• Social Security annual cost-of-living adjustments, or COLAs, should then be tied strictly to the consumer price index, i.e., inflation.
• A gradual rise in the retirement age for Social Security and Medicare benefits to at least sixty-four for early retirement and sixty-eight for full benefits.
• A hiring freeze in the federal work force where only three of every four retiring or departing employees is replaced.
• A Gramm-Rudman-Hollings law imposing an across-the-board freeze on all federal departments, including defense.
• No bailout of state governments, which should use their own tax revenue to meet their obligations to balance their budgets.
• A halt to foreign aid unrelated to national security. It is absurd that we borrow from China to send billions directly or through the World Bank to regimes that vote with China in the UN.
On the revenue side, the deduction for mortgage interest and state income and property taxes and even charitable contributions could be capped or eliminated in return for rate reductions, following the Reagan principle. While a low capital gains tax rate on long-term investments for retirement and for new stock issues that provide the seed corn for new and expanding companies could be retained, the tax for turnaround trades in stocks or commodities could be raised to the same level as taxes on other forms of gambling.
Every program has a constituency and any cuts will bring into play clashing interests and ideologies. Still, these suggestions, which butcher no one’s sacred cow, but give every federal employee and beneficiary a haircut, would seem to be the easiest path to budget reduction. As Reagan said, “There are simple answers, just no easy answers.”
As for federal agencies, departments, and programs, some should be reduced, others abolished as luxuries in an age of austerity. Do we really need a National Endowment for the Arts when its patrons are the richest Americans or a Corporation for Public Broadcasting when we have five hundred cable channels or a U.S. Commission on Civil Rights half a century after all the civil rights laws have been enacted?
Our parents made the sacrifices necessary to bring us through a Depression, a world war, and a forty-year Cold War. If we cannot manage this, we are not the people our parents were and our children will not know the life we did.
ECONOMIC PATRIOTISM
“Who won the war?” asked the posting on FreeRepublic.com. Below the question were pictures—of Hiroshima in 1945, ashes and ruins, and of Detroit in 1945, mightiest industrial hub on earth. Then came photos of Hiroshima, sixty-five years later, a gleaming city, and Detroit in 2010, a burned-out shell. Who won the war? We won the world war and the Cold War, but we lost the post–Cold War and are losing the future.
From 2000 to 2010, America saw 50,000 factories close and 6 million manufacturing jobs disappear. China, Japan, the EU, Canada, and even Mexico ran up hundreds of billions or trillions of dollars in trade surpluses with the United States. Is this because their workers are more capable and efficient?
No. Worker for worker, Americans are the best. Why, then, are we losing? Because China, Japan, and Germany are trade predators not trade partners. They look on trade the way Vince Lombardi looked on football: “Winning isn’t everything; it’s the only thing.”
Germany, Japan, and China recite the catechism of free trade—and practice economic nationalism. Their tax and trade policies, from currency manipulation to value-added taxes (VAT) on imports and rebates for exports, to subsidies for national champions, to nontariff barriers on U.S. goods, discriminate in favor of their products in their market and in our market. We talk about a “level playing field.” But they landscape the field to win.
The success of economic nationalism may be seen in the shifting balance of power. China is the world’s rising power and America is everywhere seen as the declining power. Yet, while the Chinese and German economies are but one-third the size of ours, both export more than we do.
How? The game is rigged and we need to walk away from the table. For if we do not cure ourselves of this obsession with free trade, the industrial evisceration of the United States will continue until we make nothing the world wants but Hollywood movies.
Ralph Gomory, a former IBM senior vice president for science and technology, relates what the naïveté of the free-traders and the greed of our corporate elite are doing to our country.
