Archive for December, 2006

The Resurgent Protectionist Democrats

Much has been written these last few weeks about the struggle for the soul of the Democratic party over trade. Bill Clinton, his Administration and his allies in the Democratic Leadership Council (DLC) were unabashed free traders. But some new Dems in the ascendancy are more Dobbsian in their bent.

Two of them — protectionist Byron Dorgan (D-ND) and Sherrod Brown (incoming D-OH) have an op-ed in the WaPo today, blaming the world’s ills on trade, hammering away at the two basic commandments for the new Smoots and Hawleys, i.e., that trade agreements cause trade deficits and that companies are frantically relocating overseas to take advantage of low wages in a global “race to the bottom.” We are weary of repeating the facts — the facts — but repeat them we must:

  • Trade agreements don’t cause the trade deficit. Over 90% of the manufacturing trade deficit is with countries with which we have no trade agreement;
  • Trade agreements open markets to US manufacturers by lowering the barriers to entry of US-made goods;
  • Some 90% of what US manufacturers make overseas stays overseas. It doesn’t get shipped back to the US;
  • The biggest reason manufacturers locate a plant is to be near the customer. Developing areas of the world are booming for that reason — they are customers;
  • We don’t compete on the basis of wages in this country, never have. To put it differently, we’ve competed against low-wage countries forever and won, because we are the best, most competitive manufacturers in the world. That’s still true. If wages were the driver, as our trade expert Frank Vargo likes to say, Haiti would be an international economic powerhouse. Think about it.
  • In any event, the growing cadre of protectionist Dems — and some Republicans — is worrisome. We want more trade agreements because they open markets for our US manufacturers large and small, just do. These so-called “multinationals” are nothing but a mass of small companies in the supply chain, exporting their stuff all over the world.

    As the new Congress convenes, the fur will undoubtedly fly over trade. Let’s just hope that in the process, the facts do not fall victim to the debate.

    UPDATE (By Carter Wood, 12-24-06): North Dakota blogger Rob Port at Say Anything links to us and Greg Mankiw and offers his own thoughts on prairie protectionism in this post. See, not everyone in the Great Plains is opposed to trade.

    And best wishes on the upcoming wedding, Rob!

    UPDATE 2: And Don Boudreaux at Cafe Hayek has wise words about “utterly bizarre and cartoonish” arguments.

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    Irony of Ironies: The WaPo Touts the ‘Card Check’ Bill

    Sorry we didn’t run this yesterday — got caught up in another office Christmas party, and it was a busy shopping day, getting those last few items, before shopping a little bit more today and tomorrow.

    The WaPo wrote a long, rambling editorial about capitalism, or so they said. In fact, it was a weepy tribute to the anti-democracy “card check” bill, the one that will allow unions to win recognition without an election, and by using coercion. Heck, if we wanted this kind of democracy, we’d just go see Fidel Castro. Or that guy in North Korea.

    This is ironic in that the WaPo “Pressmen’s Strike” of yore still stands as one of the greatest labor disputes of all time, with the WaPo taking a very strong stance in an effort to break the union. Today, they are known as bare-knuckle labor negotiators and they are having internal union troubles right now as they try to force their reporters to appear on their fledgling and flailing radio station. So forgive us if we tire of hearing the WaPo lecture us all about the importance of unions.

    But lecture they do, pointing out all the canards from the AFL-CIO talking points (WaPo editorial page editor Fred Hiatt and AFL-CIO General Counsel John Hiatt are brothers, after all), including our favorite that, “polls suggest that between 30 and 50 percent of nonunion workers would choose union representation if they had a chance to vote for it.” First, we think that’s a little high and second, would the AFL allow the 30-50% of current union members who don’t like their union to opt out? Of course not. As we’ve noted before, this is the Roach Motel — or the Mob — you can get in, you just can’t get out.

    Bottom line is we still think the card check bill is a lousy idea. We prefer democracy.

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    Cool Stuff Being Made: How Holiday Candy Is Made

    holidaycandy.jpg For any chocolate candy lover, what can be better than watching before your very eyes as a large vat of liquid chocolate and almonds are mixed together?

    That is the opening scene in this week’s edition of CoolStuffBeingMade: how holiday candy is made (amazing how we are able to time these videos just right, eh?). We actually have two new videos this week and, in the spirit of Christmas, a third video that we are re-gifting.

