Newt Gingrich (R)
Newt Gingrich is a former Speaker of the House for the U.S. House of Representatives. Former Speaker of the House Gingrich represented Georgia in Congress for twenty years, four of which he spent as Speaker of the House. Former Speaker of the House Gingrich holds a Master’s and Doctorate in Modern European History from Tulane University.
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At a campaign stop in Chillicothe, OH, Rick Santorum spoke about his plans for the American economy. The Cleveland Plain-Dealer reports:
During a 40-minute speech before about 300 people at Chillicothe High School, the Republican presidential candidate stuck to economic themes in a region still trying to rebound from the economic downturn.
"What kind of country do you want to hand off to the next generation?" asked Santorum. "We need innovative solutions to liberate the American people."
Meanwhile, Forbes is reporting that as Super Tuesday approaches, the candidates have stepped up their rhetoric, and are pledging to hold China accountable:
“If I’m president of the United States…on Day One, I will declare China a currency manipulator, allowing me to put tariffs on products where they are stealing American jobs unfairly. We can compete when there’s a level playing field and we’d win…. I’m going to insist that China plays by the same rules that everyone in the world plays by.” — Mitt Romney (my humble guess is he can call China chopped liver if he wants, but will do nothing to retaliate other than what Obama has already done. Romney’s the most anti-China of the bunch.)
“I want to beat China. I want to go to war with China and make America the most attractive place in the world to do business.” — Rick Santorum (quite mild; doesn’t want a trade war like Romney says he wants.)
“I think we’re going to have to find ways to dramatically raise the pain level for the Chinese cheating, both in the hacking side, but also on the stealing and intellectual property side. And I don’t think anybody today has a particularly good strategy for doing that.” –Newt Gingrich (he’s mostly come out against Chinese stealing of intellectual property; a legitimate, non-emotional complaint based on facts.)
“To fight with China now? They are our third best partners and are great customers. Why say that they are the problem? We complain that they’ve messed around with their currency. What have we done with the dollar over the last three years?” — Ron Paul (Doesn’t think China is the cause of our problems.)
The following originally appeared on our blog, ManufactureThis:
An analysis of the Conservative Political Action Conference (CPAC) from Alliance for American Manufacturing (AAM) Media Director Steven Capozzola...
I've talked with many domestic U.S. manufacturers over the past decade or so-- mostly small and mid-sized manufacturers (the backbone of America's industrial base).
One particular manufacturer whom I knew well was the president of a family-owned company that produced printed circuit boards. His firm had been around since the dawn of the computer age, manufacturing circuit boards for both commercial and military applications.
He used to tell me all the time that his workers and his factory were incredibly efficient and productive. He would say, "I can compete with anybody in the world...But what's killing me is China's currency peg."
What he meant was that, because China deliberately undervalues its currency (in violation of world trade law), its manufacturers can export goods at an artificially reduced price. Essentially, my friend's firm was competing against the full resources of the government of China.
Eventually, my friend had to close his factory. He was one of the last printed circuit board manufacturers left in the U.S. Losing his factory meant that the U.S. was now more reliant than ever on obtaining printed circuit boards from China.
I think back to my conversations with him now, after having attended the Conservative Political Action Conference (CPAC) in Washington, DC this week.
Specifically, I'm thinking of Newt Gingrich's speech yesterday. In the midst of an address about "changing the trajectory" of the "Republican establishment," Gingrich started to lay out his vision for transforming the United States. After a quick aside about the pitfalls of unemployment insurance ("Never again shall we pay somebody 99 weeks for doing nothing"), the former Speaker of the House turned to manufacturing.
Here was his solution for manufacturing:
"Now if we're serious about manufacturing, we have to eliminate the Environmental Protection Agency, which is a job killing agency."
When I heard that, I thought back to my friend who manufactured printed circuit boards. He happens to be a Republican, and a retired Marine officer. I'd never heard him complain about the EPA. But I did recall his frequent frustration about China. He said he believed in free trade, and what China was doing was protectionist. It was not acceptable, and Congress needed to act.