We have too many people today who see in the destruction of our key industries by well-organized and highly subsidized actions from abroad nothing more than the effect of free trade and the operations of a perfectly free market. This is a delusion and a dangerous one. We also have an elite industrial leadership that too often sees itself with no other duty than maximizing the price of their company’s stock, even if that means offshoring the capabilities and know-how for advanced production to other nations that have no free markets themselves.19
“[T]he heart of the problem,” writes Gomory, is “lack of leadership from our own government,” which must realize that the “fundamental goals of the country and of our companies have diverged.”20 What’s good for General Motors is not good for America if General Motors is shifting plants and production to Asia to build and export cars to America.
America has been running the largest trade deficits in history for decades. But a U-turn could be effected by adopting tax and trade policies that set as our national goals—the reindustrialization of America; the recapture of that huge slice of the U.S. market lost to foreign producers; and the substitution of U.S.-made goods for foreign goods until America is a self-sufficient nation again as she was from Lincoln’s time to JFK’s.
To reduce our dependence on goods made abroad and grow our dependence on goods made in the United States, we should impose tariffs on all imports and use every dollar of tariff revenue to reduce taxes on U.S. producers. If the United States imports $2.5 trillion in manufactures, food, and fibers, and imposes a 25 percent tariff, that would yield close to $600 billion to virtually eliminate corporate taxation in this country.
What would such a tariff accomplish?
First, a reduction of imports (as their prices would rise), and a concomitant increase in orders to U.S. factories and farms.
Second, as the profits of U.S. factories and farms surged, Americans would be hired to meet the new demand. The income and payroll taxes of those new workers would replace sinking tariff revenue from falling imports.
Third, with corporate taxes cut to nothing, U.S. companies could cut prices on goods produced here, making U.S. goods more competitive both here and abroad. As foreign companies realized that the U.S. corporate tax rate was the lowest in the free world, they would relocate here.
Fourth, as the price of imports rose 10, 20, or 30 percent, foreign companies would realize that to hold their share of the world’s largest market, the $15 trillion U.S. market, they would have to shift production here to compete with U.S. companies. Companies like Mercedes, BMW, Toyota, and Honda would not only assemble cars here but would build plants here to make their batteries, tires, motors, and frames. The tide of capital investment rolling into China would shift and begin surging back to the United States.
That would be our message to the world: every company and all products are welcome here. But if you want to sell here, you produce here, or you pay a stiff cover charge to get in. Would China, Europe, and Japan threaten retaliation? Perhaps. But we should tell Beijing, Brussels, and Tokyo we will accept a combined VAT-tariff on U.S. products entering their markets equal to our tariff on their goods, but no more. Equality and reciprocity, not globalization and free trade, should dictate the terms of trade. And would China, Japan, or Europe risk a trade war with the United States when all three run huge annual trade surpluses with the United States?
Every year, Beijing exports to us six or seven times the dollar volume of goods we export to China. If the United States lost 100 percent of the world’s markets we now have, but recaptured 100 percent of our own, we would be half a trillion in the black, for that is the s
ize of our trade deficit with the world. We have nothing to lose but our trade deficits. We have a self-reliant republic to regain.
Economists would cry, “Protectionism! We can’t turn our backs on the world.” But no one is turning his back on the world. The goal is not to freeze out foreign goods but force foreign goods to carry the same share of the U.S. tax load as goods made in the USA. A tariff so high as to lock out foreign goods produces no revenue. What is proposed here is not a protective tariff to keep out foreign goods but a revenue tariff, with the rate set at a level to maximize revenue for the Treasury and maximize tax cuts for U.S. producers.
What is urged here is that we do to the VAT nations what they do to us. Pleas, protests, and threats to take Beijing to the WTO have not persuaded the Chinese to let their currency rise. Let us accept that reality, cease whining, stop hectoring, and act.
We need to bring manufacturing back and relearn truths taught centuries ago by Hamilton. Manufacturing is the muscle of a nation, vital to its defense and the securing of sovereignty. It is the magnet for research and development. It is organic. It grows. Around the factory form other businesses. Towns develop. Manufacturing workers average twice the wage of service workers.