    The first six-minute video shows how a chocolate nutcracker is made. In this video you’ll watch how the chocolate is mixed and then poured into a depositor to form 4 oz. moulds which are then vibrated to both even the product throughout and to remove any air bubbles. After that, it enters a cooling tunnel where, upon exiting, gets taken out of the mould, into a tray pack and inserted into a nifty window box. At this point, as part of any manufacturing process, quality assurance takes over. Later, we shrink wrap the candy, date it for freshness and scan it through a metal detector. The process concludes by adding it to a tote cart where it is off to the warehouse for distribution.

    Our second video, a little longer at around 18 minutes, shows how coconut drops are made. It begins with corn syrup and sugar mixed at 244 degrees Fahrenheit which is later mixed with the coconut and cream. Once all the main ingredients are thoroughly mixed, it is formed into small pieces and placed on a conveyor belt with double curtain of chocolate applied to it at 87 degrees Fahrenheit.

    The videos that you see today come once again from our partner, PCN Tours. They are from the Wolfgang Candy Company which we featured back in early November. To put our two manufacturing videos in context, we decided to re-air another video as part of your selection today: a tour of the candy store and museum.

    Happy Holidays from the NAM and CoolStuffBeingMade.com. Enjoy the long weekend and don’t eat too many sweets: you gotta save room for dessert!

    Click here to feel the holiday manufacturing vibe.

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    Good Thing Santa Has a Flying Sled

    The NAM is making infrastructure — transportation and telecommunications — an increasing focus of attention as we develop policy proposals for the 110th Congress.

    Not that we’re ungrateful. The United States can at least offer roads better than these. (Hat tip Boortz.com)

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    This Week on America’s Business

    Americas Business with Mike HambrickWith Christmas upon us, America’s Business takes a holiday hiatus this week, reprising one the fall’s best broadcasts. Host Mike Hambrick highlights the NAM’s cost study released in September, which demonstrates that manufacturers in the United States face a 31.7 percent structural cost disadvantage compared to our major global competitors. The cause? Misguided government policies on taxes, energy, legal reforms, benefit mandates and regulation.

    Mike’s regular discussion with Renee Giachino of the American Justice Partnership focuses on major cases considered by U.S. Supreme Court and outrageous lawsuits from around the country.

    America’s Business follows up with a profile of the Manufacturing Skills Standards Council’s program to certify manufacturing production workers.

    Governor Mitch Daniels of Indiana joins the program to talk about government efficiency and economic development, efforts that are bringing thousands of new jobs to the state.

    And our regular segments feature “Soap Box” and “Factory Floor” — a first-person report from Sandra Westlund-Deenihan, president of Quality Float Works, Inc., of Schaumburg, Illinois. The NAM’s Hank Cox recalls “The Way it Was,” noting the contributions of GM engineer Charles Kettering, who invented the electrical ignition system for automobiles.

    NAM President John Engler closes with a brand-new “Last Word” commentary, a holiday message that reminds listeners that manufacturers are community and charitable leaders in the best spirit of the season.

    For more on America’s Business and to listen on-line, please click here.

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    Business Blog Roundup

    businessblogroundup2.jpgBusinessWeek’s influential Blogspotting website poses a question destined to reshape what remains of the dead tree media: “Why not publish every single letter to the editor?” Magazines and newspapers, which print just a few of the hundreds of the letters they receive each day, could instead place them all on-line. As the blogger explains, searchable, organized and interactive by readers, the letters would develop into “a very lively online forum of ideas.” Who could possibly object? Maybe this guy, who laments the mainstream media losing its monopoly on political discourse. Just a couple of days later, his employer, the Wall Street Journal, faced up to the new reality and touted its own blog, in the aptly named PBS blog, MediaShift.

    Having pioneered the practice of bringing together links to the corporate blogosphere at the Business Blog Roundup, the NAM’s ShopFloor.org welcomes the news that Verizon Poliblog will soon set up its own corporate blogroll.

    The most popular blogger at Sun Microsystems discusses the impact of the Internet on intellectual property rights, pointing out that those rights are protected at considerable cost to society. A Xerox blogger provides a glimpse of where things are heading by touting a new website for facilitating the exchange of creative ideas.

    ‘Tis the Season for exemplary customer service. At the Dell website, a helpful blogger informs customers about the best ways to contact the company for product support during the holiday gift-giving rush.

