[Congressional Record Volume 156, Number 128 (Wednesday, September 22, 2010)]
[Senate]
[Pages S7337-S7341]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TRADE
Mr. DORGAN. Mr. President, there is a lot of talk and politics on the
floor of the Congress always about something called the American dream.
People talk about the American dream. I suppose we reflect on that and
think the American dream is about a time the American people have a job
that pays well, a job with security, a career with a growth ladder to
it, a family, a home, living in a nice community, living on a safe
street--the American dream.
We look at the history of this country and discover that beginning
early in the last century, we started changing things in America--
lifting up people, doing a whole series of things to develop a group of
middle-income Americans. We have been enormously successful, perhaps
more than any other country in the world. We expanded a middle class.
Now things are changing, and we see that people are upset, nervous,
and in some cases angry. We see reports that they worry their children
will not have it as good as they have it. They worry about the future.
What is at the root of all of that, and what can we do about all of
that? Everyone wants to do well. All of us have hopes and aspirations
for ourselves, our children, our families--the American
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dream. Someone once asked J. Paul Getty: How is it that you can be
successful? Give me the elements of success.
He said: It is very simple. No. 1, go to school and get the best
education you can get. No. 2, get a good job and work really hard. And,
No. 3, strike oil. That is the advice of J. Paul Getty.
I suppose that works if you are J. Paul Getty. But his advice, of
course, makes a lot of sense on the first two points: get the best
education you can and get a job and do well, work hard.
The problem is today, in late September of 2010, a lot of people woke
up this morning without a job and cannot find one. It is estimated
there are about 20 million Americans this morning who woke up
unemployed. Most of them put on their clothes and went out looking for
work, a triumph perhaps of hope over experience because many of them
have tried for a long while and have not been able to find a job. And
they are very worried there may not be a job for them in the future.
We had 2.1 million workers in the past two years having to leave
manufacturing plants, losing their jobs as manufacturing workers. Those
are often the very good jobs. They pay well with good benefits, in most
cases. Mr. President, 2.1 million of them have lost their manufacturing
jobs in the last 2 years; more than 5 million have lost their jobs
since 2000.
What do we do about that? What can we tell the American people when
they see their neighbors, their friends, and their relatives searching
for a job, having been laid off from somewhere they worked for 15, 20,
25 years? Then they read in the paper that in Stanleytown, VA, a
company was started by a man named Thomas Stanley, a young dairy farmer
in southern Virginia, who decided he wanted to create furniture that
was of superior craftsmanship and affordable still, so he started
making furniture. It became Stanleytown, and he employed highly skilled
craftsmen, 1,300 people who carried on his vision at a manufacturing
plant of 1.7 million square feet.
Then those who make Stanley furniture woke up a couple months ago and
read this in the paper:
Stanley Furniture's decision to close its plant in the
small town that bears its name fell like a hammer blow on
southern Virginia and resounded across an industry
increasingly moving overseas. More than 500 employees will
lose their jobs this year as the manufacturer shuts down its
Stanleytown, VA, plant, where the company has made furniture
since 1944.
Where is it going? It is going to Asia. Those 500 people--I do not
know their names. I cannot tell you who they are. I would not recognize
their faces because I do not know any of them. But I am sure those 500
people are paying an enormous price in their lives for having lost jobs
at a plant in a company that produced a product about which they cared
very deeply. Gone to Asia. Why? Were these bad workers? Did they decide
it was a job, but just a job, so they were going to loaf all day and
not do their work? No, it was not that at all. In search of low wages,
this company decided: We are going to Asia to produce this furniture.
I mention Stanley Furniture. The other day I mentioned a furniture
company from Pennsylvania because I had just been to Philadelphia--
Pennsylvania House Furniture. It has a very similar story in many ways.
Pennsylvania House Furniture, made for a century in Pennsylvania, upper
level furniture, fine furniture made by craftsmen, one day it was
purchased by La-Z-Boy, and La-Z-Boy decided: We do not want to make
Pennsylvania House Furniture in Pennsylvania. We want to take the
Pennsylvania wood and ship it to China, have them put it together, and
ship it back to America to be sold. They told all the workers: You are
done. It is over. The plant is closed.
