NAFTA

In my neighborhood, Obama ran a radio ad where a fellow talked about how he had worked at Delphi (the auto parts slave to GM) and Delphi started buying parts from China and pretty soon he got laid off. Then Obama came on and was saying that he was going to tax companies that send jobs overseas and made some kind of vague promise to repeal NAFTA. I was thinking that Hillary might have a problem with this because the Senate approved the NAFTA treaty while Bill was in office. From somewhere in the bowels of Ohio, she made the statement that she was “against NAFTA from Day One” (which is not to be confused with the Day One that she will be prepared to answer the red telephone). Many foks here recall that Clinton sent Al Gore up our way to promise relief from Chinese steel dumping. They did nothing. Bush filed a section 201 complaint and froze Chinese and Brazilian imports for a year. Now, the Cleveland Plain Dealer is telling me that Hillary carried the rural counties and the union vote. Frankly, I found myself wondering why we ever got into NAFTA.

http://www.cleveland.com/news/index.ssf/2008/03/_rural_ohio_helped_clinton.html

But it occurred to me that when Airbus signed a $40 billion contract with the Air Force, what kept them out of Ohio? Why did they locate in Alabama? Just a fluke, right? Wrong. Honda, Hyundai, and Mercedes have all built plants in Alabama. When Thiessen Krupp, the bulwark of the old German war machine looked for a site for a $3.7 billion dollar steel plant they, too, located in Alabama.

http://www.airbus.com/en/presscentre/pressreleases/pressreleases_items/08_02_29_us_air_force_selects_a330-based_tanker.html

Would the repeal of NAFTA have garnered those plants for Ohio? Hell, no. No more than they would have kept them out of Alabama. Firestone, Goodyear, Hoover, and Timken Roller Bearings have all closed up shop and left Ohio. Is it just a coincidence? I think not. The Buckeye Institute, a local think tank, has a study comparing Ohio and Texas relative to NAFTA. http://www.buckeyeinstitute.org/article/1103 Is it just Texas’ proximity to Mexico that accounts for the growth? No, in fact, Ohio’s exports to Mexico have increased by over 55% and have kept Ohio’s economy out of the tank.

And I’m not sure all the political posturing is all that reassuring to our trading partners.
http://www.theglobeandmail.com/servlet/story/RTGAM.20080305.wcomment0306/BNStory/Front/home

Is it just rhetoric? Would Obama and Clinton rescind NAFTA?

Same ole, same ole, Ohio, ......... just like this Gazette Editorial yesterday.

http://www.wvgazette.com/Opinion/Editorials/200803040576

THE U.S. government is like a homeowner struggling with an adjustable-rate mortgage, several analysts have recently said.

Millions of Americans defaulted on adjustable-rate mortgages in the past two years. Their interest rates were adjusted upward, and they could no longer afford the payments.

How could that happen to the whole United States?

The nation pays more than $400 billion a year in interest on a $9.13 trillion national debt. Seven years ago, when President Bush took office, that debt was $5.7 trillion.

(snip)

Owning someone's debt is a form of power. Just as some poor American about to lose his house is in no position to bargain with the bank, the Bush administration's mealy-mouthed response to the flow of dangerous Chinese toys and pet food into American homes may well have its roots in this power relationship.

As Sen. Hillary Clinton quipped: "How do you get tough on your banker?"

America's alarming dependence on borrowed money is a serious security concern, and a top priority for the next president and Congress to address.

"DUH", it is not the "banker" one should be getting tough with, ....... it is the "borrowers" that has caused the problem.

But the Gazette says nothing about that "borrowed money" or the $9.13 trillion national debt ........ when they are "badmouthing" any proposed cuts in spending or demanding increases in "entitlement spending".

