Senator Obama campaigned in Oregon over the weekend.  He is favored to win in the state and his campaign has
asserted that an Oregon win will garner him the necessary number of pledged delegates to claim the Democratic party nomination.

Obama spoke at Vernier Software & Technology, an educational software company in Beaverton, Oregon, where he
held an economic discussion with voters.  Obama delivered his remarks on the economy, rightfully stressing that average Americans are feeling a lot of anxiety about their economic well-being.  The Senator said, “People are working harder for less. You’re paying more for gas, and gorceries, and tuition.  Millions of families are facing foreclosure. We’ve already lost hundreds of thousands of jobs this year.”

Obama talked a lot about the skewed tax insentives in our system that “reward wealth, and not work” and changing
the code to give working individual and families a break.  But he barely mentioned trade, except to say the obligatory:”We need to stop giving tax breaks to companies that ship jobs overseas.” Considering that this discussion was billed to be about the “key economic issues” the omission of trade, is troubling.  Majority of American voters now say that trade costs jobs and lowers wages.

Manufacturing is the number 2 contributor to Oregon’s economy, accounting for $27.2 billion of its GSP.  But the state
lost 22,600 manufacturing jobs from 2000-2007, and 25,700 jobs lost in all sectors in the same period of time can be
directly attribute to our trade deficit with China.

If Barack Obama is indeed more concerned about the success of Main Street, than Wall Street, as he is fond of
saying, he can’t omit trade from his discussions about how to fix our economy.

Hillary Clinton is running a new ad in West Virginia.  The state is holding its presidential primary this Tuesday. Clinton’s ad centers on the promise that the candidate will level the playing field for America’s middle class. The ad states that Clinton would end $55 billion dollars in giveaways to corporate special interests and invest in middle class tax cuts and new jobs.The ad also promises that the candidate will get “tough on unfair trade deals and end tax breaks to companies that ship jobs overseas.”

The West Virginia ad is less specific than the ad on the economy that ran in Indiana, in which Clinton talked about “standing up to China.”Taking China out of her ad on the economy is a pretty big omission, considering U.S. bilateral trade deficit with China now tops $256 billion a year.  Any candidate who is serious about creating and keeping jobs in the U.S. can’t afford not to mention China.

 Defying all expectations, the Democratic Presidential race still goes on.  Despite the “analysitis” that the media and the Washington pundits are suffering from at this point, the voters in the states holding primaries are still excited about the race. They attend the rallies and vote in the primaries in record numbers. This election matters to the voters a great deal. By all accounts Americans are not better off now than they were 8 years ago, when President Bush took office.

In 1999, the median household income was $41,994.   Six years later, the median household income increased by only 15% percent to $48,451 in 2006.In 1999, the rate of unemployment in the U.S. was 4.2.  Currently, the unemployment rate is 5%.The personal savings in the U.S. in 2000, were $169 billion.  In 2006, they were a negative $103 billion.Finally, our trade deficit in 1999, was $264.9 billion.  Today, it is a staggering $708.5 billion.

The next state to hold its Democratic primary is West Virginia.  Here’s what the candidates who campaign in the state need to talk to voters about.  West Virginia has lost more than 17,300 manufacturing jobs since 2000.  A recent EPI study found that West Virginia lost more than 8,400 jobs between 2001 and 2006, due to U.S. trade deficit with China.  Manufacturing accounts for $5.5 billion of West Virginia’s GSP. The U.S. has lost more than 3.5 million good-paying manufacturing jobs since 2000, and more than 40,000 factories have closed in the past 10 years.  Our lopsided trade deficit with China cost the U.S. 1.8 million jobs from 2001-2006. Economy is the number one issue that the voters care about.  The candidates need to tell the voters how they plan to make sure that good-paying jobs stay in the U.S.  The long-term success of our economy depends on it.

 

While the Democratic Presidential candidates were battling it out in Indiana and North Carolina, Sen. John McCain had the luxury to take a step back and reflect on long-term goals, like what kind of federal judges he would appoint and what Cinco de Mayo means to him. 

Yesterday, Sen. McCain delivered a speech on “His Vision for Defending the Freedom and Dignity of the World’s Vulnerable” at Oakland University in Rochester, MI.  The crux of his speech was about combating human trafficking around the world that leads to modern-day slavery. 

Human trafficking is a very serious problem. The International Labor Organization (ILO) estimates 12.3 million people can be found in forced labor, bonded labor, forced child labor, and sexual servitude at any given time; other estimates range from 4 million to 27 million.

But apart from saying what interagency changes he’d make when he is President to more effectively fight the problem
of human-trafficking, McCain did not mention why people become victims of this despicable crime in the first place.  The U.S. State Department’s 2007 Trafficking in Persons Report says that the supply of victims is encouraged by “poverty, the attraction of perceived higher standards of living elsewhere, lack of employment opportunities, public and private corruption, organized crime, violence against women and children, discrimination against women, political instability, and armed conflict.”  The same report states that a “significant share of the exploitation in modern-day slavery is linked to the production of products for export.”

