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pampango

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Hometown: Xenia, OH
Member since: Tue Sep 19, 2006, 04:46 PM
Number of posts: 24,686

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Bookmarked. A really great essay! Thanks for posting it.

"Our solidarity should be with activists who march on Tahrir Square in Cairo or set up encampamentos in Madrid. These are our true compatriots. The more we shed ourselves of national identity in this fight, the more we grasp that our true allies may not speak our language or embrace our religious and cultural traditions, the more powerful we will become.

Those who seek to discredit this movement employ the language of nationalism and attempt to make us fearful of the other.

Those with whom we will build this movement of resistance will not in some cases be our own.
They may speak Arabic, pray five times a day toward Mecca and be holding off the police thugs in the center of Cairo. Or they may be generously pierced and tattooed and speak Danish or they may be Mandarin-speaking workers battling China’s totalitarian capitalism. These are differences that make no difference.

“My country right or wrong,” G.K. Chesterton once wrote, is on the same level as “My mother, drunk or sober.”

Our most dangerous opponents, in fact, look and speak like us. They hijack familiar and comforting iconography and slogans to paint themselves as true patriots."

Fordney-McCumber Act, 1922 with its "scientific tariff" tied to the wages in the country of export

"Woodrow Wilson believed in low tariffs. He had reduced tariffs in 1913, and refused to increase them.

If ever there was a time when Americans had anything to fear from foreign competition, that time has passed. If we wish to have Europe settle her debts, governmental or commercial, we must be prepared to buy from her.

Woodrow Wilson, speaking in March 1921. Wilson had just vetoed the Emergency Tariff Bill, just before he handed over the Presidency to Harding.


As soon as he became President, Warren Harding passed an Emergency Tariff (May 1921) to increase duties on food imports, and in 1922 Congress passed the Fordney-McCumber Tariff. This had two principles:

a. 'Scientific tariff': this linked tariffs to the wages in the country of export. If wages in, say Italy, were very low, then Italian goods were given a proportionately higher tariff. This negated the effect of lower wages in competitor countries.

b. 'American Selling Price': this linked tariffs to the price of American goods, not to the cost of production. A German company might be able to produce, say, a certain chemical for $60, but if the selling price in America was $80, and the US tariff was 50%, the tariff would be $40. This meant that foreign imports were ALWAYS more expensive than American-produced goods, however cheaply they had been made.

The Fordney-McCumber Act established the highest tariffs in history, with some duties up to 400% and an average of 40%."

http://www.johndclare.net/America3.htm

The Fordney-McCumber Tariff was familiar but this is the first explanation of the "scientific tariff" in it that I have read.

Here we go again. All of our problems are due to trade with those evil poor foreigners.

Let's do the "progressive" thing and build walls around the country to keep out immigrants and products made by these unsavory poor folks.

To do so would be stealing from the republican playbook of 1921 to 1930 when they passed two restrictive immigration laws (1921 and 1924) and two tariffs laws (1922 and 1930).

"Woodrow Wilson made a drastic lowering of tariff rates a major priority for his presidency. The 1913 Underwood Tariff cut rates..."

"When the Republicans regained power after the war they restored the usual high rates, with the Fordney-McCumber Tariff of 1922. When the Great Depression hit, international trade shrank drastically. The crisis baffled the GOP, and it unwisely tried its magic one last time in the Smoot-Hawley Tariff Act of 1930."

" Franklin D. Roosevelt and the New Dealers made promises about lowering tariffs on a reciprocal country-by-country basis (which they did)..."

"After the war the U.S. promoted the General Agreement on Tariffs and Trade (GATT) established in 1947, to minimize tariffs and other restrictions, and to liberalize trade..."

"The GOP under Ronald Reagan and George H. W. Bush abandoned the protectionist ideology..."

http://en.wikipedia.org/wiki/Tariffs_in_United_States_history


Until 1980 the republicans were the party of high tariffs (and restrictive immigration laws) and the Democratic Party promoted low tariffs (and liberal immigration laws such as the 1965 act). Since the republicans dropped their high-tariff policy in 1980's (and converted to FDR's commitment to promoting international trade), progressives are supposed to start pushing it in their place?