On the last product of the day, on the last day at work, these
craftsmen who made this fine furniture for Pennsylvania House Furniture
turned over the last cabinet that came down the line, the last one they
had made, and they all signed their names--proud craftsmen working for
a company that existed over 100 years, the last piece of furniture ever
to be made with American hands. Jobs gone.
The list is endless. This is not a short list. Hershey chocolates,
York peppermint patties: ``The cool refreshing taste of mint dipped in
dark chocolate will take you miles away.'' In fact, it will take you so
far away it will take you to Mexico because that is where they moved
those jobs when they shut down the mint Hershey's plant in the United
States of America. It will take you miles away. It certainly took away
the jobs of those who were working there.
I am not going to go through all these charts because I have done it
before. I know what repetition means around this place. But I want to
talk just for a moment about the consequences of this to a lot of
people whose names we do not know and faces we would not recognize but
who are living as victims of something they cannot control. That is the
erosion of America's manufacturing base with jobs shipped overseas
wholesale and the hollowing out of America's manufacturing capability.
Why does that matter? No. 1, because a lot of people are losing jobs
who need jobs in this country. And, No. 2, this country will not remain
a world economic power unless we have a world-class manufacturing
capability. That is just a fact.
The question is, When will we stand up for this issue and decide we
have to do something about the export of American jobs?
Paul Craig Roberts--I have met him--former Assistant Treasury
Secretary under President Reagan said:
Outsourcing--
He means outsourcing of jobs--
is rapidly eroding America's superpower status. Only fools
will continue clinging to the premise that outsourcing is
good for America.
Another quote, if I may, from Dr. Paul Craig Roberts:
In order to penetrate and serve foreign markets, U.S.
corporations need overseas operations . . . However, many
U.S. companies use foreign labor to manufacture abroad the
products they sell in American markets. If Henry Ford had
used Indian, Chinese and Mexican workers to manufacture his
cars, Indians, Chinese and Mexicans could possibly have
purchased the Fords but not Americans.
Because they would not have had the jobs. Pretty prescient. Pretty
interesting.
This is a chart that shows Stanley Furniture's workers in the
manufacturing plant. But, of course, that was then, and now it has gone
to Asia.
I want to show this picture only because the Los Angeles Times needs
to know this. I spoke of this subject some while ago and showed a
picture of the dancing grapes that represented the advertising campaign
for Fruit of the Loom underwear. They left America and are produced
elsewhere. The Los Angeles Times wrote a piece saying I was on the
floor of the Senate talking about underwear, not describing that I was
talking about trade and the movement of jobs overseas. If they write
about it again, they might mention I was talking about jobs moved
overseas that were performed by American workers to produce Fruit of
the Loom.
I have described often Radio Flyer--a little red wagon made in
Illinois for over 100 years by an immigrant who put together a
company--that almost every child has experienced. Almost every American
child has ridden in a Radio Flyer little red wagon. But they are not
made in America anymore. They have gone to China.
Huffy bicycles, gone to China; left Ohio, gone to China. Not made for
$11 an hour by an Ohio worker, as was the case, but made now by Chinese
workers who make 50 cents an hour, working 7 days a week, 12 to 14
hours a day.
I have often mentioned, and will mention again, that all of these
folks, on the last day of work, when they walked out to the parking
lots after having been fired so their jobs could be moved to China,
left pairs of empty shoes in the parking lots saying: Yes, you can move
our jobs, but you will never replace us. They are never going to
replace these workers.
This represents a photograph of a company called HMC. Not everybody
is moving overseas. There are some manufacturers--and I want to pay
attention to what the owner of HMC said recently. They make high-tech
gearboxes, high-tech machinery. HMC--made in America and enormously
proud of it.
Let me mention what the president and CEO of HMC said:
Offshoring in search of higher profits is a mistake . . .
because it ignores manufacturing's larger purpose in U.S.
society.
