tv Washington Journal CSPAN April 8, 2016 9:15pm-10:01pm EDT
bill washington and jefferson those who especially did so while they occupied the white house. jefferson owned over 100 slaves. is responsible for supporting the a on the 12 american presidents who were slave owners, eight of them while in office. for the complete american history tv weekend schedule. next, a discussion about the state of manufacturing in the
u.s.. from washington journal, this is just over 40 minutes. joining us now is scott paul. he is the president of the alliance for american manufacturing. he will discuss the state of the manufacturing sector. good morning. thank you for joining a. let's talk a little bit about the organization. >> this is a partnership between the united steelworkers union and domestic manufacturing partners. we are nonpartisan. we have been around for nine years and our mission is to
promote smart public policy for americans to have factory jobs. host: can you give us an overview of what you think the state of manufacturing and trade is in the united states right now? guest: it is a good question. as always, the truth lies somewhere in the middle of what the extremes say it is. some say there is a manufacturing resurgence and a lot of jobs are being restored. there are others who say that manufacturing has been completely destroyed. that is also not true. if you look over the last year, the news has been pretty shaky for manufacturing. it has been buffeted by massive changes underway in china. the dollar is overly strong, which has an impact on our ability to export. manufacturing job growth over the last year has been very weak. we have lost about 40,000 jobs over the last year.
if you take it back to the end of the great recession, we have added 847,000 manufacturing jobs, which sounds like a great number. and it is a pretty long streak of job growth. but then you take it back further to the beginning of the great recession and manufacturing is the only session -- sector that has not gained all the jobs back that it lost during the great recession. the rest of the private sector has recovered about 160% of the jobs. manufacturing has only recovered about 40% of the jobs lost during the great recession. the real challenges for american manufacturing, which is always cyclical depending on business cycles, is started with the onset of china coming into the world trade system. at that point, in about 2000, since that time, the united states has shed about one third of its manufacturing jobs. 5.5 million jobs.
that is something that is felt in a lot of communities. as we have heard during the election cycle, these issues keep coming up. host: we are talking to scott paul from the alliance for american manufacturing. viewers can add to the conversation by calling in. we have a republican line, (202) 784-8001. the democratic line, (202) 748-8000. our line for independents, (202) 748-8002. we also have a special line if you work in manufacturing --(202) 748-8003. let's talk a little bit about the u.s. trade deficit here and take a look at some of the numbers from that. it widened to $47 billion in february. that is up 2.6% from january.
exports increased by 1%. that is the first increase since september. imports were up 1.3%. $225 billion. despite a drop in oil imports. the 2015 trade deficit stands at $540 billion, an increase of six -- 6.2%. what do those numbers tell us? guest: a lot of people look at that and my eyes glaze over, what do all these numbers mean? it translates into jobs at the end of the day and our ability to generate new jobs for the american economy. the trade deficit, as a primer for listeners, is the difference between our exports and our imports. if we have a deficit, it means we are importing more than we are exporting. look, this happens from time to time. the united states was running
trade deficits for a while because we were importing a lot of oil. since the onset of more global competition, we have seen the trade deficit in manufacturing goods go up. what it means is products that used to be made here for this market, a lot of those are being made overseas. there are a lot of factors that lead to that. some of it is the value of the dollar. it actually makes our exports more expensive overseas. a strong dollar is a great deal for a tourist trying to book a room in europe. you are going to get a great deal. it is a good deal for wall street. for exporting firms, it is a real challenge. we also face an array of competitors that are supported by their governments. we have a massive trade deficit with china. the state is heavily engaged, it is subsidizing and protecting its firms. it is not really run on a free market system. our trade deficit with china is
over $360 billion per year. that is an exceptionally mindnumbing amount. a lot of stuff we used to do here is being done in china. host: what can happen on the american side? you talked about the factors in china that increases the deficit. what can be done here to stem that increase? guest: it is a really good question. some people would step back and say this is a natural process. let it play out. it is important to know that public policy plays a key role in a couple of different ways. first, there is monetary policy. since the 1990's, we have had a policy to keep our dollar strong. one of the drawbacks is that it
makes our exports less competitive. if we have a more competitively valued dollar, that would probably help. the second is our trade policy. we need to continue to try to open markets overseas because 95% of america's customers are outside of our borders. at the same time, we still have the richest consumer market in the world and we should make access to that conditioned on playing by the rules. we have a number of trade partners who don't necessarily play by the rules. china is one of those. finally, what can we do domestically to strengthen our competitiveness? we need to make sure that the tax code encourages jobs coming back to the united states. president obama has taken actions on in versions, but there are other things we can do. we need to make sure that our infrastructure is in good shape. that dramatically impacts the competitiveness of
manufacturing. our infrastructure makes a terrible grade from the civil engineers who looked at it. we need a stronger investment in that. we need to invest in the skills and training of our workforce. it used to be that a manufacturing job might not take much more training than a high school degree. that is not necessarily the case anymore. we need to make sure we have a system in place that will allow young people who want this opportunity to be skilled, to get the training they need to fill these jobs. host: we are talking with scott paul about manufacturing and trade. our first call on our republican line is from rick in ohio. thank you. what is your question? caller: my question is about imports from china.
