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New approach required for global trade

August 16, 2009
By LARRY RINGLER Tribune Chronicle

Let's suppose you've done pretty well for yourself in life

Now, let's say you know a carpenter, plumber, car mechanic - anyone who has degree of skills but has hit a bad stretch and could use a helping hand.

You let them borrow your car when they're in a pinch. You might pay them to do some work you could have done yourself but you'd rather play golf or take a trip.

You watch them grow until they can stand on their own. But, when they no longer need your help, you come to realize you've become hooked on them doing work that you no longer want to do. Besides, you tell yourself, you still have lots of money.

That's why it comes as a shock when you bounce one check, then two, and finally the bank takes your house and car. It's even more of a shock when you see your ''buddy'' buying your house and car at auction.

Welcome to the global economy.

This scenario doesn't exactly capture what's occurring with the United States and its trading partners around the world, but it's close enough to make an important point: We did the right thing for 50 years in helping other nations recover from the devastation of World War II.

But you know what - that's over, fini, kaput. We did our duty. It's time we start making stuff again to rebuild our economy.

That's one of the key points in ''Manufacturing a Better Future for America,'' a book written by a number of economic, labor and social experts and published by the Alliance for American Manufacturing.

The chapter by Clyde Prestowitz and Kate Heidinger on how U.S. trade policy developed after World War II details why we lost tens of millions of industrial jobs and rang up a huge foreign trade deficit that will burden our nation for generations.

The core point is America emerged from World War II as the world's military and economic giant, while most of the rest of the world came out in shambles.

But we had a big problem called the Communist Soviet Union that was looking to expand its power around the world.

So our leaders opted to use trade policy as foreign policy. We rebuilt our enemies, Germany and Japan, because we needed them on the front lines in the Cold War with the Soviets.

We opened our country to foreign goods, turning Americans from savers into voracious consumers, because it would funnel billions of dollars into foreign economies in order to, like steroids, bulk them up.

It worked. We defeated the Soviet Union, but by then, we were hopelessly addicted to cheap foreign goods. In fact, our Cold War victory is one of those rare ones in world history that didn't require any sacrifice by civilians. We spent so wantonly that we scarcely noticed we were in a war - or losing the manufacturing base we may need at some point to defend ourselves.

We're blissfully ignorant of the fact we're in a new war, this one economic with some nations whose trading policies clearly are predatory. It's no use fighting a war we've already won; we'd better win the one we're in.

This time civilians will have to make sacrifices by doing without that 20th pair of shoes in the closet or fourth big-screen TV, or by paying higher prices so more products can be made in the U.S. But the stakes are huge. If we lose, it's unlikely the victor will be as magnanimous as we were.



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