New Mexico’s Bears Face a Dire Future

Posted on 05. Aug, 2011 by Administrator in Energy/Environment

Sandia Mountain BearWatch is now 16 years old with approximately 600 members, most of whom live in the Sandia and Manzano Mountains near Albuquerque.  S. M. Bearwatch’s mission has been to help ensure a stable bear population in New Mexico through statewide education for mountain residents, informing them how to co-exist with bears.  We continue to advocate for better management for our state’s mammal, the black bear.  Our wildlife conservation organization has never taken an anti hunting stance, but we continue to take a strong stand against poor bear management and unethical hunting practices.

Unfortunately, between fickle Mother Nature and the New Mexico Game and Fish Department, New Mexico’s bears are in for a very dire year ahead.

After one of the coldest winters on record, in early May, there was a statewide hard freeze that killed most if not all of the oak blossoms that produce the acorns that bears depend on to survive their winter hibernation.  Fruit trees were also ravaged.  Our winter snows were below normal and the high springtime winds along with no spring rains is a harbinger of things to come for this species.

In its inception, BearWatch established a Wildlife Steward program.  This program was instituted to educate Wildlife Stewards in all mountain regions on how to help inform their neighbors how to live with bears.  These Wildlife Stewards not only help inform their neighbors on all the ‘Tips’ for living in bear country, they also report bears in the area and keep us up on what is happening ‘bear-wise’ in their part of the state.  Recently, our Wildlife Steward in Cloudcroft, in the southern part of the state, reported that they had the same hard freeze along with little winter moisture.  Several of their young bears have been trapped for the first time ever in Roswell near the Texas border traveling down from the Sacramento Mountains.  Her neighbor recently saw a bear eating bugs off of his car grill.

And on top of this upcoming natural disaster, our bears face one of the largest bear hunts in New Mexico’s history.

The NMG&F has increased the bear hunt 104% over the past five-year bear hunts of 2004-2008 to harvest a total of 686 bears including 302 females per year for four years 2011-2014.

The Game and Fish Department has estimated that there are 5,327 to 6,511 bears in New Mexico.  That’s right, they have it down to the very last 11 bears, when in truth, the NMG&F has no idea how many bears exist in New Mexico.  They are basing their bear population guesstimate on their matrix, which is not a population count.  It yields the same population estimate every year and is essentially a bear capacity estimate.  NMG&F’s uncertain estimate of plus or minus 10% in the population is not realistic given the tremendous uncertainty in the method they’ve used.

The NMG&F has doubled the bear hunt they consider to be ‘problem’ zones from 7% to 15%, which is basically the entire state.  This will include 50% sows.  This four-year 2011-2014 statewide hunt is proposing to kill 2,744 bears in total, including killing approximately 1,218 females…the future.  If forest conditions are as bad as we fear, malnourished sows will not produce cubs to replace this draconian hunt, which means our statewide bear population will most likely take a massive plunge.  The tragedy is that old, young and weak bears will die of starvation, predation and depredation early on with the stronger, producing bears surviving to be hunted and killed off by bear hunters in the fall.

This Game Department’s message is trust us, we’re the experts here and we know what we’re doing.  BearWatch’s experts, two well-known, seasoned bear biologists and a PhD. physicist believe this bear hunt is unsustainable.  We believe that this ‘reduction’ hunt along with this looming natural disaster could permanently eliminate bears from some New Mexico mountain ranges.  It’s happened in states like Arizona and Utah.

Unfortunately the NMDG&F resents spending the money and personnel to manage New Mexico’s bears.  It is easier to just eliminate most of the bear population rather than educating, ticketing irresponsible residents who create human/bear problems and encouraging bear-country counties to create and enforce bear-proof garbage ordinances.

It’s now up to all caring New Mexicans to do everything possible to protect our bears because no one else is going to do it for us.  For more information, contact www.sandiamountainbearwatch.org.

Jan Hayes is the founder of Sandia Mountain BearWatch/New Mexico BearWatch.  Jan is a professional watercolor artist and has lived in the Sandia Mountains for the past 26 years.  She initially established Sandia Mountain BearWatch to protect the bears she sees drinking from and foraging along her small mountain stream. Jan welcomes you to join her in her pursuit to protect New Mexico’s black bears.   BearWatch membership dues are just $5 per person per year.  Donations are always welcome.  Send your checks to: SM BearWatch,   P.O. Box 591, Tijeras, NM  87059

 

The “Debt Ceiling” versus “Jobs Creation” Debate: Not the Time for a Mistake

Posted on 11. Jun, 2011 by Administrator in Economy

A U.S. Senator friend of mine suggested that the ongoing ‘Debt Ceiling’ versus ‘Jobs Creation’ battle underway in Congress – that began in spades within hours of the polls closing last November – can be best understood if you envision Mitch McConnell, John Boehner and Paul Ryan sitting on a settee – think of the opening scene from the movie “Animal House” – and President Obama sitting in a chair opposite.  McConnell/Boehner/Ryan are the nation’s “Budget Cutters” and the President is the “Jobs Creator”.  The ‘Rs’ invite the President to slide his chair forward in their direction, and in a spirit of reconciliation he does so – again and again and again….  Of course, throughout this ‘negotiation’ the Republicans haven’t moved an inch and only a de minimis number of jobs have been created.

This one-way negotiation has to cease – it should never have started – yet each side’s core objective is imperative and appropriate. It’s indisputable on the one hand that as Gretchen Morgenson has written, the “U.S. Has Binged [and] Soon It’ll Be Time to Pay the Tab” (NY Times, 5-28-11).  Ms. Morgenson writes compellingly of a new report by the Peterson Institute for International Economics which states plainly that “government debt will grow to dangerous and unsustainable levels in most advanced and many emerging economies over the next 25 years – if there are no changes in current tax rates or government benefit programs in retirement and health care.”

Without a long-term plan to reduce fiscal deficits in the future, our nation’s “net federal deficit” (i.e., the government’s financial liabilities minus its financial assets), which is now at 65% of gross domestic product, is forecasted, under a best case outlook, to rise to 155% by 2035 and, under a more pessimistic view, to 302%.  This is despite the fact that “debt ratios of around 200% of GDP are at the extreme limit of what advanced economies can experience without becoming destabilized.”

And what would this “destabilization” mean for the United States?  According to the authors, it would mean the combination of “a drift into ever-higher inflation and interest rates, ever-lower growth or deeper recession, and eventually hyperinflation along with rapid currency depreciation.”

So, address the debt crisis we must.

However, given that we are today so obviously mired in a jobless-recovery with a “Jobs Gap” at the end of May of 21.3 million jobs before we are back to full employment in real terms and given that the two most impactful immediate drivers of the U.S. economy – the housing market and oil prices – offer little in the way of near-term recovery, now is not the time to adopt blanket fiscal austerity that throws babies out with the bathwater.  The unprecedented massive overhang of foreclosures and vacancies has driven home values back to 2002 levels, and now that this latest massive Wall Street-made bubble has burst, any real recovery in employment will be obstructed for years to come.  In turn, oil prices, which are fully 40% higher than a year ago and putting untold pressure on auto-dependent workers, are unlikely to materially decline any time soon. We have no choice but to act, and we’re running out of time.  Our political leaders must figure out how to create jobs and cut our deficit simultaneously.

