Saturday, October 02, 2010

Post-industrial America

Dr. A. H. Krieg CMFGE
Past member CT/RI DEC*

“Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy. Its inherent virtue is the equal sharing of misery”.
~Sir Winston Churchill

America is rapidly becoming the first post-industrialized nation in world history. Most developed nations go through stages of development; in Americas case we started as a Confederation, moved on to a more federalized Constitutional Republic, and then after Lincoln began our decent into a Democracy and after FDR, into a growing Empire. The real plan of the New World Order for America began with the Wilson administration and has grown exponentially ever since. There have been 19 socialist nations since the 1880’s of these all but one failed. Norway still socialist manages this with an 85% on citizens tax rate. The reality is that Norway has ceased to produce much of anything and survives mainly on its nationalized North Sea oil export income and outrageous taxes.

The first real de-industrialization began with the ultimate “Trojan Horse” as instituted by the progressive wing of the Democrat Party and then vigorously supported by the Republican Party; called “Free Trade”. Free trade is one of those political anachronisms that twist the truth and reality away from fact. Trade in the latter 20th and 21st centuries has been controlled by a series of treaties to which America has been signatory. These are WTO, GATT, NAFTA, and CAFTA; all these international agreements regulate all trade between all nations globally. All of these treatises were written by multinational NGO’s whose sole interests lie in improving their bottom line at the expense of Americans and American labor. The entire purpose of these agreements set into law as treaties is to destroy the prime competitors of multinational corporations, small business and family business, and labor unions, in order to up the profit margins of the multinationals.

The enactment of very high minimal wage laws then served to continually increase unemployment for youth and minorities. As of 2010, 18 to 24 year olds have an unemployment level of almost 50%. Minimum wage for 2009 is $ 7.25 per hour. Factually entry-level jobs in all industries are being eliminated by two factors. Firstly the illegal immigrants that work for cash under the table below minimum wage, and secondly most entry-level jobs can be disposed of through the use of advanced industrial equipment that does the job faster and better. The prospect of a $ 7.25 minimum wage also drives the continuous departure of industries to Mexico and beyond.

The espoused concept of the progressives that their free trade policies are good for American consumers based on the lower cost of goods imported from low labor cost third world nations, is totally bogus. When Americans lose their manufacturing based jobs and are forced to take employment in lower paying service sector positions, they can no longer afford goods and see their standard of living fall continuously. Since 1950 in real dollars of 1950 valuation, American labor has seen its standard of living decline every single year.

The then offered idea by the progressives was that we had surpassed industrial production and manufacturing; which we were informed was the preview of developing economies. America we were told has now moved into the “Information Age” and that we were now a “Service Sector” economy. Such childish invention came to us from the progressives and was joyfully disseminated by the progressive’s partner in crime, the media. Just exactly how you build a house, car, high-rise, or machine tool in such an economy they were reluctant to explain. To put it in Mr. Jefferson’s terms “nations that do not manufacture are the colonies of those that do”

What do those who employ people [The Rich] do when a nation attacks them with socialism? They let their feet do the walking and depart for places more friendly to their wealth, ask any over 50-year old Englishman. When the progressives, i.e. Labor party came to power some fifteen years before Lady Thatcher fixed the socialist catastrophe, England experienced what came to be called the ”Brain Drain”, my wife was a participant. Everyone who had a good education or had money, left, to Australia, New Zeeland, Canada, America, or South Africa. As of summer 1999 there were 298 billionaires in America as of summer 2001 that had declined to 266 a loss of over 200 billion in asset loss due to emigration of the rich. By 2010, 2,800 millionaires are walking out of the country every month due to tax policies, and uncertainty of the future direction of America. There is an old saying “you can rob Peter to pay Paul until Paul is also broke, that is unless he departs for other places before. Two more years of Barack, Harry and Nancy and no one with more than five million will be left and the entire burden of the socialist nightmare will be born by the rapidly disappearing “Middle Class”.

The people behind this effort are the seventy plus members of the progressive movement [Democratic Socialists of America] in congress that surprisingly has only one openly admitted socialist, Bernie Sanders (S, VT) The fact that president Obama while in the Senate was also a member and remains to this day a stalwart socialist, can not be denied. Of the 41 Czars appointed by Obama, all without Senate confirmation, all of them are either socialists or in some case communists or perverts. That people that surround the president are all on the far fridge of the political and social left is a fact not denied by anyone.