This is from the CEO of an American manufacturer. Further he says:
[[Page S7339]]
It's my belief that every American citizen, not only me,
should feel strongly about maintaining one of the most
important cultures we have, and that is manufacturing.
Good for Mr. Robert Smith, wherever he is. Good for Mr. Smith,
president and CEO of HMC, believing that manufacturing is important in
this country.
What does all this mean? Our economy is in some significant trouble
for a couple of reasons. No. 1, for about a decade and a half or two
decades, we have pursued a different trade strategy--a trade strategy
in which we have refused to stand up for our economic interests.
For the first 25 or 30 years after the Second World War, it was just
understood that we were the biggest, the best, the strongest--we were
American. Whether it was trade competition or any other competition, we
could beat anybody in this world with one hand tied behind our back.
Much of what was imported were trinkets that were inexpensive trinkets
that were pretty worthless. We made products that were made in America,
products that lasted, products that worked, products on which you could
count.
But in the second period following that first quarter century after
the Second World War, things have changed. We have largely had
concessional trade practices. It used to be we just did outright
foreign aid to help other countries. Not anymore. We have for the last
20 years or so done concessional trade practices to help other
countries. We have said: We will do a trade agreement with you that is
unfair to us because we are bigger and stronger and better than you
are. So here is a trade agreement. We have done that time after time.
Therefore, we now have very large trade deficits.
Let me show the consequences of a trade agreement.
We have trade agreements with Korea. Here is the issue of automobiles
with Korea. Last year, because we had a deep recession, we were not
buying as many cars. Last year the Koreans put on boats and sent to
this country 467,000 cars made in Korea--467,000 Korean cars. Those are
Koreans who go to work in the morning to a job. They are making cars.
They are pleased as punch they make cars because they sell them in
Detroit, Bismarck, and Denver.
Here is what we were able to sell in Korea: not 467,000 cars, Korea
allowed us to send 6,000 cars to Korea.
One might say: Is that an accident? Of course, it is not. It is
exactly what the Korean Government wanted. They want the jobs in their
country. They want to make the cars in their country and send them
here, and they do not want our workers making cars we send to Korea.
If you wonder about that, I have another chart that shows what you
will confront on the roads in South Korea. If you drive down the road
in South Korea, what you will see are a lot of vehicles, and you will
see almost no foreign vehicles. Ninety-eight percent of the cars on the
road in Korea are made there. They are made and manufactured in that
country. Now, is that an accident? That is exactly what the Korean
Government wants. They do not want foreign cars, and they do all kinds
of things to keep them out. They want jobs for their people.
So we now have a trade agreement with Korea that we have not yet
ratified or voted on in the Senate, and they didn't address the
automobile issue. It is unbelievable to me. Why would they do that? How
about standing up for our interests, for our workers?
So, Mr. President, the reason I came to the floor of the Senate is
that there is now on the calendar a piece of legislation that would at
least begin the process of trying to even up some of the trade issues.
We actually, strangely enough, give a tax benefit for U.S. companies
who decide they are tired of manufacturing in America. If a company
says: Let's get rid of those workers. Let's lock up that manufacturing
plant. Let's send the jobs to Senshen, China, and manufacture there.
Then we will ship those bicycles and wagons and trailers and trucks and
garage door openers back, and we will sell them to Americans. That is
what we will do. And our country says: You know what. That would be
good. Why don't you do that--fire your workers, get rid of your
manufacturing plant, go to China, and I tell you what we will do. We
will give you a tax break for doing it.
We have voted four times in the Senate to eliminate that tax break. I
have offered that piece of legislation four times. On all four
occasions I have lost the vote. We are now about to vote again in the
coming days. Maybe at last--at long last--when 20 million Americans
can't find work, maybe we will see if we plug the drain just a bit on
these jobs that are moving out of this country at a rapid pace to be
located in low-wage countries around the rest of the world. Maybe now
is the time. Maybe people here will say: You know whose interests I
stand up for? The workers in my State, American workers, people who are
producing good products that say made in America.
When I speak this way, there are some who will say: Well, you are
being a protectionist. You want to change things. You are being a
protectionist. You are a xenophobic isolationist stooge. You don't get
it at all. It is a new world order. We have all these countries who can
do things cheaper than we can do them, and you don't seem to understand
that. So you are just a protectionist.
