On November 13, 2016 I caught the beginning of The New Yorker Radio Hour on WBEZ out of Chicago. I have _never_, even on CNN, which is really saying something, heard 3 people more out of touch with American than the 3 trying to convince the world they were right, Crooked Hillary won and Trump really isn’t the President.
Did I vote for Trump, No, I voted for Jill Stein simply because she was from Illinois and the least offensive choice of the 4 candidates.
Am I shocked that he won? No.
Ordinarily I donate money to WBEZ. I find the bulk of the programming informative and entertaining. Even the programs I do not agree with do a good job of providing balanced views and maintaining journalistic integrity. This show did neither. As a result, my end of year Public Radio donation went to WILL 580 AM.
There were many things in the portion of the show I found both clueless and offensive, but the wheels came completely off the cart when 3 supposedly learned “journalists” ranted about factory work never returning to America. Obviously New York is _not_ America. They also obviously don’t think much or watch the news. Some of the return has been happening since 2013.
A good many intelligent companies began planning for a tariff war during the last presidential election. Most of the better run ones began strategically staging production around the world fully expecting one to erupt during the global financial crisis. Believe it or not there is an industry wide term for it: Backshoring.
There are many ways to bring manufacturing jobs back to America at a faster pace. While a tariff war would be one, it is certainly a rather drastic and draconian method. One idea which has been gaining traction since I first proposed it back in 2011 is “The Ethics in Income Act” or “The Hundred Fold Rule” as it is sometimes called.
By no means is it the only solution, but it is a solution which will play well with the massive swath of people who voted Trump into office. Quite simply it solves their problem and it completely removes all incentive to move factory jobs to a country where people can be paid pennies per day.
Another piece of the puzzle can be solved with the Outsourcing Prevention Act proposed by Bernie Sanders. It is not quite as complete as the Ethics in Income Act but the two combined would create a Titanium clad barrier to the National Security crime of off-shoring.
I was not surprised to read an ill-informed piece on the Forbes site dumping on Mr. Sander’s proposal. After all, the bulk of their base are the ones committing the National Security crime of off-shoring. Make no mistake calling it a National Security crime is not just click bait. It always stuns me to see just how quickly MBAs have disregarded the lessons this country learned during World War II.
During World War II most Americans could not buy tires. While many believe people could not buy tires due to the massive rubber needs of the war effort. While a case could be made for that it would fall short. The truth is, at the start of World War II the United States lost access to rubber trees. This loss of access caused the formation of the U.S. Synthetic Rubber program.
How many of you reading this know we now use American grown corn to make tires? It’s true. Well, the corn starch is used to coat the molds so the tires do not stick. In 2010 biotech firms took it a giant leap farther by creating BioIsoprene from biomass which included corn. In a weird marketing twist it is called natural synthetic rubber. So, while a token few companies have not forgotten the lessons of World War II, the vast majority of Wall Street has.
The last N administrations have completely disregarded the most fundamental principals of National Security. No nation cannot be secure if it does not produce within it the basic necessities of life. During a hot war, a cold war or a trade war access to anything externally provide can be cut off for years. In order to have any hope of standing up to whatever has removed access to external things a nation must be able to feed and clothe its people while providing healthcare.
Greed and bribery have caused our leaders over the past 5 decades to allow National Security to be cast to the wind. The bulk of our medications are manufactured in foreign countries. Any one of those countries could choose to block shipments over some slight or other. Of course, in the case of some that might be beneficial to us.
When it comes to America this means we need T-shirts, underware, socks, blue jeans and shoes. Not the fancy stuff, just good enough for people to get to work in. It means coffee drinkers will need to switch to American grown tea because Hawaii probably doesn’t produce enough for the entire country, assuming it remains under our flag with unrestricted shipping. It means toilet paper and facial tissue tooth paste and tooth brushes. It also means both canned and frozen food. In short, it means the barest of actual necessities not the things you just can’t live without, must all be made within our borders from items produced within our borders. This part of National Security has been flagrantly violated and the term used to make the crime seem more palatable was “globalization.”
