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APRIL 29, 2010 -- A hue and cry erupts in Washington over the State Legislature and Governor of Arizona adopting an immigration law. At least Arizona acted. We can't get Washington to act. There are now twelve to fourteen million illegal immigrants in the United States. They didn't come over the border last night. They've been streaming over the Mexican border and Arizona's border for years because Congress passes half measures and even half measures are not enforced. The cry ought to be against Washington's failure to act on immigration rather than whining about racial profiling.

Now there's a hue and cry about the Majority Leader, Harry Reid, calling up immigration for consideration. Mexico is in crisis. Before a country can have free trade it must have a free market. The European Union forbids entry to the Union until the country has developed a free market. The European Union taxed themselves $5 billion over five years to develop an open market in Greece and Portugal before admitting these countries into the European Union. Instead of NAFTA, that's what we should have done with Mexico. Now Mexico is a basket case. Mexico has an emigration problem, drug problem, a jobs problem, trade problem, and a crime problem so severe as to cause the Mayor of Juarez to live in El Paso. With all these problems, Mexico needs a Marshall Plan to develop an open market with labor rights and assistance to solve the drug, crime, jobs, and emigration problems in Mexico. This would help solve the jobs, immigration, drug and crime problems in the United States. We don't have Canadians streaming over the border into the United States, and we need a free market in Mexico like Canada.

We have the hue and cry over an unnecessary war in Afghanistan. President George W. Bush found the Afghan War necessary for his re-election. And President Obama follows suit. We're trying to force feed freedom and democracy in a country where the Afghans favor tribe and religion. You can't force feed a culture change. The surge of bribery apparently worked in Iraq, but after eight years the surge of bribery in Afghanistan is creating as much terrorism as it's eliminating, and we'll still end up with warlords growing poppies, selling their daughters, and a corrupt government. Instead of continuing to waste money rebuilding Afghanistan, we ought to be spending money on a Marshall Plan for our friend and neighbor, Mexico.

Then there's the hue and cry about jobs -- stimulation for jobs when stimulation is spent; tax credits for small business to hire when small business is trying to avoid firing. President Obama, like other Presidents, fails to protect the economy; fails to enforce our trade laws to protect production and jobs. Long before the recession, we lost substantial manufacture - way more jobs than from a recession. And jobs and the economy continue to hemorrhage through an off-shore hole in the bottom of the economy boat. We keep bailing with stimulation and do nothing to plug the hole. Our investment, research, technology, development, production, jobs, and economy are being off-shored to China, India, Vietnam, etc. It doesn't pay to develop and produce in the United States. The best of innovation, Microsoft and Intel, is being developed in China, and now GM is producing more cars in China than the United States.

There's the hue and cry in Congress that we are losing jobs because Corporate America has the "highest taxes in the world." Instead of crying about the corporate income tax, Congress should abolish it and replace it with a 2% value added tax. To the hue and cry about paying for health care, Congress can add a 1% VAT to pay for it. Instead of the hue and cry about paying down the debt, Congress can add a 2% VAT and start paying down the debt. To the hue and cry about increasing taxes and promoting exports, this 5% VAT would be cutting taxes, promoting exports, paying for health care, and paying down the debt.

There's a hue and cry about bailouts when our trade laws (Section 201) call on the President to act when production is endangered, not wait for it to go bankrupt and need a bailout. There's a hue and cry about the deficit in the balance of trade when President Obama could solve this and create jobs with a 10% surcharge on imports like President Nixon did in 1971. There's a hue and cry about people not being able to find a job, when millions of jobs could be created and found if President Obama would enforce the War Production Act of 1950, so that the nation could have a domestic production and supply of equipment and materiel necessary for our national security.

Now President Obama submits a budget for F/Y 2011 (page 178) calling for a deficit in excess of $1 trillion each year, every year, for ten years. We left President George W. Bush with surpluses as far as the eye can see. President Obama envisions deficits for as far as the eye can see. I served on the Senate Budget Committee for over thirty years, even briefly as Chairman. If the President submitted such a budget to me as Chairman I would tell him that I couldn't go home and defend such a budget; he would have to get me a place to stay in Washington. I know all the economists and members of the Budget Committee. But there is no hue and cry from the economists; no hue and cry from the House or Senate Budget Committees. There's no hue and cry from the Peterson Foundation. All the Peterson Foundation wants to talk about is Social Security or some fiscal problem happening years from now. There's no hue and cry from the Committee for a Responsible Federal Budget. The Concord Coalition has lock jaw.

The President and Congress must change our tax laws and enforce our trade laws so that we can defend the country and make it profitable to produce in the United States. People fail to understand why this hasn't happened. The President, the Congress, the financial community and Corporate America are in cahoots. As long as the profits continue in China with the stock market up, Wall Street is happy saying the recession is over, and the contributions continue to flow for re-election. But if the President and Congress move to change our tax laws and enforce our trade laws so Corporate America can produce for a profit, the financial crowd and Corporate America will holler "protectionism" and cut off contributions. Tom Donahue of the United States Chamber of Commerce has already threatened to cut off contributions. The people can't realize that Corporate America is opposed to Washington taking action to rebuild our economy; that Corporate America is opposed to making a profit in the U. S. because it can make a bigger profit in China and doesn't have to worry about labor, safety, or the environment. Unless there is a hue and cry from the people, Congress will do nothing and the contributions will flow.

The problem is not that the government is too big because it tries to do too much. The problem is that the government is too big and of one mind with Wall Street, the financial crowd, Corporate America and their economists. The cabal's one mind is to make the people feel like jobs are being created while the cabal off-shores jobs and the economy as fast as it can. The cabal has the people feeling that, even though we have many problems, the country is headed in the right direction. The country is headed in the wrong direction. We'll stay headed in the wrong direction until there's a hue and cry by the people for President Obama to lighten up on the campaigning and go to work on the economy.

Senator Hollings of South Carolina served 38 years in the United States Senate, and for many years was Chairman of the Commerce, Space, Science & Transportation Committee. He is the author of the recently published book, Making Government Work (University of South Carolina Press, 2008).

© 2010, Ernest F. Hollings. All rights reserved. Contact us for republication permission.

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