This is why I find Gingrich's assertion disheartening. What he should be saying is: "If we want to get serious about manufacturing, let's start standing up to China when they violate our trade agreements. When they illegally dump product, when they illegally subsidize their steel and glass and paper exports with tens of billions of dollars, when they illegally undervalue their currency, let's enforce the laws we have on the books and say NO MORE. Rules are rules. Let's preserve the free market."
To be fair, Gingrich did mention China once, at the top of his speech:
"This is not about being revenue neutral, this is about maximizing economic growth to put Americans back to work and to create the most dynamic economy on the planet and to rebuild our manufacturing base, so we can pull away from China and we become once again the dominant country on the planet."
Along those lines, Gingrich did float one idea that could be helpful to manufacturers, a suggestion about revising U.S. tax law:
"You go to 100 percent expensing, so all new equipment at every level, farmer factory, doctor, business, all of that gets written off in one year. The goal is to make the American system the most modern, most productive in the world."
Revisions to tax policy are one of a number of important steps that the Alliance for American Manufacturing (AAM) has outlined in a plan to save U.S. manufacturing.
The only other speech I saw was that of Mitt Romney. Interestingly, Romney has been talking tough on the campaign trail when it comes to China, threatening to designate them as a "currency manipulator" on day one of his presidency. However, he only made two passing mentions of China:
"I will approach every spending decision by asking a few important questions: Can we afford it? And, if not, is it worth borrowing money from China to pay for it?... I will cut off funding for the United Nations Population Fund, which supports China’s barbaric One Child Policy."
Romney never mentioned manufacturing in his speech, an unfortunate omission. And while it's timely to cite the issue of U.S. indebtedness to China, it's ironic that Beijing is mentioned so prominently. In actual fact, China only owns about 8% of publicly held U.S. debt, which means Beijing possesses far less leverage than is commonly believed.
All in all, it would have been helpful to hear both Gingrich and Romney focus more on manufacturing's outsized contributions to the U.S. economy, and why (for example) they would push for Buy America policy and much-needed infrastructure investment after taking office as president.
There's much this country urgently needs to do, and rebuilding U.S. manufacturing should be at the top of the list.
On Saturday, the GOP candidates faced off in the 14th debate of the primary season. Here’s what they had to say about Manufacturing
Santorum:
I come from southwestern Pennsylvania, the heart of the steel country, the heart of manufacturing. And it’s been devastated because we are uncompetitive. Thirty years ago we were devastated because business and labor didn’t understand global competitiveness and they made a lot of mistakes. They did -- they weren’t prepared for it and we lost a lot of jobs.
That’s not what’s happening now. Our productivity gains, our labor force, their doing their job, they’re being competitive. But they’re running into a stiff headwind called government. And it’s government taxation, 35 percent corporate tax which is high -- the highest in the world. It’s a tax that doesn’t easily offset when we try to export, which makes it even more difficult...
Huntsman:
We are once again on the cusp of a manufacturing renaissance in this country, if we do it right. China is going down in terms of GDP growth from 8 percent, 9 percent, 10 percent to 4 percent or 5 percent, 6 percent. And as they go down in growth, unemployment goes up.
We have an opportunity to win back that manufacturing investment, if we are smart enough, with the right kind of leadership to fix our taxes. No one up here is calling for the complete elimination of all the loopholes and the deductions, where the Wall Street Journal came out and endorsed my tax plan. That’s what needs to be done, not tinkering around the edges.
On China, however, there were more varied statements:
Hutnsman:
Listen, we have the most important relationship of the 21st Century with China. We’ve got to make it work. Of course we have challenges with them. We’ve had challenges for 40 years. It’s nonsense to think you can slap a tariff on China the first day that you’re in office, as Governor Romney would like to do.
Romney:
My own view on the relationship with China is this, which is that China is stealing our intellectual property, our patents, our designs, our know-how, our brand names. They’re hacking into our computers, stealing information from not only corporate computers but from government computers. And they’re manipulating their currency.
And for those who don’t understand the impact of that, I’ve seen it. I’ve seen it. And that is, if you hold down the value of your currency artificially, you make your products artificially low-priced and kill American jobs. That has happened here in this country.