Even Christina Romer, who headed President Obama’s Council of Economic Advisors until late last year and whose finger prints, along with those of Larry Summers and Timothy Geithner, are all over the grossly undersized and misdirected early 2009 stimulus plan, said recently in a speech that “no part of the government [today] is addressing unemployment with sufficient urgency or hope” (NY Times, 6-02-11).  Since it was Ms. Romer and the President who said that with the stimulus plan in place the official unemployment rate would never get above 8%, it is more than sobering today, when real unemployment is a staggering 18.2%, to hear her excoriate her own plan.

But as we can’t abandon job creation, we also can’t allow attacking the deficit to ever become a mauling of the middle class and a further enrichment of the extremely wealthy, which is what many of the recommendations of the Republicans in Congress and some of Mr. Obama’s own Deficit Commission would trigger. To find the proper balance between “deficit cutters” and “job creators”, the White House and Congress first need to abandon the three false economic premises that now dominate the thinking of too many in Washington.  These unsupportable premises are that:

  • Near-term large-scale job creation and long-term deficit cutting are somehow mutually exclusive.  In fact, jobs-based stimulus, because of the large multiplier effect of high-quality job creation, is a much more responsible and effective way to reduce the deficit than is slashing spending for slashing’s sake.
  • The income inequality that is increasingly defining our economy and society – now the most extreme ever  – can continue without destroying our long-term economic growth and the vibrancy of our society.  In fact, even though a vibrant American middle class growing from the bottom up has always been the very best thing for America, we are now living in a nation where the top 1% of American earners make about 25% of the nation’s pretax income and enjoy much lower tax rates than ever before.
  • The very small-government agenda of the “cutters” is somehow compatible with our being the world’s largest economy, our global defense responsibilities, and our large population and its mature demographics.  In fact, this agenda is nothing more than a wolf in sheep’s clothing, with its inevitable result being even more wealth transfer to the already extremely wealthy, by eviscerating Social Security and Medicare and from sharp reductions in the top marginal individual tax rate and the corporate tax rate.

Once everyone is back on a level intellectual playing field, where honest premises trump false ones, and the commonly agreed objective of negotiators on both sides is to responsibly cut the budget in exchange for raising the debt ceiling, meaningful job creation initiatives, and equitable tax reform, it’s important for the Obama White House, the ‘Biden Group’ and Democrats on Capitol Hill to stand firm for a deal that meets the demands of the middle class, who, by a margin of two-to-one, favor aggressive jobs initiatives over a long-term deficit reduction program.

What is concluded in this deficit/jobs negotiation and in the intimately related negotiations over the FY 2012 budget will set the course of the 2012 elections.  If the Obama administration’s negotiators and their allies on Capitol Hill conclude a deal consistent with the goals Candidate Obama laid out in ‘08, ideally there should be four winners and at least three losers.  However, if these ideal winners and losers are somehow juxtaposed, then the fabric of our society will be further torn asunder and our leadership position in the global economy further eroded.

The WINNERS of the upcoming deficit-versus-jobs debate and resultant deal must be:

  • The unemployed, plagued as they are by a real unemployment rate of 18.2% – which is exactly twice the “official” rate reported by the BLS of 9.1% – and by the damage from an ever declining manufacturing sector.
  • Middle class workers, who, on average, have experienced in real terms stagnant wages for the past twenty years.
  • Retired workers and the sick and elderly, whose Medicare, Medicaid and Social Security are now under constant attack by the Republicans in Congress.
  • Deficit hawks, who are entitled to see inefficiencies in government spending eliminated and unwarranted tax breaks for big oil companies, tax breaks for millionaires, and carried interest taxation of money managers done away with.

The LOSERS should in turn be:

  • Any individual, multinational corporation and oil company that’s been sucking off the teat of unfair, inequitable and non-progressive tax code provisions.
  • The so-called “Ryan Budget”, which more cruelly than any House-passed federal budget in memory would, with its focus on slashing social programs across the board and the social safety net of the country writ large, gut every progressive principle upon which our nation was founded.  The Ryan Budget’s devotion to preserving the discredited “trickle down” philosophy of the Reagan administration and every Republican president and Congress since is simply obscene.
  • The six recommendations of President Obama’s own “Deficit Commission”, which, if ever embraced, would constitute their own mauling of the middle class.  Ranging from raising the Social Security retirement age to 69 (when life expectancy for the bottom half of the income distribution hasn’t budged for 30 years) to eliminating deductions of health benefits and interest on certain home mortgages to blindly cutting the federal workforce by 10% by 2015 (without carefully taking into account whether important functions would be disrupted), these recommendations, without once talking about cutting the myriad tax and economic advantages now going to the wealthiest individuals and multinational corporations, are the height of irresponsibility, and little more than the “Ryan Budget” wrapped up in different bunting.

The esteemed Paul Krugman wrote last week (NY Times, 5-29-11) that: “Inventing reasons not to put the unemployed back to work is neither wise nor responsible – it is, instead, a grotesque abdication of responsibility.  And those of us who know better should be doing all we can to break that vicious circle.”

With an unprecedented Jobs Gap at the end of May of 21.3 million jobs, and with responsible solutions in hand for both the budget cutters and the job creators if we would only embrace them, Mr. Krugman couldn’t be more right.

Leo Hindery, Jr. is Chairman of the US Economy/Smart Globalization Initiative at the New America Foundation and a member of the Council on Foreign Relations.  Currently an investor in media companies, he is the former CEO of Tele-Communications, Inc. (TCI), Liberty Media and their successor AT&T Broadband.  He also serves on the Board of the Huffington Post Investigative Fund.

Is the Pickens Plan wrong once again?

Posted on 10. Jun, 2011 by Administrator in Energy/Environment

He’s baaaack. T. Boone Pickens. In 2008, his “Pickens Plan” sounded like the solution to our energy problems and would have filled the Midwest with wind farms—backed up with natural gas-fueled power plants. At the time of his self-promoted plan, the price of natural gas peaked. He likely did quite well with his natural gas investments. He went away, and his idea of farms filled with wind turbines was forgotten.

But he’s back with a new spin: television ads and media appearances promoting, once again, natural gas use—this time in America’s fleet of trucks. With high prices at the pump and Middle East unrest, the 2011 Pickens Plan sounds good. Using natural gas for transportation fuel is, as the Natural Gas Vehicles for America (NGVA) ad posted on his website states: “clean, less expensive, and right here.” It seems hard to argue with and dozens of congressmen have signed on to the plan known as the NAT GAS Act (New Alternative Transportation to Give Americans Solutions) or HR 1380.

There are many pluses to his plan. Natural gas is good. Natural gas is American. Natural gas is comparatively cheap. Pickens deserves some credit. He is willing to take a bold step and make our dependence on foreign oil part of the national debate. Replacing foreign oil with American natural gas as a transportation fuel may be a good idea. Even benefiting personally from his own idea is laudable and is the foundation of capitalism and innovation.

