|
TRANSCRIPT
Dr. Pat Choate
on Conservative Roundtable with Howard Phillips
February 25, 2009
(Watch the video here)
HOWARD PHILLIPS: I’m Howard Phillips, Chairman of The Conservative Caucus, a non-profit, non-partisan, public policy action organization which sponsors Conservative Roundtable, now being seen from coast-to-coast on public access stations.
We are privileged to have as our guest a man whom I admire greatly and who is extremely knowledgeable about some of the most important things facing our country, particularly when it comes to issues such as trade and manufacturing. For those of you who follow politics, let me remind you that my guest, Dr. Pat Choate, was a candidate for Vice President of the United States on Ross Perot’s ticket in 1996 – is that the correct year? (PC: Yes.) – and Ross Perot could not have picked a better man to do that because, if anyone understands the manufacturing challenges, the trade challenges facing the United States of America, it is my dear friend, Pat Choate.
Pat, what is happening to manufacturing in America? We are losing it!
DR. PAT CHOATE: Well, basically what has happened is we set up a dynamic, beginning with the NAFTA agreement, Howard, that encourages companies to leave America. We have set up a situation where we are forcing companies, and we are forcing American workers to compete against “any wage” labor of China. We are in a situation in which even the Mexicans can’t compete against the Chinese. It is below the Mexican average labor wage, if you can believe this. And our government encourages us through a variety of measures – we even have in the Department of Commerce who will give lessons to people on how to ship their companies, and ship their productions, to China and other countries.
HOWARD PHILLIPS: And, of course, a lot of this relates to our fiscal profligacy. We have become increasingly dependent on Communist China because we have overspent in the Federal budget, we have a huge debt, and we have to go as beggars (PC: That’s right) to countries such as Red China to bail us out. Recently, Hillary Rodham Clinton was over there and, instead of talking about their one-child policy and other human rights abuses, the horrible way they treat women and others, she basically said “Here’s my tin cup. We’re still a good investment. Buy our bonds. Give us money.” They have, what, 31% of our debt?
DR. PAT CHOATE: Yes. It’s a Faustian bargain that we’ve made so that we can continue to run these enormous deficits. We’ve said to the Chinese, we need to borrow from your Central Bank – this is not from Chinese as such – we’re borrowing from the Chinese Central Bank these massive amounts of money. We’ve done the same thing with Japan and South Korea and Taiwan – but primarily with China. In exchange for that, we will say or do nothing as you take away our industry.
And, of course, our industry prostitutes themselves: they will leave the communities here, they will leave the jobs, they will go to China, they will take the tax subsidies, they will mistreat the workers there as well. At one level it is deplorable, but, at another level, you look at American companies – if they do not do this, their competitors will. So their competitors will then just wipe them out. So what we see is one industry after another in this country gone. We see machine tools gone, consumer electronics gone, textiles gone, apparel gone – fundamentally, the way you can count what we have lost is to go into a Walmart store and take a look. Seventy percent of their goods come from China.
These are lost jobs. This is lost revenue inside the U.S. One of the things that disturbs me is in this economic stimulus program that the President has put together, and the Congress has approved, is they do not do a single thing about trade. They just say that’s “protectionist” and we are not going to touch it.
HOWARD PHILLIPS: And, of course, Obama, tragically, has flipped. He was a critic of NAFTA, said we need to negotiate it, and then, he was recently in Canada and said “Fellows, don’t worry, we are not going to mess your deal.”
DR. PAT CHOATE: People in organized labor are very upset with Obama, as they rightfully should be, because, in states such as Indiana and Ohio, he went out and promised to renegotiate NAFTA – and NAFTA merits renegotiation. There are so many things in that pact and these other pacts that are so discriminatory against American companies and American workers, and now he’s refusing to do it.
HOWARD PHILLIPS: Why the flipflop? Why do they always flip?
DR. PAT CHOATE: I think they get trapped by this ideology of free trade. They really do think that the Depression was caused by the Smoot-Hawley Act [HP: which is one of the greatest myths in American history] in [earnest ?]. You know, one of the things you get into in the Smoot-Hawley thing is the beginning of the Great Depression was a financial panic that began in late 1929. Smoot-Hawley did not take effect until a year later. How could something that took effect a year later be the cause? It wasn’t the cause.