And if I’m president of the United States, I’m not going to continue to talk about how important China is and how we have to get along. And I believe those things. They’re very important. And we do have to get along. But I’m also going to tell the Chinese it’s time to stop. You have to play by the rules. I will not let you kill American jobs any longer.
Gingrich:
You cannot compete with China in the long run if you have an inferior infrastructure. You’ve got to move to a 21st-century model. That means you’ve got to be -- you’ve got to be technologically smart, and you have to make investments.
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As the GOP candidates hit the airwaves, the Washington Post has noticed a common theme in some of the ads: Sparks. Several of these ads focus on the themes of jobs, specifically manufacturing jobs. Newt Gingrich, Rick Perry, and Mitt Romney all feature factory floors, with showers of sparks shooting across the screen.
We hope that these candidates go beyond the visuals and present clear, detailed plans to support domestic manufacturing jobs.
Newt Gingrich, who as of late has been leading the pack of GOP contenders, was interviewed by Glenn Beck on economic issues. On the subject of manufacturing, Gingrich had this to say:
The idea of having economic incentives for manufacturing goes back to Alexander Hamilton’s first report of manufacturing which I believe was 1791. We have always had a bias in favor of investing in the future. We built the transcontinental railroads that way. The Erie Canal was built that way. We’ve always believed that having a strong infrastructure and having a strong energy system are net advantages because they’ve made us richer and more powerful than any country in the world. But what I object to is subsidizing things that don’t work and things that aren’t creating a better future.
Read the full interview here.
It seems like the China currency issue is getting more and more important in the GOP race for the presidency. As Politico reports, both Mitt Romney and Newt Gingrich have taken the lead on this issue; and President Obama recently said that China must “play be the rules of the road.”
However, it is important to remember that in three years President Obama has missed every possible opportunity to name China a currency manipulator. As we have noted previously, it can be hard to translate campaign rhetoric into governing reality.
In last night’s CNBC Debate, Your Money, Your Vote, the GOP candidates faced off on economic and fiscal issues. What did they have to say about manufacturing issues?
Rick Santorum:
The reason I put forth this manufacturing plan is not just so we can say "Made Here in America," that we can create opportunities for everyone in America, including those that don't have that college skill set, people who built this country, like my grandfather, who was a coal miner. So -- so that is a very important part that Republicans, unfortunately, are not talking about.
We need to talk about income mobility. We need to talk about people at the bottom of the -- of the income scale being able to get necessary skills and rise so they can support themselves and a family. And that's what manufacturing does, and that's why I'm laser-beam focused on it.
Mitt Romney:
I've been in business all my life, 25 years. I consulted to businesses around the world. I've been in business where we competed around the world. I understand free trade; I like free trade. I know that America can compete with anyone in the world. Newt is right about -- about our capacity to manufacture and compete heads-on versus the Chinese.
But I've also seen predatory pricing. I've seen people price their goods at an artificial level for an extended period of time, such that they can drive other people out of business. And then when the other people are out of business, they can raise their prices. That's what China's doing, by holding down the value of their currency.
Let the currencies float. If the U.S. currency, for instance, is being inflated, let it float. Let us float. Let us have a market mechanism determine the value of our respective currencies, as opposed to the Chinese government continuing to put an advantage to their -- their producers. This -- this is no longer a time for us just to sit back and say we're going to let them steal our jobs.
Michele Bachmann:
Well, the Chinese have been bad actors. Recently we found out that they dumped counterfeit computer chips here in the United States. We're using some of those counterfeit computer chips in the Pentagon in some of our weapons systems. This has national security implications.
Newt Gingrich:
... first of all, you've got to decide, how are we going to be more competitive and how are we going to be the lowest cost? And there's a new Boston consultant (ph) that says, by 2015, South Carolina and Alabama will be cheaper than the Chinese coastal provinces to manufacturing.
Second, in terms of dealing with China strategically, I think we're going to have to find ways to dramatically raise the pain level for the Chinese cheating, both in the hacking side, but also on the stealing and intellectual property side. And I don't think anybody today has a particularly good strategy for doing that.