Bill Moyers had a great show a couple of weeks ago on how the progressive "socialist" countries of Europe have promoted a strong middle class. They have encouraged global poverty reduction while at the same time promoting employment and income equality at home. To summarize the show: Our economic problems are not caused by "others" but by actions that "we" have done to ourselves - repeatedly cutting taxes for the rich, weakening our unions, slashing our safety net, deregulating to the point of absurdity, etc.

Countries that have not cut taxes for the rich, weakened unions, slashed safety nets and recklessly deregulated have weathered the Great Recession relatively much better than Americans have with stronger economies, more equality and a stronger middle class, even though they trade with "poor" countries at a much higher level than we do.

In Europe they explicitly trade more with the Third World as a part of their global development strategy designed to help the poorest. Over the last 20 years it has been successful, as the UN's statistics show, while domestic economies in these progressive countries have continued to provide good jobs and better pay despite the global recession (which was caused by the US' financial industry, not by poor Third World workers).

http://billmoyers.com/episode/on-winner-take-all-politics/

America’s vast inequality is no accident, but in fact has been politically engineered.

How, in a nation as wealthy as America, can the economy simply stop working for people at large, while super-serving those at the very top? Through exhaustive research and analysis, the political scientists Hacker and Pierson — whom Bill regards as the “Sherlock Holmes and Dr. Watson” of economics — detail important truths behind a 30-year economic assault against the middle class.

Who’s the culprit? “American politics did it– far more than we would have believed when we started this research,” Hacker explains. “What government has done and not done, and the politics that produced it, is really at the heart of the rise of an economy that has showered huge riches on the very, very, very well off.”

Bill considers their book the best he’s seen detailing “how politicians rewrote the rules to create a winner-take-all economy that favors the 1% over everyone else, putting our once and future middle class in peril.”

Krugman: 85% of consumer spending in America is on American-produced goods and services

Not So Global

http://krugman.blogs.nytimes.com/2012/01/16/not-so-global/

Barry Ritholtz sends us to a San Francisco Fed paper from last summer that makes a point on which many people seem confused: despite globalization and all that, the bulk of a consumer dollar spent in America falls on American-produced goods and services.

The reason this matters — or at least one reason it matters — is for discussion of austerity, stimulus, and all that. I often get comments along the lines of “Well, maybe stimulus worked back in the old days, but now it just means spending more on stuff from China”. In reality, that’s nowhere near true.

Why? For one thing, most consumer spending is on services, few of which are really tradable. For another, even if the thing you buy in WalMart says “Made in China”, the price includes a lot of US value-added in the form of transportation and retailing costs.



So we’re still a country where about 85 cents of your consumer dollar is spent at home, one way or another. And this means, among other things, that the rules of macroeconomics haven’t changed nearly as much as people imagine.

Canadians spend about 75% on domestic goods and services, Germans about 70%, Swedes less than 60%. Less than 2% of consumer spending here is on Chinese-produced goods.

Not surprisingly, many European countries are near the bottom in HO's "labor freedom" category.

Unfortunately the US is ranked #1 in "labor freedom" (weak/no unions) (after excluding Afghanistan, Iraq, Somalia and Sudan which had no rating). Ouch!

Europe also ranks at the bottom in "fiscal freedom" (low taxes) with Sweden, Denmark and Belgium the top 3. The same is true with "government spending" with Denmark, Belgium and Austria as the top 3. Europe does place 20 out of the top 25 in "trade freedom". (Canada is 7th and the US is 37th.)

The Heritage Foundation is about as conservative as you can get. Their "freest economy" rankings look like that they can be useful if you use them in reverse. The really progressive countries score very low in many of their categories, so that it what you have to look for.

http://www.heritage.org/Index/explore

The Great Migration is little known or taught in the US.

The Great Migration was the movement of 6 million blacks out of the Southern United States to the Northeast, Midwest, and West from 1910 to 1970. Some historians differentiate between a Great Migration (1910–30), numbering about 1.6 million migrants, and a Second Great Migration (1940 to 1970), in which 5 million or more people moved and to a wider variety of destinations. From 1965–70, 14 states of the South, especially Alabama, Louisiana, and Mississippi, contributed to a large net migration of blacks to the other three cultural (and census-designated) regions of the United States. By the end of the Second Great Migration, African Americans had become an urbanized population. More than 80 percent lived in cities. 53 percent remained in the South, while 40 percent lived in the North and 7 percent in the West.

