3. Restore American Factories and Farms

3. Restore American Factories and Farms

George Washington wrote that, “The promotion of domestic manufacturers will, in my conception, be among the first consequences which may naturally be expected to flow from an energetic government.”

America’s first protective tariff, passed in 1792, charged an average 15.1% duty on imported manufactures. This not only funded 95% of the new government’s expenses, it gave America’s infant industries a firewall against cheap labor and product dumping from abroad. This strategy was intensified during the American Civil War, allowing for the development of domestic railroad and steel industries. During the New Deal of the 1930s, the ideas of the Populists came to fruition when protection was added for American farms under Parity, a living wage price for corn, wheat and similar commodities.

Franklin D. Roosevelt sought to give these protectionist measures a place in the U.S. Constitution, introducing his “Second Bill of Rights” in 1944 that would have made permanent the price and wage protections that built America’s farms, factories and mines.

Following the untimely death of Roosevelt, the era of free trade – rightly recognized by the founders, the early Republicans, and the prairie populists as an attack by international financiers against domestic producers – has laid waste to our once proud “American System” of political economy. Presidents Truman and Eisenhower began the undoing of protectionism, signing away our industries with the first GATT agreement in 1947, and our family farms with the undoing of full Parity support in 1953.

Intensified under the long nightmare of the Reagan and Bush presidencies; free trade, low wage and low price policies have been unmitigated failures, with each new agreement pulling down wages and regulations to the lowest common denominator, and none providing a net benefit for America. The “giant sucking sound” foretold by Ross Perot in his opposition to NAFTA has laid waste to industry and living standards. To take one example, America was nearly self-sufficient in textiles and apparel – major industries of North Carolina and other eastern states – as recently as 1999. In the following decade, these jobs, and the local economies they supported, were lost almost entirely to Bangladesh, Vietnam and Central America, with only niche manufacturers left. The only winners of free trade are financiers, corporate raiders and cartels.

It makes no sense to blame China for “currency manipulation,” or even to blame most manufacturers for offshoring jobs. In fact, we should take a hint from the nationalist Chinese – who have built the world’s largest steel industry and an emerging auto industry by using tariffs (as high as 25%) to prevent dumping of cheap foreign goods. Americans have only ourselves, our elected representatives, and Wall Street to blame for the failure to protect our own national interest.

A) Restore American Industry:

  1. We demand an immediate, emergency, and indefinite suspension of ALL free trade agreements. All foreign nations will be held to the same wage and regulatory standards, regardless of our supposed political alliances.
  2. We demand the application of a 15% general tariff, paid to the US Treasury by any importers of foreign goods or services. This will provide the protection needed to bring back jobs manufacturing automobiles, appliances, steel, building materials, forestry products, and other basic commodities and manufactured goods.
  3. The new tax revenue captured from cheap imports will contribute immediately to the social safety net, lower the burden on income and payroll taxes, and will be used to finance the public infrastructure, R&D and various credits and subsidies needed to expedite the recovery of American industry.
  4. We demand low-interest public credit, managed through commercial banks, for industry, agriculture, mining and related fields of production. Cheap credit will allow for rapid re-industrialization, and will be a competitive advantage for exporters of manufactured goods.
  5. We demand steady movement toward a $15 national minimum wage, a process made easier with the pull-up effects of reindustrialization.
  6. We demand the restoration of union rights by reinstating the Wagner Act (a nationwide “right to organize” law), and the Davis-Bacon Act to pay prevailing Union wages on all public works projects financed by the new National Bank.
  7. We demand “Buy American” provisions in all new public works projects, to create immediate demand for American concrete, glass, steel, wire and similar building materials.

B) Restore American Family Farms

The fundamental problem in agriculture is and has always been low prices. If the farmer has no protection, speculators (through the $1 quadrillion/year Chicago Mercantile Exchange) absorb his due profits. For example, the proper fair price for a bushel of corn (calculated by factoring the costs of inputs and that of a fair labor value) is roughly $12, while the actual price paid is roughly $2. This problem was corrected during the New Deal with living wage (Parity) price guarantees. Today, China and a variety of developing nations are successfully using similar price floor strategies to build their agricultural economies. The undoing of these Parity price floors in America – not the Farm Bill – is the reason we have lost millions of family farms, along with untold jobs, income and the physical health of the nation.

  1. Living Wage Farm Prices: The US Secretary of Agriculture must issue non-recourse loan guarantees for all major agricultural commodities at Parity rates (still calculated by the USDA).
  2. Rebuild Emergency Reserves: Today the US effectively has no strategic reserves of grain. This puts our nation and much of the world at risk of famine. If Parity increases total production, surplus can be directly purchased and stored by the Federal government; to be used to as emergency supply, to regulate supply in years to come, and as continuing foreign aid to countries transitioning to their own self-determination in agriculture.
  3. Full Funding for Food Assistance: The needs of the hungry at home and abroad must not be held hostage by the needs of Wall Street. Food assistance (SNAP, WIC, etc.), Food for Peace, emergency aid, school lunch and similar programs must funded at improved levels. Analysts predict that basic food costs under Parity would rise on average 15%, and the Federal Reserve should stand ready to prevent consumer price shocks and hunger with long-term financing to subsidize near-term consumers of these products.
  4. Assistance to Millions of Farmers-in-Training: A parity system will tend to bring the size of farms in line with the realities of nature. What this year required 1,000 acres might require 100 in the future. While much of this transition will be determined in "the market," we must deal with the dearth of skills and human capital in the farm economy, and the distorted ownership of American farmland. We need federal and state funding to educate and equip new family farmers for success, and we need land reform, as Abraham Lincoln pursued with the Homestead Act, to make cropland available to farmers and prevent a monopoly of super-rich and foreign real estate speculators.

C) Pursue International Cooperation and Development

We demand an international, fixed-rate exchange agreement and the establishment of regional development banks. We seek to establish fair trade between like nations, to undermine the predatory IMF and World Bank, and to provide mutually-beneficial assistance to the developing world on the model of the proposed BRICS bank.