Pickens’ new plan might be a good idea if, as a country, we were still “living large,” as we thought we were in the nineties. Then, we could maybe afford to give a billionaire his next billion. But now, in the middle of the worst economic crisis most Americans have ever seen is not the time to be adding to the deficit by giving away more subsidies to fix a system that is not broken.

If the idea of converting diesel trucks to natural gas and installing new fueling stations along the interstates is so viable, Pickens should be courting private industry such as Mac and Kenworth. He should be working with the network of truck-stop owners and trucking companies. Instead he is tempting Congress with what appears to be a juicy apple. Sadly, with subsidies for wind energy, solar power, and ethanol, the playing field is not level—a true visionary cannot compete as government deals favors for its friends (like Jeffery Immelt and GE).

The NAT GAS Act takes advantage of high oil prices with natural gas, low. With the exception of a blip during Pickens’ last plan promotion, the decline in natural gas prices tracks the discovery of new shale gas reserves made available through a process known as “fracking”—supply is now higher than demand. However, if a switch to natural gas vehicles was forced to take place, suddenly more would be used. At the same time, environmental groups want to stop the use of hydraulic fracturing, which would cut future supply. Rather than coal, the carbon-crazed culture supports natural gas-fueled electricity generation. The low-cost benefit could easily disappear as use increases.

While natural gas uses and costs could climb—we do have lots of it. If exploration was encouraged, we may well have even more. Recently, Germany announced plans to shut down their nuclear plants and replace them with natural gas. Their natural gas use will go up—but they have very little. Most of Europe’s natural gas comes from Russia—which wields the supply like a weapon. Shale gas discoveries in Poland and the Ukraine have lowered prices. In an effort to maintain control of the market, Russia’s Gazprom is in support of France’s recent ban on hydraulic fracturing.

A potential EU-wide ban on fracking, coupled with rising demand for natural gas, could tighten the global market for something America has in abundance. Instead of replacing foreign oil with American natural gas and borrowing more money for new subsidies, we should limit our exposure to price volatility and lower transportation costs by encouraging exploration and extraction of our own oil. Natural gas is great for the generation of electricity and a growing population requires more energy. America’s, Europe’s, China’s and India’s needs will expand. If natural gas-powered vehicles can survive in an open market—fabulous! But let’s not borrow trouble by forcing ideas that don’t naturally work. Instead, let’s take a step to solve our economic crisis and sell something we have that everyone else wants. America could be baaack—on solid ground, with news jobs and foreign money pouring in to purchase our natural gas!

Marita Noon is the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). Together they work to educate the public and influence policy makers regarding energy, its role in freedom, and the American way of life. Combining energy, news, politics, and, the environment through public events, speaking engagements, and media, the organizations’ combined efforts serve as America’s voice for energy.

Green Building Council pushes to maintain 2009 NMECC (New Mexico Energy Conservation Code)

Posted on 06. Jun, 2011 by Administrator in Energy/Environment

The US Green Building Council New Mexico Chapter strongly urges the CIC to maintain the 2009 New Mexico Energy Conservation Code. The 2009 IECC is a template, intended to be used as a base for the creation of a locally appropriate code. For this reason, CIC undertook a two-year open, democratic process to develop a code that works for New Mexico.  A diverse group of professionals from around the state volunteered their time, analyzing the template in an open process of comment and revision. Their discussion, negotiation and compromise developed the current New Mexico Energy Conservation Code, a regional overlay for the template that responds to the specific climate and building techniques unique to our state. Reverting to the 2009 IECC template does not make sense for New Mexico.

Fear of challenging economic circumstances should also not be the basis to retreat from the New Mexico-specific energy saving code. The New Mexico Energy Conservation Code offers opportunity for our communities to lead by example. The long term benefits include reduced building operating costs and cleaner, more comfortable, indoor environments for building occupants. These benefits accrue to our entire community: our natural environment, our children, our families, our employees, ourselves.  The financial savings help offset the pending utility rate increases and allow New Mexicans to choose how they spend their hard-earned money.

We accept the imperfections of a document generated by open and honest discussion about the effects of the code. Rather than make hasty changes behind closed doors, we urge the CIC to accept the open process for revision and improvement already embedded in the code. We challenge opponents of maintaining New Mexico’s Energy Conservation Code to identify specific technical problems and present solutions through the existing revision process.

Other regions and states are preparing to adopt more progressive codes, Maryland, California, Washington, New Jersey, Oregon, New York and Vermont. New national codes are already pushing beyond IECC 2009, to IECC 2012. . As you can see, NMECC is not the most progressive energy

conservation code and it will quickly require ongoing evaluation and updating to remain current. USGBC NM offers its expertise to provide technical assistance and to help assist small businesses develop energy models and reach code compliance. The USGBC—NM remains committed to changing the built environment within a generation – this requires building codes like the NMECC 2009, which require increased building performance and energy savings for our communities.

For more information, contact the organization at: execdirector@usgbcnm.org.

 

Waterworks Survey Conducted

Posted on 06. Jun, 2011 by Administrator in Energy/Environment

By Nancy Gordon and Kathy Whiteman — What do you know about the historic Silver City Waterworks?  Do you know where Silver City’s water comes from today? Students from Aldo Leopold High School and staff from the Gila Conservation Education Center recently conducted a phone survey to find out how many people could answer these questions. The Silver City Waterworks was established in 1887 and provided the Town’s first municipal water supply.  Located on Little Walnut Road, the stone building had rooms for the pumping equipment and a 2-story residence for the engineer.  It was listed on the National Register of Historic Places in 1984.

Despite numerous studies, plans and attempts to secure large grants over the past 25 years, little has been done to rehabilitate the building other than emergency roof repairs.  The cost of the total rehabilitation is now estimated at about $1 million. In March of this year, the Town of Silver City was awarded a grant from the Freeport McMoran Copper and Gold Foundation which has re-energized efforts to restore the Waterworks building.  The grant, for $39,200 with a $35,140 in-kind match, will pay for surveying, grading and drainage plans, structural engineering and historic architecture assessments, masonry repair as a community service learning project, evaluation and outreach.  Nancy Gordon, a volunteer for the Town, is managing the project.

The Gila Conservation Education Center (GCEC) was contracted to conduct a pre- and post-project evaluation to assess the effectiveness of outreach efforts related to this project.  Kathy Whiteman, GCEC Director, arranged for Aldo Leopold High School students in Harry Brown’s Year 4 Interactive Mathematics class to participate in data collection.  During March and April, students Milagre Coates, Camille Dalton, Caleb Kalisher, Miriel Manning and Dhante Stroud phoned 142 Silver City residents and had 70 responses.  In May, GCEC AmeriCorps members and three Youth Conservation Corps interns made 50 more contacts.  A surprisingly high proportion of people contacted, 45 percent, knew something about the Waterworks, either what it was historically, or where it was located.  One person guessed that it was on Gold Street and another said downtown.

