Kitty Pilgrim, sitting on for Lou Dobbs, had a pretty gloomy piece on manufacturing last night. In fairness, they did correctly note that they invited our Chairman on the program and correctly noted that he couldn’t do it because of a scheduling conflict (hard to get CEO’s on very short notice, as everyone knows), but the piece was factually wrong in several respects. There were a few lefty commentators on there, however, who made points with which we would agree. Among them:
Alan Tonelson of the US Business and Industry Council, credible to Lou and few others, is chronically wrong in his “trade is bad” comments throughout. Kitty Pilgrim closed the segment by saying, “The value of the dollar has fallen sharply against other currencies this week, particularly against the euro and the yen… The major reason for the trade deficit is the commitment of successive administrations to so-called free trade policies. Those policies have allowed imports from cheap, overseas labor markets to flood into the country.” This is not correct.
The truth is that the weaker dollar actually makes US goods cheaper overseas, so US-manufactured products are cheaper for folks to buy in Europe and Asia. Them’s just the facts, so the Dobbsians have it exactly backwards. Trade agreements open markets to our goods and the lower dollar makes them cheaper to buy. Hard for some to get their brains around apparently, but it’s true.
We’ll say it again: If Lou Dobbs really wants to talk about what’s bedeviling US manufacturers, he need look no further than the 33% cost disadvantage vs. our competitors in areas like legal costs, tax burdens, energy and regulatory costs. We hope Lou will dedicate a show or two to those topics if he really wants to get to the root of the problem.
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