The Daily Caller

The Daily Caller
Opinion

Protectionism is the solution to America’s jobs shortage

12:54 PM 02/18/2011
Zachary S. Krajacic

When it comes to trade, we need to level the playing field. Manufacturing is all about the unit cost of production. Currently, American companies that offshore, as well as foreign firms that export products to the U.S., bypass American minimum wage laws, environmental laws, and health and safety laws to lower their costs, especially labor costs. This enables the companies to undercut American-made products on price. We should tax imported products to help offset this market imbalance and encourage domestic manufacturing.

Free trade enthusiasts will argue that protectionism would raise prices on American consumers — and they are right. But isn’t it better to maximize the number of employed Americans and pay more for products than to subsidize with our tax dollars a growing number of unemployed people so that we can all save a few dollars at Wal-Mart?

More employed Americans would expand our tax base (only 50% of Americans currently pay federal income taxes), which would reduce the tax burden on each taxpayer and possibly offset the higher prices we pay at the stores. Most important, more Americans would be working, productivity would increase, and our nation would be stronger.

Republicans won the November 2010 election in part because Americans want to restore individual liberty and freedom. But if we wriggle free of Washington’s control, yet are still beholden to Beijing, are Americans any better off?

Alexander Hamilton was one of the founding fathers who favored protectionism and warned about the dangers of the economic policies we have been pursuing over the past few decades. He wrote, “Not only the wealth, but the independence and security of a country, appear to be materially connected with the prosperity of manufactures.” Thus, we can only be free if we become more self-sufficient, restore our manufacturing base, increase exports, and put people to work right here in the U.S.A.

Zachary S. Krajacic is a writer and public relations professional from Buffalo, N.Y.

Tags: Alexander Hamilton, Economics, International economics, Labor, Manufacturing, Unemployment
  • rdefazio

    Considering that only 1/3 of all employable adults in the United States have a college education and that the lion’s share of advertised job listings require a college degree, it would seem that a structural employment pattern is being set up due to the lack of work that does not require a college degree. Manufacturing jobs generally do not require a college education, and they have historically paid far more than service sector jobs. So, it would seem that from a national interest point of view, the fostering and support of manufacturing would be in the best interests of the country.

    What is not clear is how to get to that place where U.S. manufacturing can be competitive from a cost perspective. For all the reasons outlined by JJSmithers in his post above, manufacturers have left the country in droves. Politicians, who seem to think that funnelling money from the public treasure chest to local districts is the only way to be re-elected, have created tax and regulatory structures that discourage any real private investment in manufacturing, so protectionism would only be another layer of incompetent decision making layered on another. Yes, it would be good to have full employment, but if the employment we create is of the variety that exists in Greece, Spain, or other countries where the socialistic pressures are such that private initiative is sacrificed for security, then we will have an even greater problem than we have now.

    If we really want manufacturing, to thrive here, we as businesses have to choose to buy from domestic manufacturing companies and forego the price advantages that might be obtained by buying from foreign suppliers. Manufacturers in the U.S. have to step up their game and deliver more than just goods. They have to deliver superior customer service and higher quality control to justify the added expense. It’s a two way street, this loyalty thing.

    Rattling sabres in the name of nationalistic fervor is not the way to create manufacturing jobs. There has to be a real commitment on the part of the nation as a whole to buy American first. Anything short of that will simply mean that the U.S. manufacturing will fade into the twilight.

  • jjsmithers

    The author does not understand why manufacturing jobs leave this country, so it is not a shock that he has no idea what the solution is.

    Putting tarriffs on imports will only cause other countries to respond in kind. So, exports will be hurt, resulting in job losses. Making the product in the US will raise the costs, then the prices go up. That hurts consumers and reduces their buying power.

    The problem is regulations, regulations and more regulations, topped with a huge helping of government red tape and bureaucratic nonsense. Then, for good measure, throw in years of environmental lawsuits that are often just shakedowns by the “green” crowd.

    Endless regulations continue to be piled on businesses after they are up and running. A nightmarish maze of Federal, state and local laws, combined with a tort system that encourages frivolous lawsuits only exasperates the problems. The day-to-day costs drag our economy into the mud. Obamacare will really bring things to a crawl.

    Then there are the unions– every entrepreneur’s nightmare. Just like arguing with liberals, there is no upside to trying to have a realistic negotiation with union goons. They will absolutely destroy your business over time. Any benefits to a national manufacturing economy will be given back in the costs of dealing with unions. And it won’t take that long.

    The costs of doing business in America cannot be negated just by giving tax cuts to corporations– the next administration can undo everything, anyway. Then you have no benefits to any part of this author’s unrealistic plan.

    To get manufacturing back to America will take a major, across-the-board effort to drastically reduce regulations, cut the red tape and lawsuits involved in building new plants, reign in the unions and make every state a right-to-work state, and reform the tort system.

    Then, when there is a new, more business-friendly environment… cut taxes. Then cut them some more.

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