More than half of respondents knew where Silver City derived its municipal water, correctly citing the source as wells, groundwater, or underground aquifers – but when asked where the Town’s wells were, only three people mentioned Franks wellfield and only one knew that the Town had other wells.  One person thought the Town’s water supply came from Lake Roberts.

The Town of Silver City obtains its municipal water from the Franks and Woodward wellfields and the Anderson and Gabby Hayes wells, all located southwest of Silver City between highways 180 and 90.  Some of these wells are over 1000 feet deep.  Future water demands for the Town are uncertain, but one study indicates that the Town’s wells will be capable of meeting domestic needs (under a 1.45 percent population growth rate) for the next 40 years.  However, well levels are declining and additional sources of water will eventually be needed.  The Waterworks, once the Town’s only water source, has water rights of 18 acre-feet per year compared to the Town’s current water use of about 2,800 acre-feet per year.  It was disconnected from the Town’s water system at some point (the date is uncertain), although it was used as a non-potable water supply (e.g. for construction) up until the year 2000.  Rehabilitation of the Waterworks building and well will allow the facility to play a small part in Silver City’s water future, by providing landscaping water on-site and at the Silva Creek Botanical Garden.  GCEC will be giving presentations on the Silver City Waterworks until the end of the year, at which time a post-project evaluation survey will be conducted.  The same questions will be asked – and if you’ve read this article, you’ll have all the answers.

If you would like to schedule a presentation on the Waterworks for your organization, or are interested in participating in September’s mortar repair project, please contact Nancy Gordon at 538-3969 or aqua@zianet.com.

Our Shrinking Manufacturing Sector

Posted on 31. May, 2011 by Administrator in Economy

Part I

It’s almost impossible to walk through a major ‘big box’ store these days and not feel like Ichabod Crane riding through the dense trees of Sleepy Hollow. Surrounded by thousands of products now stamped with the ‘Made in China’ label, the feeling is one of profound loss. America has awakened to a brutal new reality. A one-time enemy turned trading partner has now become our largest creditor and one that is pulling the levers of our financial system through its investments in – and stranglehold on – the U.S. economy.

Back in the 80s, the Japanese were the bogeymen, threatening to take over New York City with offers to purchase Rockefeller Center (and other prime real estate). I was frequently asked then if I thought this was a dangerous development. My answer was, “I’d rather have foreign ownership of real estate than world domination of the currency or bond markets. What would the Japanese do if they ran into cash problems? Pack up their real estate and take it with them?” That was then when we still made things at home and sold them abroad.

The 90s changed all that with the rapid growth of the high-tech sector that sucked investment money from old-line manufacturing companies and put it into the stock market. Many U.S. manufacturers struggled to stay profitable (and protect their share values) by moving huge production volume off-shore where labor rates were lower and where foreign governments rolled out the red carpet for them in industrial parks across southern China and southeast Asia.

Back then everybody was making money (not unlike the late 1920s), and it seemed that by cleverly off-shoring production, manufacturers would be able to compete with the whiz kids of Silicon Valley and their growing dot com companies.  The trouble was that American companies were not taking their new gains made from lower production costs and re-investing them in newer technology (though their foreign partners, the contract manufacturers, did) while all that off-shore manufacturing was going on. To make matters worse, their stock prices were not rising as fast as those of the new-tech service sector, so many invested there instead.  Any new products developed were developed with a view towards overseas manufacture, thereby perpetuating the vicious circle of dependency.

At the same time, Federal tax loopholes made it more attractive for companies to move profits to tax safe-havens in a whole new set of foreign countries rather than bring them home! Neither the Feds nor the private sector thought that there would be a day of reckoning when “America’s chickens (failed investment and manufacturing strategies) would come home to roost.”  All operated on the assumption that our GDP and disposable income growth rates would continue unabated.  We thought we were on a journey towards prosperity without suspecting for a moment that what we were really doing was insuring the demise of our generations-old manufacturing supremacy. By the time that realization set in, our options to reverse the trend disappeared. We were involved in expensive foreign wars that drained our treasury; bad law-making that grew our deficits and indebtedness; and our companies began down-sizing American workers instead of reducing their foreign workforces or cancelling production contracts, overseas.

To be fair, these corporate decisions were really ‘no-brainers,’ because American consumers were used to paying low prices for their goods (and were reluctant to accept higher prices no matter where the goods were produced) AND Federal tax laws gave companies little room or incentive to repatriate their profits. In Part II, we’ll talk about Free and Fair Traders and how seemingly competing interests moved America into a dependency on major foreign contract manufacturers. In Part III we’ll discuss how a product goes from being domestic to foreign and the consequences of those decisions.

Part II

In part I of this series, we discussed the events that led up to America’s fall from manufacturing grace, but the root cause of that fall is not only our tunnel vision regarding the dangers of too much off-shoring, but also our devotion to the notion of FREE TRADE.

For many free marketers and inveterate capitalists, free trade is more than a mantra; it is an economic way of corporate life that unshackles (some would say encourages) American companies to escape the laws of regulatory gravity and move about the world seeking the highest possible profit and the best deals.  At this point it’s important to draw a distinction between Free Traders and Fair Traders. Free Traders believe in a commercial world with few or no boundaries or encumbrances like tariffs and quotas. They believe in the free and unfettered movement of goods, services, capital and workers across international boundaries with minimal or no intervention from local, regional, national or international institutions. If all Free Traders wore t-shirts they would probably say, “Free Traders do it anywhere, anytime, with anybody.”

Free Traders are also aware of the historical baggage they carry from the days when oil and mineral cartels reigned supreme. They are used to hearing themselves called monopolists and capitalist pigs, but they cling steadfastly to their contention that world commerce could simply not function in a tightly regulated trading regimen. Despite that fact, they’ve allowed themselves to be controlled by international trade agreements and institutions like the GATT and the WTO. Fair Traders, on the other hand, subscribe to a different theory of world commerce, one that is constantly looking for a ‘level playing field’ where no one country gains economic advantage or hegemony over the other. The problem with this philosophy is that ‘fair’ is a subjective term that is more often defined by politics than economics. That’s why Fair Traders are always frustrated and spend an inordinate amount of time trying to rearrange and re-position the regulatory framework to equalize the opportunities.

Both Free and Fair Traders have their share of proponents and detractors, and their ideological purity is constantly under attack by market forces, well-heeled companies, lobbyists and legislators not to mention special interest groups. Trade Pragmatists make up the third group.  These are the realists, companies who understand the rules of global commercial engagement and who live within them while they work to change them to their advantage.  Trade Pragmatists are not patriotic. Their loyalties are to their shareholders, not their country of origin, and that’s why most of their time is spent in trying to shave a few dollars off the cost of their manufacturing and sheltering their profits. Their raison d’être is survival, preferably survival at a higher level. It is precisely these companies that comprised the vanguard of the off-shorers, joined later by the Free and Fair Traders to form the perfect storm that has led to vast unemployment and decimated opportunities for millions of American workers today.

Are they the only ones to blame?

