...Politics & Current Events In N.C.

Saturday, January 03, 2004

No surprises From Candidates 

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In 2004 we cannot expect anything new from the Republicans it seems. Looking at the issue positions on the websites of the candidates for Governor it seems clear that we are in for a run of the same old flibberdijib.

Here is my summary of all of their issue stances.

1) They want to CUT taxes and RAISE spending, and will claim that they can ballance the budget by cutting waste instead of programs
2) They will make some sops to the christian right in the area of school prayer, flag-burning, abortion, or in these days of Dean -- gay marriage.
3) Inversely to plank 1, they will accuse Easley of raising taxes too much, cutting too many programs, stealing money from various trusts in order to spend on general spending, and wasting tax-payer dollars.

And of course all of this (because it is politics, not because they are Republicans) will be done in a deceptive manner that treats voters like they are intellectual pygmies.

Friday, January 02, 2004

China's Cheating Heart 

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Forget the lottery, the war on terrorism, and schools. The big election issue this year is CCC. That stands for Cheating Communist China. In case you haven't gotten the memo, CCC is to blame for all of the job losses here in North Carolina. Yet examining the evidence it is clear that it is not China's cheating that has caused so many problems for manufacturers in the United States, but rather our own trade policies. However, that probably will not stop many politicians from trying to run against China instead of dealing with the cold hard facts.

Richard Burr, a Republican Congressman running for the U.S. Senate, likes to brag that he voted against normalizing trade relations with China. Jay Helvey, a Republican Candidate for Burr’s 5th Congressional district, is already broadcasting ads set in a closed down furniture factory. What happened at this factory he asks? People "were cheated out of their jobs by unfair imports by countries like China." He ends by saying he "wants to stop the cheating."

Republican Robin Hayes, who is defending his seat in the 8th Congressional District, says that one of his top legislative priorities is legislation to punish the transshipping of goods.

These are goods made in one country that are shipped into the United States from another. China is one of the biggest offenders, he said, shipping its goods through Mexico, which then sends the goods to the United States. This avoids U.S. quota restrictions, he said.

Even Karl Rove has been taking notice. The Bush Administration recently placed import quotas on certain goods from CCC. Some observers have speculated that this was in response to pretty severe criticisms from stolid Republicans infuriated at the job losses suffered in the Carolina’s and elsewhere.

"The Solid South is no longer the Solid South for George W. Bush," said Jason Copland, executive vice president of Copland Fabrics and James' son. When Bush visited Winston-Salem this month and talked about the need to retrain workers displaced by shifting trade patterns, people here were not soothed. "It was kind of like a slap in the face," the younger Copland said. "Why are we sending jobs over to Communist China? It was just like he didn't get it."

Robert DuPree, vice president of government relations at American Textile Manufacturers Institute, contends that inexpensive imports from China are to blame for the demise of American textiles. "We're in a fight for survival, and it's not getting better," he says.

CCC, it seems, has much to answer for.

But a new series of articles printed in the Milwauke Journal Sentinel suggests that another CCC may be responsible for America’s suffering manufacturing sector—Competitive Chinese Capitalism. Their four part series, Made In China: The New Industrial Revolution, takes an in-depth look at the pattern of job-losses in the manufacturing sector. They discovered some trends that should be familiar to many here in North Carolina.

It's a far bigger business these days, the Richardson Brothers Furniture Co. - big enough to cause a stir in the troubled American furniture trade and cries of pain in its hometown by launching a new collection of furniture.

This summer's lingering sense of shock in Sheboygan Falls, though, has little to do with the look of the new line. If anything, the Richardsons have outdone themselves. The solid oak pieces - "inspired from the court of French Emperor Napoleon I, 18th-century designs and American colonial" - could pass muster in a chateau.


The big difference with this collection, which is named the American Empire, is that Chinese workers at low-wage Chinese wood shops carved it, lacquered it and joined it - down to the bulging solid oak pedestals that hold up the regal tabletop.

The gala launch of the made-in-China American Empire, in fact, marked a major turning point in the company's 155-year history. Earlier this month, the Richardson family began shutting down its Sheboygan Falls furniture works and laying off the last of its craftsmen.

The series dramatically shows that China has indeed played a major role in destroying jobs in Wisconsin and throughout the nation.

Only a decade ago, imports claimed about 20% of the U.S. market for wooden furniture, said consultant Art Raymond, president of A.G. Raymond & Co. of Raleigh, N.C.

Today, he said, it's up to 55%. China, according to the U.S. Commerce Department, accounts for more than a third of the imports.


Within three years, 75% to 80% of wooden furniture sold in the United States will be manufactured in Asia, said Keith B. Hughes, an industry analyst in Atlanta at SunTrust Robinson Humphrey Capital Markets.

"It's an industry ripe for this sort of attack from foreign competition," said Gary Shoesmith, an economics professor at Wake Forest University. "So here we are and now there's no time to catch up."

