President Obama says that Mitt Romney is part of the problem. He made his living as an executive sending jobs abroad and maximizing the return to investors. Romney's jobs plan will create 800,000 new jobs, says Obama, but they will all be in other nations.
Romney says Obama is out of touch with average Americans. He accuses the President of having no clue how to fix the economy. A vote for Obama, says Romney, is a vote for more of the same.
Want the really bad news? They're both right. Neither one is going to fix the economy, because neither party is going to do anything that really impacts the jobs picture. They remain absolutely committed to the policies that got us here in the first place.
Conventional wisdom says there is no bipartisan consensus in Washington. That's not quite true. For many years the Republicans and Democrats have both supported a "free trade" economic policy, which has gutted our manufacturing base, driven down our standard of living and left us crippled economically.
You probably feel all of that already, just by virtue of living in the real world. But, if you want to understand how truly terrifying the situation is, just take a look at one piece of the overall economic picture. Take a good look at the statistics concerning our trade with China.
In October 2000, President Clinton "normalized" trade relations with China. Barriers to the entry of Chinese goods into this country disappeared. Corresponding barriers in China to the entry of our goods were supposed to be eliminated as well. Soon thereafter, China joined the World Trade Organization (WTO) and fully emerged into the world economy.
There was a great deal of opposition to the opening of our markets to Chinese goods. Political opponents said we were climbing in bed with a hostile Communist regime. Labor opponents said we were sanctioning abusive Chinese labor practices and that large numbers of American jobs would be destroyed. These concerns were ignored. We were told that we would now have direct access to one billion Chinese consumers and that American businesses would grow rich supplying them with goods and services.
It did not turn out that way.
Since 2001 in excess of 2.8 million US jobs have been eliminated and 42,000 factories have closed as a direct result of our trade deficit with China. In 2001 that trade deficit was $84 billion. In 2011 it was $295.5 billion.
Traditional industries such as textiles have been hit hard, but 32% of all jobs lost have been in the computer and electronic parts industries. We no longer make Levi's, vending machines or men's dress shirts. We also no longer make televisions or cell phones. Dell has moved all of its computer manufacturing to China.
Global trade in high tech products, which was supposed to be our area of competitive advantage, is now dominated by China. Over the last decade, the three Congressional districts, which have experienced the greatest percentage of job loss in the entire United States, have been in Silicon Valley, California.
The damage is not limited to job loss and plant closings. Even workers who succeed in finding work after plant closings are typically unable to find comparable work at the same pay. One-third of workers who lose their jobs in manufacturing simply leave the work force. On average, those who do find work have to settle for 11% to 13% less than they were making before.
The causes of this disaster are not hard to understand. We may have genuinely opted into a system of "free trade". The Chinese did not. Instead they followed a classic mercantilist policy of promoting their exports and limiting demand at home.
The Chinese government engages in a variety of practices to keep the value of its currency artificially weak, thereby making Chinese exports cheaper and imports correspondingly more expensive. The Chinese government provides direct subsidies to Chinese companies and, in fact, many large Chinese firms are state owned and controlled. Chinese workers are prevented from organizing. Wages are kept unnaturally low. Environmental concerns are ignored. Worker safety protections are non-existent. The theft of intellectual property is not only tolerated but encouraged.
We are, in short, playing a game, which is rigged against us, and we are losing very badly.
How is this possible? How, over a decade later, can we be holding such a disastrous course? Why haven't our leaders taken action to protect us and to preserve our domestic industries?
Because while you are reduced to working two jobs at fast food joints to pay your bills, and Chinese workers are slaving away in sweatshops twelve hours a day seven days a week, some people are making a whole lot of money out of this new international norm.
Take a look at the list of the most valuable corporations in the world. The list changes slightly from year to year, but, on average, out of the top 25 over half are American, and that proportion holds for the top 100 or top 500. Apple is by most accounts the number one company on that list with sales of $100 billion last year. Other US companies in the top 25 are Exxon Mobil, Microsoft, IBM, Chevron, Google, Berkshire-Hathaway, Wal-Mart, AT&T, Johnson & Johnson, Procter & Gamble, General Electric and Coca-Cola. Just out of the running are Wells Fargo and JPMorgan Chase.
Between 2000 and 2010 the median income of US families fell $3,719. During the same time period, the average income of CEO's of US corporations skyrocketed. The typical CEO now makes 380 times as much as the average American worker. In 1980 that figure was 42 times as much.
This year profits for American corporations hit an all-time high. Wages, as a percentage of the economy, hit an all-time low.
Now you'll understand the impeccable logic behind "free trade". It's not about bettering you or your family. It's certainly not about the future of the poor Chinese factory worker virtually chained to the shop floor. It's about huge multinational corporations making massive profits at the expense of all of us.
Think about that when you listen to the latest Obama-Romney exchange. They're both right.