According to the U.S. Bureau of Labor Statistics, American manufacturing employment fell to its lowest level since July 1941, just five months before America's entry into WWII. The American Manufacturing Trade Action Coalition is warning that the only way to revive the fledgling economy is to reverse this trend.
"America is facing its greatest economic crisis since the Great Depression because it thought it could substitute debt to mask a shortfall in U.S. production,"- said AMTAC Executive Director Auggie Tantillo. "America will not be able to borrow its way out of this crisis; it will need to manufacture its way out to keep its standard of living."-The Bureau of Labor Statistics reported that in February, the American economy shed another 651,000 jobs. Of those jobs lost, 168,000 were in the manufacturing sector. The BLS also revised their January numbers to show that 257,000 jobs were lost in January, up from the previously reported 207,000.
"These job losses are staggering but sadly predictable,"- Tantillo said. "They are the logical outcome of an economic policy that was doomed to fail."
That economic policy caused American non-farm payrolls to fall by a staggering 4.918 million in the one year period between February 2008 and February 2009.
"The U.S. government will spend trillions of taxpayer dollars to bail out the very Wall Street interests responsible for driving U.S. manufacturing offshore,"- he said. "Meanwhile, key policymakers and opinion leaders remain oblivious to the fact that America has run a cumulative $5 trillion trade deficit in the last eight years that has destroyed millions of middle-class jobs."-
To reverse that trade deficit, restore America's manufacturing base and preserve the standard of living in this country, Tantillo proposes some solutions.
First, according to Tantillo, the U.S. must do something to combat the enormous tax disadvantages that it faces with its trading partners around the world. Specifically, he points at the Value Added Tax, utilized by approximately 150 of America's trading partners. The VAT results in a $474 billion disadvantage.
Next, the U.S. must do something policy wise to effectively tackle China's currency manipulation. The practice allows the Chinese to purposely undervalue their products and drive up their balance of trade surplus, especially with the U.S.
The U.S. must also enforce laws to halt the illegal trade activities of foreign governments. Many of America's trading partners practice subsidization, dumping and intellectual property theft.
Additionally, Tantillo believes America must reduce its dependence on foreign oil and strictly enforce the "buy American"- clause in the stimulus package.
Finally, Tantillo says, America must develop a fair trade policy that requires reciprocity among its trading partners, especially in the areas of labor and environmental standards.
"The quickest way to boost U.S. manufacturing is to start producing here at home more of the cars, trucks, computers, software, electronics, pharmaceuticals, furniture, and textiles that Americans consume,"- he said. "That's what will create the millions of middle-class jobs needed to get America out of this mess."
