Textile Industry Exerting Pressure
The White House is under increasingly bitter criticism from the textile industry. Pressure is building to write restrictive legislation that would reverse the long-time American trend toward international free trade.
In 1969, a year that saw all imports into the United States rise by 8%, the flow of cotton, wool and man-made textiles rose by almost 18%.
"Two out of every five men's wool suits sold last year were made from cloth manufactured in Japan," reports Stanley Nehmer, U.S. deputy assistant secretary of Commerce. The Commerce Department claims that from January, 1969, to January, 1970, a total of 50,000 jobs disappeared in the American textile and apparel 'industries. The loss was blamed primarily on imports.
Attempts to get the Japanese textile industry to agree to voluntarily limit their exports to the United States have met a stone wall of resistance.
According to the spokesman for the Japan Textile Federation, its group is "fully prepared for a protracted war with the U.S." over the matter of restricting exports of textile goods to America. The Japanese textile men blame the inflating U.S. economy rather than their own economic success for the textile impasse.
Commerce Department officials who have been exerting pressure on the Japanese accuse them of displaying "arrogance" and "rudeness" in negotiations. Japanese trade negotiators are almost unanimously described as being rough and unyielding.
Shoe Industry Feeling the Pinch
The impasse over textiles is threatening to spill over into other industries.
The New England footwear industry, once the largest and most important in the nation, is being decimated. In places like Haverhill, or Brockton, in Massachusetts, or Manchester, New Hampshire, factories are closing and workers are being laid off.
American shoe manufacturers insist that imports are responsible for their plight. Like the textile men, they are demanding some type of quota arrangement to protect them from the rising flood of overseas merchandise. So far, Congress and the administration have been impervious to their pleas, but the shouts are getting louder and more desperate every day.
According to one shoe company official in Haverhill, there were 23 footwear plants in that city a decade ago. "Only seven are left," he says, "and two of these are going out of business in the next 30 to 60 days. It's become a ghost town — I've got nobody to talk to anymore."
Imported Living Color
Every U.S. company which makes and sells color television sets suffered financially the first quarter of this year. Two factors are responsible: the general economic slowdown — and the rising tide of imports.
Joseph Wright, chairman of Zenith, charges that Japanese sets are being "dumped into the U.S. market at prices far below the Japanese home market price."
In 1968, color sets imported from abroad totaled 243,000. In 1969, they rose to 447,000.
This year they are coming in so fast they may reach the one million mark!
"Nearly all the imports come from Japan," reports San Francisco newsman Milton Moskowitz. "They seem to be doing to the TV set manufacturers what Volkswagen and other foreign cars have done to the automotive industry."
On and on it goes.
And the big lesson of it all is — if the United States had been living within its means, checking inflation, curbing excessive wage increases, and controlling government spending, the import problem would virtually cease to exist.
How Long Can It Continue?
In the light of all this, there are several important questions that need answering.
How long can America's rapidly deteriorating export-import situation continue?
More important, how long can America's annual balance-of-payments hemorrhage — a record $7,000,000,000 in 1969 alone — continue? How long will Europeans be willing to hold onto over 43,000,000,000 inflated "Eurodollars" backed up by a mere $12,000,000,000 in U.S. gold? How long will the strained foreign confidence in the undisciplined American economy continue?
For a little while longer, at least.
If there were a heavy run on the U.S. gold supply, the Treasury would simply stop selling gold. The last link between the dollar and gold would be cut. This would leave foreign banks holding over 30,000,000,000 totally unbacked dollars.
The fact is, there simply is no other international reserve currency on the scene to replace the dollar — yet.
But the seed has been planted for just such an alternate unit, should it become necessary.
The six nations of the Common Market have already agreed to move toward the establishment of a Common Market reserve fund, and eventually a common currency. The current thinking is that it would take from five to nine years before such a currency unit could become a reality.
But should there be another international currency crisis — such as the devaluation of the British pound sterling in 1967 — the timetable could be stepped up.