why do we import all these tools that have harmful metals on them and on the back of them it says "may cause cancer" -- we should start making tools in the states that are controlled by epa policies. is that is my question. guest: it is a good question. i think rick points out something that is frustrating to a lot of people. we see a lot of recalls from made in china products. the system for regulating health and safety standards certainly is not what it approaches in the united states or western europe. there are some tools that are made in the united states. gentlelock, snapon, they do face very stiff competition from chinese competitors that are aided by the fact that they are not necessarily complying with the same kind of regulations that we take for granted as protecting consumer safety and
the environment and workers and clean water and air here. they also receive subsidies from their government and some protection. it needs to be a priority to congress and the white house to push back on this. unfortunately, i think that there has been a reluctance to do that in any systematic way and that has had an impact on the choices that consumers have in terms of everything from hardware to toys to closing. host: can you talk a little bit about how currency manipulation effects the trade deficit? guest: sure. currency manipulation is a tool that some governments use to make their exports artificially more competitive or to protect their currency. a central government will
him intervene by buying up federal reserves or treasury bonds, hold hundreds of billions of dollars of u.s. debt -- another signal is that that country is running a persistently high trade surplus. if you look, you see something that china and japan have done that. this matters because these countries are not supposed to do it. the international monetary fund,
to which they belong, as well as the united states, says you should not be doing this. the wto says, you should not be doing this. our own domestic law says it. unfortunately, it is dependent upon two things. the administration needs to designate a country as a currency manipulator. president obama has not done it, but president bush did not do it either. there is a lot of criticism to be shared there. under our domestic trade laws, you can file a trade case for relief which comes in the form of usually tariffs on some product for a lot of different unfair trade practices. but you cannot do it for currency manipulation yet. there is a lot of support for it , we havetunately gotten over the hurdle a couple of times. host: and you talked about the ducknation as a treatment of you later? -- trade manipulator? it would trigger a set of
negotiations and shift a set of .riorities it would be geared towards correcting this behavior. there could be sanctions available if a country did not come into compliance with this. again, the reason this matters is that we are losing jobs for no other reason than other countries are intervening in a way that distorts the free market and our government, instead of pushing back has done nothing. you see that frustration coming through a lot and i think there are a lot of reasonable people saying that you can push back a little more without starting a trade war. there are other countries that stand up for their trade rights much more than other countries do.
we wait until a lot of damage has been done and then any of the systems come much too late. we're talking to scott paul about manufacturing and trade. --was formerly a prison principal lobbyist for the afl. up next is randy. what is your question? caller: good morning, c-span. i am calling from the classroom right now. we have's c-span in the classroom. history represented. i just wanted to ask a few questions.
