Let's Have a Red-White-and-Blue Friday

Something to think about if you're out shopping on Black Friday is that many of the products sold at retail stores were made in China.
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America has been in plenty of tough spots and each time emerged as a stronger nation. We overcame British tyranny, reconciled after the Civil War, vanquished Hitler and rebuilt our economy after the Great Depression.

These are hard times for many Americans, with underemployment at 17 percent and 43 million people on food stamps. But I am convinced that we will once again restore our economic greatness.

Something to think about if you're out shopping on Black Friday is that many of the products sold at retail stores were made in China. And that many China-made children's products in stores like Toys R Us contain toxic materials like polyvinyl chloride.

If you decide to buy electronics on Cyber Monday, you might want to remind yourself that the U.S. makes exactly zero cell phones and fewer personal computers than it did in 1975, when the first PC was sold.

We've lost about 42,400 factories since 2001. Three-quarters of those factories employed more than 500 people when they were still in operation.

We can turn this around, but only if we abandon the religion of free trade. The mainstream media is almost unanimous in its support for job-killing trade deals, despite massive evidence that they hurt the U.S. economy. They recite the word "protectionism" as if it's some sort of voodoo spell that will ward off all criticism.

Thom Hartmann does a great job of explaining how strong economies have historically been built behind a wall of protectionism in his new book, Rebooting the American Dream.
He describes how in this century, protectionism changed South Korea from a poor country that exported fish and human hair for wigs to an economic power that ships cars, machinery and electronics overseas.

In the 15th century, protectionism enabled England to transform itself from a backwater exporter of raw wool into a wealthy nation selling fine clothing and textiles.

In the 18th and 19th centuries, protectionism allowed the United States to grow from a small agrarian country into the biggest and most powerful nation in the world.

Hartmann notes that Alexander Hamilton, as the first Treasury secretary, laid out a blueprint for our young nation's industrial development by fostering new industries and protecting them. Hartmann reviews how Hamilton "noted that when people make things, they also earn money, which will be used to buy more things, thus creating a real economy with things of real value circulating in it."

Hartmann suggests bold changes to reverse America's economic decline. He wants to slap additional tariffs on goods made overseas that compete with our industries. He wants out of the WTO, NAFTA, CAFTA, and all the other trade deals that gave American workers the SHAFTA. Finally, he wants the government to subsidize new and emerging industries.

Those ideas may sound pretty radical to some. But they're very familiar to the U.S.-China Economic and Security Review Commission, which submits to Congress every year on the state of U.S. China's relations. The commission's report, released this week, describes how China's economy is thriving because of its protectionist practices.

Among the report's findings:

•China forces U.S. corporations to move there and hand over their advanced research and development, technology and manufacturing techniques.

•China made its state secret laws retroactive; in July, a U.S. geologist was sentenced to eight years in prison for buying publicly available geologic reports that Chinese authorities retroactively called "state secrets."

•Cyber attacks to steal intellectual property secrets from U.S. companies are originating in China.

The report's conclusions are not too different than Hartmann's. The authors say that complaining to the WTO won't solve our problems with China. They suggest government programs to foster the renewable energy industry are inadequate -- and that tariffs might be the answer.

These are all ideas that we should consider carefully before another Black Friday rolls around.

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