Well, let me plead guilty to wanting to protect our country's
economic interest. I would hope every desk in this Chamber would be
occupied by someone with similar instincts and wanting to stand up and
protect the economic interests in this country.
I am not interested in withdrawing from the world. I am saying,
however, that after a long struggle and doing the things that are
necessary to improve things, as we have done in the struggle for
workers' rights, the struggle for safe workplaces--and people were
killed over those struggles. I described in the first book I wrote
about James Fyler who was shot 54 times. You know why he was shot 54
times in Ludlow, CO? Because he believed people who went underground
and dug for coal ought to be able to work in a safe workplace and be
paid a decent wage, and for that he was killed.
We have struggled for a century to raise standards, to get safe
workplaces and decent wages. Now, all of a sudden we are told it is a
new world order. We should compete with workers who are going to work 7
days a week, 12 to 14 hours a day, for 50 cents an hour. If we can't
compete with that, tough luck.
That is what they told all the folks at Huffy bicycles. They said: If
you can't compete with the Chinese prices, you are out of luck because
that is our standard. The list is endless. Just about every kid has
played with Etch A Sketch. Everybody knows what Etch A Sketch is, a toy
made in America. It was the principal employer of a town in this
country. But no more. Walmart told Etch A Sketch: You won't be
marketing at Walmart unless you meet this price, and Etch A Sketch has
gone to China. All those people who were proud of making a children's
toy are now not working.
Mr. BROWN of Ohio. Mr. President, will the Senator yield for a
question?
Mr. DORGAN. I would be happy to yield.
Mr. BROWN of Ohio. I have been listening with fascination to the
Senator's speech because there is nobody who comes to the floor and
better explains jobs, trade, trade policy, and tax policy and what it
does to our communities and our workers.
The Senator mentioned two very well known American companies, and
both happen to be from my State--Huffy bicycles and Etch A Sketch,
which is a company called Ohio Art in Bryan, OH. That is exactly what
happened. Walmart came to Ohio Art and said: We want to sell Etch A
Sketch for less money than we are selling it for now. So they had no
choice.
But let me ask the Senator, it seems to me that there has not been
anytime in recent history where U.S. companies have put their business
plans together in this way: Instead of manufacturing something, cutting
costs, and treating their workers decently and contributing to the
community--which American companies have done for generations and is
why we have such a strong middle class--it seems that the business plan
for so many large American companies is to move their production
offshore, obviously getting less expensive labor, avoiding
environmental and worker safety rules, and then selling the product--
well, first lobbying Congress to change the rules, as they did with
PNTR for China, but moving their
[[Page S7340]]
production out of the country, offshore, producing it, and then selling
it back into the home country.
That is a curious business plan that many American companies follow.
I hear those companies say to me: Well, we have no choice but to go
offshore for the cheapest production because our competitors are doing
that, even though they lobbied Congress to help change the rules. I
mean, it is a bit cynical but a curious business plan that you leave
behind the community that built you up and you move somewhere else and
then you sell the products back to the country in which you were
founded.
Mr. DORGAN. I would say to the Senator from Ohio that it is a
business plan these days for too many companies. Not all, but too many.
There are some companies--and I just described a company, a CEO, and I
was giving him credit because what he said is important--a company
called HMC. It is a company that manufactures very high-tech products
in this country. He says:
It's my belief that every American citizen, not only me,
should feel strongly about maintaining one of the most
important cultures we have, and that is manufacturing.
The fact is, we are in a situation where a lot of companies have
decided they would like to produce elsewhere, hire other workers, but
they would like American consumers to buy their products. The question
in the longer term is, Who is going to buy those products if American
consumers don't have jobs? I mean, that is the question.
I have talked a little about China. I am chairman of the
Congressional Executive Commission on China, and I just chaired a
hearing for 2 hours about the issue of piracy and counterfeiting and so
on in China. One of our witnesses described something I had written
about in my book as well; that is, American businesses should know
their intellectual property is not secure in China. It will be stolen.
