Buddy Roemer is Close  

November 17, 2011

I found some information about presidential candidate Buddy Roemer’s economic proposals. It appears that Roemer is in favor of “Fair Trade” instead of Free Trade.  I think that it is too late for Fair Trade, and stronger action is needed to save the American economy and bring all our jobs back to America.  But, I do think that Roemer should have been included in the presidential debates.  Roemer could have offered some strong insights about the problems with Free Trade.

I think that Roemer is very aware of the devastation done to the American economy by Free Trade, and Roemer does a very good job describing our present situation.  Roemer appears to be much more aware of the real cause of our economic plight than the other presidential candidates that I have read about.  But I think that his solution does not go far enough, and is easily foiled by the importers.

The following excerpts are from a speech given by Buddy Roemer on 9-1-11.  My comments follow each of the three parts of Roemer’s plan to bring our jobs back from China and other low-wage countries.

1.  “…Tax Deduction Solution. I [Roemer] would allow a tax deduction only when businesses employ and buy American…My solution will amend those sections [of the tax code] and the definition of costs of goods sold to state that ‘any expenditure for any goods or services located and/or produced outside the United States shall not be deductible.’”

—Frank’s comment: This would help some, but if the products were produced cheap enough in the foreign country, the importer could still import the item and make a hefty profit.  If an imported item costs $10 and retails for $95, then the importer may decide to pay the average effective corporate tax rate of about 27% on the item.  This would raise the importer’s cost to $12.70 instead of $10.  The importer could still make a nice profit.  Also, Roemer does not mention whether partial domestic content in an item would be pro-rated for tax deduction purposes.

2.  “I [Roemer] would eliminate the foreign tax credit.”

—Frank’s comment:  Eliminating the foreign tax credit would also be helpful, but I don’t think that it would bring very many factories back to the US.

3.  “…Fair Trade Adjustment Solution.  A new way to level the playing field and protect American industry from unfair foreign competition is to require importers to pay our government an adjustment equal to the unfair advantage they gain by using cheap foreign labor and avoiding America’s health, safety and environmental standards.

I [Roemer] shall ask Congress to adopt a statute that no product may be imported into the United States of America unless it is accompanied by a fair trade adjustment form, completed and certified by a foreign analyst who has been trained and authorized by the U.S. government but would be paid by the importer. The analyst will charge a fee to this importer to complete and certify the form. When the goods arrive in the U.S., the importer must pay to our customs agent the total certified adjustment in order to obtain a release of the goods into our country.

The fair trade adjustment form will contain blank fields where the analyst will enter the calculations to value the difference between labor costs here and labor costs in the foreign country of origin, showing differences between such costs as OSHA and the EPA here, and the costs there. There will also be an adjustment for unequal tariffs or other costs of import and for any export subsidies given by the foreign country.

The adjustment is simply an economic calculation. No politics are involved. It will cost the U.S. government nothing to implement it, all administration costs effectively being paid by the importers who will pay the certified analysts to complete the form…”


—Frank’s comment:  This would be next to impossible to implement, enforce, and police, given the difficulty of obtaining accurate numbers from the foreign country to make the financial adjustments for imports.  Corruption is widespread in much of the third world, and it would be very easy for the foreign manufacturer to falsify the cost of labor, raw materials, etc.  (I once saw a documentary TV show about how factory workers in a third-world country were being forced to sign a form stating that they were being paid more than they were actually receiving.)

Also, even if we “leveled the playing field” for US factories, we would still have to compete with all the imported goods produced in foreign countries which could still be sold in the US market, although at higher prices.  There could be cars made in China, Korea, India, Japan, etc. competing at comparable prices with American-made cars like Ford and Chevrolet in the US market.  So, any sales made by Chinese exporters to the US would still be jobs lost by American workers.

And Chinese consumers are not going to buy the much higher cost American-made products, when they could buy the cheaper Chinese-made products.  There will not be a level playing field for US exporters trying to compete in China.

Buddy Roemer does appear to have a better understanding of the harm being done to the Americian economy by Free Trade than the other presidential candidates, and he does offer some hard-hitting solutions.  And Roemer is trying to spread the word about how cheap imports are destroying our economy.  Too bad that the mainstream media is ignoring Roemer.

But, I think that the best policy to save our economy is to stop all imports of manufactured goods from China and elsewhere.  If imports are destroying our economy, let’s not be hesitant about stopping them.  We need to take strong action and ban imports.  Buddy, come join us!

3 Responses to Buddy Roemer is Close

  1. TaxiDriver on November 19, 2011 at 6:40 pm

    Ian Fletcher, the author of “Free Trade Doesn’t Work,” interviewed Buddy Roemer. When presented with Fletcher’s idea of a 30% across the board tariff, Roemer replied:

    “… I wouldn’t flinch at putting a 30 percent tariff on Chinese goods, or a tariff on imports across the board, with the whole world or the countries running a surplus with us.”

    I think it’s important to keep in mind that Roemer is trying to get the idea across that it’s unfair trade that is at the heart of our economic woes, and that any kind of cheap labor policy is bad for America, but he also has to be careful not to go too far overboard. He’s already considered radical in the Republican camp.


  2. TaxiDriver on November 19, 2011 at 6:47 pm

    Agreed, our agenda still needs to be put forward, but we currently have the GOP question to contend with. Which candidate shall we choose? Cain, Romney, et al. are all in the cheap labor camp. Libertarians are all for unfettered free (lunch) trade. Buddy Roemer is the only one promoting a dear labor policy, so it seems like a no brainer.


  3. TaxiDriver on March 17, 2012 at 8:25 pm


    I noticed that Roemer recently changed his response to the illegal alien question on Americans Elect, changing his position from “most would be deported with some exceptions” to “most would be able to stay with some exceptions.” Apparently he has changed his labor stance to comport with the establishment republican “national security” issue, which would condone all alien labor so long as they pass national security muster.

    So much for our lone holdout on labor arbitrage. Oh well. At least I can still drive a taxi, but my hope of getting back into the software field just went up in smoke.


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