Manufacturing and Our Failing Stimulus

In the days of a “second stimulus” discussion, it’s time to re-examine the failures of the first.

The collapse of the manufacturing sector of the United States has been a major component of the failure of the first stimulus and a reason to shelf any plans for a second stimulus unless the White House and Congress address the growing loss of our manufacturing industry.

The Obama administration has pushed hard for the development of “green” energy jobs. Included in many of the stimulus pep rallies were discussions on how green jobs would bring employment back and how this would yield a more energy dependent United States. It sounded good – and there is hardly anyone that would doubt our dependence on foreign EVERYTHING has gotten a bit out of hand.

However, as typical in the government sector – little was properly thought out (perhaps not even read) before signed.

Although there were stipulations placed onto stimulus dollars, the government missed an opportunity to assist the manufacturing industry and bring a true reduction in unemployment figures to the table.

American manufacturing has taken such a hit in the past 20 years (down 37% since the early 90’s) that small manufacturing firms were not properly prepared to handle the mass of manufacturing needs the stimulus created. Thus, loopholes were added to the legislation and this meant billions in stimulus dollars went to foreign countries instead of to an ill American economy which could have used this opportunity to restructure our manufacturing and bring prosperity back to the sector. Taking the short cut approach not only allowed for money to go overseas, but also resulted in little to no effect on unemployment and still left unaddressed, the ability of our nation to rebuild and repair our manufacturing industry which is vital to our nation’s future growth..

Obama, like his predecessors, has not clamped down on the unfair playing field of international manufacturing. Particularly with China when it comes to manufacturing jobs and manufacturing products, the United States has allowed China to keep its exports and currency artificially cheap. The value of the Chinese currency has been an argument for a decade now, yet no real pressure has been placed on the nation to correct it.

President Obama during his campaigned promised to address the currency manipulation of China but soon after taking office, he retreated, perhaps out of fear of China’s economic threat to this nation now that it holds the single highest amount of US debt. If China were to dump treasury bonds, they could in one week cause this nation to lose all recovery to date and sink far lower than where we were when Obama took office. China’s threat of economic warfare holds a cloud over this administration and this cloud has resulted in damage to our industries and our clout in the world’s economy.

Of course, one cannot help but wonder what diplomatic deals were drawn up and discussed as the United States begged for China’s bailout of our economy. Placing faith in a nation built on every principle that clashes with our own was a grave mistake and forces us to accept pressure from a nation that has sent lead riddled toys to our children, poisoned our pets and sent drywall that rots from the inside out. When China purchased American debt, our fate in manufacturing became even darker.

The decline of manufacturing in this nation is carefully documented. It is nothing new to the administration and it is certainly not new to Congress. The failure of the government to take action before the first stimulus was released is criminal. That there is a push today to stop portions of stimulus dollars for renewable energy is laughable. The manufacturing of renewable energy supplies (solar panels, wind turbines etc) shifted to Europe and Asia long before the stimulus had passed and Senator Schumer, D-NY one of the main voices behind today’s letter to set a moratorium on spending, is certainly no rookie Senator.

Naturally, the American Wind Energy Association condemned the letter stating: any effort to stop the funding would “torpedo one of the most successful job creation efforts” of the stimulus bill.” While AWEA may have a point in its response citing the foreign company Gamesa employs Americans in the production of turbines in Pennsylvania, it is negligent in its defense of this as Gamesa employees less the 1,000 Americans and is a foreign company that may pay a few salaries here – but dominates its employment base elsewhere and all profits go back to its home country – Spain and anything developed in the US utilizing the employees expertise is the intellectual property of Gamesa – a company not from the US – but again – from Spain.

Although Schumer and his colleagues are correct to ask that stimulus dollars be stopped to these foreign countries, it is a bit of a wonder as to what took so long?

It is also not an alternative energy problem only. In the first stimulus, $8.4 billion was allotted (as was $75 Billion from 23 States) for the upgrading and expansion of our mass-transit systems which included new subway and light rail cars. Instead of allotting these funds to American companies to design and build these cars, since no American companies currently do make the cars, the loopholes were used and foreign companies received the bulk of these stimulus dollars too.

It is beyond comprehension that we are not using taxpayer dollars wisely after all the waste we have complained about for the last decade. When Americans yielded power to the Democrats in the last election, it was imagined we would see a return of some fiscal responsibility yet what we’ve seen is the collapse of all fiscal responsibility. While the Obama administration is talking about saving jobs, they are missing what they have lost – every penny they sent to Germany, Spain, China Japan…. Every penny could have turned the manufacturing industry around. Small business manufacturing firms should have received these awards to grow – to expand and to HIRE.

America is not at a loss of people who need work. It’s just at a loss of people who see how best to use taxpayer dollars to get these people back to work.

Before considering spending one more dime of the stimulus dollars, the first stimulus should be re-written. It should not allow for any foreign companies to compete against United States companies for funds. This means GE would be cut off if the manufacturing of turbines built with stimulus dollars are found have been built in their China manufacturing plant verses a US plant and the that the small firm in Lake Placid, NY would receive the billions that GE would have been awarded had they left their development in the US. Upstate New York could use some jobs.

Small business would grow – Americans would go back to work, manufacturing decline would turn around and America would be rebuilt from its roots.

So in my letter to Congress, unlike the Democratic Senators did today, I would like President Obama and Congress to put a moratorium on ALL stimulus funds and shelf any plans for a second until this whole “NOT MADE IN THE USA” problem that is darkening the skies of this nation is corrected.

The rest of the world may own our debt – but as of today – they don’t own the right to take away our creativity, our development and our jobs.

Keep the stimulus dollars here and put AMERICANS back to work.

Sources:

http://blogs.desmoinesregister.com/dmr/index.php/2010/03/03/41191/

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201003031233dowjonesdjonline000563&title=lawmakers-urge-immediate-suspension-of-wind-energy-grant-program

http://investigativereportingworkshop.org/investigations/wind-energy-funds-going-overseas/story/foreign-companies-control-wind-manufacturing/

http://www.awea.org/newsroom/releases/03-3-10-AWEA_Statement_on_Senators_and_Stimulus.html