By MARK HELM
Retired engineer living in Sandusky
I am sick and tired of hearing ill-informed politicians blame American businessmen for the loss of American jobs. The most significant reasons for the job losses can be traced to the following:
-- The free outflow of technical information after World War II.
-- The computer and Internet.
-- The auto industry strikes in 1969.
-- Free trade policies.
At the end of WW II, the manufacturing facilities of the world were a mess except in America. U.S. industries, free of the ravages of war, quickly resumed normal operations. In fact, the U.S. led the efforts to revive industry in Germany (Marshall Plan) and Japan. Our engineering schools (MIT, Stanford, Purdue, etc.) opened their doors to foreign students. Our engineering societies opened memberships to anyone, and the Chinese, Japanese and Indians took advantage of our open policies. Today, the Chinese and the Indians are graduating many more engineers per year than the U.S. China is building scientific training facilities intended to vie with Stanford in prestige.
The U.S. invented the computer and developed the Internet and then we turned our vast store of knowledge over to any foreign person able to purchase a computer. We also invented systems called computer aided design and computer aided manufacturing. These systems are available to foreign competitors and they can be used to copy our product designs.
But the straw that broke the camel's back was the 1969 labor strike in the U.S. auto industry. At that time, U.S. automobiles were riding a wave of popularity internationally. The AFL-CIO (now UAW) succeeded in negotiating a very lucrative contract. Other industries had to raise wages, in order to retain their employees. The Japanese discovered they could build an auto in Japan, ship it to the U.S. and sell it for a profit. They continued to exploit our open policies regarding technical information and computer technology. They upstaged us in quality control and occasionally beat us with their product designs. They have built competitive auto plants in the U.S., and Toyota now challenging GM for the title of "largest auto company."
Some people blame free-trade policies for the loss of U.S. jobs. For the purpose of this article, it is sufficient to point out that several U.S. presidents and both major political parties have favored free trade; because the benefits accrue to all citizens, as compared to restrictive-trade policies which favor part of what has been labeled the "middle class."
Bringing U.S. jobs back from China will require a tremendous effort by all U.S. citizens, because we all must realize the current recession will affect all or us. Future government actions will fall into three general categories; namely business, industry and education.
The U.S. government had taken action to help business by loaning capital money to banks and lending institutions. To date, their actions appear to be logical; except that some how penalties must be imposed on lenders who promoted the sub-prime mortgage scandal.
In the business area, Congress is trying to help the auto manufacturers who are in serious trouble. General Motors employs so many people it can not be allowed to fail. GM stockholders have been beaten into the ground. GM management had agreed to make concessions and the success or failure of the company is in their hands. We must bear in mind the wage and hour pay rates at GM have in the past been the yardstick for the U.S. industries that have unions. In the next two years, we are likely to see pay rate adjustments at Ford, Chrysler and many other U.S. industries.
In the field of education, we need, first of all, to realize that the average citizen needs training regarding the meaning of the U.S. "balance of trade." Each quarter of the year, the U.S. government calculates "current accounts," which us a broad measure of America's dealings with the rest of the world and it includes not only trade in merchandise and services, but also investment flows. When current accounts are positive, it means America is selling more than it buys. When it is negative, it means America is buying more than it sells. For the last 11 years, current accounts have been negative. For all of last year, the current account deficit was $731 billion, which meant that our country needed to borrow $2 billion per day from foreigners to finance our activities. Economists expect the deficit to fall to $660 billion this year and $282 billion next year. Our goal should be a slight positive current accounts, which would indicate that our national wage structure is about right. Considering that the rest of the world's economies have problems, and our government is taking positive steps to improve our economy, there is a good chance of success, which means that the jobs will come back from China.
The writer is a 96-year-old retired engineer living in Sandusky, a graduate of Purdue University (B.S. degree Ch. E. -- 1935) with 37 years experience in industry and five years as an Army Ordinance Officer stationed in the Cleveland District.