And just what is our government doing to protect domestic industry and its citizens’ ability to earn a living? Not enough it seems.
The Blue Heron paper mill has closed in Oregon City, Oregon, and its management says it is primarily the result of competition for recycle materials from China. The mill had filed for bankruptcy in 2009 and in an attempt to get back into the black it shifted much of its production to recycled paper products, but apparently that was not the solution, especially when, according to the mill management, the Chinese government subsidizes its industry and lets it bid up world prices for raw materials.
I can’t blame it all on Obama or even his predecessors (then again, maybe I can), but why can’t our government do something to help workers and to help domestic industry and why do we take part in trade deals that allow other nations to subsidize their industries and give them an unfair advantage on the world market and in our own domestic market?
And why did Obama who campaigned on the promise that he was going to help ordinary working folks immediately turn his back on them when he became president and fall all over himself to bail out fat cat bankers? (Probably because like most of us he does not understand banking and was intimidated by them and their threat to take us all down with them.)
Yes he also presided over the bailout of GM and Chrysler, saving a lot of high-paid union jobs, but while I would generally applaud saving jobs, I am not sure that was such a good idea or even necessary, but I’ll get back to that.
And I doubt one can actually blame the mill closure solely on China. I know something about that paper mill. I’ve hauled many thousands of tons of paper out of that mill for something like a decade and a half as a long-haul truck driver. The mill is old, and although I personally thought of it as a colorful place (well actually kind of dismal and gray, but colorful in another context), I imagine, judging from its outside, it may have not been the most technologically advanced on the inside (I don’t know). There has been a mill on that site under various names dating well back into the 19th Century. What I hauled out of there was newsprint, and with the downfall of the newspaper business, demand for newsprint has taken quite a dive. But much or most of the newsprint I hauled out of there went to commercial printing plants that printed advertising circulars primarily — some of them going into newspapers, some not. But I hauled a lot of newsprint directly to newspapers too.
I did see the trucks bringing in recycle material that was turned into all kinds of recycled paper products. Apparently, according to what I have now read, much of that recycle material is going to be shipped to China. The Blue Heron mill management claims that China has bid up the price of recycle material to the extent the Oregon City mill could not make a profit.
(A letter-to-the-editor writer to an oregon newspaper noted the irony that in the name of green industry recycled material will be shipped to China and the finished products shipped all the way back to the U.S. — and that saves energy and the environment???)
There are other paper mills in the region. Business is always a competition, but it should be a fair competition, and one would think that our own government would want to look out for our own domestic industry.
Now I know the whole line about you can’t get all protectionist and keep out foreign products because that is what happened worldwide in the 1930s (countries put up high tariffs) and it only exacerbated the Great Depression. But as I think I once blogged already, that was then and this is now.
I know everyone, or at least all the “enlightened” ones, think that the answer is for all the young people to go to college and get into something in which they can keep their hands clean. Well you know we tried that computer/financial services/speculative/Taco Bell economy for the past few decades. How’s that working out for us?
Back to the GM and Chrysler bailouts:
While I think the government should do what it can to promote and protect domestic industry, it can’t run it and should not directly finance it.
GM and Chrysler got stuck in marketing one kind of product and got too big and bloated to quickly shift gears when product demand changed. And Detroit union workers got a little greedy themselves and lost out to non-union, but domestic workers hired by foreign companies down South.
While I don’t think our government should heavily subsidize our own industry, it could do more in the way of tariffs on incoming products, as well as outright bans on unsafe products coming out of China (such as toxic toys), as well as in some cases import quotas.
A government that fails to protect its own people will eventually fail, and in this day and age that eventually can come rather soon (look around).
Are you listening Washington?