As America’s economy continue to sputter, politicians blame China for taking American jobs. But is that fair or is it just provocative rhetoric that redirects the ‘pitchforks?’ I find it ironic the same politicians tout globalism when it fits their agenda, yet they refuse to acknowledge the dynamics and nature of the global supply chain when it comes to domestic economic policies. This is especially true when US companies seek affordable resources abroad. Then it’s: “those greedy corporations are shipping our jobs to China!” The truth is it’s most convenient to make China the boogieman because this populous narrative works like a charm to deflect attention. Clearly, the vast number of imported consumer products is proof we’re loosing traditional manufacturing jobs in America, but China isn’t the problem, Washington is. Capitol Hill has a spending addiction and our gargantuan debt is evidence they will do just about anything to feed it. Therefore politicians make us watch the other hand to cover for the white elephant. The fact is, businesses move production to China because most have little choice.
Let’s first, set the record straight: “profit” isn’t “evil”. It’s not only necessary, the inability to profit prevents growth and doom businesses to failure. Just as a great work force is important, profit is likewise crucial. Profit provides resources for expansion creating more jobs. It enables rewarding excellence further driving performance. Profit builds sustainability which guarantees tax revenue. It also funds corporate charity to benefit the needy, and profit adds vibrancy and prosperity to the community. Yet many politicians routinely vilify corporations and use class warfare shamelessly to pit workers against management. They strangle businesses at the behest of their special interest partners like the unions, the green lobby and others. Who in America does not want better wages and security for their family? What American does not want clear air, clean water and a healthy environment? The ruling elites manipulate public opinion by exploiting populist fears to enrich their political capital. Their crime is the systematic degradation of American free enterprise. In other words, they’re killing the golden goose.
Demagogues suggest “greed” is the motivator, but the truth is many companies can no longer afford to make products at home. To do so means their high prices will put them out of business. It’s not “greed,” it’s about survival. In fact, for many industries domestic production hasn’t been a viable option for years due to: high taxes, draconian regulations, exploding healthcare costs, higher labor costs, restrictive work rules, unaffordable pension obligations, strangling environmental compliance, more permit fees, more license fees, bloated legal costs, prohibitive raw materials and energy costs. By contrast, China promotes free market activity even as they restrict political freedoms. Imagine, these days China lectures us about our lack of fiscal discipline! The irony is not lost on this humble patriot living with restrictions on our own economic liberties.
Jobs have disappeared because our traditional manufacturing is unaffordable. Progressive politicians, their union partners and radical environmentalists put America in this untenable position. Their inability to deliver real solutions to prevent the job exodus is not China’s fault. For our politicians to vilify American Business, the engine of our economy, is like putting sugar in our own gas tank. Protectionists say buying Chinese only makes China richer while we become even more indebted to them. Poppycock! That we owe China has nothing to do with our consumption but everything to do with our out of control government deficit spending, so they vilify China to defect blame from the reckless political class.
The government requires the “Made in China” label displayed on products manufactured in China, but most consumers don’t know the untold story beneath that label. Take toys for example, Mattel manufactures in China, but did you know Mattel also exports billions of Dollars of toys internationally? Even though you see a “Made in China” label, it does not mean all Mattel revenues go to China. Quite the contrary, on average only 15 to 20% of every Dollar paid for a Mattel toy goes to the factory, the rest Mattel and its customers keep to create jobs, buy services and invest right here at home. If we add a 25% tariff on Chinese imports as some suggest, what happens to Mattel’s business and the economic prosperity Mattel generates in America? The “Made in China” label is misleading. It implies the products are Chinese owned. They are not. Like Mattel’s Barbie, these are US brands. The Chinese factory or original equipment manufacturer (O.E.M.) is merely a vendor in Mattel’s supply chain.
Politicians say China manipulates its currency to artificially keep their exports cheap so we should impose tariffs. But their US customers benefit from the low prices as do US consumers. By imposing a tariff we will hurt our own companies and consumers, especially the poor. Waging a trade war isn’t the answer. If America returns to common sense free market principles, we will be better able to compete. We should increase production of domestic energy, raw materials and rebuild our own manufacturing services. A competitive America will give us greater leverage with China to level the playing field.
Progressive law makers have deliberately banned domestic drilling, blocking access to our own petroleum. Obama blocking the Keystone Pipeline is a prime example of an unreasonable liberal-progressive bias against supporting domestic energy. We may debate the motives of the anti-oil crowd another time, but let’s expose its consequence to business. Oil is a vital global commodity critical to all industries. Plastics its byproduct, is also essential to produce consumer and industrial products. Plastic raw materials are derived from petroleum but because our radical environmental policies have restricted drilling and our refinery capacity, businesses are forced to go overseas. When US companies contract Chinese factories they also gain access to affordable international raw materials. Therefore, unless our domestic policies change to permit drilling, companies will continue to go overseas and American jobs will continue to do likewise.
US companies with customers world-wide contribute to our GDP. To service international customers they must operate globally and manage a global supply chain network accordingly. China has positioned itself extremely successfully as a reliable manufacturing vendor of choice. Their success was not built on the backs of Americans. Our misguided economic, labor, educational, environmental and energy policies are to blame for our malaise. Washington is the problem. It’s an outrage our leaders are not focused on solutions to enable American businesses to compete. Their stunning lack of leadership has been the steady undoing of what was once the greatest growth economy on Earth. Therefore, whether you’re an American entrepreneur, union worker, corporate professional, environmentalist, educator, student, home maker, immigrant or public official, we all share a common interest in an economically vibrant America. We must work together to solve real problems not for short term gain but for America’s long term success. Politicians need to be held to account to not pit Americans who need jobs against Americans who provide them.