September 29 in a
harrowing live television broadcast, was to allow the U.S.
government to payoff bad debts by going deeper into debt. It
did not sit well with anybody.
September 29, 2008, will be an important day in the history
of the American Republic. It is the day the American era
ended. Watching the live pictures on CNBC of the traders in
the pits watching the television monitors above their heads
as the vote on the House floor was tallied was like watching
New Yorkers standing in horror as they watched the burning
World Trade Center towers in 2001. The congressional vote
count was simulcast with the Dow, and they were crashing in
unison. There was shock in the eyes of the traders, and a
panic among the CNBC broadcasters, who couldn't believe what
they were witnessing. These men and women are consummate
professionals and are not prone to panic. But there they were
barking out: ``What's happening with gold?'' ``Look at the
oil markets!'' The market did what the towers did and what
our President predicted: it collapsed. For the second time in
seven years, the energy was visibly drained out of Lower
Manhattan and the country at large, as it realized a scary
new era had begun.
Yet, there is still NOT ONE mention from anyone in power--
especially not the two presidential candidates, nor of a
single congressional leader--of what is really needed to
bailout the United States.
The only way out of this mess is for the United States do
everything it can to make the country what it was until 30
years ago: a nation that valued manufacturing.
The U.S. economy long ago collapsed around domestic
manufacturers. Now it's collapsing around the financial
wizards who either forget or didn't know that their
livelihoods depended on a robust industry and workers making
livable wages.
As someone who works in Washington, attends press
conferences, government meetings, congressional hearings and
who asks questions of the power elite, I can assure you from
first-hand experience that the United States government did
not do a single thing--nothing--to re-set the global ground
rules to allow U.S. industry and its millions of workers to
be competitive. In fact, all the rules were changed to favor
the foreign and financial interests. The country is now
paying the real price of saving a few bucks at Wal-Mart.
The United States government and its elected reprsentatives
long ago stopped representing the interests of American
workers and American producers. If there is any silver lining
in the historic House vote on the Bailout Plan on September
29, it is that maybe Congress has woken up to the power of
the people. Unfortunately it was the wrong time to wake up.
``The people'' must now pay the consequences of their elected
representative's somnambulance. They must now prepare to
confront the ``dire'' consequences caused by decades of Wall
Street's short-term focus on quarterly profits at the
exclusion of everything else.
The country has a lot to learn from American manufacturers
and their workers, and it will not like what's coming one
bit.
____________________