Jewish World Review May 27, 2003 / 25 Iyar, 5763

Lou Dobbs

JWR's Pundits
World Editorial
Cartoon Showcase

Mallard Fillmore

Michael Barone
Mona Charen
Linda Chavez
Ann Coulter
Greg Crosby
Larry Elder
Don Feder
Suzanne Fields
James Glassman
Paul Greenberg
Bob Greene
Betsy Hart
Nat Hentoff
David Horowitz
Marianne Jennings
Michael Kelly
Mort Kondracke
Ch. Krauthammer
Lawrence Kudlow
Dr. Laura
John Leo
Michelle Malkin
Jackie Mason
Chris Matthews
Michael Medved
Kathleen Parker
Wes Pruden
Sam Schulman
Amity Shlaes
Roger Simon
Tony Snow
Thomas Sowell
Cal Thomas
Jonathan S. Tobin
Ben Wattenberg
George Will
Bruce Williams
Walter Williams
Mort Zuckerman

Consumer Reports

America's export problem | We're in a modest economic recovery, one that is still fragile. And this recovery is not creating jobs. I'm far more concerned about the jobless nature of this recovery than the level of interest rates or the market levels.

Government and corporate policies are now sending more jobs, capital and American know-how overseas to produce goods and services more cheaply. The proof is in the numbers: The United States' current account deficit, the broadest measure of transactions with other nations, swelled to $503 billion in 2002.

That's not the way it was supposed to work. Increased global trade was supposed to lead to better jobs and higher standards of living. Now some people, myself included, are rethinking the belief that free trade benefits all nations.

According to the Economic Policy Institute, rising trade deficits cost 3 million jobs in the United States from 1994 to 2000. And a report by Forrester Research predicts that nearly 500,000 tech jobs will be moved overseas by 2015.

We're also exporting capital. Companies like Motorola have invested billions of dollars in China, the country with the largest trade imbalance with the United States.

Another problem resulting from America's trade imbalance: Intellectual capital is being shipped overseas - in some cases, raising national security concerns.

So what's gone wrong? Alan Tonelson, author of "Race to the Bottom," says that Corporate America is largely to blame.

"They sold America a bill of goods during the 1990s," Tonelson says, "because they said that all of these new trade agreements . were going to boost exports from their American factories. And what they've done is, they've used these trade agreements to send production abroad."

Of course, American businesses need to look for ways to control their costs. And consumers are often driven in their purchases by prices.

And it's not just Corporate America that needs to adjust to the new global marketplace. Federal and local policymakers need to recalibrate as well.

David Huether, chief economist at the National Association of Manufacturers, says policymakers need to ensure that the regulatory environment is conducive to maintaining our competitive edge. "To make domestic manufacturers more competitive," he says, "we have to make sure that there aren't future increases in regulation that would push up costs here."

Huether adds that the federal government should promote trade adjustment assistance to help displaced workers find new employment.

We also need legislation that encourages companies to keep jobs here.

"The only way we can get in on this game is to . make penalties for those who manufacture overseas and benefits for those who manufacture in the United States," Sen. Fritz Hollings, D-S.C., told me. "I have a bill to keep the jobs in this country. It's going to be an uphill fight because we've got to really change the culture."

Changing the culture won't be easy. The middle class has little representation in Washington, the multinationals have little incentive to produce here at home, and working men and women in this country are watching their paychecks shrink in response to the competition of lower paid foreign workers.

And Huether says that policymakers also need to lower barriers to trade overseas. "Our tariff rates on industrial goods average less than 2 percent," he says. "The rest of the world, particularly developing Asia, is a lot higher - in the area of around 10 percent."

Huether says that on the corporate side, businesses need to invest in their employees.

"The way that manufacturers compete is through their very high productivity," Huether says, "and one of the ways to do that is . by maintaining a very able and trained work force."

There's no easy corporate or government policy solution to America's export problem. It's time for corporate leaders and policymakers to heighten their efforts to keep American jobs from going overseas.

Every weekday publishes what many in Washington and in the media consider "must reading." Sign up for the daily JWR update. It's free. Just click here.

Lou Dobbs is the anchor and managing editor of CNN's "Lou Dobbs Moneyline." Comment by clicking here.

05/21/03: Wall Street's new imperative: Integrity
/13/03: Losing sight of the dangers in creating further fiscal stimulus
05/06/03: Optimism is unfashionable, but here's some anyway
04/29/03: Nuclear nightmare
04/22/03: Naysayers ignore signs of economic recovery
04/15/03: Game over--but for whom?
04/08/03: No more fool's games
03/31/03: United States must seriously review foreign economic and political relationships
03/24/03: Delusional Chirac may be a thorn in coalition's side, but new alliances are forming in response to 21st-Century threats without him and UN
03/18/03: Bush critics offer little more than hyperbole
03/11/03: Geopolitical visibility
03/04/03: Freedom: Our best export
02/27/03: Guns, butter and greasing the way
02/18/03: Looking for a silver lining
02/10/03: Space program remains a valuable investment
02/04/03: Hi pal, come back
01/28/03: Bush address a chance to bolster confidence
01/22/03: Here we go again!
01/14/03: Bush's bold bid
01/07/03: The only thing certain is uncertainty
12/30/02: No need to be so negative as new year approaches
12/23/02: NY's AG deserves credit for settlement
12/18/02: Critics of Bush nominees should tone down rhetoric
12/09/02: A lot rides on prez's Treasury pick
12/04/02: A fast fix for corporate credibility?
11/26/02: Urge to merge is hard to resist
11/19/02: Are we really so bad off?
11/12/02: Bush's lucky week bodes well for recovery
11/05/02: Wall Street firms treat investors as fools
10/29/02: Earnings estimates offer some hope
10/22/02: Economy's strength tied to national security
10/17/02: Harvey Pitt, get real!
10/08/02:Are we experiencing the fall before the rise?
10/01/02: Concerns about earnings are justified
09/24/02: Business leaders must abandon stall tactics
09/17/02: Wall Street's reality check
09/12/02: There's no better time for leaders to show resolve


© 2002, TMS