We need to change the way we think. Production must come before consumption. We cannot consume if we do not produce. We must start making things again. We must reduce our dependence on foreign nations for our national necessities and the loans to pay for them. If it can be made here, it should be made here. We need to start relying on one another and stop listening to the “sophisters, economists, and calculators” who gutted the greatest manufacturing nation the world had ever seen. Our problem lies not in ourselves but in policies imposed by politicians in the hire of corporatists whose loyalties rise no higher than the bottom line on a balance sheet.
A MORATORIUM ON IMMIGRATION
“If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide,” said the young Lincoln in 1838.21 He was right. While threats to the United States from abroad still exist—a series of 9/11-scale terrorist attacks or a nuclear attack—the threats from within are more immediate.
There is the possibility of a run on the dollar, a default on the debt, and a depression. There is the danger of a sustained decline in our living standards, the end of the American Dream, and the social crisis that would come with it. And there is the possibility of a total disintegration of the nation into ethnic, class, and cultural enclaves distant from and distrustful of one another.
If America is not to disintegrate, if she is to regain the “out of many, one,” unity we knew in the Eisenhower-Kennedy era, the first imperative is to readopt the immigration policy that produced that era of good feeling, so that the melting pot, fractured though it is, can begin again to do its work.
Elements of that policy would include:
• A moratorium on new immigration until unemployment falls to 6 percent. To bring in foreign workers when 23 million Americans are still underemployed or out of work is to put corporate profits ahead of country.
• Reform of our immigration laws to give preference to those from countries that have historically provided most of our immigrants, who share our values, speak English, have college or advanced degrees, bring special skills, and can be easily assimilated. We need more taxpayers and fewer tax-consumers.
• The border fence should be completed.
• The next president should declare that there will be no amnesty for those here illegally, that illegal aliens must return to the countries from which they came. The first to be deported should be those convicted of crimes, including drunk driving.
• The erroneous interpretation of the Fourteenth Amendment that any child born to an illegal alien is automatically a U.S. citizen should be corrected by Congress via a provision attached to the law that it is not subject to review by any federal court, including or the U.S. Supreme Court.
• The U.S. government should undertake a series of high-profile raids on businesses that have hired large numbers of illegal aliens. Punishment of corporate scofflaws is the best prevention of this unpatriotic practice.
• Congress should enact a constitutional amendment and send it to the states making English the official language of the United States.
The issues addressed by these proposals are becoming a matter of national survival.
And if nothing is done to halt mass immigration, which now comes almost wholly from Third World countries, the Republican Party as we know it is history.
In 2010 James Gimpel measured the correlation between immigration and voting patterns between 1980, when Reagan won 51 percent and 2008, when McCain won 45 percent. The correlations are devastating. Between 1980 and 2008, Los Angeles County, the nation’s largest, added 2.5 million people. The immigrant share of the population rose from 22 to 41 percent, and the Republican share of the vote fell from 50 to 29 percent. In Cook County, Chicago, the nation’s second largest, the immigrant share of the population doubled to 25 percent and the Republican share of the Cook County vote fell from 40 to 23 percent.22
So it went with virtually all of the top twenty-five of the nation’s counties. Increases in the immigrant share of the population were matched by plunges in the GOP share of the vote: San Diego, Riverside, San Bernardino, Santa Clara, and Alameda counties in California; Kings and Queens in New York; Dade and Broward in Florida; Dallas and Harris in Texas all followed the pattern. In Manhattan, the immigrant share of the population rose from 24 to 34 percent, and the GOP share of the vote was cut in half to 13.5 percent.23
Either the Republican Party puts an end to mass immigration, or mass immigration will put an end to the Republican Party. As Barry Goldwater used to say, “It’s as simple as that.”
Barack Obama’s decision in 2011—to scrap even a virtual fence on the U.S. border with Mexico—suggests that the Democratic Party is not unaware of the fate that will befall the Republican Party if illegal immigration continues, and the illegals are put on a path to citizenship.
