congressional_record: CREC-1994-12-20-pt1-PgE16
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| CREC-1994-12-20-pt1-PgE16 | 1994-12-20 | 103 | 2 | URUGUAY ROUND AGREEMENTS ACT | HOUSE | EXTENSIONS | FRONTMATTER | E | E | [{"name": "Fortney Pete Stark", "role": "speaking"}] | [{"congress": "103", "type": "HR", "number": "5110"}] | 140 Cong. Rec. E | Congressional Record, Volume 140 Issue 150 (Tuesday, December 20, 1994) [Congressional Record Volume 140, Number 150 (Tuesday, December 20, 1994)] [Extensions of Remarks] [Page E] From the Congressional Record Online through the Government Printing Office [www.gpo.gov] [Congressional Record: December 20, 1994] From the Congressional Record Online via GPO Access [wais.access.gpo.gov] URUGUAY ROUND AGREEMENTS ACT ______ speech of HON. FORTNEY PETE STARK of california in the house of representatives Tuesday, November 29, 1994 The House in Committee of the Whole House on the State of the Union had under consideration the bill (H.R. 5110) to approve and implement the trade agreements concluded in the Uruguay round of multilateral trade negotiations: Mr. STARK. Mr. Chairman, I oppose passage of the GATT Uruguay round implementing legislation. Over the years, I have generally supported trade expansion bills. But I have come to question the fundamental premise of these various trade expansion bills. There are some things more important than pure, free trade principles. What is more important is our society--our sense of being a nation in which all are sharing in the growth and upward movement. In the last 20 years, something has gone fundamentally wrong. The lower-income and middle-income families are working harder and longer than ever--but their real incomes are stagnant or declining. The rich get rich, and the poor get poorer. The rising tide no longer lifts all boats--too many lifeboats are being swamped. There is a terrible sense of fear and uncertainty about jobs, about the American dream, about the possibility of one's children having a better quality of life. There is a growing underclass, which has no employable skills and is locked in a cycle of violence, hopelessness, and despair. A society cannot long exist and there can be no sense of community, when the middle class is being destroyed. We are starting to see this in America. I do not assign all the Nation's woes to international trade. Indeed, free trade is wonderful for consumers--if consumers have jobs with which to buy the goods. This is the problem. Increasingly in the last 20 years, quality, good-paying, dependable jobs have been under attack--in part because of expanded international competition from nations where there is no minimum wage and where labor exploitation is rampant. Expanded trade creates more, higher-paying jobs as nations specialize in what they do the best. Great theory--and true. But we have failed to find a theory which helps the less well-trained, the non-high-school graduate, the lower-income families keep pace with these dynamic changes. As a result, our GNP climbs and our civilization declines. It is time to stop sacrificing our sense of community by unquestioning passage of trade bill after trade bill. I do not believe we should pursue further trade agreements until we have developed and have in place in the United States a set of policies which genuinely ensure that All parts of the population are moving in the same income direction: upward; All Americans who need assistance have an ability to receive retraining and relocation that ensures a decent chance at a lifetime of productive work; That the welfare population is able to find work--it is policy schizophrenia to talk of requiring everyone to leave welfare after a fixed period of time when the semiskilled kinds of jobs welfare people can do are being wiped out through international trade competition. Following are excerpts from a recent article from the Washington Post which make similar points. It is way past time, Mr. Speaker, for the Nation to debate what freer trade means for our society--not just for our economy. Will Success Spoil America? Why the Pols Don't Get Our Real Crisis of Values (By Edward N. Luttwak) Having tried George Bush, who showed himself blithely unaware of the very existence of the problem, and having tried Bill Clinton, who spoke as if he knew all about it but failed to act, the American electorate has now given a two- year opportunity to the congressional Republicans to show that they can understand the problem and also come up with valid remedies. The problem in question is the unprecedented sense of personal economic insecurity that has rather suddenly become the central phenomenon of life in America, not only for the notoriously endangered species of corporate middle managers, prime targets of today's fashionable ``downsizing'' and ``reengineering,'' but for virtually all working Americans except tenured civil servants--whose security is duly resented. Individual Americans who are neither economists nor statisticians do not focus on the economy's overall rate of growth, but rather on the security of their own jobs. Hence the vigorous recovery that provoked the Federal Reserve's anti-inflationary crusade cannot assuage personal fears. And the source of these fears is obvious: The once highly regulated and internationally dominate U.S. economic system has given way to a far more dynamic but also much more unstable turbo-charged capitalism open to the world's competition, in which no single firm, no particular industry and certainly no job or self-employment niche can be secure any longer. However tiny its effect, the General Agreement on Tariffs and Trade (GATT) Treaty now before this lame-duck Democratic Congress, can only add to those worries. There is nothing new about the ``creative destruction'' of free competition. Only if outdated economic structures and obsolete working methods are first swept away, freeing up their human and material resources, can more efficient structures and methods arise in their place. What is new is only a matter of degree, a mere acceleration in the pace of structural change at any given rate of economic growth. But that, as it turns out, is quite enough to make all the difference. The rise and decline of skills, firms and entire industries is now quite rapid even when there is zero growth, becoming that much faster when the economy does grow. In the process, the most enterprising or most fortunate individuals are offered more opportunities for rapid enrichment than ever