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Last month’s government shutdown wasted a lot of time. Now that it’s over, it’s time for our elected officials to get down to the business of the people, and the people want manufacturing jobs.
But let’s not rush from one manufactured crisis into another one. While many politicians in Washington are quick to bemoan our federal budget deficit and predict spending cuts are the answer to our economic woes, too few of them acknowledge a more problematic deficit that continues to reach record levels: the trade deficit. It reached $540.4 billion in 2012.
Our out-of-tune trade stance has stared us in the face for a few decades and we’ve yet to address it. But now is the perfect time, because there’s an obvious connection between the trade deficit and our budget problems.
Imagine if, via a national manufacturing strategy, we put just a fraction of the millions of unemployed Americans into the manufacturing sector, where one job in the sector supports five others elsewhere in the economy. More people working would decrease demand for public services while increasing tax revenue, which in turn would lower our budget deficit.
Not exactly rocket science. Still, we can’t fix either deficit without addressing the chief driver of the trade deficit, and that’s our trading relationship with China.
It’s not natural that America ran a $315 billion trade deficit with the world’s second-largest economy in 2012. No, the trading practices of China—including its chronic habit of currency manipulation and the raft of illegal subsidies it provides its industries—actually encourage it.
And while the Chinese government is quick to offer vague promises of economic reform to stave off repercussions, the data tells the truth: In the decade after the U.S. helped China join the World Trade Organization in 2001, America lost 2.4 million middle-income factory jobs.
These are huge numbers. But they aren’t insurmountable. One report, for instance, found that up to 2.25 million jobs would be created and the U.S. budget deficit could be reduced by an annual $71.4 billion if our trading partners simply stopped manipulating their currencies.
So why not provide them a pointed nudge to help them do so? There’s one such plan being bandied about the Capitol at this moment. House Resolution 1276, the Currency Reform for Fair Trade Act, would add currency manipulation to the list of illegal subsidies against which an international trade case can be filed. In effect, it would give American businesses the ability to seek redress when a foreign government targets their industries with a rigged currency. And applying pressure on China for manipulating its currency has proved effective in the past.
In Indiana, home to the highest concentration of manufacturing jobs in the nation, getting currency manipulation onto this list couldn’t be more urgent. But while 134 members of Congress are pledging their support for this bill, only two Hoosier congressmen—Pete Visclosky and Andre Carson—have signed on as cosponsors.
Hoosiers in manufacturing are counting on the rest of our House delegation to defend us when foreign countries cheat us out of our jobs in the trade arena.
So for the budget hawks among our delegation who can’t see the forest for the trees, remember this: If you’re serious about reining in the budget deficit, you’ll get serious about our trade deficit, too. Plenty of out-of-work Hoosiers are waiting for your support.•
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Steury, who lives in Auburn, is a Midwest field coordinator with the Alliance for American Manufacturing. Send comments on this column to ibjedit@ibj.com.
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