THE CULTURE WAR
As a consequence of the cultural revolution, America has become two countries. The differences between us are wide, deep, and enduring. Less and less often do we take the trouble to find common ground with people unlike us in views and values. Rather we secede into enclaves of people like ourselves. Cable, with its hundreds of channels, and the Internet, with its millions of websites, enable us to create worlds of our own to go to when the day’s work is done. Perhaps some of us misremember the past. But the racial, religious, cultural, social, political, and economic divides today seem greater than they seemed even in the segregated cities some of us grew up in.
Back then, black and white lived apart, went to different schools and churches, played on different playgrounds, and went to different restaurants, bars, theaters, and soda fountains. But we shared a country and a culture. We were one nation. We were Americans. We spoke the same language, learned the same history, celebrated the same heroes, observed the same holy days and holidays, went to the same films, rooted for the same teams, read the same newspapers, watched the same TV shows on the same three channels, danced to the same music, ate the same foods, recited the same prayers at church and the same pledge of allegiance at school, and were taught the same truths about right and wrong, good and evil, God and country. We were a people then.
That America is gone. Many grieve her passing. Many rejoice. But we are not a people anymore. We do not share a common faith or culture or common vision of what our country is or ought to be. “We do not consider ourselves a Christian nation or a Jewish nation or a Muslim nation,” said Obama, which tells you who we are not, not who we are.24 He went on, “We consider ourselves a nation of citizens who are bound by ideals and a set of values.” But what set of values binds us together when we cannot even agree on what a marriage is?
Traditionalists need to understand how we lost. In some ways, there was noth
ing we could do. The social, moral, and cultural revolution had been a light in the minds of men for generations, its ideas traceable to the French Revolution and the Enlightenment. Some even trace the roots back to the sundering of Christendom during the Reformation.
Some trace the seeds of this revolution back to the Garden of Eden temptation of “Ye shall be as Gods”; others even further to Lucifer’s rebellion against God. As Dr. Johnson mused, “The first Whig was the Devil.”
Whatever the roots, it was in the 1960s that the revolution, with its repudiation of Christian morality and embrace of secularism and egalitarian ideology, reached critical mass, as the Baby Boomers arrived to double the population on America’s campuses. This revolution divided families and generations and rocked the New Deal coalition, enabling Nixon to stitch together a New Majority that defined itself by opposition to the revolution. In 1972, Nixon crushed the first national political expression of the ’60s revolution: the McGovern campaign.
Indeed, Senator Tom Eagleton, McGovern’s first choice for vice president, confided to columnist Robert Novak that the McGovern campaign could be summed up as standing for “amnesty, abortion and acid.”25
While the revolution captured many among the young, it was a revolt of the privileged, not a rising of the people. Eventually, it had to be imposed by a Supreme Court that read its own values into the Constitution, de-Christianized America, elevated secularism to a state religion, and enthroned group rights. Prayer, the Bible, and the Ten Commandments were expelled from the schools, Nativity scenes purged from public squares. Abortion and homosexuality were declared constitutional rights. Children were ordered bussed across cities to achieve the courts’ concept of an ideal racial balance.
What astonishes, even now, was the lack of resistance. There were protests, and Republicans ran campaigns decrying judicial activism and the Warren Court. Once elected, however, Republicans made only futile attempts to enact constitutional amendments to overturn decisions that had no basis in the Constitution. The weapon the Founding Fathers had wisely put in the Constitution, authorizing Congress to restrict the jurisdiction of the federal courts, rested and rusted in the scabbard. With the Norris-LaGuardia Act, a Depression-era Congress had stripped courts of the power to issue injunctions in labor cases. Sens. William Jenner and Jesse Helms both proposed legislative restrictions on the court, but they failed to win passage.26 Lately, however, Congress has acted as though the Supreme Court is the supreme branch of government, having the last word, and against whose judgments the elective branches have no appeal.
Suicide of a Superpower_Will America Survive to 2025? Page 43