The cartoon character Pogo said, “We have met the enemy and he is us.” Pogo was right; Americans are also to blame. That goes for organized labor, white collar workers and consumers. Had we voted with our feet and insisted on purchasing more goods made in the USA, we might not be in the situation we’re in. I believe that most Americans are reasonable people and when confronted with a purchasing decision that would save an American worker’s job or let it migrate overseas, they would choose to save one here. The problem is that the choice has not been ours to make. Corporations don’t survey their customers on where they would like their products manufactured, nor do they offer us a choice of the same products made in two different locations (one in the U.S. and one made overseas). It is basically a take it or leave it situation, and without an alternative we must take it. Part III will discuss how a product goes from the drawing board to the store shelves and what decisions can be made along the way to add value in the USA.

Part III

In parts I and II of this series we explored the root causes for America’s ‘off-shoring’ situation and the unemployment problems it created for our economy. Now we’ll look at the entire product development chain to get a better idea of where we can still add value. I have a friend (we’ll call him Leonard) who is an experienced industrial designer and manufacturer of a line of outdoor barbecue items. Leonard has been manufacturing his assortment of products (Leonard’s Line) in China for about eight years. Like other companies he didn’t start out that way. For many years, Leonard’s Line was designed, manufactured and marketed by U.S. workers working for U.S. companies until one day, he got a call from a major manufacturer that was private-labeling his line and selling it to a nationally-recognized discount retailer. The manufacturer started to pressure Leonard on price and on delivery times. After calling his usual contract manufacturers and asking if they could make some product modifications that would cut some product costs thereby bringing the products into the price range of the manufacturer AND meet the stringent delivery times, he was told, ‘no,’ they couldn’t.

Leonard got nervous. If he botched this order it could be his last with the nationally-recognized manufacturer and even harm his reputation with the major retailer (whom he was courting with other products under his own label).  He could lose immediate sales and long-term ones as well. Leonard did what hundreds of other American manufacturers would have done in a similar situation… he started looking abroad for a contract manufacturer. China was at the top of his list, and he made some inquiries and soon found himself on a plane headed for an industrial park there. A deal was worked out and Leonard’s Line became Leonard’s International Line. After solving some thorny quality control and other manufacturing problems over a period of several years, Leonard’s Line has now become a 100% out-sourced assortment of products with average yearly gross sales in the millions to major manufacturers and major retailers.

Where’s the value added?

Aside from the product design (which Leonard still does, himself), all other value is added in China. This includes: product prototyping, manufacturing, packaging design and fabrication, point of sales displays, brochure design and printing, inventorying and shipping.  All but a tiny percentage of the total costs associated with producing Leonard’s Line are added overseas, leaving no value for American workers to add until the products land in U.S. container ports where they are off-loaded to American trucks and begin their journey to the retailers’ shelves.

When discussing the situation, Leonard feels no guilt about off-shoring his Line. He explained that, “If I hadn’t done so (gone offshore), I would have found myself out in the cold – just another rejected company by one of America’s largest retailers. Believe me, I love my country, but last time I checked there was nothing patriotic about going bankrupt. Maybe someday I’ll design a line of exclusively American-made items, but I have my doubts. Most of the quality machine shops and efficient low-to-medium volume factories have closed their doors, and even if I opened my own facility I don’t know if I could find the skilled personnel to run it!”

Leonard’s story is typical of many American entrepreneurs who’ve found themselves dependent on the price points of major retailers and a market too used to those prices, and while there appears to be a new wave of companies that are selling direct, via the internet, potential customers still want to ‘kick the tires’ and handle the products before opening their wallets.  One thing is for certain, the manufacturing paradigm has shifted, and if America’s companies want to compete they’re going to have to do it without much help from their government – or from America’s retailers. We will never be able to completely go back to the way things were. Our only hope is to make American companies, consumers and the government aware of the consequences of doing nothing.

Stephan Helgesen is a former diplomat who served in 24 countries over a 25 year period and former Director of the State of NM Office of Science and Technology. Today, he owns his own high-tech consulting company and is also the Honorary Consul for Germany in New Mexico. He can be reached at: helgesen@2ndopinionmarketing.com.

 

Where We Have Hope

Posted on 26. May, 2011 by Administrator in Education

It is such a pleasure to have the opportunity to write and contribute to the amazing conversations going on around the world on the welfare of orphans and vulnerable children.

The Goromonzi Project Inc is a 501c3 (tax deductible charity) that was founded by a New Mexican resident, Janet Shaw. Shaw who is originally from Zimbabwe was visiting the Southern African country and she came across numbers of children who were not in school. On enquiring further why these children were out of school she was shocked to learn that these children were orphans and had no one to pay their school fees. On her return to Albuquerque she immediately got some friends together and this marked the birth of The Goromonzi Project. Over the past four years TGP has assisted over 500 orphans and vulnerable children to access education, food, health and material provisions. This number can increase with your contribution. These children are no different from those in New Mexico it is only that their life circumstances are different.

TGP is currently running a program that is increasing access to early education for orphans and vulnerable children. Through this program we have managed to secure support for the renovation and equipping of four rural preschools, providing a breakfast meal for over 400 children, increasing access to health service provision for the same number of children and engaging grandparents and guardians in conversations on revitalizing community safety nets for orphans and vulnerable children. This work has had a lot of impact on the communities being served and a lot of children are getting hope for a better future. TGP works to empower the communities to take responsibility and ownership of the programs. In this way there is sustainability in the work we do and that the communities are empowered to continue caring for their children after we have exited that community. In our work over the years we have learnt that in identifying community strengths and building upon them, successful interventions in orphan care are realized. It is important to realize that these communities were looking after children since time immemorial but what changed was their economic situation, their way of life and the political system within the community and country. The community strengths therefore help us identify the mechanisms used traditionally for social protection.

Education is one of those mechanisms that can be used to enhance the social protection of children. TGP through the early learning centers is able to reach out to young orphans and vulnerable children to give them an opportunity to play and learn at the same time. Research has shown that once children are involved in the learning system they grow up to become responsible citizens who harness the opportunities that are presented to them. The children in Zimbabwe have not been able to get those opportunities because of them who are orphans do not have anyone to pay the required fees. TGP has in this case engaged the communities to make sure that the children benefit from early learning through the preschool program. Once the children are in school, as they grow their interest in education grows and hence they will stay within the school system and grow to be responsible citizens.

Once educated these children are able to live a life full of possibilities and have hope for a secure and brighter future. You too can give hope to these children, visit our website on www.goromonziproject.org or email me at patrick@goromonziproject.org to learn how you can contribute. Over the next couple of weeks I will be writing in this column about the issues affecting children in Zimbabwe and how we can all be involved. I also would love to have feedback from you on this and other issues. Happy reading, until next time!

Patrick Makokoro
Director – Goromonzi Project Zimbabwe, Africa

“All we are saying is give the truth – and your union – a chance.”