HOWARD PHILLIPS: Our discussion about NAFTA and trade and China relates to something on which you and I are both working. You and I are both fighting the so-called NAFTA Superhighway; we are both fighting the North American Union – and one of the reasons for the NAFTA Superhighway is to speed goods from Communist China into the United States by way of a Mexican port on the Pacific into our heartland and up through the spine of America so that their slave labor and low-wage labor goods can be more readily marketed.
DR. PAT CHOATE: When you take a look at a map, you can see exactly what’s happening. Here is the Mexican port, massive port, that is being built [HP: Lazaro Cardenas] and then you see the rails and the highways across Mexico coming into south Texas, and then you see Interstate Highway I-35 running straight up through San Antonio, Austin, Dallas-Ft. Worth, Oklahoma City, up to Kansas City [HP: and Kansas City, it has become Mexican “territoraligus” – that is controlled by the Mexican government in the heart of the United States] and you say to yourself, what were these legislators, what was this President seeing here – when compared to cities ____ into Canada, and goes over to Chicago and to Detroit.
In Texas, it is almost a near political revolution underway there. This highway would be built as a toll road, the toll road would be owned by a firm out of Spain (Cintra), it would take a thousand feet-wide corridor through what is the [blackland?] region which is probably the most productive region in the United States [HP: all kinds of private property complications] ranches, farms, et cetera. It will take 145 acres of property – of land – for every mile that is built. One of the things that they are proposing in this toll road, Howard, is you might have your farm cut in two, then you would have to go down ten miles with your equipment to get around to the other side. If that isn’t a “taking” I don’t know what a “taking” is.
And then, the state of Texas has given it to a Spanish firm, a foreign firm that will be able to raise tolls as they basically wish. From Austin to Dallas – 190 miles – it will cost something like $45 to $50 in tolls to make the run.
HOWARD PHILLIPS: From Austin to Dallas. Unbelievable. And, of course, another dimension of this is the payoff developing in Mexico. Mexico is a country that is out-of-control. Drug lords are beheading people, they’re kidnapping people, they’re murdering police chiefs – and, if you look at El Paso on one side and Ciudad Juarez on the other side, it’s like two different worlds. Instead of having our troops in Iraq, we need to put them on the border with Mexico. Right now, you’ve got in Phoenix, a record number of kidnappings because of [PC: ________] ________, because of the spillover from the crime in Mexico.
DR. PAT CHOATE: One of the great opportunities that we lost in this economic stimulus program, was for the Congress and the administration to put up the money to put up that fence, finish that fence, all the way across two thousand miles. We’re really talking about – to do a real fence – somewhere in the neighborhood of $2 - $2.5 billion.
I went to Israel last April and toured that country – 400+ miles – it’s fantastic. No one gets across it. It is something that everyone understands that you can’t surmount it – people don’t challenge it, so you actually save lives in that. We would save hundreds of lives every year of people coming across the desert, dehydrating and dying – and yet we have this politics that says “oh, we’ll let a million-plus people come in through our southern borders, we’ll look the other way on the security danger that that brings with them”. This was one of the real gaps, one of the real opportunities that were lost.
We are going to wind up with another stimulus program because this one is not going to work in my mind’s eye. When we do that next one, we should insist that that fence be there, that we control illegal immigration coming across it, that we do everything that we can to stop the intrusion into the United States of these drug wars that are tearing Mexico apart.
HOWARD PHILLIPS: We’re going to take a break, Pat. We’ve got a lot more to talk about. When we come back, I’d like to get your thoughts on what we can do to restore America as the manufacturing capital of the world. Stay with us. Our distinguished guest is Dr. Pat Choate. We’ll be right back.
HOWARD PHILLIPS: Welcome back. I’m Howard Phillips with our guest Dr. Pat Choate.
Pat, let’s talk a bit about NAFTA. What has been the real impact of NAFTA on the United States, on Canada, and on Mexico. As everyone knows, it is a tripartite deal. In my view, totally unconstitutional because Article I, Section 8 says “Congress shall regulate commerce with foreign nations” instead of giving a bunch of bureaucrats a chance to regulate our commerce.
