Here are my notes from the 5/30/08 meeting with Rep. Doug Lamborn, hosted by NAM (National Association of Manufacturers, a "free trade" group representing major manufacturers promoting offshoring) at Goodrich Interiors, Specialty Seating Systems, 1275 N. Newport Road, Colorado Springs. The press (The Independent) wanted to attend, but were specifically told they were not invited.
These notes are rough, in that they're not word-for-word and don't capture all that was said, but they do contain the main points Lamborn made on "free trade", the "free market" and other issues. That said, here's an unsolicited comment:
To: "'Bob Powell'" <email@example.com>
Subject: RE: NAM meeting with Lamborn
Date: Tue, 3 Jun 2008 15:19:58 -0600
I'm overwhelmed. I didn't see you taking any notes, and here you give practically a verbatim account of the Lamborn session. Did you have a tape recorder? How many gigs of available random access do you have in the brain??
I have no comment other than wonderment.
Milt Heft, President
Lamborn and his staff invoked the "free market" many times. Granted, it is a powerful mechanism (see The Invisible Hand), but they seemed completely unaware of its shortcomings.
As Daryll E. Ray, Institute of Agriculture, University of Tennessee, and Director of UTs Agricultural Policy Analysis Center (APAC) wrote on February 27, 2009:
Events of the last year have taught us that blindly believing that markets are unequivocally self-regulating and universally self-correcting does not reflect reality. We are finding that those beliefs, while true under certain theoretical conditions, come up short in the real world.
We have been living in an alternate reality based on compellingly logical arguments coupled with ideological fundamentalism in the absence of shocks of a sufficient size to force financial, economic, and political leaders to confront the difference between the theoretical and the actual behavior of free markets. Events in the housing market, financial markets, and their worldwide repercussions provided that shock. ...
Economic "conservatives" worship the "free market" as an extension of the hand of God. Here's an excerpt from A World of Ideas -- A Dictionary of Important Theories, Concepts, Beliefs, and Thinkers by Chris Rohmann, 1999
- Burke, Edmund (1729 - 1797) Anglo-Irish statesman and political theorist, considered the founder of CONSERVATISM. ... Burke also embraced the LAISSEZ-FAIRE economics of Adam Smith, maintaining that "the laws of commerce ... are the laws of nature, and consequently the laws of God." (Capitalized words indicate other entries in this dictionary.)
Find more on Edmund Burke, an prominent conservative in his time, in The Conservative Mind by Russell Kirk, 1953. Economic conservatives & libertarians are stuck in "government will only make things worse" thinking ... exactly the 16th century thinking of Machiavelli. This has pervaded their thinking from then to Edmund Burke to David Brooks today (see The Big Test by David Brooks).
I've described many "free market" failures at the Invisible Hand Drops Ball & Economics 101. Unfortunately, belief in "free market" and "free trade" fundamentalism are incredibly powerful. Belief in them today is just as blind, just as powerful, and just as damaging to our economy as the 18th century (and earlier) belief in bloodletting was to the vast majority of those who received the treatment (read about it at the link just above).
Ignoring economic reality has resulted in the enormous job losses and trade deficits (see Jobs & 'Trade' Data Update Feb09) and finally led to The 9/22/08 Economic Crisis.
The meeting was not what I expected. Tara Smith, NAM's Director of Public Affairs, did not give a presentation. It started at 9:15a and ended just before 10 am. Most of the persons attending, about 14 or so, were from Goodrich, including Rick, an ex-United pilot, Air Force Academy grad, who seemed to have a leadership position. Lamborn was accompanied by about 5 staffers and his wife. There were 2 or 3 from other local manufacturers (2 of them medical). Milt Heft, President of Petrogen, and I were the only ones that raised opposition to Lamborn's and others' "free trade", "free market" rhetoric.
Terry Oachs, VP, Specialty Seating Systems introduced Lamborn and Tara Smith. He said that Lamborn supports low taxes, the free market, less regulation. He said that NAM is a strong supporter of the free market system.
Lamborn said he wants a strong economy and manufacturing sector; and he's a strong supporter of NAM.
Tara Smith only spoke briefly, noting that NAM is a strong supporter of the free market system. She said NAM was organizing meetings in many Congressional Districts with manufacturers.
Lamborn: Manufacturing is so important. He hears talk of the manufacturing base moving overseas and concerns about China to the possible detriment of the manufacturing base here.
The "cap & trade" legislation being discussed in the Senate is being presented as a silver bullet to prevent global warming. But he is concerned about what that will do to energy costs and the negative impact of that on our economy. He said it's touted as a market approach, but that it's based on a government mandate. He does not want a command and control economy where the government picks winners and losers. He said, why should the U.S. bear the burden of stopping global warming? Why not China and India?
