W. Alan Beckelheimer "Something To Think About ..." Published Oct. 13, 2004

Trading America: Our current economic picture brought to light

As of September 28, 2004 the national debt of the United States of America was $7,354,347,561,874.98. This is the largest deficit in our nation's history and is cause for alarm. For the past few years, America has also been running large trade deficits, which means we import from other nations more than we export to foreign nations. Since we have a hold, albeit tentative, on the claim as the world's largest economy, these figures should be disturbing for their implications. If we continue to run in the red and are not able to balance our trade deficits at least somewhat, our country runs the serious risk of falling into economic ruin.

With these alarming economic numbers, common sense would seem to dictate that the American government would be taking steps to reverse these trends in order to help ensure future economic prosperity by our nation.

Instead, our nation continues to out source jobs and in some cases entire industries.

These claims are evidenced by two recent developments.

In the last three decades, the clothes we wear have gone from 90 percent made in the USA to less than 20 percent made here. Ever since the post-World War II period, trade barriers have gradually been coming down. The trend has given companies like The Gap, Wal-Mart and Ann Taylor greater access to cheaper labor and raw materials. It's also lowered prices for American consumers. But textile companies like Burlington Industries and Guilford Mills have been hard hit. According to the American Textile Manufacturers Institute, more than 250 U.S. textile plants have closed in the past six years. And in the last year and a half, more than 30,000 American textile workers have lost their jobs, a situation that has forced factory owners to join with unions to fight what they see as unfair trade policies. It's a relationship that's new for both sides.

Despite complaints from American textile mills and their unions, more and more production will move to those countries where labor is cheapest. On January 1, 2005, countries in the World Trade Organization will try to eliminate all textile quotas, and if they do, which is a sure thing, imports are expected to soar.

Quotas are all that is keeping the struggling American textile industry alive. Industry experts are predicting that once the quotas on textile ports are eliminated, China will consume anywhere from 50 to 75 percent of the <I>world <I>textile market. Where does that leave American textile workers? Unemployed.

What is the American government doing to protect the jobs of its citizens currently working in the textile industry? Nothing worth mention. In an industry that employed approximately two million workers as little as two years ago, now only 700,000 remain employed in the industry. These 700,000 are rightfully worried about their jobs, they sense the inevitable because they have seen the same thing happen to a long list of other industries.

America is also struggling to retain dominance in what has been one of its best industries, pharmaceutical research and development. Where are these jobs going? India.

India's pharmaceutical research, development and manufacturing industries currently operate at half the cost of American companies. Pfizer, Ely-Lily, Bristol Myers Squibb, and others already have research and development centers headquarted in India, which is fast becoming an international hub for pharmaceutical research and biotechnology. India has a large population, their census numbers from 2001 state that there are 1,027,015247 people, making it the second country in the world, after China, to pass the 1 billion mark in population numbers.

Clinical trials of drugs in India occur at a much swifter pace than in America. When this fact is added to the cost effectiveness of producing drugs, it is easy to see that America's pharmaceutical industry is in jeopardy of effectively disappearing.

To make matters worse, the Food and Drug Administration has accepted over 70 Indian companies as direct feeders for American markets. This means that an Indian company can research, develop and test its drugs in India on their population without the close supervision that the FDA exercises over American firms. This wouldn't be so bad if the companies were simply distributing drugs to Indian markets. But this isn't the case.

Instead once these drugs are developed and ready to be marketed in America, even though they've been developed beyond our borders, they can and do receive approval by our government to be sent to America for purchase and subsequent use by our citizens. This is shocking. The claim that pharmaceutical companies are making is that in order to lower the cost of consumer products in America, in this case pharmaceuticals, cheaper labor must be found wherever it may be, in this case India.

These practices don't make sense because our government currently forbids its citizens from importing cheaper drugs from Canada, which has much more stringent regulations than do Indian companies. If money is the issue at hand, why can't American citizens benefit from NAFTA and cheaper Canadian drugs by importing them into the U.S.?

With our national deficit, saving money is an important issue. But the deficit keeps climbing and more middle class American jobs are being moved overseas by the day. This leaves a chilling question to be answered. If the American people are expected to pay off the national debt through taxes and many of their jobs are being eliminated because of globalization of key industries, what is going to happen to America's tax base? Corporations won't be footing the bill; they don't pay their share now.

America is quickly becoming like a mountain with no trees. Every time it rains a little erosion occurs. With daily rainfall, the mountain is quickly a hill and eventually becomes a desolate plain.

Progress should be our goal, cheaper prices should be our goal, but it is also the responsibility of the American government to hold our jobs forefront in its interests and support its citizens in their quest for "life, liberty and the pursuit of happiness."

Perhaps the words of Thomas Jefferson should be heeded in this regard. He said, "Shall we make our own comforts or go without them at the will of a foreign nation? He, therefore, who is now against domestic manufacture must be for reducing us either to dependence on that foreign nation or to be clothed in skins and to live like wild beasts in dens and caverns. I am not one of these."

Thomas Jefferson (1743-1826)

Letter to Benjamin Austin, January 9, 1816

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W. Alan Beckelheimer is a Crossville Chronicle staffwriter. His column appears each Wednesday in the Chronicle.