"China," Hughes said, "has changed everything."

But it is not China's cheating heart that is causing us so much pain. Certainly some entrepreneuring importers have been skirting import restrictions in order to bring in more Chinese goods. But it would be difficult to blame the 147,000 jobs that we have lost in North Carolina on cheating. The real problem is that China, with its almost inexhaustible supply of labor, can make these goods cheaper than we can. Combine that fact with the ever-lowering trade barriers that have been pushed for the last decade, and you have a recipe for disaster in the manufacturing sector.

The rise of China coincides with what economists clinically call "I.T.-enabled global labor arbitrage," as if jobs can be swapped across borders like securities on a dealing desk.

George Koo, a Chinese-born business consultant in San Jose, Calif., with the Deloitte & Touche advisory firm, spoke with Confucian simplicity about the borderless global economy. "As naturally as water flows downhill," he said, "products are made by the lowest-cost producer. It's just simple economics."


Since the Berlin Wall fell more than a decade ago, international trade barriers have been falling like dominoes. And since the latter '90s, the Internet has enabled a new business model for companies to outsource virtually everything. Further, in 2001, China joined the World Trade Organization, the 146-nation body that is dismantling the barriers of global trade.

Trying to calculate China's direct impact on U.S. factory jobs, some labor economists use a theoretical formula. The labor-oriented Economic Policy Institute in Washington estimates that Americans lost 344,000 jobs because of Chinese imports. And institute economist Robert Scott calls it "the tip of the iceberg."

"The job losses are having tremendous downward pressure on wages throughout the economy and prompting firms to threaten to close plants, which they are using to force down wages and having a chilling effect on wages in service industries," Scott said.

And we cannot expect this trend to end anytime soon.

"Every year, 20 million to 30 million people can move into the urban areas and employers would still keep their low labor costs," Cheng said.

In fact, even if all of China's current industrial workers quit at the same time, employers theoretically could replace every one of them and still have a surplus of rural labor. Nicholas Lardy at the Institute for International Economics, one of Washington's most respected China analysts, concurs that surplus labor so outnumbers demand that "entry-level unskilled wages have been stagnant."

And it is not just low wages that we are facing. Workers in China are willing to deal with conditions that would never be tolerated in the United States.

In hall after hall, there's not a single piece of idle machinery. Cascades of orange metalworking sparks fly off milling machines. The din forces Kwok to speak loudly:

"In the U.S., protective goggles are required," he yells, gesturing at his workers without eyewear. "Over here, we don't."

Sure, China may be cheating a little bit. But the real problems facing the United States is that our trade policies have doomed low skill labor to unemployment or drudgery in the service sector. The high-paying, low-skilled jobs we have lost are not coming back, and there is very little chance that they will be replaced.

A critic of the new textile import quotas wonders if trade barriers may do more harm than good. He points out that trade restriction raise the costs of goods and hurt retailers.

Will the new jobs in, say, textile mills make up for the losses at places like Wal-Mart?

A better question is do we want to replace high-wage factory jobs which often included generous benefit packages, with part-time jobs at faceless big box retailers. Moving people from the factory floor to cash-registers is too often the result of our free-trade policies

So if the problem is China's competitiveness and not their cheating, what can we do solve the problem? Perhaps a first step would to fire those politicians who like to rant and rave about Cheating Communist China.

Richard Burr, who opposes trade with Cheating China, just loves "free trade".

His website says:

I will continue to work with the Administration on trade agreements before they are finalized, in an effort to get the best deal possible for American industry…

Robin Hayes, who wants to get tough on China, also gave the President the power to negotiate the Central America Free Trade Agreement when he voted for Trade Promotion Authority. That treaty, championed by President Bush, is sure to send more textile jobs overseas.

The same politicians who want us to blame China, are ducking responsibility for their own yes-man attitudes towards free trade. GOP candidates like to mouth loyalty to the American worker, but they are ideologically opposed to the trade restrictions that many experts think may be necessary to foster what we really need -- Fair Trade.

And "Fair Trade" must be more than a buzz word. People of all political persuasions claim to be for fair trade. What it really means is that trade should be promoted in ways that seek to ameliorate hardships caused by globalization. Fair traders want to foster economic growth without lowering wages, causing severe unemployment, or damaging the environment.

It is unrealistic to demand that workers around the globe have the same wages and protections as U.S. workers. It is just as ludicrous to argue that international trade itself is detrimental to the economy. But it is reasonable and just to ask that our elected leaders require trading parnters to have SOME standard of protection for their workers. They do not need to have our minimum wage, but it would be a step in the right direction to ask that China impose ANY minimum wage. Likewise, it may not be necessary to outlaw all child labor, but it would be within the realm of reason to require countries to at least monitor working conditions to prevent egregious abuses. Certainly it should at least be legal for workers to unionize and fight for themselves. That is what fair trade means. We must acknowledge the fact that international trade has serious implications that cannot simply be ignored. To do otherwise is to join in the race to the bottom of wages, labor protection, and environmental standards.

