Monday, October 11, 2010
Let’s Put the Washington Back in D.C.
Most people know that our first President, George Washington, played a critical role in keeping the union from splitting apart. He was well respected by both the industrial north and the agrarian south. Were it not for his leadership, the United States may not have survived as a single country.
What few remember from their history lessons was Washington’s support of a treaty which made a truce with the British in the first decade of our republic. It was controversial because following the Revolutionary War, the British continued to attack our commercial shipping and occupied posts in the Northwest Territory.
Nevertheless, our first president knew that the flood of immigrants from Europe would continue to press our borders westward. The British presence there would eventually lead to another war. He also knew that, with the treasury weakened by debts owed to foreign governments from the country’s recent victory, the U.S. could not win another war with the Brits.
The treaty called for reduced maritime commerce by U.S. merchant ships; however, the British would abandon their western forts. It was highly unpopular. Many in Congress called for a declaration of war. The public was outraged. The treaty’s author, John Jay, was stoned in public. Protests spread throughout the land. Pamphleteers, the cable news pundits of their day, urged “a speedy death to General Washington!”
President Washington was resolute. The treaty opened up the western territories and their economic possibilities and gave the U.S. time to build up its treasury to prepare for the British war that he knew was inevitable. When it happened in 1812, we were ready.
Washington’s courage and leadership was missing when the House passed the Currency Reform for Fair Trade Act last week. It seems that we have entered the silly season on Capitol Hill. It’s only a month before the election and who would run the risk of not voting for a bill that penalizes the Chinese for their unfair practices. No one involved really believes that passage of this bill will bring jobs back from China. When China allows its currency to appreciate (yes, I said when not if), low skill manufacturing jobs will go to other low wage countries like Vietnam and Indonesia. They will not come back to the U.S.
But, the public needs a villain and better a foreign power than a politician running for reelection. The bill, if enacted, would have the effect of a tariff on Chinese goods. (All this talk of tariffs and balanced budgets reminds me of Herbert Hoover!!)
The U.S. is still the world’s largest economy, most powerful military player and influential society. This won’t last if we continue to behave as though it’s still the Twentieth Century. It’s time to start looking forward and plan according to our current reality.
It is fairly well known that the Chinese treasury holds more than seven times the dollar reserves of our own Federal Reserve Bank. China invests those dollars in US Treasuries, its infrastructure and enterprises around the world. They seek to advance their own economy but not to destroy the U.S., the largest market for its goods. Despite their growing wealth, they still have deep systemic problems, the solutions to which are difficult to develop in a closed society. The key to remaining competitive is not for the U.S. to hamper trade but to embrace it.
Historically, our economic success has resulted from openness to immigration and trade, superior education and extraordinary innovation, all of which led to the most productive economy in the world. Our economic power is projected throughout the world by global corporations – GE, Microsoft, and McDonald’s. Yet, we seem consumed by fear -- fear of terrorists, rogue nations, foreign investment, free trade, immigrants and the U.N. Why do we see ourselves as threatened by forces beyond our control? Because politicians and their willing accomplices in the media have convinced us we should be afraid.
The 1990’s provided an historic opportunity for both major parties to forge a path to the future. In the wake of the Cold War, the Republican revolution of 1994 was founded in Newt Gingrich’s Contract With America. It built upon Reagan’s legacy and provided a construct for governing in the 21st Century. Similarly, Bill Clinton transformed the old liberal agenda by declaring that with rights come responsibilities. The philosophy of communitarianism was one of his hallmarks. He championed free trade and forged new agreements that enabled it.
So, why this bill at this time? Because politicians get elected by telling us what to be afraid of and who to blame.
America doesn’t succeed because of laws that hamper commerce; we succeed because of the historic vitality of our society. We thrive because of our openness to the world – to immigration, to innovation and to other cultures.
So, if you are looking for the answer to our question, “WHO WILL LEAD?” when you go to the polls this year, you might want to start with the list of Congressmen who voted against the Currency Reform for Fair Trade Act. You can find them by clicking right here.