How Richard Nixon Destroyed American Manufacturing
Back in 1963, the day before JFK was assassinated in Dallas, Richard Nixon was in that same city, along with Don Kendall, the CEO of Pepsi. While some conspiracy theorists have suggested Nixon was there to set up the Kennedy killing, in fact this was really part of Nixon's assassination of our middle class.
Today, America lost around 14 factories. In fact, as Thomas Heffner notes over at Economy in Crisis, we're losing 14 factories a day, every day, and have been for decades. And it all started with Nixon.
In 1959, as Vice President, Nixon visited Russia to push Pepsi. We may never know what he got out of the deal personally, but he was there in Dallas in '63 for Pepsi, and then went to China, presumably in part on behalf of Pepsi, in 1972 as President.
Just as he started our failed "War on Drugs," Richard Nixon was also the godfather of our failed "Free Trade" policies, starting with China, which began sending us manufactured goods, while Pepsi was the first American product sold in China. While Nixon was probably paid handsomely by industry for this—we know of his bribe-taking from the dairy industry, for example—he tried to sell so-called "free trade" to us as a way of ending Communism in China.
As he wrote in his book Seize the Moment in 1992, "If we remain in China, we can play a critical role in helping the private economy gradually eclipse the state sector. In this respect, the most counterproductive thing we could do would be to revoke China's most-favored-nation trade status. ... If we want to have an impact on the changes occurring in China, we should not pull the plug on trade. Increasing economic progress will bring progress on human rights."
Thus began the destruction of American manufacturing. And ironically, once again the "evils" of China are being evoked to push more of our factories out of the United States via the TPP, as President Obama recently told us that if we don't "write the rules of trade" with Asia, "China will."
It was a bad idea in 1972 when Nixon first started all this in a big way, and it's a bad idea now. We've lost over 60,000 factories just since 2000.
Our $500 billion trade deficit is so bad that foreigners now own fully one-seventh of all assets in the United States and we've lost two-thirds of the factories we had when Nixon went to China.
Back in 1776, Adam Smith pointed out that what makes nations wealthy is manufacturing. We did manufacturing here in the US for about 200 years, and all that time the thing that kept manufacturing here in America was protectionist trade policies.
While we're backing out of Nixon's failed "War on Drugs," now is also a good time to end Nixon's insane trade deals that only move our jobs overseas and destroy our middle class.