Monday, January 7, 2013

Is Bill Clinton to Blame for Woes in 2013?

Was Bill Clinton's support for President Obama over these past 4 years just a way for him to make some type of amends with himself, and to help sooth his conscience for his past bad judgments while Bill was still our President? Please... say it ain't so Bill! (And no, I'm not talking about Monica Lewinsky.)

A recent New York Times article (The Benefits of Uncertainty) quotes a study* showing that manufacturing jobs fell from 17.2 million at the end of 2000 to 12 million by the end of 2012, and attributes it directly to President Bill Clinton.

On Oct. 25, 2011 an Ohio Democrat in the U.S. House of Representative named Betty Sutton made a few points about these lost manufacturing jobs with a few facts.

Her data showed that there were 398,887 private manufacturing establishments of all sizes in the United States during the first quarter of 2001. By the end of 2010, the number declined to 342,647, a loss of 56,190 facilities. Over 10 years, that works out to an average yearly loss of 5,619 factories. Dividing that by the 365 days in a year produces a 15.39 average daily number of factories lost.

The New York Times article, written by Binyamin Appelbaum, says, "When people argue that uncertainty about taxation and regulation is freezing corporate decision-making, they are generally arguing that more certainty would be a good thing for the economy. The idea, deemed so self-evident that it sometimes is left unspoken, is that corporations are hesitating to invest in the United States.

But an interesting study flips this story on its head. It finds that manufacturing employment in the United States declined sharply as a direct result of a 2000 government decision to fix in place the level of tariffs on imports from China.

In 2000 Congress granted “permanent normal trade relations” to China. The legislation mostly left the existing tariffs unchanged. What it eliminated was "uncertainty" about next year.

The result was a burst of corporate decision-making. Newly confident that tariffs on imports would not increase, executives responded by firing workers in the United States and moving production to the other side of the Pacific."

In the last year of his presidency Bill Clinton called on Congress to help him change China’s normal trade relations status with the U.S. to permanent. The legislation was introduced to the house as H.R. 4444 on May 15, 2000 by Bill Archer, a republican Representative from Texas.

The Republicans dominated both houses of Congress during that time (the106th United States Congress was from January 3, 1999 to January 3, 2001). There were 227 Republicans and 207 Democrats in the House -- and 55 Republicans and 45 Democrats in the Senate.

After Permanent Normal Trade Relations (PNTR) passed the House (by a greater than expected margin because the Democrats were also on board), the U.S. Senate voted in favor of granting PNTR to China, opening the way for the landmark US-China trade agreement and China's accession to the World Trade Organization.

The "YES" votes in the Senate totaled 83 FOR and only 15 AGAINST China --- 37 of the "YES" votes were Democrats and 46 were Republicans. President Clinton signed the bill.

At the same time that the PNTR with China went into effect, the deregulation of the U.S. banks also went into effect, with the 1999 Gramm-Leach-Bliley Act, which was also sponsored by the Republicans and signed in to law by President Clinton.

President Clinton also lowered the capital gains tax rate (which he later said during a TV interview in 2012 that he regretted) from 28% to 20% -- and then George W. Bush later lowered them again to 15% in 2003, which just went back to 20% in 2013 under President Obama.

Let's be perfectly clear. Even after recently allowing the Bush tax cuts to expire for individuals earning over $400,000 a year, the richest of the rich still got the best deal, because they earn most of their money with capital gains, and that tax only went up to 20% --- which is only about half of the top marginal rate of 39.6%

Wouldn't it have been more appropriate for reducing our national debt if Congress had kept the Bush tax cuts permanent, but instead passed Obama's Buffett Rule, taxing everyone earning over $1 million a year 30% and taxing all their stock transactions a penny? (When grandpa goes online to trade stocks in his ROTH IRA account, the brokers make a commission on all the stocks he buys and sells.)

In other words, the way it is now, Warren Buffett's secretary will still have to pay a higher tax rate than her boss.

Last year the Republican dominated House of Representatives also voted 365-43 to pass Permanent Normal Trade Relations (PNTR) with Russia. After it was passed in the Senate, Obama signed it into law last month (at Clinton's urging?)

When we think of the Great Recession, we think of the collapse of the housing market, which cost American homeowners trillions of dollars in lost equity and cost all the taxpayers billions more to bail out the banks (which itself was a scam, because instead of lending money or restructuring home mortgages, the rouge banks earned interest off of U.S. Treasuries and gave themselves huge bonuses).

When we think of the Great Recession, we think about the stock market crash in 2008 that set back 401k retirement plans and union pension funds by almost four years...because of the rouge banks....allowed by Bill Clinton.

When we think of the Great Recession, we think about the 8.5 million jobs that were lost during the recession between 2007 and 2009, and the millions of jobs that had already been outsourced before the Great Recession began during George W. Bush's reign...most jobs that will probably never come back...because of PNTR and corporate greed...also allowed by Bill Clinton.

When we think of the Great Recession, we think about how cash-strapped our local, state, and federal government is now, both because of low tax revenues from homeowners and the low tax rates that George W. Bush had in place for the last 12 years prior to the U.S. economic collapse...when it's now that we needed a budget surplus to deal with high unemployment insurance demands and the increase in food stamps for millions of Americans.

Under Bill Clinton, millions of jobs were created, and he left office with a budget surplus, but he also set the table for all the calamity that followed him 8 years later in 2008...a calamity that we're still dealing with in 2013...banking, taxes, jobs, housing, and trade...the heart and soul of the country.

Thanks Bill --- my dad once told me, "If it's not broke, don't fix it." You should have left well enough alone.

And as an aside: Why did President Obama invite Mitt Romney into the Oval Office? Romney was never "a man of the people", and so therefore had no business being in the "People's House".

*The study quoted in the New York Times was by Justin R. Pierce, a Federal Reserve economist and Peter K. Schott, a professor at the Yale School of Management.

1 comment:

  1. See the food stamp chart at "China-WTO Meme Spreading"