Question: What will happen with the R&D tax credit in Congress? It's important for new technologies.
Lamborn: Don't know what's happening with it ... not aware of changes.
Lamborn Staffer from DC. I'm mostly concerned with military affairs, but expect it to continue as is.
Milt Heft: I'm concerned about the effect of offshoring and the loss of our industrial base on our ability to fight wars. What do you think?
Lamborn: I'm very concerned about it. It's a huge issue. I know what's happening with the value of the dollar. Goodrich faces global competitors. But I don't want protectionism and getting into trade wars because we've got a lot to lose. I want tax policies [to help manufacturing] and a level playing field.
Rick (Goodrich): With technology things have changed since WWII. We can now bomb multiple sites with accuracy.
Milt Heft: But war is about more than dropping bombs. The "surge" in Iraq was 25,000 men and that's stretched the military. That's a small force compared to what's required to fight a war. More things must be produced other than bombs and, with the loss of our industrial base, we don't have the ability to gear up.
Powell: I understand that we can't produce some missiles without ICs from China. Isn't that a concern?
Rick (Goodrich): There are a lot more weapon systems than that depending on parts from other countries. It's a concern.
Powell to Lamborn: You're concerned. What do you propose doing about it?
Lamborn: We have the ITAP program. [Is this "Integrated Tactical Avionics Programs"???]
Lamborn Staffer from DC: There's a happy medium. The Congressman believes in the free market and doesn't want trade wars. The answer is somewhere in the middle.
Question: What about utility bills and a lack of energy policy? There's coal, gas, nuclear, hydroelectric. Ethanol isn't efficient or practical and drives up fuel prices.
Lamborn: I have a lot of faith in the free market system; in the ability of lots of individuals to make decisions that are better than a government that tries to pick winners and losers. Some say we can't drill our way out of the problem, but I say we can.
Powell: Are you aware how much oil the U.S. exports compared to imports? [He wasn't.] Exports are 11% of imports. Did you know exports increased by 25% since 2005? Oil from ANWR would likely just be exported. We offshore manufacturing to China, which uses energy at only a quarter or less the efficiency that we do; that drives up oil prices and we pay more at the gas pump for those cheap products. Plus, we haven't slowed pollution, we've only exported it. I don't know how they'll ever hold the Olympics in China.
Lamborn Staffer: They'll shut the city down for a period before and during the Olympics.
Comment from attendee: Oil from ANWR would go onto the world market and lower prices. [... this is a valid point to which I didn't respond ... but it would only be a drop in the proverbial bucket ... oil and gas prices are determined by many factors ... e.g., falling dollar, OPEC, occupation of Iraq, manipulation of refinery capacity].
Comment from attendee: Shouldn't we do more with nuclear and stop government interference in the free market that makes it difficult to develop nuclear power?
Powell: Without the government interference in the free market through the Price-Anderson Act that relieved the nuclear power industry of liability there would never have been nuclear power at all. The potential damages would be too high. The public now assumes the risk.
Rick (Goodrich): France seems to be doing well with nuclear. If they can do it, why can't we?
Powell: The problem of storing the waste products for 100,000 years has not been solved. We still haven't figured out what to do with it ... not in my backyard ... perhaps in yours? It may be that France isn't thinking long-term either ... 100,000 years is a long, long time.
Rick (Goodrich): What do you propose?
Powell: A major government initiative for renewables like that during WWII. A Manhattan-like project. It would create jobs and it would make the U.S. more competitive and secure.
Lamborn: Other comments?
... so I launched into a series of comments ...
I've been involved with the Cos Mfg Task Force since Rocky Scott started it many years ago. I didn't know anything about the issue of trade before that. As I've educated myself, I've gotten more and more concerned.
You talked before about not wanting a trade war, but with a $706B trade deficit I submit we're in a trade war and that we've surrendered [... some eyes opened wider ...].
You cited concerns about protectionism, but the U.S. has policies that actually promote offshoring ... I cited about half my list, including the one on labor & environmental standards and democracy ... China's not a democracy [... heads nodded].
I also cited
[see my write-up for the points & numbers (doc format)... won't repeat them here ... find updates of these at Jobs & 'Trade' Data Update Feb09 ... and later updates]:
- mfg & IT job losses in nation and Colorado Springs.
- Advanced Technology Products trade surplus to deficit numbers ... not just low tech jobs that are going. People retrained in IT when they lost their mfg job. For what are they going to retrain now?
Lamborn: Well, our time is up and we've got to move to what's next on the agenda. Any final comments?
... and that was that ...