Hillary Clinton on Jobs, NAFTA, and China

Tuesday, May 6, 2008 5:11
Posted in category The Big Picture

I am generally of the opinion that if you are writing a blog focused on business, you should follow the cardinal laws of topics to avoid at networking events: politics and religion. In china, I would also add culture.

However, I recognize the fact that the line between business and politics is a fine one, and that come this November the line that the Bush Administration has drawn in the sand will be moved by one of the candidates…. and more than ever, I think we need to understand clearly the knowledge, understanding, experience, and potential impact of the candidates as it relates to globalization.. and of course China.

and, as luck would have it, Youtube has provided such an opportunity through a 9 minute clip of Hillary Clinton being interview on the George Stephanopoulos show:

[youtube width=”425″ height=”335″]http://youtube.com/watch?v=FzKMzuP3ObE&feature=related[/youtube]

 The highlights of the clip are:

1: Manufacturing is key to the strength of an economy, but some jobs may not come back. That what is more important is to stop losing jobs.

2: The US gov’t should no longer provide tax incentives/ benefits to firms that move operations overseas. that it is unpatriotic to do so.

3: Hillary is for forcing other countries into improving their environmental and labor conditions becuase by being clean and labor friendly, the US is actually at a disadvantage.

4: Becuase China has poor standards and consumer protection… they are able to export lead paint toys, contaminated pet food, etc

And my thoughts on those points are: 

On points 1 and 2, I am with her 70%. I think that in general it is important that an economy have a strong econpmiy based in manufacturing, and that governments should do their best to protect industry.

However, the statements that she makes lose a bit of reality in that economies are dynamic, and in the case of the US economy, resiliant. A manufacturing jobs lost in one state is 2 logistics jobs in another.

It isn’t perfect, and leaders need to do their best to keep the balance, but losing manufacturing jobs is not necessarily as evil as presented.

Point 3 – I am 40-50% there. She is right in that we need to work to improve the environmental and labor conditions to an international standard. But, given the fact that part of the reason the US is so clean and green is that they exported the dirty stuff… I am not going to follow her line of logic that it is somehow a competitive disadvatage to be clean.

Point 4 – Is she serious? I thought we had been through this already… but for one last time, MAde in China does not equal made by China, and it was in fact the poor standards within American importers that lead to the problem. Mattel, Iams, and others either did not have the proper QC procedures in place or did not follow them.

Following that, the impact of trade, and learning from history are discussed and there are two things that I took from this that I liked:
1) HC admits that they have learned a lot, and that some of the decisions need to be revisited.
2) HC is of the mind that the US has a poor handle on what the real cost drivers are of the economy, and have failed to address them.

following this, George tries to bring Bill’s ties to foreign companies and speaker fees into the picture ,and I tuned out because I see the interview is headed back to politics as usual.

My general thoughts

To be honest, all of the candidates at this point seem to have a mixture of good/ bad in their positions, and I still am not clear enough who has the most balanced policy.

I am in complete agreement that globalization, and the role of the manaufacturing need to be constantly studied, but I am not sure that the most qualified people are currently on the job. There seems to have been little review of what is actually occuring in the supply chain that is popping tires, killing pets, and giving Barbie a deepre red hue, and that is what is most troubling because without an honest review, real solutions cannot be developed.

That is what a leader needs to be able to do.  Develop real solutions.

Anyway, you can expect more on the candidates from me as they relate to the issues of trade. I am not looking to develop a thread of midly politicaly motivated rantings (I prefer to do that over beer), but I think it is important to cover how one candidate’s position is good, bad, or otherwise…

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7 Responses to “Hillary Clinton on Jobs, NAFTA, and China”

  1. Gem Hudson says:

    May 6th, 2008 at 7:46 am

    The name maquiladora mean just that. It is oursourcing on the slave trade and than importing on our tax pay NAFTA superhighway and she didn’t know.