We need leaders who will take a serious look at creating enforceable international labor and environmental standards. We need leaders who will stand up to corporations who WANT to be able to shop around for the cheapest workers. We need leaders who have not been bought wholesale by lobbyists and special interests.

In the Made in China series we are introduced to Dan "Dusty" Moore.

Moore is a bitter man. The United States, in his opinion, is going to hell. Greed rules. Fools run corporations and the government. "The golden rule is, those who have the gold make the rules," he said.

He's felt this way for a while, and losing his job at Metal Ware's Algoma factory has done nothing but reinforce his perspective.

He reacted angrily later when told that workers at Metal Ware's Chinese plants typically earn 27 cents an hour.

"They're going to drive America right into the ground," he said. "I thought they were making a buck an hour at least. Twenty-seven cents an hour. Who's making all the money?"

It "makes me want to overthrow this government and give it back to America," he said.

Next year many voters may agree with Dan.

Politics online 

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Ed Cone has this post up that is worth considering.

Is North Carolina really a good test bed for Internet campaigning? That's one of the subjects Henry Copeland and I discussed yesterday at Thiggy's Pizza in beautiful downtown Greensboro.

Henry raised three questions: Is the passion behind Dean lacking in the Bowles camp? Is there a blog community of critical mass to sustain a Web campaign? And, doesn't the existence of a big, strong Democratic party in the state make the party less likely to adopt new tools?

I thought I would chime in with my own responses to these questions, although I would venture to guess that Mr. Cone knows infinitely more about it than I.

I could not agree more with his response to the first question.

My answer to number one: campaigns shouldn't try to out-Dean Dean. He's got the anti-war vibe going -- that's unique, or at least rare. The key is to abstract the online strategy by asking simple questions: does grassroots organizing matter? If so, are tools that make such organizing cheap and effective of value? Yes, and yes. Coordinated volunteer activity in 100 counties would be a big plus for any NC campaign. The Net can help you do that. QED.

No one is going to get the kind of momentum from the internet that Dean has. For starters there just are not enough people online in the state to accomplish goals like writing 60,000 letters or raising $15 million. Second, people do not see state level elections, rightly or wrongly, as important as the Presidential Campaign.

The only two candidates listed on meetup.com are Patrick Ballantine for Governor and Richard Burr for Senate. They have 1 member and 4 members signed up to support them respectively. It is just harder to get folks motivated.

BUT-- the campaigns will be doing a lot of grassroots organizing. From what I hear out of the Bowles camp, they are considering a significantly different tack for this campaign from the "blast the airwaves" tactics of the past. The Democrats know they are getting killed on the ground, and the Bowles folks (at least if people aren't lying to me) are interested in making up the slack. The internet is the best tool out there for cheap and efficient organization.

Two: the blog community. It's not there yet on the volunteer level, but with the right focus and seeding (local activists, universities...) there could be dozens of Bowles blogs by June.

I have serious doubts about this one. My feeling is that most people who start a blog will be going for the national scene. Even sites with promising names like Tarheel Pundit mostly focus on national level politics. I hope to be proved wrong, if only to have someone to fight with.

Finally, the existing party structure breeding complacency and turf jealously. Definitely a danger. But in a tight race, getting new voters out and convincing swing voters to swing your way will be critical.

In 1994 the Democrats got slaughtered in a number of ways. They lost the House of Representatives in the General Assembly. All told the Democrats lost more state legislative seats than any state party in the country. Their response was the Caucus system. They organized how state legislative races were run, coordinated fundraising and expenditures to reduce overhead, and worked to provide experience and expertise to every campaign.

The Caucus system had a good run, and the coordinated campaign was slapped on top to provide even more economies of scale. They now have a caucus program for the down-ballot council of state offices, municipal elections, and a little coordination between congressional campaigns. However, the tide is running red in the North State, and if the party wants to hold on they need to squeeze out every possible voter for every single race. The Democrats know this (or at least they should), and are looking for ways to hang onto control.

Ed says it well:

Forget the Internet-changes-everything fallacy -- if a good online campaign delivers, say, an incremental 3% of the vote, it's well worthwhile. And any campaign that loses a close race in which it doesn't deploy Internet tools deserves what it gets.

It's been a while 

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Having somehow survived the holidays, I can now spare a moment to work on this blog. I hope your holidays were good. I know mine were fun, if extremely busy.

Since we're on a personal basis now, I should tell you that I am working full time on www.ncpublictrust.org in the hopes that we can improve the website significantly, and gain enough legitimacy to 1) get funded, and 2) get more organizations and people interested in contributing.

So if you want news, check out the site. I'll keep this site going for the views.

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