The State Department designates China to be on a Tier 2-Watch List as a “source, transit, and destination country for men and women trafficked for the purposes of sexual exploitation and forced labor.” The State Department indicates that in 2007, “China’s efforts to combat trafficking for forced labor remained inadequate.”  Countries like China that rely on cheap labor to produce vast quantities of cheap goods for export take part in the vicious cycle.  We in the U.S. become complacent in the problem when more and more of the products that we consume are made in the nations that lack adequate labor protections.

Well, the voting is over and NC and IN picked their winners and losers in the Democratic primaries yesterday. As with the previous primaries the economy was singled out by the voters as the most important issue in both states.  According to the CBS exit polling, 67 percent of voters in Indiana voted their economic concerns first, and 61percent in North Carolina did, as well.  In Indiana, 49 percent of voters said Clinton would be more likely to improve the economy and 47 percent said that Obama would.  In North Carolina, 53 percent said that Obama would be more likely to improve the economy and 42 percent said that Clinton would.

The Democratic Party is still sorting out who its nominee will be.  It is clear, however, that the economy has emerged as the issue most important to the voters.  Pandering, or not, the next President will have to take the concerns of the working class to heart and deal with the issues that are hurting people the most, whether its unfair trade that takes away their jobs, skyrocketing healthcare costs, or our unsound energy policy.  On to West Virginia, where we’ll continue to follow what the candidates say on the issues that matter to the American voters.

Hillary Clinton was visiting High Point, North Carolina yesterday.  High Point is a furniture hub and show rooms
dot the streets of the town. “I will get tough on China because what they are doing is not right,” said the Democratic candidate.

Hillary rightfully singled out China for causing the loss of thousands of jobs in NC furniture industry.  A study done for AAM called “Enforcing the Rules” cited the wooden furniture manufacturers in the U.S. among its case studies of various industries affected by the unfair trade with China.

In 2001, the U.S. industry recorded shipments $2.3 billion dollars and employed approximately 33,000 workers.  At the same time, the furniture industry in China started to expand rapidly, with a large share of production targeted toward the U.S. market.  In 2003, the U.S. International Trade Commission investigated the possible dumping of Chinese-made wooden furniture on the U.S. market.

The Commission surveyed the U.S. furniture makers.  Of the 54 U.S. producers from 23 states that responded to the US ITC’s producers’ questionnaire during the investigation of dumped wooden bedroom furniture from China, ten (the most) were headquartered in North Carolina.  The firms responding to the Commission’s questionnaire indicated that between 2001 and 2003, China’s capacity to produce wooden bedroom furniture had doubled, shipments to the U.S. market increased by 147 percent, and exports to the United States accounted for approximately three quarters of these firms’ total shipments. This growth has occurred despite a high incidence of quality problems with Chinese furniture.

Despite the enormous pressure from the Chinese furniture makers and their U.S. distributors, the Commission ruled in 2003, by a vote of 6 – 0, that the U.S. industry was materially injured by dumped imports from China.

The first step to fixing a problem is acknowledging we have a problem.  Hillary Clinton says that she understands the consequences of the unfair trade with China for U.S.industries and communities across the nation.  The next President, whoever he or she may be, must take a serious look at U.S.-China trade relationship and finally take the necessary steps to benefit the American workers.

 

Hillary Clinton participated in the live TV show, “This week With George Stephanopoulos” in Indianapolis this Sunday.  The show was aired before studio audience, and the members of the audience had an opportunity to ask the candidate questions directly.  There was a question on trade.  Senator Clinton was asked by a voter: “Hillary, Alexander Hamilton said that the key to U.S. supremacy in the world is the manufacturing sector. Sens. Obama and McCain have stated that these manufacturing jobs that we’ve lost cannot be brought back to Indiana or United States. What is your position? Do you agree with Sens. Obama and McCain?” 
 

Well, Indiana’s manufacturing sector has been hard-hit in the last seven years.  Stephanopoulos did preface the question
by saying that Indiana lost 45,000 manufacturing jobs to China in that period of time.  That is true, but he didn’t mention that the total manufacturing job loss in Indiana from 2000 to 2007 was 109,800.

Senator Clinton said that she believed that the declining manufacturing base is a threat to the overall economy.  She continued, “we need to change the tax code to take out any single benefit from your tax dollars that goes to any business that exports a job out of Indiana to any foreign country. It’s outrageous. It’s unpatriotic that is still going on.” The candidate advocated for strong labor and environmental standards in our trade agreements. “if you go to work in Indiana, there are certain rules that the employers have to follow to protect your safety and your health, and there are certain consumer rules,” said Clinton,”but look what’s happening with China. You know, we get lead-laced toys and contaminated pet food and polluted pharmaceuticals, sent back into our market; they get our jobs.”  She specifically singled out the defence industry to say that: “if we are going to have a half-a-trillion defense budget, then I want to see American workers do what is necessary to produce the defense materials and good for our country.”