    GE’s Global Research Blog reports on innovative research into bringing down the cost of fresh water by using wind turbines to power water desalinization plants. Here, Owens Corning blogs and brags about how its new composite material is advancing the burgeoning wind power industry in Brazil.

    General Motors also does a bit of bragging at its FastLane blog, with a story about a man who has driven his GM car (a Saab, actually) over one million miles. FastLane regularly features stories, with nifty photos, about memorable GM cars and the people fortunate to own them.

    Bragging — that seems to be the corporate blogosphere theme of the week. Boeing blogger Randy Baseler starts with “All I can say is, ‘Wow, it’s been an incredible year.’” Well, it turns out he can say more, and does, with 13 more paragraphs about the company’s many successes in 2006. His comments (okay, bragging) about the success of his blog should inspire other corporations to take that plunge into the blogosphere.

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    New Laws! New Laws! New Laws!

    Happy New Year, everyone! Across the nation, new state laws go into effect on January 1, 2007. Put out that cigarette!

    Stateline.org has the particulars in this story, drawing from work by the National Conference of State Legislatures.

    We’re left with two impressions from the legislative summary: First, that if a problem arises, apparently the default position — the knee-jerk reaction, if you will — is to pass a new law to expand government spending and authority. Are there no alternatives?

    Second, the American system of federalism retains its brilliance, allowing states to address their own problems in their own ways (and noting the first point, to make their own mistakes).

    Nothing too much in this story about manufacturing-related legislation. States have increased the minimum wage, but that affects very few workers in the manufacturing economy. The story does point out that Governor Schwarzenegger’s over-reaching, jobs-killing, scientifically-spitballing and politically repositioning law to limit CO2 emissions goes into effect January 1. We blogged on the law previously here and here.

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    Q&A With Rep. John Dingell

    Somebody sent us this Q&A from Grist with once and future House Energy and Commerce Committee Chairman John Dingell (D-MI) for what he said about climate change:

    ” Q. So you don’t believe the scientific consensus on global warming is established at this point?

    A. This country, this world, the [human] race of which you and I are a part, is great at having consensuses that are in great error. And so I want to get the scientific facts, and find out what the situation is, and find out what is the cure, and find out what is the cure that is acceptable to the country that I represent and serve.”

    We thought that was pretty great, and pretty insightful. Then we read on, to what Dingell had to say about the auto industry and the ripple effect of manufacturing:

    “One job in 10 in this country is in the auto industry. Most people don’t know that. The auto industry is the biggest user of carpets produced in the Carolinas. The auto industry is the biggest user of glass produced in Pittsburgh. The autos are the biggest consumer of steel. The autos are tremendous users of plastic. And they’ve got, I think, about four computers in an automobile. Now, you can be quite calm about destituting Detroit, but do you want to shut down Silicon Valley and North Carolina and the Gulf Coast and Pittsburgh and other places that are heavily dependent on this? Plus the transportation industry that moves these cars around?”

    We’d recommend the entire interview, full of pithy comments from “Big John.”

    And, allow us a personal observation, if you will: The blogger-in-chief was a Republican appointee who testified before Chairman Dingell a number of years ago, not typically a coveted role for Republican appointees. But we found Dingell to be tremendously supportive and fair with us during our time before him, was great to work with. We look forward to working with him again.

    And, like we said, check out the full interview. Some good stuff here from a very wise man with many, many years in the saddle.

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    Friday Follies Bonus: A Bad Morning….

    Friday FolliesRegular blog — and Follies — readers know we have a rule ’round the blog corral: When we receive the same bit more than once, it’s time to post it. This one was sent to us three times this past week and so we had no choice.

    In solidarity with all our blog readers in the Rockies and the Great Plains we post this short video of a guy who had pretty bad start to his day. He’s probably wishing he had a garage.

    Click here to see this week’s Friday Follies Bonus video.

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    Friday Follies: Elf Yourself

    Friday FolliesThanks to Sarah Prichard for sending this along as “the perfect Friday Follies.” We agree, certainly for the Friday before Christmas.

    It’s a little thing called, “Elf Yourself.” It’s a program that allows you to paste your own photo — or one of a friend, or enemy — on to the body of an elf that does a funky little dance to “Jingle Bells.” You can even record your own voice. It’s all good. Here’s a link to a test elf that we made with the face of one of our many loyal blog readers.

    Click here to “Elf Yourself.” And Merry Christmas.

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