SalemNews.com, Salem, MA

November 14, 2013

Our view: Losing the economic war


The Salem News

---- — This is the time of year when our local cities and towns set their tax rates, the tax bills for the upcoming year finally get printed and mailed, and we open them with trepidation.

Invariably, taxes go up, and often the discussion turns to how to lessen the burden. That discussion usually turns to “attract more economic growth” in the form of new industry and businesses. And then the competition is reviewed — cities and towns look to get a competitive advantage over one another, to pull a small manufacturer over the town or city line and claim a small economic victory from a neighbor.

These situations play out year after year. The truth is that our local cities and towns are fighting over a fast-diminishing pool of manufacturers, the scraps of what was once a robust and dominant segment of our economy and our economic security.

We’re not alone. It’s happening in nations across the world, and the culprit is the same in every case: China.

For the past 13 years, we’ve been at the losing end of an economic war, one that we have largely refused to fight. Instead, we’ve rattled our rhetoric ineffectively and then casually watched as our losses have grown. It’s estimated that some 57,000 American manufacturers have closed their doors during that period. For many American workers, their final act is boxing up their manufacturing equipment to be shipped over to China.

As of 2011, America is estimated to have lost 2.7 million manufacturing jobs directly to Chinese competition, plus an unknown number of related jobs in related sectors.

The economic war with China began in 2001, after the United States and others championed its entry into the World Trade Organization. This allowed China, which had a notorious reputation for unfair trade practices, to trade on par with nations that followed the WTO’s strict policies. It was thought, naively, that once China entered the WTO, it would follow the rules, its working class would embrace democracy and prosperity, and other nations would gain equal entry to China’s economy.

None of those things have happened. China continues its old tricks — subsidizing its private sector in order to destroy foreign competition, unfairly manipulating its currency to give itself a big advantage in trade, and suppressing its worker class. It has stolen intellectual property from our nation and bullied against American companies’ attempts to enter its market. Meanwhile, China continues to buy up our mounting public debt, furthering our dependence on it.

The European Union nearly entered into an economic war with China earlier this year in an effort to combat the predatory strategy that China was inflicting on Europe. China’s autocratic government seeks to dominate the world economy. It only responds to serious threats, as the recent showdown with the EU proved.

Meanwhile, our own internal bickering has distracted us. President Obama skipped a crucial Asian summit last month, a move that was widely seen as giving China an advantage in its efforts to dominate its Asian neighbors and push its economic warfare agenda. Obama was here in the U.S., dealing with Congress’ shutdown of the federal government.

“I’m sure the Chinese don’t mind that I’m not there right now,” Obama said. “There are areas where we have differences, and they can present their point of view and not get as much push back as if I were there.”

Next month, our local cities and towns will set their tax rates, and we will hear the same arguments — economic development is needed to ease the burden on local residents. The scramble for the scraps of industry will renew.

We are fools to think that the fate of our local communities is immune to the global picture. It is up to our federal government to see this broader picture, and deal with the economic threats that face our nation. China is a formidable and predatory force that wants it all.