Posted on 26. May, 2011 by Administrator in Economy

Back in 1969, John Lennon famously wrote, “All we are saying is give peace a chance.” Well, here in May 2011, while labor peace is not always at hand, maybe we can at least give labor truth a chance.  Unfortunately, telling the truth seems to be increasingly difficult for the CEOs of our multinational corporations when talking about “Making It In America” and saving and creating American jobs.  And Exhibit A right now is Jim McNerney, who is the Chairman, President and CEO of the Boeing Company.

The reason I am picking on Mr. McNerney is that he is defending Boeing’s decision to retaliate against its union workforce in Everett, Washington, by moving thousands of jobs to a non-union location in South Carolina, with statements that are among the most misleading and disingenuous by a major American CEO ever.  And I’ve been around long enough to have heard a lot of statements by a lot of big company CEOs.  Compounding my dismay with Mr. McNerney is that he also happens to currently hold a very senior economic advisory position in the Obama administration as head of the President’s “Export Council.”  He holds this position of crucial influence despite the fact that for years he’s been exporting thousands of his American manufacturing jobs to Mexico and China.

The facts of this dispute are pretty simple.

As reported by Hal Weitzman and Jeremy Lemer in the Financial Times (5-8-11), “nineteen [Republican] Senators are threatening to block President Barack Obama’s two appointments to the National Labor Relations Board…after the organisation filed a complaint last month against Boeing that seeks to force the manufacturer to transfer 787 production from the non-union factory in South Carolina to its unionised facilities in the Seattle region.”  The NLRB believes that Boeing selected South Carolina – a right-to-work state – purely in retaliation for a strike in 2008 at the Everett facility.  To attack the NLRB’s conclusion, Mr. McNerney, in a preferentially placed op-ed in the Wall Street Journal (“Boeing Is Pro-Growth, Not Anti-Union”, 5-11-11), said the following (the underscoring is mine):

“We viewed Everett as an attractive option and engaged voluntarily in talks with union officials to see if we could make the business case work.  Among the considerations we sought were a long-term ‘no-strike clause’.  “Despite months of effort…union leaders couldn’t meet expectations on our key issues. “We hold no animus toward union members, and we have never sought to threaten or punish them for exercising their rights, as the NLRB claims.  About 40% of our 155,000 U.S. employees are represented by unions – a ratio unchanged since 2003.”

Now, for the truth:

  • The most important right any union has is the right to strike.  Without this right, what real opportunity does it have to ensure fair and balanced treatment for workers?  Thus it is at once irresponsible for McNerney to make this unreasonable demand and disingenuous for him to then say that union leaders couldn’t meet his “expectations on key issues.”  As Christopher Corson, General Counsel of the International Association of Machinists and Aerospace Workers, wrote on May 9 (“Less Rhetoric and More of the Law in the NLRB’s Boeing Action”, Huffington Post), “In every state in our nation, the law provides important protections for individual workers when they act together to improve their work lives for themselves and their families…If retaliation were permitted, there would be no protection.”
  • McNerney says that “Boeing never sought to threaten or punish [workers] for exercising their rights.”  Yet the NLRB based its finding on the very specific comment by Boeing executives that “avoiding strikes was a central reason for the decision.”
  • Yes, “40% of Boeing’s [overall] U.S. employees” today may be “represented by unions”, and yes, this ratio may be “unchanged since 2003.”  However, in the late‘60s when I was in college in Seattle and working nights as a Sheetmetal Workers journeyman, the number of Machinists and other union members working for Boeing in the greater Seattle-Everett area was around 22,000, and by the year 2000 it was around 50,000.  Now just a decade later, with McNerney as CEO for the last five years, the number of union members at Boeing in the Pacific Northwest has shrunk to around 35,000, with at least 20,000 of these jobs having moved to China.
  • In just 15 years or so, using an initiative benignly called “systems integration mode of production” which entails providing foreign suppliers and overseas subsidiaries with massive amounts of business knowledge, management practices, training and other intangible exports, Boeing has gone from producing nearly 100% of its commercial aircraft and parts in America to today producing only a small fraction of that work here.  The workhorse 727 airframe, launched in 1963, had just a 2% foreign content; the 777 airframe, launched in 1995, has about 30% foreign content; the new 787 Dreamliner, officially launching this year, will have nearly 70% of its manufacturing content coming from foreign sources, with workers in Everett accounting for only about 4% of each aircraft’s value.  This massive transfer by Boeing, and by almost every other American corporation committed to off-shoring, of intellectual property that took decades to develop with internal investment and support from government-funded research laboratories will, with its massive ripple effects throughout our economy, ultimately be an even bigger ‘drain’ on America than even the direct off-shoring of millions of American jobs over the last 15 years.

Jim McNerney’s very public and cynical efforts, however, are just another egregious example of the broad opportunism that many American multinational corporation CEOs have embraced in their continuing efforts to offshore American jobs, cut the wages and benefits of the American workers whose jobs are not being shipped overseas, and, whenever they can, BUST UNIONS.  As reported by David Wessel (Wall Street Journal, 4-19-11), “U.S. multinational corporations, the big brand-name companies that employ a fifth of all American workers, have been hiring abroad while cutting back at home, sharpening the debate over globalization’s effect on the U.S. economy.”  According to the Commerce Department, these companies cut their work forces in the U.S. by 2.9 million during the last decade while increasing employment overseas by 2.4 million, which is a big shift from the ‘90s when they added 4.4 million jobs in the U.S. and 2.7 million abroad.  In just the year 2009, they cut 1.2 million, or 5.3%, of their workers in the U.S. but only 100,000, or 1.5%, of their workers abroad.  Three highlights:

  • Between 2005 and 2010, General Electric, the nation’s largest industrial conglomerate and #6 on the Fortune 500 list, cut 28,000 workers in the U.S. but only 1,000 workers overseas.  This notwithstanding that GE’s Chairman and CEO, Jeffrey Immelt, now heads President Obama’s “Council on Jobs and Competitiveness”, which is supposed to help create jobs in the United States and not ship them overseas.
  • Cisco Systems Inc., the Fortune #62 company that makes networking gear, has also been creating jobs much more rapidly overseas.  Over the past five years, it has added 21,350 employees overseas, but only 10,900 in the U.S.  At the beginning of the last decade, 26% of Cisco’s work force was overseas; today, around 46% is.
  • Oracle, the Fortune #96 company that makes business hardware and software, added twice as many workers overseas over the past five years as in the U.S.  At the beginning of the last decade, it, like Cisco, had many more workers at home than abroad; today, however, around 63% of its employees are located overseas.

McNerney and his fellow CEOs tout many global ‘differentials’ as the reasons why they’ve been economically ‘downgrading’ some jobs (with moves to South Carolina and other right-to-work states) and off-shoring others (to China and elsewhere).  Wessel further wrote that American multinationals repeatedly say in justification that it is the “combination of the U.S. tax code, the declining state of U.S. infrastructure, the quality of the country’s education system, and barriers to the immigration of skilled workers [that is] making the U.S. less attractive to multinationals.”   Yet it is these very multinationals which every day support and maintain these differentials by:

  • Fighting to preserve the corporate tax practices that favor overseas earnings and employees (read “The Tax Man Cometh – Just Not For Everybody”, Huffington Post, 4-12-11);
  • Resisting efforts to couple government infrastructure investments with ‘Made in America’ requirements that are no more demanding than every other member of the G-20 has for its own infrastructure investing;
  • Fighting the adoption of our own Manufacturing & Industrial Policy, which we need in order to compete with the mercantilist practices of our major trading partners, often by blaming the relatively poor state of American public school education, which, while of grave concern, has absolutely no correlation; and
  • Manipulating our immigration practices so that these companies can continue to hire employees from India, Taiwan and China at the expense of qualified American job seekers.

