By Frank Gillispie
The Madison County Journal
December 10, 2003
How to win the trade wars
OK. We have removed the tariffs on steel. Now what can we do to protect the American steel companies? Should we make the effort? Clearly, American steel has failed to keep up with the times or they would not have lost their competitive edge. After all, they have been losing market share to imports for quite a few years now.
Actually, the steel companies are not totally to blame for their problems. Neither are the other American manufacturing firms that are rapidly losing out to low-wage foreign plants. When you compare the cost of labor in American plants with the labor costs in China, Mexico and other emerging countries, it is clear that we cannot compete on that level.
What can we do to combat the cheep labor manufacturers? We can continue to push technology, of course. The more we can use robots on the assembly lines, the less it will cost us in labor. But there are limits on what technology can do. We can start putting pressure on the unions to stop driving up the cost of labor. Lots of luck on that one.
There is one place where we can make a dramatic existence, that is, if the politicians have the courage to do it. We can make drastic reforms of our tax system.
Every time you purchase a widget, the price you pay is dramatically increased by payroll taxes. Every step in the production, distribution and sale of the widget adds more payroll taxes to the cost.
Someone had to dig up the iron ore for your widget. His labor cost involved a sizable payroll tax, which goes into the price of the oar. Someone else hauls the ore to the smelter and his taxes are added to the cost. The steel workers who smelt and refine the steel pay taxes on their labor for another price boost. Add to that the wages earned by the truck drivers who deliver the steel to the widget factory, the workers who stamp out the parts for the widgets, the assembly line workers who put it together, the sales staff who convince the store managers to put the widgets on sale, the clerk who rang up the sale for you, and taxes make up the greater amount of the price you paid.
How can we make American manufacturing competitive? Get rid of all payroll taxes!
Without the multiplying tax bill on American-made products, the price would be far lower than now. When you combine our advantage in productivity with the cost savings a payroll tax ban would produce; our American-made goods will be highly competitive here and abroad.
Fine, you say. How do we pay for our government? I assure you that if the payroll taxes suddenly disappear, American factories will suddenly be operating at full capacity. So many new jobs will be created that welfare will almost disappear. The need for government bureaucrats will shrink dramatically. That will greatly reduce the cost of government.
Next, we put a wholesale tax on all goods and services, including those imported from low-wage nations. Such a tax is easy and inexpensive to collect and will spread the cost of government over all domestic and foreign products. The IRS would be unnecessary, another reduction in the cost of government. Imported goods will pay as much tax as domestic goods, making the demand for American goods even greater, and create even more jobs.
Just think. No more IRS. No more April 15. No more welfare. American made products at competitive prices
Why cant our state and federal legislators see this?
Frank Gillispie is founder of The Madison County Journal. His e-mail address is email@example.com.
By Zach Mitcham
December 10, 2003
In the Mean Time
Who needs Cinderella when we have computers?
Talk about the college football national championship and there is no flesh and blood to blame, no Olympic figure skating judge whos been bought off.
No, theres a computer. I picture an enormous one, an old, clunky model with large, square blinking buttons, like you might see in a 60s sci-fi movie, a metal monstrosity all aglow behind some mad scientist.
The only hint of modernity is the NASCAR fashion of the hard drive. Pasted all over the computer are ads Tostito, Nokia, Insight.com, a faded Poulan Weedeater sticker. BCS is freshly stenciled amid the ads, because some cynic put a large red line through the C, leaving only BS.
The room-sized computer shakes and steams. A deep, horrific laugh startles the onlookers.
Then the computer spits out a fortune cookie thin strip of paper.
LSU and Oklahoma.
And so it goes. The machinations of the playoffs are not on any field, but in the complex math of football theory where wins squared + polls squared = confusion squared.
If you prefer the clunky computer choosing a championship matchup to a playoff system, I ask you: What if other sports were modified to fit the college football format for determining a champion?
What if Major League baseball played 162 games, then allowed sportswriters and coaches to vote on who is actually the best team, before feeding that information into a computer, which would mix the beauty contest balloting with each teams strength of schedule, its quality wins, etc., before finally spitting out a World Series matchup?
What if the NCAA abandoned March Madness, setting up an annual matchup of the number one versus number two ranked teams after the regular season? The other 62 or, actually, 63 squads who might have had notions of net-cutting and a national championship could settle for exhibition games in neutral settings with corporate sponsorship titles, such as the Insight.com Basketball Bowl or the Continental Tire Consolation Game.
Imagine telling number three ranked Connecticut and number four Missouri that they can forget any championship hopes. Yeah, UConn, yeah Missouri, perhaps you would have earned a one seed in a tournament, but only Kansas and Florida are entitled to hit the court.
Also, you can forget it N.C. State, and you can forget it Villanova. You may have had your Cinderella national titles in the 80s, but you werent really the best teams that year.
And Gonzaga and any other small school all a buzz with hope, forget it.
All that excitement you create is like spilt Coca Cola on our BCS computer.
Why not just cut out the Cinderella element from all sports?
Why not click a computer mouse at the end of the NFL regular season to determine a Super Bowl matchup?
Some college football purists argue that both the old polling method or new BCS formula give us a mostly true representation of who is the best team for the regular season. Every game, they say, is a playoff game. The current system makes the regular season truly special.
The problem with such arguments is that a truly great team stands up to the pressure of the post-season. Thats how we define greatness. Isnt it?
Otherwise, wouldnt the Atlanta Braves of the past 12 years be recognized as one of the most remarkable franchises of all time?
But we know they wont be, because minus one shining example they have fallen short of the ultimate October glory time and again.
Yes, the reality is that its hard to change whats lucrative. Bowl sponsorships and payouts to participating schools are deeply rooted in the current structure. The BCS contract extends through 2005. And it will probably continue after that.
So we may always have to settle for a certain and the Oscar goes to... element to our most popular sport.
As my dad says of college football: Its figure skating in the end.
If so, I might just take a shady Olympic judge over the computer.
At least then, you can point to someone to blame.
Zach Mitcham is editor of The Madison County Journal.