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Fixing the Leak

By       Message David Glenn Cox     Permalink
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We are what we are; we are good and bad, strong and weak, intelligent and stupid. Yet here we are. As President Kennedy once observed, "Our most basic common link is that we all inhabit this planet. We all breathe the same air. We all cherish our children's future. And we are all mortal."

There is much common ground that unites us all. We all seek a peaceful life in comfort and dignity. We all seek the opportunity to better ourselves and opportunities for our children to better themselves. In time of crisis secondary issues lose their importance. If, for instance, the ship were sinking it would no longer matter if I brought along my brown suit.

There are no class distinctions in lifeboats. Steerage and first class sit side-by-side, and for the sake of common duty you ask few questions; you just row. Because without combined, communal action survival itself hangs in the balance. No one on board would be foolish enough to describe a leak filling the boat with water as a "New System!" Even a fancy name devised calling it "Free Water Exchange" wouldn't be enough to convince those on board that they weren't going to get wet.

No amount of propagandizing could convince them that the boat wasn't sinking, although the experts in the media would claim it not so, that the water was merely rising and that it was all part of the new system of Free Water Trade! Yet all will get wet, Liberals, Conservatives, Libertarians, Christians, Atheists, Muslims and Jews. This issue is bigger than issues; abortion will be made more common in a land without jobs. Taxes will be higher in a land without jobs, children will go hungry and families will disintegrate, education will suffer because this crisis is non-selective.

If you had four players playing Monopoly and every time a player passed Go and received their $200 the banker also sent $200 to another game across the room, eventually your game would end. You would suffer while those across the room benefit. The argument that the other guys brought you inexpensive chips and drinks would not compensate for losing the ability to continue playing the game. It is not trade that is damaging this country, and not even the concept of free trade that is damaging this country, but who this country is practicing free trade with.

The banker being a banker would simply follow the money to the next table. Your well being or suffering is not of consequence. The banker sees only the growth in the new game and not the demise of yours. His boat is dry; why should he concern himself with your wetness? He has new customers now.

If you look at the countries in the European Union, you see that they trade primarily with other countries of like economies. The wage scales are similar and the cost of production is compatible. On the other hand, The United States' largest trading partners, with the exception of Canada, are third world economies. Chinese industrial workers earn $5.00 per day and the Mexican minimum wage is $3.89 per day!

So, in actuality this is not about trade at all. You trade goods, but you exploit people. Mexico's economy has been built on the backs of the people's hard labor. Foreign-owned factories have surged from just 79 to almost a thousand. The goods are imported into Mexico under free trade agreements then assembled and shipped directly into the United States. This is only possible by keeping wages low in Mexico, otherwise production will move to China.

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The city of Tijuana needs a new water treatment plant due to the influx of workers and the pollution from the new factories. However, because the wages are so low and the government dare not tax the industries, the new facility becomes an impossibility. They have effectively priced themselves out of civilization because the rich don't live there and the poor, the bulk of the population, are too poor to afford clean water.

So how does the American worker compete with four and five dollar-per-day wage scales? You can't, there is no level of productivity, no amount of robots or innovation that will enable you to compete. This affects us all equally, be you doctor, lawyer, butcher, baker or candlestick maker. Our tax base is constant; it costs the same amount of money to pave a mile of highway regardless of whether you work for Wal-Mart or for GM. Each wage reduction or layoff means less money in the pool to pay the bills.

Many Republican lawmakers like to make the argument that the poor don't pay taxes. What they mean is the poor don't pay federal income tax and in a way that is true. Yet allowing free trade agreements with third world economies without protection for American workers is nothing short of treason. They argue that it can't be helped; it's the global economy. Imagine a bank guard who allows a robbery to be committed unmolested and then uses the same argument. "It can't be helped; it's the global economy."

In Toulouse, France, Airbus recently built one of the largest state-of-the-art aircraft factories in the world. This massive plant employs 11,500 French workers to perform final assembly of the aircraft. They are paid union scale wages; their government provides them with national healthcare and four weeks vacation per year. How do they do it? Haven't they heard about globalization? When these Airbus workers go out to lunch at McDonalds they find workers earning the minimum wage of around $10.00 an hour, with national health care thrown in along with guaranteed vacation time, sick leave and maternity leave.

Why is it the French workers can compete in the world economy and American workers cannot?

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Please don't say it is because the French government subsidizes industry. Our government subsidizes our industries as well. The French tax system for the average citizen is comparable to the US system, complete with Social Security deductions, but when it comes to, as the French call it, "Impôt de Solidarite' sur la Fortune," or Wealth Tax, those with worldwide assets exceeding 732, 000 pay the Wealth Tax on a sliding scale from .55% up to 1.80%.

Now, for the wealthy here is where it gets thick. On interest income you may opt for a flat 26% payment or 16% with 10% contributions to social agencies. Capital gains are taxed at the same 16% plus 10% in social contributions. The top tax rate? 48.09%.

The taxes fund the system that provides for healthcare that allows the businesses to be competitive. Everyone pays taxes and the wealthy pay a lot more taxes. The rates are similar to those in US in the 1950's and 60's when prosperity abounded. While we allow our politicians to proclaim that free trade means everyone must open their doors to anyone even if it swamps the boat, the fact is that's a damn lie and every politician that says it is more dangerous to you than Al Qaeda. Look at the countries that France exports its products to.

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I who am I? Born at the pinnacle of American prosperity to parents raised during the last great depression. I was the youngest child of the youngest children born almost between the generations and that in fact clouds and obscures who it is that I (more...)
 

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