None of America's trading partners, however jealous they may be of our abundant affluence, or however much they may want to improve their own trade account with the U.S., want to see an economic collapse in the United States. It is in virtually every nation's self-interest to see the shaky U.S. economy improved. No nation or bloc of nations eagerly anticipates assuming the burden of a world banker.
But the United States must show some reassuring sign it is willing to tackle its mounting fiscal and economic problems — and this includes resolving the financially disastrous war in Asia.
Says Jelle Zijistra, board chairman of the Bank of International Settlements:
"The ultimate discipline for the international payments system as a whole is the degree of stability achieved by the U.S. dollar as the anchor currency.
"That the United States should strive towards a major improvement in its external current account," he argued, "is not only in its interests but also in that of the entire Western world."
Survival at Stake — Who Cares?
Americans still have time to act — to act unitedly in their individual and national interests. Yet, instead of gearing up for the fight for economic survival, Americans are seemingly more interested in battling themselves.
1970 may go down in U.S. history as the Year of the Strike.
All that matters for the average working man, it seems, is a fatter paycheck every year. Whether the increase is tied to an increase in productivity is of little consequence to him.
President Nixon and Labor Secretary Shultz suggested last winter that unions should moderate their demands in coming bargaining talks. Otherwise they would run the risk of pricing their employers right out of the marketplace.
One powerful labor boss retorted that no union leader would think of scaling down his demands. "If he does, he isn't going to be in the head of that union very long," he reasoned.
Another top union leader, looking ahead to a major contract negotiation later this year, said: "We're going to the bargaining table in 1970 to get our equity, and we don't care what business' attitude may be or the attitude of the Nixon Administration may be."
But who is going to act in the national interest?
Where do we find sacrifice for the good of the nation — which in the end is for the good of every individual within the nation?
In his new book, The End of the American Era, author Andrew Hacker laments that "a willingness to sacrifice is no longer in the American character."
What was once a nation, writes Hacker, "has become simply an agglomeration of self-concerned individuals" — 200 million egos, as he captions one chapter.
Americans are in "a stage of moral enervation," and "we lack the will" to continue being a great nation.
What kills a nation? Lack of national spirit, purpose and unity — and an unwillingness to sacrifice for the common good.
How Can We Compete?
"Both the Japanese and the Germans are determined to be outstanding in the world," said Philip H. Abelson of the Carnegie Institute. "How can the United States, which is in some sense lethargic and without a sense of direction, compete with such energetic people, especially when we do not recognize that we are in a contest?"
The Japanese have such a team spirit. The nation is determined to be Ichiban — Number One.
Japanese industry, government and the public as a whole are concerted in the national efforts.
The average Japanese has been willing to sacrifice for the good of his country, even to the point of accepting overcrowded living conditions, housing shortages, and other privations.
The average Japanese workman "socks away" 18% of his take-home pay into savings. In West Germany, the figure is 11%. The United States? A mere 6% — with much of this diluted by the exploding growth of consumer credit.
The Japanese have a sense of national purpose and will. Western Europeans are determined to overcome their historic differences to create a United Europe.
And the United States? It's coming apart at the seams in all directions!
Listen to the words of John W. Gardner, former U.S. Secretary of Health, Education and Welfare:
"While each of us pursues his selfish interest and comforts himself by blaming others, the nation disintegrates. I used the phrase soberly: The nation disintegrates.
"This is a time for the highest order of patriotism. This is a time to ask what it is we stand for as a people. . . .
"We face two overriding tasks. We must move vigorously to solve our most crucial problems. And we must heal the spirit of the nation. The two tasks are inseparable. If either is neglected, the other becomes impossible."
Time Is Short
It's time Americans wake up to the facts — and act before it's too late.
There is still time for all Americans — governmental bodies, industry, labor unions and every individual — to act responsibly and do their part to stem inflation, and help put the nation's economic house back in order.
But who will be the first labor union leader, for example, to tell his men honestly and frankly that the company and the nation can't afford them a pay raise this year.
What about honest cuts in governmental spending?
All that is needed are some good examples and forthright, unselfish leadership.
There is still time left. There is still time left to rescue the dollar on the international front. Our creditors are more than willing — in their own interest — to give the U.S. time to put its economic house in order.
But time is running out.