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January 11, 2005


Realistically, the Union Menace has been de-fanged a long time ago; only about 14% of private-sector workers in the USA are represented by unions. (Government is a different story, however.)

Alabama has attracted some auto plants, perhaps in preference to Wisconsin, because Wisconsin presents far more challenges to a manufacturer than does Alabama.

However, you glossed over the fact that all those 'foreign' cars are being manufactured in the United States because Ronald Reagan forced the issue by placing tariffs on non-domestic-content autos.

There are two significant questions which are not resolved easily: first, what are the prospects of a nation which no longer manufactures "things"?--recalling that manufacturing was at one time 25% of the US' GDP and is now only about 14% of GDP. This is not a result of "productivity gains"--it is a result of industry seeking better terms and conditions.

Secondly, what, if anything, should US policy be on this question? It is a given that the Congress will not substantially reduce regulation on issues such as safety or environment--nor will the several States do that, nor reduce taxes in any meaningful way.

Further, there are some items which should NOT be touched--wage and hour laws come to mind.

Thus: should the US trade policy require that firms which 'offshore' production pay tariffs which equalize their burden? If not, why not?

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