Through history great empires have seen their citizens become dependent upon government largess (socialism) creating a lazy indigent and uninformed population. Through the process of federalization of education by the progressives in the 1970’s by Carter (TC member) the population is being ‘Dumbed Down” at an amazing speed of decline. On the economic front our weakening from 2002 to 2010 is absolutely astonishing. Consider that in 1950 America was the largest manufacturing nation of the world, we were number one in Aircraft, Ship building, machine tool manufacture, home construction, skyscrapers, television, radio and automobiles, you name it we were number one, there was not even a close second. In education we were number one in secondary as well as university level. Today we are not even in the top twenty in education and who knows where we are in manufacturing. In 1950 American industry could out produce the entire combined world production annually, today Japan, and China can and do out-produce us. Guess what our largest by volume export is? Waste paper, I well remember when it was machine tools.

In economic terms America is bankrupt. We have a national debt of $ 202 trillion when all the off line and smoke and mirrors crap is scraped together. On the books we have an immediate debt of over $ 14 trillion, but that number is about as realistic as the labor department touted unemployment level of 9.8 percent. As in all government statistics the reality is in what is counted and what is left out or just simply removed. The national debt does not take into account all those IOU’s in the non-existent “Lock Box” of Social Security, the present and future shortfalls in Medicare and Medicaid, all the looted by congress funds from the Highway Trust Fund, Patent Office Fund, and so forth. With unemployment they use M-3 data based on a 3% sampling using only citizens getting cheques when in 1933 they used M-6 data that today results in an unemployment rate of over 18%, and which ShadowStats ® estimates to be 24.7% or 0,3% higher than at the height of the “Great Depression” of 1933.

Should our progressives retain power in 2010 mid term elections, reprieve for America will become impossible. Just think of it, in the week of September 26 Obama borrowed another 41 billion dollars to “increase lending by banks to small business” Not only is our president and his team of economic advisors clueless on matters of business and banking, because non of them have ever been employed in the private sector, but they are and have been instituting policy which is destructive of the private sector especially small business that employs about 70% of American labor. Banks have plenty of money to loan out. They are not loaning money for two distinct reasons. First banks under current FED policy are borrowing money from the FRS at 0% interest. They then purchase T-bills issued by the FED at 3.7% making a profit on a totally insured investment without one iota of risk of 3.7%. Secondly under the political social and business climate created by Obama and his troop of nihilists the uncertainty of future business is so bad that no one in business wants to borrow anything because they have no interest in expansion.

Great nations are great because of what they bring to world markets. When your largest export is last week’s newspapers and the cardboard boxes in which the imports arrive in from China you are in very serious trouble. Sadly, Americans due to a mindless media are not even aware of our situation. Every week we are witness to scores of pundits hyping the great benefits of free trade. The fact that our trade deficit is a stratospheric $42.8 billion just for June 2010 should rattle even the most liberal trade expert. The amount represents the variance between what we exported and what we imported in June. This has been an ongoing process for over ten years. How long could you survive bankruptcy if you spent more than you make every single month?

Since the introduction of NAFTA and the expansion of it, CAFTA America has lost 42,400 factories about three-quarters of which employed over 100 people. We have lost over 4,000 manufacturing plants to just Mexico. We should point out the manufacturing jobs are the highest paying available jobs for blue-collar labor and that we turned a $5.7 billion annual trade surplus into a $54.7 billion deficit with just Mexico in a short ten years. In total number America has due to progressive polices lost over ten million manufacturing and engineering jobs in ten years or about one million jobs per year. The only people happy about this are international bankers, multinational business, and of course government bureaucrats who could not care less.

You must understand that the New World Order is about making everyone equal, it is the socialist way. In order for us to be equal with say India our standard of living must be reduced by at least ten fold. Consider in our own hemisphere Haiti whose average annual income is under $400. less than what most Americans make in a week.

As of 2010 The People’s Communist Republic of China holds just under one trillion dollars of American debt. The Chinese are financing Americas demise. They will overtake us as the world’s largest economy in 2011. They are liquidation this debt by purchasing mineral and mining rights on the African continent, where they are now the single largest economic participants. That they have lost confidence in the dollar is common knowledge.

