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U.S. needs a new Bretton Woods deal

WASHINGTON -- President Obama this week will put the final glaze on his plan to revive the sodden economy. In it, Obama will pretend -- as did his two predecessors -- that America can build its common wealth by serving breakfast, swiping plastic and taking in each others' laundry.

Meaning, Obama, George W. Bush and Bill Clinton talked up a consumerist economy that buys goods on credit from Asia, and that makes fewer and fewer value-added durable manufactured products here. That this is a cruel myth is shown by the evictions still carried out in every corner of the country, by staggering unemployment and fear, and stultifying personal and government debt.

The hollow promise of the "service" economy is revealed by steady population losses in blue-collar cities in New York, Ohio, New Jersey, and a dozen other states. To young people hoping to move out of their parents' homes, the fiction is as plain as the nose on Pinocchio's face. But not to Wall Street and the politicians it hires to run your government.

The "service economy" canard may also be dawning on Greece, Ireland, Spain, Italy, Britain and Portugal. Like the U.S., these countries are mired in debt. Like the U.S., they are carrying massive foreign trade deficits. And like us, their biggest trade deficits are with China.

Instead of promoting President Bush's free trade pacts with Panama, Colombia and South Korea, Obama should convene a Bretton Woods-style conference to ponder the organic changes that have completely altered the "old" industrial regimes of the United States, Canada and Western Europe since 1990.

Bretton Woods, N.H., was where the industrialized nations met in 1944 to plan for the post-war economy.

Yes, the issues of joblessness and rolling debt -- and urban anger -- are that big. Gimmicks such as tax credits, retraining, research grants and trade deals won't do it, although Obama is likely to propose a variety of these used Band-Aids. These nostrums helped once; that was before the surge of India, China, Brazil and other exporting economies we once called "developing."

The manufacturing sectors that once thrived in the West must be revived, rebuilding communities where citizens bought most of the products they used from their own countries. The Alliance for American Manufacturing has a 10-point list of basic reforms, including punishing China for undervaluing its currency, that Obama should advance. But he won't. Unfortunately for Main Street, Obama listens only to Wall Street, whose bets are on outsourcing American jobs. The investment business does not need to gamble on the U.S., and it isn't.

"Currently, our nation does not have a comprehensive approach to dealing with unfair (foreign) trading practices," says Rep. Louise M. Slaughter, D-Fairport. She is developing a bill to force other nations to open their markets to our goods, or face sanctions. Slaughter plans to talk to the White House about it.

She'll need luck climbing over the investment business's great wall of cash and lobbying that discourages enforcement of our trade laws.

In the past two federal elections the industry gave candidates $238 million, and spent $196 million influencing the White House and Capitol. This year, the Center for Responsive Politics says, the top three beneficiaries are Republican presidential hopeful Mitt Romney, Obama and Sen. Kirsten Gillibrand, D-N.Y.


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