I am not a big fan of them--in fact, I have fought the pharmaceutical
company pretty tough on the floor of the Senate--but Viagra, made by
Pfizer, was quickly reengineered in China and just sold without any
respect for property rights or intellectual property rights. In fact,
the witness over at the hearing this afternoon said the Chinese, once
they reengineered Viagra and sold it on their own basis, had a new
twist on it. They were putting it in soft drinks and hot dogs. So it
was kind of interesting to hear this guy, who is an expert in
intellectual property rights, describe his view.
He finally said, by the way, Pfizer has won a case against the
Chinese for reverse engineering of Viagra. But this discussion is not
about that, it is about jobs in virtually every industry in this
country. There are service industries that can never leave, of course.
You can't take a taxicab driver's job and move it to China or India
because they have to drive a cab up and down an American street. But
Alan Blinder and others have said we are talking about the potential of
tens of millions of additional American jobs leaving unless there is a
strategy to understand that our participation in the global economy is
designed to raise up others, not push down our standards. It is
designed to be in our economic self-interest to try to keep Americans
employed in good jobs that pay well.
So we have a lot to do. I mentioned, Senator Brown, that we are
likely to have another vote in the Senate in the coming days on the
question of shutting down this unbelievably ignorant provision in tax
law that says if you leave America and get rid of your workers and
padlock your plant and then go produce the jobs in China or India and
then sell back here, we will give you a tax break for doing that. We
would like to reward you for doing that. The other side of that is that
a lot of American business men and women who started their companies
here don't intend to go anywhere. They are here and they are proud of
it and they are not leaving. They are going to hire their friends and
neighbors in their communities, and they are going to make the best
products possible. They are going to stick a made-in-America label on
it. But they are disadvantaged. It is not just the workers but those
American business owners who are now having to compete against the one
that was across the street and then went to China and now has a lower
tax rate because our Tax Code says that is fine.
I hope at long last that maybe we will have enough people here with
the courage to say: It is not fine with us. It is not fine with people
who are unemployed in this country. It is not fine with business men
and women who are disadvantaged because of it.
Mr. BROWN of Ohio. Will the Senator yield once again?
Mr. DORGAN. I will be happy to yield.
Mr. BROWN of Ohio. I thank the Senator.
I would add that a major manufacturer that leaves from Minneapolis or
leaves from Cleveland or from North Dakota is a company that has the
resources to do that, and that company has a multitude of component
manufacturers in its supply chain and that large company that leaves
may be its biggest customer. Perhaps it is a big assembly plant that
leaves to go to China. The component manufacturer that sells to that
auto assembly plant has all of a sudden lost its biggest customer. It
is not big enough to move to China, so it loses 30 percent of its
customer base.
So it is not just the company that moves and what that does to
American workers and companies and communities, it is also those
multitude of component manufacturers. In the auto industry, for
instance, there are way more people working in the supply chain than
there are in the actual assembly plant. So in the wake of a major
company moving overseas, we see devastation in the entire supply chain
of component manufacturing. I am sure you saw that with Huffy bicycle.
There is the manufacturer that made the steel, that stamped the
fenders, that made the tires and the spokes that were taken to Huffy--I
think to Celina, OH, in those days--to assemble. So all of them lose.
In smaller communities, as the Senator knows, a manufacturing plant
oftentimes has a husband and wife both working at the same plant,
making $12 to $15 an hour. Their whole lives are upended because all of
a sudden they have lost both jobs in their family.
Thirty years ago, 30 percent of our GDP was in manufacturing and only
11 percent was in financial services. That number has flipped now, and
look where it got us. Only 11 percent of our country's GDP is now as a
result of making things. We know how to make things in this country,
and we are losing that ability. Without a real manufacturing policy--
more than a strategy but a policy--like every other country has, we are
going to see a decline in the middle-class long term.
I thank the Senator.
Mr. DORGAN. Well, I thought it was interesting that when the Senator
from Ohio and I worked hard on putting together the Economic Recovery
Act to try to put a net under this economy and stop it from
collapsing--and we were probably close to having a complete collapse.