There is a third method of bringing factory jobs to America which can also be implemented without threat of a trade war. In fact the reason behind it can be sold as helping to solve a global problem. The side effects of this plan would be not only to bring factory jobs back to America but to exponentially reduce America’s dependence on foreign oil.
Pass a $12-14 per gallon tax increase on port fuel for container ships buying fuel in U.S. ports but not being of U.S. registry. Also pass a law making it illegal for non-coastguard/DOD tankers to fuel ships within U.S. territorial waters.
There are 2 very different, nothing to do with factory jobs ways of selling this to the world.
- Cracking down on murder at sea
- Forcing ships coming into U.S. ports to be greener.
Many news outlets, including the New York Times, have done stories on the rampant crimes including mass murder taking place at sea. Many of you will have seen the cell phone murder at sea video where crew members video taped themselves shooting people in the water while a voice on a loudspeaker commands “Shoot, shoot, shoot!” You probably heard the men laughing then stopping to take selfies. Had the cellphone containing the video not been left in a taxi neither law enforcement nor the news media would have known about it.
Most container ships fly a “Flag of Convenience” meaning the ships owners exist in one country but register a ship in a lax third world location to avoid taxes and regulations. The regulations most often trying to be avoided are labor and safety.
Once the tax is passed the ship owners will then have to decide if they wish to pay the tax, try to eek out a living with the ever dwindling amount of cargo which is neither coming into nor going out of U.S. ports or, register the ship under a U.S. Flag thus being forced to become good corporate citizens abiding by labor and safety regulations. If it isn’t already there, adding the requirement of reporting crimes at sea to the list of regulations should be an easy thing.
Those choosing to pay the tax won’t have much cargo unless they demand ship manufacturers develop vastly most fuel efficient propulsion systems. I did not know this prior to writing this article, but one container ship on the seas today pollutes as much as 50 million cars.
Yes, some companies will try to either increase the size of their tanks or refill at sea but both of those end runs push the consumption of crude oil into other countries. Hopefully you clicked the link about container ship pollution. For those who didn’t here is a rather shocking quote:
The Emma Maersk, the longest operating cargo ship in the world, is about 1,300 feet from bow to stern and can carry as many as 11,000 twenty-foot metal shipping containers. All that baggage requires a massive 14 cylinder, 109,000 horsepower diesel motor that consumes 1,660 gallons of heavy oil fuel an hour even at its most efficient setting. These motors are among the most efficient in the world too, with a thermal efficiency rating around 50%, where the average car or airplane motor has thermal efficiency of just 25-30% at best.
Do the math. 1660*12 = $19,920 in tax per hour.
This tax will artificially create a demand for more fuel efficient container ships much the way pump prices going over $4.00/gallon created demand for high mileage hybrid rides. All of the revenue from the tax needs to be put directly into an infrastructure fund where Congress is barred from getting their greedy grubby mitts on it. All of the money goes first to rebuild the crumbling river lock system, then to repair/expand harbors, repair the aging rail lines MBAs have skipped out on fixing and finally to fix bridges and interstate highways.
One bill which has seemingly nothing to do with factories or American jobs will force shippers to hire American workers and factories to move back to America to avoid high shipping costs.
Many years ago I predicted the end of Amazon (NASDAQ: AMZN), Walmart (NYSE: WMT) and eBay (NASDAQ: EBAY) would come when pump prices went north of $6. The minute transportations costs invert the business model Amazon goes under. When it costs dramatically more to ship individual items to consumers than it does for a retailer to receive bulk shipments, hire staff and operate a store the Amazon model ceases to work. A good many retailers are already copying what J.C. Penny has done since I was a child. On-line/catalog orders ship free to your nearest store. You pick them up next time you are out running errands and don’t have to worry about thieves following UPS/FedEx, etc. and swiping the goods from outside your home.