DR. PAT CHOATE: Congress, in 1993, turned that to the Executive Branch – they gave their power to the Executive Branch. [HP: Another way they did it was with “fast track” saying that we forfeit the right to amend any piece of trade legislation.] And, that we’ll take it up within 45 days, it will take precedent, and they agreed with the Senate – this is the only piece of legislation – the Senate agreed not to have debate and filibuster. Amazing, amazing. [HP: They said it wasn’t a treaty.] That’s right. [HP: Congress has abdicated. But, go ahead.]
There are several things it has done. The first thing that it did is that, by creating this openness and by taking 65 categories of occupations, it also was an immigration treaty, so we have seen a massive influx of people from Mexico, both legally and illegally. [HP: How was it an immigration treaty? Explain that.] Basically, it had 65 categories of professions – from psychiatrists, doctors, economists, and others – that had the free right to practice and come inside the United States as though they were in Mexico. We established the same thing with Canada. [HP: H1b?] No, it was a special NAFTA provision.
The second thing that happened is the NAFTA model became the model for a series of other trade agreements, the most important of which was breaking China into the World Trade Organization. Once we did that, what we, in effect, did was create the dynamic in which Mexico was competing with China to sell goods in the United States. So, suddenly, many of the factories that moved to Mexico because they had a preferred access, moved to China. The NAFTA [generalist ?] China agreement decimated American – not only American, but Mexican manufacturing. We now have a million-plus people from Mexico coming to the United States illegally, largely because they have been wiped out on their jobs.
The other thing that we did was we made it easy for American corn producers – the Archer-Midland-Daniels and the other giant, Cargill – to sell corn into Mexico, something that has been prohibited. [HP: destroying Mexican agriculture] We put off the land 10 million Mexican peasant farmers – there were no jobs for them in southern Mexico, Mexico City, they came north, there’s no jobs there. Again that’s the source of illegal immigration into the United States. By opening the border, we made it easier for drugs to come into this country, so Mexico has become the main route of drugs into the United States.
HOWARD PHILLIPS: I know everything you are saying is factually accurate. Why have we been unable to kill this in Congress, or at the White House?
DR. PAT CHOATE: Basically, we are unable to kill this because we have a large number of companies that are making great profits by producing goods and bringing them into the United States. Half the goods that come into the United States from China are owned by American companies. That’s American companies that have moved to China.
These are the companies that the moment anyone says “Let’s talk about taking care of American workers; let’s talk about American community” – any politician who steps up and speaks to that – any academic, people such as you or me – we’re immediately labeled as “protectionists” or “racists” or “demagogues”, etc. Few politicians can stand up to that kind of heat. That’s the basic reason. It is so powerful that you’ve got President Obama breaking his promise about NAFTA, and in this economic package that’s been put together, it’s [total figuration?] trade – you stop and think about it.
We had almost a $700 billion trade deficit last year. Each billion of trade equates to about 10,000 to 15,000 jobs. So, embodied in that trade deficit is between 7 and 12 million jobs. We eliminate the trade deficit and we have 7 to 10 million more jobs. That would really be the solution to the problem. [HP: I hope this is going to be in your book.] It is. The President and the Congress are afraid to take it up. You’ll wind up with the Walmart’s, the Penney’s, the Target’s, all the giant box stores, all these people have the “made in China” label – they, and their well paid lobbyists in this town, just get out their tar brush and start to smear.
But, ultimately, we are going to have to do it. We can’t solve this economic crisis unless we reduce and eliminate the trade deficit. We’ve got to bring production back into the United States.
HOWARD PHILLIPS: Is there any Republican or Democratic actual or prospective Presidential candidate who understands the trade issue and has the guts to talk about it?
DR. PAT CHOATE: None. But let me tell you, that’s the opportunity. It’s the candidate that’s got the guts of Pat Buchanan, hard-core, tough conservative [HP: This is the year Pat Buchanan should have run] Absolutely, he would have had an audience. But, I’ll tell you what – that candidate who will stand up for workers on that issue is going to be like Ross Perot in 1992 when he was talking about the necessity to balance the budget. If that candidate will go on and explain it in very simple terms: explain that we have got to bring production back, that’s the only way we are going to get jobs, I think the American people will support him.