At the end of the day, as I noted earlier, what’s really going on here is a massive, nation-wide attempt to bust unions in order to further enrich our nation’s multinational corporations.  Yet this is happening at precisely the point in time when the United States needs millions more, not millions fewer, union jobs in order to stabilize our middle class. For our country to be ascendant again, American workers everywhere – at Boeing and hundreds of other major corporations – must be treated as the highly skilled, enormously productive and wealth-producing ‘assets’ they are.  We need more union-made quality goods to sell abroad and many more union paychecks producing fair incomes here at home if we are to grow ourselves out of the dismal ongoing jobless recovery we are experiencing.

Expanding union membership will be one of the surest signposts on the road back to a vibrant, consuming middle class, more income equality, and fairness in employment.  And when we have all of this again, along with fairer trade practices, our nation will prosper as it did for the half century before unfair globalization and union-busting practices began to run amok twenty or so years ago.

In all of our manufacturing industries – not just in aircraft manufacturing – we must ensure that American workers compete on level-playing fields.  Right now, however, our workers are forced to compete against foreign workers, many of whom work for American multinational corporations, who are the indirect beneficiaries of illegal subsidies, massive currency manipulation and shameful environmental practices that swamp any measure of true country ‘comparative advantage’.  All the while here at home, with very limited mobility in general but especially in this distressed economy, workers must confront the enormous power that multinational corporations’ almost unlimited geographic, capital and technology mobility gives them.

The members of America’s unions are skilled, resilient and tenacious.  They did not win the 40-hour work week, benefits and safer working conditions in one fell swoop.  These integral pathways and others to the middle class lifestyle – a lifestyle that is now being challenged in so many of our cities and towns – were hammered out over years of negotiations with very powerful corporations.  And sometimes these women and men had to strike to ensure fair dealing.  But in exchange for their skills, hard work and productivity, these unionized workers produce real wealth that’s been shared for generations across our entire economy and society.

I can’t envision a day when unions don’t represent the best path to fair and balanced dealing between companies and workers, for without union voices workers have little or no say in their future.  And no worker anywhere should have to work without organizing protections, which is why Jim McNerney’s and Boeing’s demand that Boeing workers now agree to “a long-term no-strike clause” is so obviously unfair.

Leo Hindery, Jr. is Chairman of the US Economy/Smart Globalization Initiative at the New America Foundation and a member of the Council on Foreign Relations.  Currently an investor in media companies, he is the former CEO of Tele-Communications, Inc. (TCI), Liberty Media and their successor AT&T Broadband.  He also serves on the Board of the Huffington Post Investigative Fund.

Apologize

Posted on 26. May, 2011 by Administrator in Politics

The hit song “Apologize” could become the theme song of the 2012 Republican Presidential campaign.  Mitt Romney won’t shed his “Romney-care” baggage through a simple apology. Instead he is embracing his controversial plan, claiming that he is no “flip-flopper.” While he is pulling strong poll numbers, pundits believe this one issue will make it tough for him to garner the support of conservatives and may cost him the nomination.

Likewise, Gingrich was thought to be a strong candidate with layers of people and policy carefully in place. Instead of catapulting to the top, as he likely expected with his May 11 announcement, he has been in the forefront of the news with his apology to Paul Ryan for his Sunday morning gaffe regarding the Ryan Plan. He has made several fumbled attempts to recover from this violation of Ronald Reagan’s famed “eleventh commandment,” but most cannot forgive him for sitting on the sofa with Nancy Pelosi and agreeing with her that “our country must take action to address climate change.” No worry. He has not asked for forgiveness and, in fact, refuses to apologize. As recently as a year ago, Gingrich claimed that he would still do a commercial, only this time with the spin that both conservatives and liberals should be prepared to stand on the same stage.

Adding to the “apologize” theme, Tim Pawlenty, who entered the race on May 24, differs from Gingrich. He has apologized for his climate-change support. As governor of Minnesota, he supported cap-and-trade legislation and agreed to participate in the multi-state Greenhouse Gas Reduction Accord—both aimed at reducing the hydrocarbon use then believed to cause global warming. Like Gingrich, back in 2008, Pawlenty was also featured in advertising from an environmental group supporting government involvement in stopping climate change. He urged Congress to “get moving” on the issue. Unlike Romney and Gingrich, he has apologized for decisions that seemed right at the time, but have become politically toxic among Republicans.  Now, he says, it was wrong. “It was a mistake, and I’m sorry.”

Setting himself apart even further, his formal announcement speech on Tuesday earned him the high praise of “downright amazing” from the Wall Street Journal. He pledged to phase out subsidies on ethanol—which was popularized to combat climate change.  WSJ political columnist John Fund said: “One of the immutable laws of modern American politics is that no candidate who wants to win the Iowa Presidential Caucuses can afford to oppose subsidies for ethanol. … By opposing ethanol despite the political risks, Mr. Pawlenty will also gain credibility to tackle other energy subsidies that drain the federal fisc to little good effect.”

It was a different political era in the mid-2000s. As TIME defines it, “Carbon regulation was not so verboten in the GOP just a few years ago.” Policies were drafted based on the then-accepted idea of man-made climate change. Apology accepted. But T-Paw needs to do more than apologize for his climate-change stance. He needs to renounce man-made global warming and government-imposed solutions. In doing so, he needs to apologize for the wake of his actions. In Minnesota, they are now trying to meet energy standards of 25% renewable energy by 2025 with un-economic wind turbines designed to provide clean, green, and free energy—which is really expensive (not to mention it destroys the serene and beautiful farming communities, property values, and lives).

Without a total renunciation, voters are left with the assumption that Pawlenty would force the same policies, Senator Bingaman has been promoting, on all of America. Such behavior is expected of green-beholden Democrats like President Obama, but to fare well in the GOP primaries, Pawlenty needs to assure voters of a true change-of-heart. In New Mexico, the major utility company is fighting the numbers to try to provide reliable and affordable electricity that meets the mandates passed under former Governor Richardson. No matter how they run the scenarios, the mandate-meeting modeling shows increased costs for ratepayers.

Like Richardson, Pawlenty has moved on. Today, neither has direct policy impact in their individual states; each has saddled ratepayers with higher energy costs. Richardson has been replaced by a governor, who is doing her best to reverse his policies. Pawlenty’s successor will likely continue to punish Minnesotans with the Next Generation Act of 2007 foisted on the people.  Minnesota and New Mexico are just two states with renewable energy standards. Many have realized the error of their ways and are working on reversing the hidden-tax mandates that raise energy costs and hurt all ratepayers, including the broken-budget cities and counties.