When the Emancipation Proclamation was signed in 1863, less than eight percent of the African American population lived in the Northeastern or Midwestern United States, but this would begin to change over the next decade. The already recognized migration would be investigated by the U. S. Senate in 1880. By 1900 this figure would increase by about 25%, with about 90 percent of blacks still living in Southern states.

While the Great Migration helped educated African Americans obtain jobs, eventually enabling a measure of class mobility, the migrants encountered significant forms of discrimination. Because so many people migrated in a short period of time, the African-American migrants were often resented by the urban European-American working class (often themselves recent immigrants); fearing their ability to negotiate rates of pay or secure employment, they felt threatened by the influx of new labor competition.

Migrants often encountered residential discrimination
, in which white home owners and realtors prevented migrants from purchasing homes or renting apartments in white neighborhoods. In addition, when blacks moved into white neighborhoods, whites would often react violently toward their new neighbors, including mass riots in front of their new neighbors' homes, bombings, and even murder. ... By the late 1950s and 1960s, African Americans were hyper-urban, more densely concentrated in inner cities than other groups.

http://en.wikipedia.org/wiki/Great_Migration_(African_American)

Chicago Race Riot of 1919

The sociopolitical atmosphere of Chicago was one of ethnic tension caused by competition among many new groups. With the Great Migration, thousands of African Americans from the South had settled next to neighborhoods of European immigrants on Chicago's South Side, near jobs in the stockyards and meatpacking plants. The ethnic Irish had been established first, and fiercely defended their territory and political power against all newcomers. Post World War I tensions caused frictions between the races, especially in the competitive labor and housing markets.

Beginning in 1910, thousands of African Americans started moving from the South to Chicago as one destination in the Great Migration, fleeing lynchings, segregation and disfranchisement in the Deep South. The Ku Klux Klan committed 64 lynchings in 1918 and 83 in 1919 in southern states. With the pull of industrial jobs in the stockyards and meatpacking industry beckoning as European immigration was cut off by World War I, from 1916 to 1919 the African-American population in Chicago increased from 44,000 to 109,000, for a total of 148 percent during the decade.

The riot lasted for nearly a week, ending only after the government deployed nearly 6,000 National Guard troops. They stationed them around the Black Belt to prevent further white attacks. By the night of July 30, most violence had ended. Most of the rioting, murder, and arson was the result of ethnic whites attacking the African-American population in the city's Black Belt on the South Side. Most of the casualties and property damage were suffered by blacks.Newspaper accounts noted numerous attempts at arson; for instance, on July 31, more than 30 fires were started in the Black Belt before noon and were believed to be due to arson. Steel cables had been put across the streets to prevent fire trucks from entering the areas.

United States President Woodrow Wilson pronounced white participants the instigators of the prolonged riots in Chicago and Washington, D.C.....The riot shocked the nation and raised awareness of racial problems. It also demonstrated the new willingness of African Americans to fight for their civil rights despite injustice and oppression.

http://en.wikipedia.org/wiki/Chicago_Race_Riot_of_1919

Good Wages, Unions and Government Regulation Are The Solutions, Not Causes, of our Economic Woes

Can we compete with China's wages? Does government interference and regulation hold us back? Are our unions keeping us from being competitive? Do we need to lower our standard of living in a race to the bottom? You might be surprised to learn that Germany pays higher wages, has strong unions, has much more government involvement and is doing better as a result. Conclusion: our wages, unions and government are not the problem, they are the solution.

Hourly manufacturing compensation (wages plus benefits) was $48 in Germany in 2008 - the most recent year surveyed by the Bureau of Labor Statistics - while it was $32 in the United States. Yet Germany is an export giant, while we are the colossus of imports.

In Germany, workers also get six weeks vacation - by law, federally mandated, a right. They get health care, university, child care and pensions and as a result they have higher productivity. In Germany, the government requires worker representatives to hold seats on the boards of directors of companies, depending on the number of workers. Government-funded research and vocational training, and policies to retain skilled workers bring another competitive advantage.