Hi OC,

While I am against NAFTA, it is not the only reason that plants leave the country, as your example of plants choosing some states over others demonstrates. A candy company just left Chicago for Indiana, but those pit vipers controlling our state and local governments will never, ever consider why it is that a company would do so. It's never their fault. Chicago's sales tax will become 10.25 percent (even more on bottled water, soda, and alcohol), and when businesses locate outside of Cook County, and convention planners choose to meet elsewhere, harming the local economy, it will magically become Bush's fault somehow.

Similarly, the Wall Street Journal compares Texas and Ohio:

http://online.wsj.com/article/SB120450306595906431.html?mod=djemBestOfTheWeb

Sam, I think the quality of the Gazette's editorials has gone way down. Doesn't the Gazette advocate bailing those banks out that made risky loans? How can they have it both ways?

Shiek, competition makes everybody better. Protecting your domestic producers does them no favors. I'd wager Illinois and Ohio are a lot alike.

I was listening to some yahoo on the radio on my back from Chigago a couple of weeks ago and he was talking about how bad NAFTA has been for Mexicans with American corporate farmers flooding Mexico with fruit and vegatables that the small Mexican farmer can't compete with. It seems that there are those in Mexico that want NAFTA repealed as well.

I cannot remember where I read it but I saw it opined that Obama lost Ohio because of the kerfluffle over the Canadian government's leaking of communication between the Obama campaign and the Canadian government. An adviser apparently assured the Canadians in writing that Obama was blowing smoke with regard to renegotiating NAFTA. Consequently, Hillary who might be vulnerable with regard to NAFTA was able to turn Ohio's unhappiness with NAFTA to her own advantage.

Mexican farmers cannot compete. I'm not surprised. I cannot say that I am geographically attuned to Mexico but I'd think our more temperate climate will always favor us. On balance, I'd also say that Mexico in general would be most anxious to continue NAFTA.

Ohio hates it and their exports to Mexico have increased by over 55%. My point is that it isn't NAFTA that's crippled Ohio's economy. It is their failure to adapt to the new reality: closed shop protectionism and high taxes are a recipe for disaster. States that are prospering under NAFTA are generally Right-To-Work whereas those that continue to protect their closed shop status are suffering. I don't hate unions. I hate the union bosses who have not represented their membership in good faith. I hate politicians that protect arrangements that hurt their constituents in order to wring the last nickel out of union bosses.

Unions have ceded their positive characters to the government by lobbying for the establishment of OSHA and MSHA and other work-place safety and health bureaus. Once we have OSHA, etc., what good are unions? They push for liberal, socialist public policies that are in contradiction to the interests of their members.

I think the Mexican government in general wants to continue with NAFTA. I don't know about the average citizen as their government rivals that of WV for corruption and mismanagement and many of the businesses make ours look like Mary Poppins in how they treat thier employees.

I agree with what you say about the union. I know how vital the union was in the growth of this country. And I still, on principal, agree with many of the concepts of the union. The problem is, it is the Union's themselves that no longer follow those concepts much more so then corporate America does. Gone are the days of an honest days work for a fair wage and policing their own and a strong desire to see the company succeed and that has been replaced by the "get all you can for little or no work" attitude and it's crippling not only business but whole economies. Look at Ohio and Michigan or the steel mills of OH, WV and PA. And the vast majority of it has to be placed squarely on the union and the working man.

When a man braggs about getting paid $17.00 to sweep at the stamping plant or climbing on the roof to watch Friday night football games (I know him personally) and they have way too many people to do it because one man can't take work away from another or when an average GM car has a $2,500 per car HIGHER labor cost and a sub par product then a Toyota (can you say Buffalo and their 1,000 or so jobs) how is it not the union man's fault? It is just plain pathetic that the UAW can hold a company hostage and force them to pay an average wage of $25.00+ per hour for unskilled or semi skilled labor and when the company attempts to address the problem, the union working man votes to shut the plant shut down rather then make concessions on wages. Yet when the plants do shut down, they cry about how bad they have it. PLEASE!!!