Mr. Pawlenty, Americans are forgiving people—but you have to ask. We know you can say: “I’m sorry.” Can you renounce the man-made climate-change scheme, apologize for the policies you put in place that are hurting the people of Minnesota, and assure your potential voters that as President, you will not pick and choose—through mandates and subsidies—which energy sources we the people can use? It’s not “too late to apologize.”

Known as the voice for energy, Marita Noon is the Executive Director at Energy Makes America Great Inc. the advocacy arm of the Citizens’ Alliance for Responsible Energy—working to educate the public and influence policy makers regarding energy, its role in freedom and the American way of life. She is a popular speaker, a frequent guest on television and radio, her commentaries have been published in newspapers, blogs and websites nationwide. For more information, visit www.EnergyMakesAmericaGreat.org.

Germany and the USA: Shared Visions

Posted on 23. May, 2011 by Administrator in Social/Cultural

It is said that fully 25% of all Americans can trace their heritage back to Germany. That figure has dipped a bit only because of increased immigration from other countries, but it stands out as powerful reminder that our collective ‘Germanness’ is well-earned. There are myths that abound as well. One of them is that the German language almost became the legal language of the United States. History tells a different story.

On January 13, 1795, Congress considered a proposal, not to give the German language any official status, but merely to print the federal laws in German as well as English. During the debate, a motion to adjourn failed by one vote. The final vote rejecting the translation of federal laws, which took place one month later, is not recorded. It seems that the translation proposal originated as a petition to Congress on March 20, 1794, from a group of Germans living in Augusta, Virginia.

Past is prologue

The German/American relationship is full of exciting moments, and some urban legends like the ‘German language vote’ have become fodder for the growth of a mythology about our two countries, but as we all know, myths are not the stuff true relationships are made of. Facts are another story. Putting aside the long and proud history of Germany and the two World Wars that tarnished that pride for several generations of young and old Germans alike, let’s focus on our shared values. The immigrant Germans that came to our shores in the 18th and 19th centuries were hard-working, God-fearing people. Many were farmers, but thousands had tradesmen’s skills, and they plied them across our great land. Stonemasons, carpenters and others built our courthouses and public buildings (a trip to the German settlements like Fredericksburg in our neighboring state of Texas will prove that).

They brought with them their love and zest for life as well. Scratch the surface of a German and more than likely you will find a person endowed with a love of food, dance, music and art. Their mercantile skills led them into businesses as diverse as purveyors of goods, grain and other items needed by America’s settlers. If we fast forward to the 20th century in the years after WWII and the Marshall Plan, we saw a country that was intent on rebuilding itself as it shifted into high gear. To be fair, the decimation of Germany’s old-world manufacturing and the support of the U.S. helped them implement newer technology, enabling them to leapfrog over many nations stuck with older manufacturing sectors.

They embarked on a full-scale redefinition and retooling of their manufacturing sector. From steel production to capital goods (the machines that make the machines) and the associated technology that went with it like Computer Numerical Controlled (CNC) technology helped Germany lead the way to more efficient production of not only capital goods, but also the downstream products that evolved from them. These gains enabled Germany’s premier auto companies like Mercedes, BMW, Volkswagen and many other lesser-known non-automotive firms find willing buyers for their high-quality products.

Workers and unions: past and present

Germans have always supported their own industry (unlike the U.S. that has seemed to put price and the profit margin over ‘buying local’). Trade unionism, which was an outgrowth of the old guild system in Germany, worked well for them. The unique form of German worker/owner cooperation, ‘mitbestimmung’ (joint decision-making), in the factories helped turn workers into stakeholders as many key decisions of the German corporation were vetted with workers’ representatives. This worker participation has no relationship to the Communist model where the corporations were owned and operated by the people. It was, however, a daring step on the part of German firms to bring the unions and workers into the boardroom so they could see how the ‘sausage was made.’ I’m convinced that it prevented more strikes and labor unrest from happening and helped German industry plan and execute its plans better.

While German industry was finding its footing in the post-war world, German society was experiencing its share of prosperity but also moving towards a modified form of what Americans would call, ‘socialism.’ The Germans would probably prefer to call their decisions to provide healthcare, unemployment insurance, education stipends and other forms of social safety net investments as much-needed insurance against the kind of vulnerabilities that they faced before WWII in the thirties and after. The architects of these social contracts and the politicians that voted for them were themselves witnesses to the dire economic conditions of pre- and post war Germany. They were bound and determined not to put their country at that level of risk ever again.

Immigration problems?

Ironically, Germany’s success in the sixties led to a shortage of workers in the seventies, so it looked abroad and ‘imported’ workers from Turkey, Pakistan and elsewhere. It modified its immigration laws to allow for a more liberal policy that brought many unskilled laborers (so-called gastarbeiter or guest workers) into the country and gave them special status that eventually allowed them to stay on as permanent residents. That would turn into a challenge for them, later, however. Since the formation of the Hanseatic League, Germany has always had its eye on foreign markets. Exporting has been an integral part of Germany’s business plan for centuries, and they’ve been quite good at it, establishing trading houses, distributorships and agencies for their products around the world. A joke was, if you walked into a bar in some far-flung corner of the world, you would encounter three foreigners: a Dane, a Dutchman and a German – and they would all have one thing in common (besides being able to speak German) – an abiding interest in the local market.

What do we have in common with the Germans and what can we learn from them?

Our two countries were created in large part from ‘sweat equity’ and by an abiding belief in our ability to improve on the past and seize the opportunities of the future by learning from our successes and failures. Americans can learn much from the German example and from the Germans themselves. We need a viable industrial plan that invests in new technology and new industries. We need a strong partnership with our workers, one that promotes openness and a stakeholder mentality. We must look outward to new export markets and the new opportunities for growth that comes from that effort. We need to create our own unique brand of ‘safety net’ that protects us from catastrophic illness and that trains or re-trains us in the skills we need to compete in the new world economy. We must also be flexible and forward-thinking about our immigration policy, realizing that cheap labor is not always good labor.

We must begin to bring back outsourced jobs with the carrot not the stick, AND we must learn to buy our own products, backed by the realization that exporting dollars is not the way to achieve fiscal stability or security. We must save more, and our government must spend less more wisely. German society is changing, too. It has been hit hard by the world economic downturn. While its companies are prominent in many foreign markets, Germany is part of a culturally and financially diverse mosaic called the European Union with plenty of have-nots. It knows that not everybody can afford the most expensive products, and it’s doing its best to match its products to the market. Despite that fact, somewhere in every German is a little voice that whispers, “We must never be too poor to buy anything cheap.” Maybe that’s the lesson we all need to learn when it comes to valuing each other as well.

Stephan Helgesen is a former U.S. diplomat who lived and worked in Germany. He is also the Honorary Consul for Germany in New Mexico and is working on a project called ‘IQ New Mexico’ that is designed to raise the ‘Internationality Quotient’ (profile of New Mexico) among foreign companies and governments. He can be reached at: stephanhelgesen@cs.com.

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