The result of all this government interference is that Germany's export-oriented manufacturing economy recovered from the recession and is doing OK, and their workers are paid well and have great benefits.

http://www.alternet.org/economy/149305/good_wages,_unions_and_government_regulation_are_the_solutions,_not_causes,_of_our_economic_woes/

In 1936 many felt that FDR had not been "progressive enough" for the times.

The Campaign and Election of 1936

FDR entered the 1936 election with a strong, but not invincible, hand. The economy remained sluggish and eight million Americans still were without jobs. Critics from various points on the political spectrum—such as Father Coughlin and Dr. Francis Townsend—had spent much of the previous two years attacking the President. (They supported Representative William Lemke of the newly formed Union Party in the 1936 election.) Likewise, by 1936 FDR had lost most of the backing he once held in the business community because of his support for the Wagner Act and the Social Security Act.

Republicans, though, had few plausible candidates to challenge FDR in 1936. They settled on Alfred "Alf" Landon, a two-term governor of Kansas who was the only Republican governor to win reelection in 1934. Nominated on the first ballot at the Republican convention in Cleveland, Landon was a moderate conservative—and notoriously lackluster public speaker—who the party hoped could take votes from FDR in the rural Midwest. Unfortunately for Landon, his moderation was often drowned out during the campaign by the conservative clamor emanating from the Republican Party, as well as from his running mate, Chicago publisher Frank Knox.

Roosevelt seemed to relish the attacks of Republicans, maintaining that he and his New Deal protected the average American against the predations of the rich and powerful, Referring to "business and financial monopoly, speculation, reckless banking," FDR crowed, "Never before have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me—and I welcome their hatred." Roosevelt's supporters believed their candidate understood and sympathized with them. As one worker put it in 1936, Roosevelt "is the first man in the White House to understand that my boss is a son of a (expletive.)" FDR won the election in a walk, amassing huge majorities in the popular vote and in the Electoral College.

What the 1936 election made most clear was that because of FDR and the New Deal, the Democratic Party was now the majority party in the nation. Roosevelt had put together what came to be called the "New Deal Coalition," an alliance of voters from different regions of the country and from racial, religious and ethnic groups. The coalition combined southern Protestants, northern Jews, Catholics and blacks from urban areas, labor union members, small farmers in the middle west and Plains states, and liberals and radicals. This diverse group, with some minor alterations, would power the Democrats for the next thirty years—and it was Roosevelt who put it together.

http://millercenter.org/president/fdroosevelt/essays/biography/3

Fr. Charles Coughlin

"After the 1936 election, Coughlin increasingly expressed sympathy for the fascist policies of Hitler and Mussolini as an antidote to Bolshevism. His weekly broadcasts became suffused with antisemitic themes. He blamed the Depression on an "international conspiracy of Jewish bankers", and also claimed that Jewish bankers were behind the Russian Revolution."

But before the 1936 election "Early in his career Coughlin was a vocal supporter of Franklin D. Roosevelt and his early New Deal proposals, before later becoming a harsh critic of Roosevelt as too friendly to bankers. In 1934 he announced a new political organization called the National Union for Social Justice. He wrote a platform calling for monetary reforms, the nationalization of major industries and railroads, and protection of the rights of labor. The membership ran into the millions, resembling the Populist movement of the 1890s."

http://en.wikipedia.org/wiki/Charles_Coughlin

Dr. Francis Townsend

"Dr. Francis Everett Townsend (January 13, 1867–September 1, 1960) was an American physician who was best known for his revolving old-age pension proposal during the Great Depression. Known as the "Townsend Plan," this proposal influenced the establishment of the Roosevelt administration's Social Security system.

In 1935, partly in response to the continued growth of the Townsend Plan, President Franklin D. Roosevelt proposed his own old-age policy, which was less generous than Townsend and Clement's proposal. The president's policy included a program for poor older people with matching payments from the federal government, known as Old Age Assistance, and a national old-age annuity program that later was called by all Social Security. The president's programs were included in the Social Security Act, which passed in August 1935.