Cell-phones were an American invention, until 1985 all cell phones were made in America, in 2008 1.2 billion cell phones were sold on world markets not a single one of them was made in America, all the technology and manufacture was exported. Even well known American trade names have their cell-phones produced overseas and privately branded in order to optimize their profit margins. Why do they do this? Because they see the writing on the wall, our government does its very damn best to encourage manufacturing industries to depart our shores. America has lost 32% of its manufacturing base in the last ten years. Manufacturing in America in 2010 is lower than it was in 1975. This is the spiral of de-industrialization that progressives have subjected America to.

Let us provide an enlighten example of such polices. In 1982 Widder Corporation a New England manufacturing company that had been importing saw blades decided to manufacture saw blades in America in their Naugatuck, CT plant. Widder purchased or ordered all the necessary machine tools and then contacted all American steel mills to get quotes for the necessary tool-steel. Not one single American steel producer not Bethlehem, US Steel, not one of them was interested in our business. Mind you we were requesting quotes for volumes of over $25,000 per month. We contacted mills in Europe via telex and had quotes in hand within hours from over a dozen mills. We settled with an Austrian company and orderd the steel to commence shipment on a monthly basis for a 12-month contract of $300,000. That’s when the ITC (International Trade Commission) reared its ugly head and informed us that there were quotas for tool-steel imports that had already been exceeded and that Widder could not get on the list and we were not allowed to import any tool steels. When we provided evidence that no American mill wanted our business they told us sorry those are America’s laws as negotiated by the ITC under GATT. In order to get our required raw material to manufacture a previously imported product in America we had to farm out the stamping operation to an Austrian company and import the steel as produced material. Then we had to sell our 80-ton new stamping press, as we no longer needed it. Yes. That’s right our own government forced us to farm out the stamping portion of the manufacturing of saw blades to a foreign manufacturer.

In another case Widder was a prime contractor to the U.S. Navy, Underwater Sea Systems Command, and U. S. Air force, as well as numerous governmental organizations. In order to sell machine tools to the Navy we had to undergo a rigorous testing regimen called TPR (Tool Performance Report) These tests were expensive and time consuming but once a product was approved sales were made after product instruction to a Naval purchasing authority. We gradually over the years built that business to over $ 50,000 per month. All at once in 1981 our orders stopped coming and business fell off sharply. We contacted our Naval representatives and were informed that a change in federal purchasing policy allowed any NATO nation to sell the U S Navy and all American military, without a TPR. As some of our items were patentended the navy gave the importers a rider so that they could sell our knocked-off products that did not meet specifications to them. We bitterly complained to the Navy, our congressman as well as Senators. Noting happened. Then we were contacted by the Navy and informed that we could sell our products to all NATO military worldwide. Our Zurich “Panox office contacted the British Admiralty, The French, Belgium, Dutch, and German Navies not one of them allowed our sales personnel into their buildings.

The fact that our own ITC negotiators who are clueless about business and manufacturing are the very people destroying our domestic manufacturing base is commonly known by all manufacturers, and certainly by ITC personnel.

Dell computers have just announced that they will be closing their largest American based manufacturing plant in Winston Salem, North Carolina. 900 American manufacturing jobs will be lost. Dell is moving their manufacturing operation to China and is investing $100 million in their new Chinese operation. American job losses According to the Economic Policy Institute, just to China are now at about one half million per year, while our trade deficit with China has grown a whopping 18% in just 2010. In 1950 American employment in manufacturing was 31% in 2010 that has fallen to 11.5%.

In national defense America no longer has the wherewithal to produce even one defense related product domestically. Not electronics, not armor, not aircraft, not even a ship. The real problem with this is that should any war of global size commence the replacement parts may not be available especially if the producer of those products is the enemy. (Not really a far-fetched proposition)

The American economy today, is made up of 70% in consumption of consumer goods and about half of that is spent on services. The problem with this scenario is that over 85% of those consumer goods are imports. And while that is going on, we learn from “Tax Notes”, that American multinationals have increased their foreign employment by 30% by over 10 million workers, in the last ten years, while at the same time reducing American labor employment to 21.1 million an 8% reduction. Now, let us be clear, while the government claims this to be solely the cause of corporate greed the facts don’t support that opinion. The reality is that American producers are saddled by a plethora of laws, regulations and mandates, mostly enforced by a bunch of nihilistic bureaucrats that don’t have a clue as to what they are actually supposed to be accomplishing.