my students right now are learning about the great depression and herbert theer-ish response to tariff act. how do tariffs hurt or help the economy? my students are newly arrived immigrants to the united states and they have heard a lot of him from donald trump about -- we are being beat up on foreign trade. to the candidate? i personally support john kasich with what he did to the economy and ohio. who do you think would be the best candidate for the next
president? guest: that is a very good question. i'm glad your students are learning a bit of history through the lens of current events as well. there is a thread there. figure,historical alexander hamilton, was the founder of industrial policy. he wrote a report to the congress on manufacturing, something he and the president had discovered. he realized that america did not make much of anything. they depended on france and smuggling. hamilton had a vision that you would have to tariffs but they would not be too high or too low. we would develop our infrastructure and we would depend on the flow of recently arrived immigrants to fill these
manufacturing jobs. this is an economic philosophy that did not become a reality until after the civil war. reasonst of different but tariffs have been a part of u.s. policy for a wild. -- while. as nobel prize-winning economist , their impact on accelerating or deepening the great recession is overstated. he has studied this more than anybody else. clear that i am not calling for a 45% tariff like all trumpet -- donald trump is. to give an example, there is a -- steel. on deal,
hasa's administration ontatively set these tariffs over 200% which sounds like a lot. as president reagan, a free market guide intervened in two ways. to save harley davidson motorcycles and to create a grand bargain on currency with western europe and japan. , anotherodern days part of the question is which candidate do i support? we are nonpartisan. i will save it i am glad these issues are being raised. i think the way that donald trump has raised them doesn't do any service. mischaracterized
the debate. i am heartened by the fact that a lot of candidates are talking about these issues. hillary clinton had a manufacturing roundtable in new york. bernie sanders talks about trade agreements in every speech he says on the campaign trail. the governorch is of a manufacturing state. who has not been particularly helpful on these in wisconsin saying how he was going to stand up for american trade ellis the and the blue-collar worker. this is something that voters are demanding. policy.is changing next call comes from
randy on our democratic line. we will move on. jim is calling in from wisconsin. my question is on tax. tariffs are very tricky and can be dangerous but what if they just eliminated the corporate income tax on manufacturing? that would cause a great boom to take place. appropriate taxes could be applied. we should completely eliminate the corporate income tax. it is an interesting question. my concern about completely eliminating the corporate income
tax is that we lose an incredible revenue stream. manufacturersfor who are in global competition in kind of a unique way say retail but manufacturing can be done anywhere. you have to look at the right incentives to invest in your workforce. you have to look at the right incentives to invest in your plant to modernize it. can do that through the tax code. cut,nk a broad-based tax most of the benefits of that would go to wall street or to the retail sector that is not face this global competition. a targeted approach works much better. to taker thing we have
a look at is most of the rest of the world has something called value added tax that is refundable for exports. u.s.ot suggesting that the but just a bad model. that is something that our exporters face. in every other nation, the exporters get this type of discount. let's take a look at what the new york times said about trade deficits. he writes that trade deficits are not good or bad. they can be either depending on the circumstances. what is your reaction? it is an interesting
statement that our workers are used as leverage for other foreign-policy goals. we may one china to interact with north korea in a way to mitigate its nuclear goals. push back on trade policy. that has been born on the backs of our workers and you see this uprising. you see political revolutions on the right and on the left. it is because of this type of deficits,d with trade another fancy way of saying the trade deficit. it is a component of our gdp.
have a trade deficit, it means our gdp is not high as it should be. -- if we had policies that would boost our exports, that would bring our imports down a little bit. the advantage of that is that instead of having 2% growth every year, our economic growth would be between three and 4%. there would be a lot more people getting jobs and accumulating and the benefits would be more broadly shared. the benefits of the trade deficit accrue mostly to wall street or to our foreign-policy goals and not to middle-class americans who want to paint jobs
are now. host: our next call comes on our republican line. great show. i wanted to find out what areas of manufacturing are going to be states inn the united the latest trade trade agreement? guest: the latest agreement is ,he trade pacific partnership the biggest new entrants would vietnam and malaysia. this agreement has been reached.
the implementing legislation has not been introduced and would need to be passed by congress and that has not happened yet. there is a raging debate about this. donald trump and tom ted ted cruz says he opposes it. hillary clinton and bernie sanders says they oppose it. john kasich says he supported the tpp but is not spoken out on it recently. when you look at the potential benefits for manufacturing, they are pretty limited as that of the high-tech center. even the analysis that is used by the administration to make tpp is anor the analysis that has been done by the peterson center for economics. their estimate is that there might be some modest positive benefits for the overall global economy.
it is very modest. for manufacturing specifically, they estimate that the tpp would increase our manufacturing trade billion andbout $55 the estimate is going up. it would cost 20 to 30,000 manufacturing jobs. other countries have mercantile policies that lie outside trade agreements. it would make it difficult for us to export an easy for them to import. we would lose a lot of manufacturing jobs so the question is, is this worse for there is aursuing tiny economic benefit that are pretty big challenge for manufacturing? the host: let's talk about about
expansion of manufacturing. mexico inory in itico for small cars -- outlined a 2.5 billion dollar factory investment. how does this expansion overseas affect manufacturing here russian mark --? the auto industry has been a bright spot in manufacturing. the auto bailout actually worked. the top three companies stabilize. they have made a lot of investments and are sailing -- selling a lot of cars.
they're selling larger cars now because gas prices are low and because interest rates are very low. you can get an interest rate on a new car for 1% or less. it is a great time to borrow and to do this. when it comes to locating production, you are seeing some ships of cash shifts of smaller cars to mexico. it is driven by japan's currency party. heavilynese government intervenes in the yen. over the last year and a half, it has been going down. , theseother reason
japanese automakers make more detroitr car than the three makers. they've shifted this production to mexico. that important to note there is a lot of investment in the u.s. manufacturing sector is. once this auto replacement has run its course and interest rates begin to rise again. not a factor of wages in mexico. a lot goes into it. we can make the domestic industry even more competitive. host: we are talking about manufacturing and trade with scott paul.