before, and even tiny firms can aspire to fabulous growth. (Microsoft, born 1975, is the classic example). At the same time, however, the great majority of individuals has experienced not only unprecedented job upheavals, but also an absolute 20-year decline in personnel earnings.... Viewed in the very narrow national-accounting perspective of all our globalization debates, whether NAFTA last year or the GATT Treaty now, any increase in the combined income of all Americans--no matter how unevenly distributed--fully justifies going ahead to globalize some more. On that there seems to be a perfect consensus between mainstream Democrats and mainstream Republicans. Both take it for granted that globalization has increased and can continue to increase the country's total GNP (true), that it must therefore increase the income of all Americans or at least most of them (false), and that because protectionism is always bad for U.S. consumers (true), it must always be bad for the country (false). What is missing is anything resembling a social perspective. In fact it is simply taken for granted that economic efficiency must never be compromised in the slightest to suit the needs of society. That would make perfect sense if the United States were a very poor country with a perfectly peaceful and tranquil society. As it is, the United States has much more wealth than social tranquility and would benefit much more from economic stability than from further economic growth, inevitably achieved by disruptive structural changes of one kind or another. If one does take into account the psychological and practical need of families and communities for a reasonable degree of stability, very different criteria apply to globalization as well as to deregulation. Those are the very criteria that have shaped Japan's protracted resistance to the globalization of its own economy, as well as to deregulation. U.S. trade negotiators are forever arguing the merits of free markets, but the overall purpose of Japan's many overt and covert trade barriers and domestic regulations is precisely to protect Japanese society from the disruptive effects of any competition, foreign or domestic. Small shopkeepers are protected by a Large-Scale Retail Law that greatly restricts the spread of chain stores, supermarkets and department stores. Craftsmen threatened by cheaper imports are protected by unwritten customs house conspiracies as well as overt barriers. And many industries, including low-tech paper and plywood, have their own informal protective arrangements, while high-tech industries are officially assisted as well as protected. As a result, Japanese-as-consumers must pay very high prices, but Japanese-as-producers enjoy all the benefits of personal economic security. American visitors immediately notice the tranquility of Japanese crowds, and the conspicuous absence of the free- floating anger that has become a sinister feature of American life, and a deadly one at times. They may attribute all this calm to the homogeneity of Japan's population, or its ancestral discipline. But they would be wrong: Before its all-powerful bureaucracy stabilized Japan's economy with its regulations and protectionism, the country witnessed a great many very violent strikes, any number of political assassinations and frequent mass demonstrations that often degenerated into outright street fighting. To be sure, the Japanese system sacrifices economic efficiency at every turn, and the consumer pays the price every time. It is a fact that the actual Japanese standard of living is on average much lower than the American, even though average Japanese money incomes are now substantially higher. But that is a very incomplete truth, for it only includes purely material factors, overlooking society-wide considerations that count for much more--even in purely monetary terms. When I drive into a gas station in Japan, three or four clearly underemployed young men leap into action to wash and wipe the headlights and windows as well as the windscreen, check tire pressures and all the different oils, in addition to dispensing the fuel. For that excellent service, I have to pay a very high price for the gasoline. The Japanese bureaucracy, determined to protect those low-end jobs for youths who lack the talent for better employment, as well as small gas stations in rural areas, flatly prohibits self- service gas pumps, and in any case forces all gas stations to compete by offering lavish service because fuel prices are fixed by the government and price-cutting is banned. Back in America, I fill my own tank much more cheaply from a self-service pump, but there also three or four young men are waiting--sometimes in person but certainly by implication. But because they are not employed by the gas station, or by anybody else, I do not have to pay their wages through government-imposed high prices for my gas. That is where U.S.-style economic analysis stops; Japanese consumers are being exploited, while the free market provides American consumers with cheap gas. But in reality, I still have to pay for those young men who are not employed by the gas station. My car insurance rates are higher because of their vandalism and thefts, my taxes must be higher to pay for police, court and prison costs, and even a little by way of welfare benefits. If I am very unlucky, I may have to pay in blood. In a recent article on a Washington youth who killed a Korean immigrant at the age of 17, while absent from a psychiatric clinic where he had been sent for killing a taxi driver at the age of 15, it was parenthetically noted that more than $100,000 had been spent on his psychiatric treatment; his 30-year prison term will cost another $750,000 or so. Not counting two deaths and his trial costs, the cost of not employing that one youth would pay for at least 37,777 gallons of gasoline--even at very high Japanese prices. American free-market gasoline is thus very expensively cheap, as compared to Japan's employment-generating, cheaply expensive gasoline. There is no assurance, of course, that those young men whom I see loitering would actually take gas station jobs if any were available for them. But what is certain is that in Japan the government acts to ensure that there are job openings for youths incapable of more demanding employment, while in the United States, nothing must stand in the way of free-market efficiency, very narrowly defined to exclude any and all social consequences. . . . ____________________ |