Despite the folks who come to the Senate floor who say no jobs were
created, the CBO says 3 million jobs were created or saved. But when we
put that together, Senator Brown from Ohio and I and others wrote
something called a ``Buy American'' provision, and people nearly had
apoplectic seizures here. They were doing cartwheels in the Chamber, so
upset and concerned and nervous about what this would do, if with our
money, in order to employ our people, we decided to buy our products.
How selfish is that, they would say.
It was exactly the right thing to do. Why would we try to stimulate
economic recovery in America by buying goods from China or Japan? So
what we tried to do is to say that there should be a preference with
these funds to buy American. But even that was unbelievably
controversial. We got it done, and I am pleased we did.
While the Senator is here, I wanted to make the point that the Huffy
bicycle story is almost the perfect storm of everything that is wrong.
These are workers in Ohio who made $11 an hour plus benefits and then
they all got fired. I have described about their leaving their empty
shoes in the parking lot on the last day of work and so on. But the
Huffy bicycle was sent to China. I described the conditions under which
they are now made. This brand still exists. It is still sold in major
American stores, Wal-Mart and Kmart and so on. But once it was sent to
China, it declared bankruptcy and then
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the Chinese bought the brand. The bankruptcy meant that not only did
the workers in Ohio lose their jobs, the Federal Government here, under
the Pension Benefit Guaranty Corporation, assumes the pension of the
fired workers, and China ends up with the brand. We still buy the
bicycles but the people are out of work and we are stuck with the
pensions.
It is almost a perfect storm of what is wrong with what we are doing
in this country. The question is, when will it ever change? The minute
we talk about it the Senator from Ohio will be called--well, he's one
of those protectionists. He has a narrow head; doesn't understand the
breadth and depth of this new global economy. They say that about me
and all of us who say this doesn't add up.
We have to stand up for this country's economic interests. We don't
need to put a fence around America. We don't need to decide there is
not a world economy--there is a global economy. We need fair rules and
to stand up for our economic interests, and that has not been the case;
it has not.
The question is what do we do about that. At least you can take a
baby step in the right direction. One of my regrets, serving in this
institution, is that I may well leave this institution without having
succeeded, at least on this issue. I have been proud to participate in
a lot of things that have been successful in advancing public policy
but this has meant a lot to me. I think America is losing its
capability, its energy, it manufacturing base. People are losing hope,
with nearly 20 million of them out of work. I think it is very
important for us to understand we have to address this issue.
There is no social program in this country as important as a good job
that pays well. That is a fact. We have to find ways to put people back
to work in this country. People say innovation--I am all for
innovation. But we innovate, we create the product, but they
manufacture it somewhere else and the jobs are gone. It is very
important for us to rebuild our manufacturing capability in this
country.
I said at the start we will not long remain a world economic power
unless we have world class manufacturing capability. The American
people need to see some hope from this Chamber. At least one step, one
ray of hope would be if we decide in the coming several days to enact
legislation that is now, I believe, rule XIV'ed at the desk, that we
likely will have debate on--and I will be here during that debate--that
will say finally, at long last, we will stop, put an end to this
insidious provision in the IRS code that says if you move your American
jobs to China we want to reward you with a tax break. That has to end.
It has to end, the sooner the better.
Let me end by saying there is plenty in this country that needs
fixing but there is a lot to work with because there is plenty right in
this country as well. I have spoken previously about the New York Times
1-inch story about a man named Stanley Newberg. Stanley Newberg, with
his father, left his country in Europe to flee the persecution of the
Jews, landed in New York, went peddling fish with his dad, went to
school, an immigrant kid, went to college, became a lawyer, went to
work for an aluminum company, managed the place, finally bought the
place, then died. When they opened his will he left his $5.7 million to
the United States of America, he said, with gratitude for the privilege
of living in this great place. What a wonderful thing to hear. What a
wonderful thing to do. It is a wonderful reminder, it seems to me, how
important this place called America is in the heart of many people.
I yield the floor.
The PRESIDING OFFICER. The Senator from Washington.
____________________