HOWARD PHILLIPS: How do we restore America as the great manufacturing country, the great manufacturing base of the world?
DR. PAT CHOATE: The first thing we’ve got to say is we’re not going to pit the American people against any wage labor around the world.
HOWARD PHILLIPS: In other words, we have to recognize that there is a large measure of unfairness when we treat underpaid, slave-paid workers in other countries on an equal footing with U.S. workers.
DR. PAT CHOATE: We would say – we could put in an equalizing tariff that would say as other countries bring their level of wages up that we would reduce the tariff. The American people are great competitors. They’ll compete…
HOWARD PHILLIPS: Tariffs are better than taxes, in my view. We could pay for the legitimate cost of the Federal government with a good protective tariff.
DR. PAT CHOATE: We did until 1913 in this country. It is also philosophically honest – what it says ‘you can buy American-made products, and here they are, that’s what they are’ and you pay no taxes on it. But if you want a luxury good, or if you want to buy something that is made in Germany or in Brazil or China, you have to pay a little bit more, and it’s your choice.
HOWARD PHILLIPS: George Washington articulated that. [PC: yes.] It’s better to buy an American product. You can spend more money on the foreign product, but when you buy an American product, you’re strengthening the American worker, your strengthening your family, your strengthening American industry.
DR. PAT CHOATE: I don’t think most history is [clear?] on this, but George Washington was very much a nationalist in that sense. He was, when he was inaugurated, it was in a suit that was made out of American cloth, buttons that were made in the United States, shoes that were made in the United States. After the Revolutionary War, George Washington would only buy things made in America.
HOWARD PHILLIPS: Would that this prevailed again.
DR. PAT CHOATE: Wasn’t that a nice attitude?
HOWARD PHILLIPS: As a matter of fact, most of our Presidents until 1913, were protectionists – they wanted to protect American industry.
DR. PAT CHOATE: Well, Teddy Roosevelt – remember the great line? Thank God I’m not a free-trader. That’s how we built this country. It is so interesting in the propaganda around trade is to hear academics and others talk about how free trade built America.
HOWARD PHILLIPS: What bolognie. This was another key element of Karl Marx’s Communist Manifesto. He said the way to advance communism is with a policy of free trade.
DR. PAT CHOATE: It is disruptive. Look at the disruption that we are having right now inside our economy. Of course, our bankers know – they just fall over themselves with these sort of short-term profits regardless of the cost to the country in the long term.
HOWARD PHILLIPS: We are going to have to take another break. When we come back – we’ll have about two minutes with Pat Choate to encapsulate and convey to you his wisdom, based on a lifetime of study and experience. That’s Dr. Pat Choate. Stay with us, we’ll be right back.
HOWARD PHILLIPS: Welcome back. I’m Howard Phillips. We’ve been privileged to have as our guest Dr. Pat Choate. And, by the way, he’s got a book coming out called Saving Capitalism which will cover many of the things we’ve been talking about. If you are interested in the kinds of issues that I have been discussing with Dr. Choate, please check out the website of The Conservative Caucus, www.ConservativeUSA.org. If you want some written literature, you can fax me your name and address – 703-281-4108, or drop me a note at 450 Maple Avenue East, Vienna, VA 22180. I publish a twice-monthly newsletter that covers many of these issues.
Pat Choate, what a pleasure it has been to benefit from your wisdom. We have about a minute left. What are your parting thoughts for the people sharing this program with us?
DR. PAT CHOATE: First, it’s a real privilege to be with you. I’ve learned much from you over the years, we’ve been in many of the same fights together, and I’ve enjoyed that greatly.
My comments, I think, for the American people basically would be this: the American economy is the greatest in the world, the American economy is the foundation of our strength, it has enabled us to have a secure national defense, it has enabled us to be generous with other countries, it has enabled us to improve our standard of living. That economy is now threatened. It is threatened by a series of policies that have allowed our production to go offshore. It is still well within our capacity to reverse these policies and, if we can do this, our children and our grandchildren will have a better future than what we had.
HOWARD PHILLIPS: You can get the rest of Dr. Choate’s comments by reading his book, Saving Capitalism, published by Knopf. Pat, thanks so much. Thank you for joining us on Conservative Roundtable.
|