Two examples, while your author was installing a large Ring Former (cost over $250,000) in Philadelphia an OSHA inspector appeared on the doorstep. Nice lady in a dress wearing high heels to inspect a steel fabrication plant. When she came to the machine she saw me in the pit under the machine adjusting the hydraulic clamping system. I was on my back working overhead. She fined the plant because I was not wearing a safety helmet, something that is impossible when you are lying on your back and working above. In another instance I had just completed the architectural plans for one of our new plants. OSHA regulations are thousands of pages and while I wrote the regulations for welding safety for the AWS & ANSI that were adopted by OSHA I wanted someone to go over the plans to see if there were any possible violations before we built. OSHA in Hartford CT was emphatic when they said “We do not look at plans before hand we will inspect after construction and tell you what you must change and fine you for the violation”, if that’s not stupid I am left speechless.

Even in the so-called “Service Sector Economy” we are on the losing end of the proposition. In 2000 America was number one in “Broadband” Internet use, today in 2010 we are ranked as number 15.

Progressive LBJ our 36th president was the genius that came up with the ultimate system of creating government dependency by citizens. It was LBJ’s continuation of FDR’s socialist plans for us. He called it the “Great Society” also called the “War on Poverty” that he instituted on Jan 8th 1964. America has spent over four trillion dollars on this fiasco. According to the American Census Bureau, the War on Poverty has been such an outstanding success that we have 43.6 million American’s living below the poverty line in 2010, the highest number since record keeping on this issue in 1960 and about double the number in 1964.

There is solution to this in economic, social and governmental terms!

• Allow all manufacturing companies to write off the total expense of any new equipment made in America the first year of purchase.

• Eliminate capital gains taxes for the coming three years.

• Eliminate the 3.8% tax on housing sales as instituted in the new Obamacare plan. (Repeal Obamacare)

• Require all regulatory agencies to upon inspection of any issue to issue a warning in writing suggesting the remedy and allowing reasonable time to implement it for the company to comply. Fines may only be given if the suggestion is ignored.

• Make permanent the Bush tax cut.

• Begin a decentralization of all bureaucracies out of Washington DC which posts an average bureaucrat’s pay at over twice the national average income.

• Close down the Department of Energy

• Close down the Department of Education

• Close down the Department of Housing and Urban Development

• Close down the Department of Health and Human Services

• Disband the Department of Homeland Security and make the various agencies including the Coast Guard stand alone organizations

• Close the department of Agriculture

• Close the Department of Transportation

• Fire all the Czars

• Shut down all Wars including the War on Drugs, War on Poverty, and wars overseas. (Not one of them can be shown to have succeeded in their planned outcome)

• Bring all troops home from all EU nations. (They are more than capable of defending themselves)

• Bring all troops home from Afghanistan and Iraq.

• Close the IRS and institute a flat 14% sales tax that may not be increased without a three-quarter majority and both houses and presidential approval.

• Repeal the 16th amendment

• Repeal the 17th Amendment

• Repeal the 14th amendment that was never legally ratified by congress.

• Reduce all government employment by 10% per year for the coming five years.

• Eliminate all legislative and executive branch pensions.

• Enforce term limits for all elected offices to two terms and appointed positions to ten years.

• Eliminate all taxes of savings accounts.

• Produce a constitutional amendment requiring congress and the executive to only produce a balanced budget.

• Place sufficient troops on the Mexican border armed with loaded rifles to stop all illegal immigration. (Use those troops coming home from overseas)

• Repeal the American Patriot Act

These acts would begin a very rapid recovery and reestablish America to its former greatness.

*DEC [District Export Counsel] CT Connecticut, RI Providence Plantation and Rhode Island, USDC Untitled States Department of Commerce. An advisory group appointed by the Secretary of Commerce to USDC on issues of trade. Malcomb Baldridge (Reagan) and every consecutive Secretary through Ron Brown appointed Dr. Krieg in the Clinton administration.

Facts do not cease to exist because the media ignores them.
A. H. K.


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