Sunday, March 14, 2004

Something must be done restore jobs in U.S. manufacturing, an industry hit over the past three years with layoffs, or expand employment elsewhere in our economy.

But whose economic agenda and which policies will create jobs and strengthen America’s manufacturing base is the question voters will have to answer in this year’s presidential election.

President Bush was once again in Ohio last week addressing the issue. The bulk of the quarter of a million jobs Ohio has lost since 2001 were in manufacturing, a figure that’s fueling the state’s 6 percent jobless rate.

In February, the Ohio Poll found Mr. Bush’s job approval rating had slipped to just under 50 percent. Only 40 percent say they approve of the way he is handling the economy.

No Republican president in modern times has won re-election without carrying Ohio. So the outcome there, and the debate over jobs policies in this campaign, will be pivotal to whether Mr. Bush or John Kerry wins the White House in November.

Mr. Bush readily acknowledges that Ohio’s “manufacturing communities like Youngstown and Cleveland have been hit particularly hard.” But, he argues, the kind of trade protectionism, rules, taxes and other regulations being pushed by Mr. Kerry and the unions that back him would makes matters worse, a “recipe for economic disaster.”

Ohio, like most of the country, has a lot riding on American exports and expanding trade — which remains one of the bright spots in the economy. U.S. export sales exceeded $1 trillion last year.

Ohio’s exports have risen more than any other state in the country. Its export sales to Mexico have tripled since the North American Free Trade Agreement was approved in 1996. Notably, Mr. Kerry was one of NAFTA’s big supporters, although he has been running away from that vote ever since he began running for president.

Let’s be honest. Some of these manufacturing jobs will not be coming back because of structural changes in our economy. Manufacturers have been reducing payrolls, in middle management and on the production line, because they have found ways to produce more goods at far less cost, boosting profits for further expansion and fatter investor and worker pension dividends.

So how can we create more manufacturing jobs? Mr. Bush says we do it by expanding the economic pie — by cutting taxes on workers and on businesses, expanding free-trade agreements to open more markets to made-in-America products and commodities, and reducing federal regulations that heap huge costs on everything we buy and make us less competitive.

Mr. Kerry’s prescription for manufacturing doesn’t seem based on expanding anything. Instead, he calls for increased regulations (which levy higher costs of their own) and wants to punish businesses that find ways to reduce their costs.

In many cases his plans would kill even more jobs. Economics reporter Amy Goldstein, writing in The Washington Post, says Mr. Kerry’s “central proposals to stem the flow of U.S. jobs overseas are relatively modest.”

Among them: requiring businesses to give government agencies three months’ notice of any “off-shoring” of jobs, and terminating federal contracts with any American business that cuts its costs through subcontractors abroad — which would mean job cuts here for any business that loses government contracts.

Worst of all, Mr. Kerry would review all trade agreements and demand that our trading partners — no matter how weak their emerging economies may be — adopt tougher, costlier labor and environmental regulations similar to our own.

But Mr. Kerry’s voting record suggests an agenda that may have an even deeper economic impact on states like Ohio.

He opposed funding to such U.S. weapons systems as the Abrams Tanks, which were used in the Iraq war, and are upgraded and maintained in Lima, Ohio. His vote to cut aerospace systems like the unmanned Predator and the B-1 bomber would have cut jobs at Wright-Patterson Air Force Base. His vote for a bill to slash coal use in utilities would have eliminated some 37,000 coal mining jobs in Ohio.

There is something else rarely mentioned in the heated debate over global trade and U.S. businesses that subcontract abroad: It works both ways. Thousands of foreign companies operating here employ millions of U.S. workers.

Some 900 foreign firms employ tens of thousands of workers in Ohio alone. Among them: Honda Motors (14,000); Siemans AG (4,000); DaimlerChrysler (11,000); Nestle SA (2,600); Bridgestone (1,800); and Matsushita Electrical Industrial Corp. (1,400).

Any attempt to impose protectionist policies on our trading partners could result in a trade war retaliation that would mean the loss of these and future jobs.

Mr. Bush urged Ohioans last week not to buy into the protectionist rhetoric. “Some politicians in Washington,” he said, want “to build a wall around this country and to isolate America from the rest of the world. The old policy of economic isolationism is a recipe for economic disaster.”

The choice for voters this year is between a defeatist policy that calls for taxing, regulating and punishing manufacturers versus long-term, pro-growth tax cut incentives and increased access to overseas markets.

Donald Lambro is chief political correspondent for The Washington Times and a nationally syndicated columnist.

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