The Townsend Plan continued to agitate for higher benefits after the Social Security Act's passage and reached its peak of support in the months after it was enacted. The Townsend organization could plausibly claim that the benefits were far less than what the American public wanted. The average Old Age Assistance benefit was about $20 per month as late as 1939, and the program known as Social Security was not due to take effect until 1942, despite the fact that opinion polls indicated that the American public thought that $40 per month was fair for the elderly.

Although the Townsend Plan was hampered by Dr. Townsend's personal control over his organization and his vendetta against Roosevelt, by continued political pressure, augmented by other pension organizations, such as California's Ham and Eggs, the Townsend Plan helped to induce amendments to the Social Security Act in 1939. These amendments greatly upgraded old-age benefits for both programs."

http://en.wikipedia.org/wiki/Francis_Townsend

Huey Long

Aware that Roosevelt had no intention to radically redistribute the country's wealth, Long became one of the few national politicians to oppose Roosevelt's New Deal policies from the left.
He considered them inadequate in the face of the escalating economic crisis. Long sometimes supported Roosevelt's programs in the Senate, saying that "[W]henever this administration has gone to the left I have voted with it, and whenever it has gone to the right I have voted against it." He opposed the National Recovery Act, calling it a sellout to big business. In 1933, he was a leader of a three-week Senate filibuster against the Glass banking bill for favoring the interests of national banks over state banks.

In terms of foreign policy, Long was a firm isolationist. He argued that America's involvement in the Spanish-American War and the First World War had been deadly mistakes conducted on behalf of Wall Street. He also opposed American entry into the World Court.

In March 1933, Long offered a series of bills collectively known as "the Long plan" for the redistribution of wealth. The first bill proposed a new progressive tax code designed to cap personal fortunes at $100 million. Fortunes above $1 million would be taxed at 1 percent; fortunes above $2 million would be taxed at 2 percent, and so forth, up to a 100 percent tax on fortunes greater than $100 million. The second bill limited annual income to $1 million, and the third bill capped individual inheritances at $5 million.

With the Senate unwilling to support his proposals, in February 1934 Long formed a national political organization, the Share Our Wealth Society. A network of local clubs led by national organizer Reverend Gerald L. K. Smith, the Share Our Wealth Society was intended to operate outside of and in opposition to the Democratic Party and the Roosevelt administration. By 1935, the society had over 7.5 million members in 27,000 clubs across the country. Long's Senate office received an average of 60,000 letters a week. Some historians believe that pressure from Long and his organization contributed to Roosevelt's "turn to the left" in 1935. He enacted the Second New Deal, including the Social Security Act, the Works Progress Administration, the National Labor Relations Board, Aid to Dependent Children, the National Youth Administration, and the Wealth Tax Act of 1935. In private, Roosevelt candidly admitted to trying to "steal Long's thunder."

http://en.wikipedia.org/wiki/Huey_Long#Long_in_the_Senate_.281932.E2.80.931935.29

During his first term many on the left thought that FDR was "Obama" rather than the FDR that we remember today.

You understand that our trade with "free trade" countries is much more equal than with

the rest of the world?

We have "free trade" with 17 countries. In 2010 our total trade with the those 17 countries was $1.115 trillion. We had a deficit of $71.1 billion (6.5% of the total). Exports were 47% of the total and imports were 53%.

In 2010 our total trade with the rest of the world was $2.108 trillion. We had a deficit of $574.8 billion (27.2% of the total). Exports were 37% and imports were 63%.

Every developed country has seen manufacturing decline. Several have it worse than the US.



"One interesting tidbit: While Americans sometimes complain that the country doesn’t “make” anything anymore — a sentiment related to manufacturing’s long-term slide in this country — they should know that declines in manufacturing jobs are common in the rest of the developed world, too:

In the United States (the red line), manufacturing as a share of total employment has fallen 15.5 percentage points in recent decades, from 26.4 percent of jobs in 1970 to 10.9 percent in 2008. In some other countries the decline has been even steeper. In Britain, for example, the share of employment held by manufacturing has fallen 21.9 percentage points in the last few decades, from 33.9 percent in 1971 to 12 percent in 2008.

There are several generally accepted explanations for these trends. They include productivity growth and new technologies; the rise of the service-sector economy; and the shift of manufacturing jobs to areas of the world where labor is cheaper."

http://economix.blogs.nytimes.com/2009/11/16/manufacturing-around-the-world
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