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People who say it cannot be done should not interrupt those who are doing it. Welcome to From On High.

Monday, September 03, 2012

Rick Boucher Got It Right

I think I once gave my former Democratic congressman credit for having done something right in the two decades he hung out in Washington.  Once.

That was his vote against NAFTA back in 1994.

Yeah, I know.  I'm supposed to be a "free trade" kinda guy.  But in the real world?

There ain't no such thing.

In the manufacturing/marketing/sales world, there are only advantages and disadvantages.  Nothing's "free."

That's why I've always favored limited, targeted tariffs.

Knowing all the while that we have certain advantages - especially here in Southwest Virginia - that Mexico doesn't.  Those being encapsulated in two words - RAW MATERIALS.

Our primary disadvantage?  The cost of labor.

What did we traditionally do to exploit the advantage and mitigate that disadvantage?

The tariff.

What did NAFTA do?  It eliminated trade barriers between Canada, the USA, and Mexico.

What has the net effect been on American manufacturing?

If there's been any, it's been negligible.

But how has it affected Southwest and Southside Virginia?

It was devastating.

How?

Look at this chart showing manufacturing output from the federal Bureau of Labor Statistics:



Overall manufacturing output has not grown. But it hasn't declined.

It has, however, dramatically shifted. From textiles and furniture (and others) to tech-related industries.

Good for America?

At best, it was a wash.

Good for Southside and Southwest Virginia?

That plummeting red line is us.

Textile factory jobs are nearly all gone.  Furniture manufacturing is all but ceased.

Along with coal, these were our three primary economic drivers here (okay, we could include prison employment along with other government jobs).  And they have vanished.

Can NAFTA be blamed?

In part.

Along with what goes on in China and Indonesia and Honduras and ...

But they are not to be blamed.  They are simply exploiting their advantages.

Something we used to do.

As the coal industry hurtles its way toward bankruptcy - all thanks to Barack Obama (and fracking) - we're left with government checks.  Thank God for criminals and the need for prisons.

So, all things (provincial) considered, Rick Boucher - to his credit - got it right.  NAFTA was a bad deal for us.

We'll eventually make our way back.  Those raw materials are still there, ours for the taking.

Eventually ...