Newt Gingrich participated in the Republican Presidential Forum on Manufacturing in Pella, Iowa yesterday. He had this to say about manufacturing jobs:
Well, if you have the best trained workforce in the world with the most modern equipment in the world wages go up because your productivity goes up. There's a study that just came out of the Boston Consulting Group I think it was in August that says by 2015 South Carolina and Alabama will be less expensive than coastal manufacturing in China if you take total cost. It's not just what you pay the person but it is what is the cost of the equipment, what is the cost of logistics, what is the cost of all the other factors. There's no reason we can't rebuild America at a remarkable speed. We've done it before but we have to have a totally new attitude in Washington and frankly, as the Governor knows, in states, in local communities we're not going to remain the post World War II America coasting because we're so dominant. We're going to have to go through a period of very fundamental change in our policies and in our institutions.
As we’ve reported on, Mitt Romney was the first of the GOP field to take a strong stance against China’s currency manipulation. Now it appears that this incredibly popular stance is catching fire with some of the other candidates.
Newt Gingrich warned of China owning...
…trillions of dollars of our debt, and they have a superior manufacturing system and a superior military, then our range of independence will be within the framework the Chinese tolerate.
Jon Huntsman, meanwhile, takes a much more cautious stance:
I don’t want to find ourselves in a trade war. With respect to China, if you start slapping penalties on them ... you’re going to get the same thing in return.
Former Speaker Newt Gingrich made the following statement in last night’s CNN/Tea Party debate:
We have a simple choice. We can depend on Saudi Arabia, Iran, Iraq, Venezuela, or we can encourage development in the United States of manufacturing, as Rick said. We can encourage development of oil and gas. We can do it by saying we're going to let you keep more of your money if you create more of what we want. I'm for an energy- independent America, and that means I favor people who create energy.
Eight candidates for the Republican Presidential nomination faced off against each other last night at the Ronald Reagan Library in California. During the 1-hour, 45-minute debate, the candidates all spoke about the need to create jobs and attacked President Obama for failing to do more on that front.
However, not a single candidate made mention of manufacturing jobs. In fact, the debate transcript reveals that there was not a single mention of the word “manufacturing.” The closest any of the candidates got to this topic was when Jon Huntsman was asked if he agreed with Mitt Romney’s plan to label China a currency manipulator. His weak response, which we’ve included below, was not what we should expect from the candidate who wants to be seen as the intellectual alternative:
Q: Governor Huntsman, as you know, Governor Romney's new economic plan calls for the U.S. government to officially label China a currency manipulator, But "The Wall Street Journal" editorial page says such a move would cause a trade war, perhaps.
You're a former ambassador to China. You have served four U.S. presidents. In your view, what does Governor Romney not get about China?
HUNTSMAN: He doesn't get the part that what will fix the U.S- China relationship, realistically, is fixing our core right here at home, because our core is weak, and it is broken, and we have no leverage at the negotiating table.
And I'd have to say, Mitt, now is not the time in a recession to enter a trade war. Ronald Reagan flew this plane. I was in China during the trip in 1984. He went on TV, he spoke to the Chinese people -- I'd love to do that too, in Chinese itself -- and he talked in optimistic, glowing terms.
And it reminds me about this, Ryan, we are the most blue sky, optimistic people on earth. We're going to find solutions, and I have an offer for the two great governors over here.
And I hate to rain on the parade of the Lone Star governor, but as governor of Utah, we were the number one job creator in this country during my years of service. That was 5.9 percent when you were creating jobs at 4.9 percent.
And to my good friend, Mitt, 47 just ain't going to cut it, my friend, not when you can be first. We've got to remember, that to beat President Obama, we have to have somebody who's been in the private sector, understands the fragility of the free market system, has been a successful governor as it relates to job creation, and knows something about this world.
I've lived overseas four times, I've been an ambassador to my country three times, I think I understand that.
The American people are angry at Washington for not doing enough to create jobs. Anybody who wants to run the country needs to listen to what the people want: jobs, jobs, jobs.
Read the transcript here.