Maybe it's coming to an end. I know of a company that basically got rid of the teamsters union from their plant. Drivers were being paid, on average, $7,000 per month to drive a truck. The company offered contracts for 2 years that was more then fair (included was a 4% increase in pay) to the union employees but the union leadership refused for over a year to even put the contract offer up for a vote. The company finally put a deadline in for a vote, at which point the leadership recommended voting the offer down, which the employees did. The company pulled the offer and gave the union their 6 month notice that company trucks were being disbanded and all product would be contracted out.

The result was a decrease in delivery cost by approximately 10% with no drop in service. That happened in Chicago and union plant workers didn't bat an eye for their union brothers. There is hope.

I spent a few years weighing trucks in and out of a chemical plant. I'd say that the Teamsters were more aware of HAZMAT regulations, more versed in rates and routes, and, generally, smarter and harder working. But they killed the goose that layed the golden egg. This was during the time that Chemical Leaman, Matlack, and Coastal Tank Lines ruled the roost. The Chemical Leaman terminal was farther south but were ruled by a contract out of Wheeling. Matlack and Coastal in New Martinsville were governed by a contract out of Parkersburg. Chemical had to work while Coastal and Matlack were on strike. Coastal and Matlack had to work while Chemical was on strike. Little independents would spring up to replace them each time anybody went on strike. First, Coastal went belly up, then Matlack, and finally Chemical. As customers, we suffered. We lost drivers who knew our plant, knew our products, and would go the extra mile to give us good service.

How much is loyalty worth? How much can you afford to pay to take care of the people who have taken care of you? At some point you have to draw the line and refuse to pay extortionary rates.

My dad was a teamster for 40+ years and drove for Chemical Leaman out of the Institute terminal from the mid 60's until he died in 1979. He said the union was pretty much done in 77 or 78 when they lost part of their health benefits and that CLTL wouldn't be around for much longer.

They were offered a contract in 1986 and after 6 months told to ratify it or they would pull up shop and run everything out of South Carolina. They ratified a union contract that included a 5% paycut. 6 months later CLTL closed the institute terminal and moved operations to SC or used owner operators.

Slightly off-topic, but I for one am getting mighty tired of hearing Congress get all in a huff because Boeing apparently deserves to be awarded a $100 billion contract for building a undeniably inferior fuel tanker to the Northrop-Airbus model. If Boeing wanted the contract, they should have built a better plane.

Randall,

Where is the Airbus made?

The flaw with protectionism (even though I believe in it) is that you end up protecting inferior domestic operations like the one you cite. The success of American made Hyundais and Toyotas shows that you can still make stuff in the US without going broke, you just need to tell the unions who it is exactly that is necessary for the venture to succeed, and it's not them.

The Airbus is made in France but will be gutted and fitted with tanks in Mobile, AL. The original deal was to lease one hundred Boeing tankers for $26 billion, a price the White Office of Management & Budget found to be $6 billion more than would have been paid outright. McCain caught it and put the brakes on. Later, he was made chairman of the Airland subcommittee of the Senate Armed Services Committee. From that post he started subpoenaing Boeing e-mail. After two years he finally got it. Pow, Boeing CEO Phil Condit was forced to resign, Boeing CFO Michael Sears was hauled off to prison and Boeing paid a $615 million fine. At the same time, civilian procurement officer Darleen Druyun was also jailed for working to procure a job for herself and other family members at Boeing in return for the tanker contract. It was a big fat sleazy kickback and McCain caught it. I don't like seeing a foreign company walk away with a big contract but if the domestic producer is ripping off the taxpayers, what else you gonna do? Curiously, the democrats are trying to crucify McCain for outsourcing jobs. His demeanor almost redeems him in my eyes.

http://article.nationalreview.com/?q=YzBlZGY5YTE0MWQ1YjQyNzY2NWQ1ODQ2MWYzMGVkNjQ=