http://www.ocala.com/apps/pbcs.dll/arti ... 83/OPINION

Generous to a fault
America needs to curtail massive overseas investment

NORMAN CATES
Special to the Star-Banner
In early 1945, I joined the U.S. Navy. During the next three years, eight months, 15 days, five hours and 32 minutes I spent my off-duty time having fun and chasing girls, oblivious to the things that were happening in government circles in Washington — things that still adversely affect my life, and yours.

The postwar need for some of them was evident. But the internationalists didn’t adequately foresee the long-term effects, and they didn’t stop when they should have.

First was the Marshall Plan. Between 1948 and 1951 the U.S. provided about $13 billion in cash, goods and services to help Europe rebuild its war-torn economies. The goal was to prevent the spread of communism in Western Europe and stabilize the international economy in a way favorable to the development of political democracy and free markets.

The Marshall Plan was a boon to Europe and Japan, but a disaster to heavy industries in the United States, which could not compete against new, modern plants by using plants and manufacturing techniques up to 50 years old.

Low-cost European imports resulted in the closing of many American plants and the loss of many jobs.

In addition, U.S. companies were still subject to high wartime taxes that further restricted their ability to compete. Taxes affected individuals as well as corporations.

At the end of World War II personal tax rates for incomes of $100,000 or more was 90 percent. As far in the future as the administration of President Ronald Reagan, tax rates were an exorbitant 70 percent, until he reduced them to 28 percent.

But it was too late, as corporate executives utilized “stock options” and tax attorneys to take the bulk of their income out of the personal tax structure.

In 1971 the government established a public corporation, the Overseas Private Industry Council, to provide political risk insurance, loan guarantees and direct loans at reduced rates to U.S. companies that invested in for-profit corporations overseas.

Since 1971, OPIC has supported more than 3,100 projects in the “developing world” and provided nearly $145 billion in investments that have helped “host countries” generate more than $11 billion in “host-government” revenues and create over 680,000 “host-country” jobs.

If only our government would support investments, generate revenues and create jobs in our country! But no, they decided to help Caribbean countries.

The Law for Economic Recovery of the Caribbean Basin of 1983, effective Jan. 1, 1984, contains tariff and commercial measures designed to promote the economic revitalization and expansion of the private sector of the Caribbean basin region.

In the mid 1980s multi-national corporations began to move their own manufacturing facilities out of the U.S. to avoid restrictive and expensive environmental regulations and high labor costs. Many went to Mexico where there were few such regulations and labor costs were minimal.

Our government was also up to this challenge, giving us the North American Free Trade Agreement (NAFTA), which took tariffs off products including vegetables from Mexico and caused heavy economic damage to our farmers by the import of fruit and vegetables that were not subject to the environmental and food safety regulations of the U.S. Many outbreaks of intestinal disturbances have been traced to those sources.

Additionally, NAFTA permitted unrestricted access to U.S. highways by Mexican trucks that were not required to meet the maintenance and safety standards required of our trucks.

Now we have the Central American Free Trade Agreement (CAFTA) that extends NAFTA to the rest of the Central American countries. And a few months down the road will come the Free Trade Agreement of the Americas (FTAA), tying together countries from Canada to the southern tip of Chile.

To some people this may sound like a good thing. If so, take a look at the European Community. There is little agreement between the members.

We are not the only people who are proud of their country and want it to be free and independent. Many South American people are physically resisting CAFTA and FTAA.

The internationalists have had their way so far and may win out eventually. But there will be anger and strife before and revolutions after. It is not a pleasant future to contemplate.

___________
Norman Cates is a retired U.S. Army aviator and safety specialist who resides in Ocala.