  2. Jalal Bourgana says:

    May 6th, 2008 at 12:09 pm

    Few thoughts:

    On point 1, Saying that the government can stop the loss of jobs is pure election pandering, what they should focus on is investing in scientific research that would feed the business community with a steady flow of new products to make in the US for domestic and global distribution.

    Point 2, I’m not against the idea, it’s just that most of the companies referred to have perfected the art of Tax avoidance already, by taking advantage of the global network of tax havens.

    Point 3, in order to move forward on the environmental issue, the US needs to take a leadership position and start engaging the world a less hypocritical way; remember the Kyoto agreement? The US senate unanimously passed a resolution stating that the United States should not be a signatory to any protocol that “would result in serious harm to the economy of the United States”…

    Point 4 – Well if China has poor standards and consumer protection, the US is not any better for letting these products get to retail shelves everywhere in the country without holding anyone responsible…

    Of course we are not going to hear this from the candidates because it doesn’t poll well…

  3. China Law Blog says:

    May 6th, 2008 at 12:09 pm

    “Mattel, Iams, and others either did not have the proper QC procedures in place or did not follow them.” How can you be so sure this was the case? Isn’t it equally plausible that these companies did have the proper QC procedures in place and did follow them but their Chinese suppliers circumvented them?

  4. Rich says:

    May 6th, 2008 at 5:31 pm

    Dan,

    No it is not possible, and here is why

    Just to use Mattel as the example.

    Had they followed the protocols they had in place (they were known for having a good QC program – But admitted to failing to follow their own inspect regime), then the toys would not have made it to market. I am not saying that the supplier would not have used lead paint. I am saying that Mattel would have know the toys had lead paint on them before they left their facilities in China, and thus would have stopped them from getting on the shelves.

    It is a system, and if bad product hits the shelves it is because something in the system went wrong, not just at a single supplier, but in multiple places. That is why a strong QC system has different steps along the way, and in my opinion any firm who stocks 20 million lead painted toys, sells 3 million “defective” tires, or loads a few containers of chemically enhanced pet food on the shelves has obviously failed to ensure the integrity and effectiveness of the system.

    R

  5. Rich says:

    May 6th, 2008 at 6:24 pm

    Jalal –

    I would have to agree on all points, however I would say that Kyoto was in large part a failure and it didn’t matter if the US signed or not. Where I think the candidates need to take a stand on the environment though is at home. Us consumes more energy than anywhere else in the work in volume or per capita… and a lot of other countries use their resources to manufacture stuff to be bought by Americans.

    A true leader would address that, but like you say… it doesn’t poll well (yet)

    R

  6. Dan Harris says:

    May 7th, 2008 at 10:21 pm

    I disagree. Unfortunately, one can have a great system in place and follow it, and things can still go wrong. Unless one checks every single product for EVERY SINGLE thing, there can be problems. Sometimes one cannot even know what to check for. Sometimes (most of the time, actually), checking every single product just cannot be done cost effectively. So companies have to do less than check every product and that means something can always happen. Even the best companies sometimes have problems. There is no 100% solution.

  7. Rich says:

    May 7th, 2008 at 10:43 pm

    Dan,

    I am not talking about 100%. In fact, I have written a lot on the fact that the numbers that occurred are not all that unreasonable to begin with.

    What I am talking about is that fact that the importers of he dog food never visited the factory

    What I am talking about is that Mattel was not following their own internal rules

    What I am talking about is the fact that it you look at many of the cases on the consumer websites, they are actually really really small quantities.. 200 here… 200 there.. and that those guys can do a physical check.

    Mattel had a great system and didn’t follow it, others didn’t have a system at all.

    For my system (I just did a quick calc for one product), we have had .005% product fail at market. Why that is relevant is that were we not so anal about our process, we would have loaded a lot more than that into the containers.. We are not 100% during the China portion of the process, mistakes are made, but over the course of our work we have removed the failed products before they reach the end of the line, make it into a container, and are sold to the market… So, while the China side has statistically a higher failure rate, in the eyes of our customer we are 99.995% … and that is all that matters

    R