we have bruce on our democratic line. i think our policies in building products and shipping .hem over here today the stuff you buy will not last year. car andgot a brand-new the shifter cable fell off on it. it just deteriorated within five years. that should not be. bruce raises the consumer paradox. americans love a bargain. they like to think they're
getting a good price on something when they go to the oftenand the purchase is satisfying in the short term. butt a great deal on this this is something that all of this face. you can get the great bargain now or pay a little more for something that is going to last longer. there is a lot of complex consumer behavior that goes into this. gratification , you seeyone wants him that everywhere. that bluelightet special or that deal. but if you invest in quality, you're going to beast and the last -- spending less over five
years. it is going to cost you more money than but over the course you're going to be spending less money. it is not something that i have the answer to but i don't know if that is uniquely american. other factors that affect american manufacturers to compete in terms of cost? guest: for consumer goods in good luck finding an american-made product. there is a cost differential that makes it difficult to manufacture in the united states. thatot someone that says we have to make everything here.
i do think there are some artificial advantages that do affect that competitiveness. bigr rates, there is a deferential. it is going to be hard to be with that. most people want wages to go up and not down. there are some other factors the we discuss that government could address. host: on our independent line, rene is coming -- calling from san jose. caller: good morning. in the middleered class, i'm in the lower class. i have zero credit.
whereould your comment be your ideas would be if consumers moreerica had opportunities to buy things within their own country and were able to get things on payment plans. i bought a gibson on a payment plan. that was on a payment plan. i usually get the bargain. if a person like myself wanted , howart their own business does credit put into play on the consumer and people that are trying to develop credit? we're talking about a dual challenge here. jobs thath creating allow for more disposable income.
there is a virtuous cycle there. when you have more manufacturing jobs, you have more of that disposable income. they tend to pay a little better. ath regard to credit, that is complex topic and that is something we are struggling with. there are a lot of people who are under banked and do not have a lot of access to credit and that is an ongoing challenge that we have seen consistently in the next couple of decades. it is important to address that. pass were able to find ways -- pathways. find a way toe to a living wage or the right
amount of credit, they are going to buy a car. that has extraordinary benefits for the american, me. -- economy. host: in the new york times, there is an article about the u.s.-china trade. it adds china's internet controls to the list of trade barriers. the entry says that over the last decade, the limit have posed a significant burden to foreign suppliers and hurting both internet sites themselves and users. can you talk about the cyber factor? documente underlying is trade folksky
would ever read it. it is missed opportunities. it does talk about a dilemma business people want to address. you have to surrender your intellectual property? do you have to censor your content? of companiesot that have to decide about these trade-offs. there are some companies that have made the right call. you see other companies that have been willing to go along. moral dilemma.
it has economic consequences because there is real, untapped potential among chinese consumers who tend to like and theirrands government will not give it to them. our next call is from chad on our independent line. thank you for taking my call. i just wanted to get your opinion on america's trade given of with canada the change in presidency is going to be coming. -- dond area of concern you see an area of concern? guest: that is a good question. canada is our largest trade partner. there are a lot of good that flow akin forth between our borders.
-- i talked about the auto industry. the supply chain is heavily integrated. that goe a lot of goods back-and-forth between canada and the usa and mexico. i do not think that the trudeau government is going to radically alter its policy towards the united states. one thing that we would like to is for canada to open up its system a little more. i often hear canadian complaints about american laws. hours are very mild compared to some of the restrictions that canadian provinces have on procurement. that is a small, discrete issue.
i do not anticipate that there is going to be not -- much of a shift. the two did -- the trudeau government is supportive of the tbp. u.s.-canadaw the agreement being a trade and petted -- impediment. as host: scott paul present, president of the alliance of manufacturing. thank you for joining us. guest: thank you for having us on. morning, saturday sherk,ooper and james labor economics research fellow. they join us to discuss how that
minimum wage has impacted businesses at the state and local levels. christian weller will talk about the new labor department which raises investment advice standards. he will also look at how americans are saving for retirement. 7:00 a.m.live at eastern. when the discussion. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] tv -- book tv is live at the los angeles times less full of books which takes place at the university of southern california. book,ks about his latest dig deep.
schedule.working miranda vs. arizona, and a forum options for funding money for higher education. former vice president dick cheney talking about the role of vice president and the selection process. >> all persons having business before the supreme court. cases, c-span special history series, produced in cooperation with the national constitution center, exploring the human story, and behind 12 nal dramas historic supreme court decisions. 759, miranda,