There were members of the Steelworkers Union in the audience.  These guys got up before dawn to hear the candidate speak about trade and other important issues.  The voters in TV studios and on the campaign trail should remind the candidates that real jobs and real livelihoods are at stake in this election.  What the candidates say matters a great deal to those who are will be voting tomorrow in Indiana and North Carolina.

 

The Labor Department released its monthly jobs report today.  Unlike in the previous months of January, February and March showing decreases of 80,000 jobs on average, the U.S. economy only shed 20,000 jobs in April.  This brought the unemployment rate to 5.0%, down 0.1% from the Month of March. 

Looking back a year, the number of unemployed persons in April 2007 was 800,000 less, and the rate of unemployment was 4.5% compared to 5.0%in 2008.  In another troubling development in just one month, the number of persons working part time for economic reasons increased by 306,000 to 5.2 million in April.  This level is 849,000 higher than in April 2007. These individuals indicated that they were working part time because their hours had been cut back or because they were unable to find a full-time job. 

John McCain issued a following statement on the jobs report: “Today’s job numbers are another clear indication of the economic challenges facing our country. With Americans hurting, we must act to strengthen our economy for families and small businesses. We must help Americans now through gas tax relief, which provides immediate relief from rising energy prices. We must also help those facing home foreclosure by enacting a HOME plan. At the same time, we need to act to lower taxes, streamline regulation, lower health care costs, ensure energy independence and open foreign markets. To help those who have lost jobs, we must focus on promoting effective worker re-training programs.”  

 

Senator McCain, once again, is talking past the problem. The point is there aren’t enough full-time jobs.  And we are rapidly losing good-paying manufacturing jobs in this country.  The April loss is another 46,000 unemployed in the manufacturing sector.  In addition to 306,000 more people forced to work part time, there is an additional 1.4 million who are “marginally attached” to the labor force in April.  These people were not counted as unemployed only because they have not looked for a job in the 4 weeks prior to the survey.  The Labor Department indicates that among those “marginally attached” were 412,000 so-called “discouraged workers” in April.  Discouraged workers were not looking for work specifically because they believed there are no jobs available for them.

Giving people an 18-cent break on a gallon of gas, or lowering their taxes is not going to give someone hope that they once again will be counted as a productive member of society and not as someone who is “marginal” or “discouraged.”  Neither is retraining them for a job that may be gone by the end of the training.  The answer to employing more people is creating more jobs in the U.S., instead of creating them for workers overseas.  The single greatest factor contributing to manufacturing jobs’ losses is our unbalanced trade with China.  Our Presidential candidates, Republican or Democrat need to get real.

 

When Barak Obama met with the Indianapolis Star’s Editorial Board, he too was asked about the U.S.-China trade in the context of the larger U.S.-China relationship.  Barak took his time getting around to talking about trade, but he acknowledged that there are some “indisputable” problems in our trade relationship with China. 

China manipulates its currency; maintains non-tariff barriers; subsidizes its export industries; and has a hugely problematic environmental record.  We in the

U.S., on the other hand, said Obama, have a problem with our own inability to ensure the safety of Chinese imports through inspections.

In Senator Obama’s view, negotiating effectively with the Chinese is not only a question of maintaining a strong economy, but also a matter of securing our own future as a strong nation.  “There’s never been a nation on Earth that saw its economic standing decline relative to the rest of the world and maintained its military pre-eminence,” said Obama.  Senator Obama said that “we’ve been taken to the cleaners” in out negotiations with the Chinese and that, if elected President, he would have a meeting with China’s President Hu to set our economic relationship with China on an equal footing. 

Obama agreed that even though low-cost goods have been helpful in keeping the inflation in the U.S. down, in his words “it doesn’t do you much good to pay $10 less on some sneakers, or $100 less on a flat screen TV, when you don’t have a job.”

Hillary Clinton met with the Editorial Board of the Indianapolis Star yesterday.  She talked about the U.S. economic relationship with China at length, emphasizing that it is our national responsibility to hold China accountable. 

The Senator pointed out that “our companies are not competing with individual companies, but with the whole national agenda [of China].”  In Senator Clinton’s view, China’s agenda is to grow its economy as fast as possible without creating political unrest and, eventually, to dominate the world economically and politically.  Clinton added that there’s no question that China manipulates its currency; sends low-quality and unsafe imports to our market; and has a history of counterfeiting, theft of intellectual property, and industrial espionage. 

Hillary Clinton brought up the case of Magnequench, a company in Valparaiso, IN, that was shuttered in 2003 with all equipment and know-how moved to China.  The story was used in one of Clinton ads running in Indiana.  Magnequench used to make magnets for military applications.  Its production capacity along with sensitive military technology is now lost.  Clinton asserted that we allowed cases like Magnequench and others to occur because we haven’t been effectively protecting our own strategic and economic interests vis-à-vis China.

“I’m 100% in favor of free trade, but I’m not in favor of being taken advantage of,” concluded the candidate.  And she promised that “We are not going to stand idly by and lose our standard of living.”   We’ll keep following Senator Clinton’s position on this issue.  Stay tuned for Senator Obama’s view on China issues.