Stop Playing Nice

This is a partial transcript from "Your World with Neil Cavuto," December 27, 2004, that was edited for clarity.

STUART VARNEY, GUEST HOST: You want more jobs? Then stop playing so nice. That's what my next guest wants corporate America (search) to know. As long as American CEOs keep kowtowing to China (search), we will lose our position as the world's economic leader.

With us now to explain is Representative Bernie Sanders from Burlington, Vermont.

Congressman, welcome to the show.

REP. BERNIE SANDERS, I-VT.: Nice to be with you.

VARNEY: Let me encapsulate for the benefit of our audience what you say. You don't like U.S. companies setting up shop in China. You say we're exporting jobs and money to a foreign communist totalitarian power.

But my question to you is what would you actually do about it?

SANDERS: I think for a start, we have to recognize that our current trade policy is a disaster. It's resulted in a huge trade deficit and the loss of millions of good paying manufacturing jobs (search).

And what concerns me now is not only the loss of blue-collar jobs. We're on the cusp of losing millions of high paying information technology jobs. A number of experts are now predicting that in the next 10 or 20 years, China will be the No. 1 information technology country in the world.

VARNEY: But we essentially do have a free trade policy, and we've been moving in that direction since the days of Ronald Reagan. Would you reverse that? Would you become a protectionist?

SANDERS: I sure would.

VARNEY: You'd put up tariffs and barriers across the board?

SANDERS: Well, if your question is would I move aggressively to protect decent paying American jobs, damn right I would. I sure would.

VARNEY: That implies protectionism, doesn't it? You're going to put up tariffs, or you're going to put up some kind of barriers at the borders to keep the stuff out?

SANDERS: Yes. I'm going to go back to the ways in which the middle class in America expanded and where we were the major manufacturing power and economic force in the world.

The reality is our current trade policies are not working. The middle class is shrinking. Poverty is growing. Average Americans are working longer hours for low wages, and our disastrous trade policy is one of the factors.

VARNEY: We've just come through a holiday season. And almost everybody in our audience has been out there buying gifts and presents for that holiday season. A lot of the things they bought came in from China.


VARNEY: And they bought at extremely low prices and they bought high quality. If we do as you suggest and put up the protective barriers, prices go up. I'm not saying that quality goes down, but prices do go up and down comes our standard of living.

SANDERS: Oh, no, no, no. It is possible that prices may go up. That's true. But when you're talking about our standard of living, our standard of living today is shrinking. The middle class is in decline, precisely because companies are throwing millions of Americans out on the street.

VARNEY: On what do you base this? I'm a poor foreigner fresh off the boat. I look at America and it's absolutely paved with gold. On what basis do you say that our standard of living across these United States is actually falling, and that the middle class is shrinking and there's more and more poverty? Where's your statistics from?

SANDERS: By every economic study down by the government and private economists. The average American today is working longer hours for lower wages than was the case 25 years ago. Four million people more are in poverty today than was the case four or five years ago. The reality...

VARNEY: There are lies and then there are statistics.

SANDERS: Well, I could cite you many, many statistics. But I think the average American person in the middle class today is in most cases, not all, is today working at a job which pays less in real inflation accounted for wages than was the case 20 years ago.

There was a study. I'm surprised that you guys don't see this. There was a study done by the U.S. government, projecting that over the next 10 years, most of the new jobs that are going to be created in this country are going to be low wage jobs, Wal-Mart-type jobs with minimal benefits.

We have lost in the last three years 2.7 million good paying manufacturing jobs. I don't think these facts are much in dispute.

VARNEY: Do you take aim primarily at China? Or do you take aim at India? How about the Europeans?

SANDERS: No, I take aim at corporate America. China is doing OK. I don't begrudge them. I do get very angry at these large corporations who became great and profitable in the United States.

And now they're saying, "Hey, why do I want to pay an American worker $10, $15 an hour when I can move to China in a country where workers have no democratic rights, can't form a union, no environmental protection, and I can pay 30 cents or 40 cents an hour. I'm going."

VARNEY: Would you be selective in your trade policy? Would you be selective in your trade policy?

SANDERS: Yes. Sure.

VARNEY: For example, would you allow in high priced BMWs and Mercedes made by unionized workers in Western Europe, where they make $30, $40 an hour, let them in but keep out low priced South Korean cars, for example. You'd do that?

SANDERS: Trade is not a bad thing. I am not anti-trade. But you have to trade on level playing fields, not in a way that is crushing the middle class in this country. And you have to do it as we have done it in the past, on an individual product-by-product basis.

You cannot simply say to American workers, "Hey, you're not going to be competing against people who make 30 cents an hour."

We're getting killed. And we're selling out the middle class of this country.

VARNEY: I know you're an independent, but what degree of support do you think your suggestions have in the Democrat Party? I mean, how many Democrats will stand up and abrogate NAFTA, abrogate GATT, abrogate free trade and go in the opposite direction? What proportion of the Democrats would go with you?

SANDERS: Well, to start with, we're seeing more and more who are prepared to do that, and it's not just Democrats. I introduced legislation that would repeal permanent normal trade relations with China. We have a number of Republicans onboard.

The problem, of course, is that the Bush administration, the Republican leadership and a number of Democrats receive a whole lot of money from corporate America. And unfortunately, they're doing the bidding of corporate America, rather than the working class and the middle class of this country.

VARNEY: Would you specifically go out of your way to say to the heads of corporate America, Intel, for example, GE, for example, you'd say, "Look, you may not any longer put your money into Chinese factories. You can't do that"? You'd say flat out, you can't do that.

SANDERS: No, you can't do that. Of course, you can't do that, but this is what you can say. You can say a couple of things, that if you're going to go invest in China, you can do that. We can't stop you. But you're not going to bring your products back into this country tariff free.

We can also say, and I have legislation that will do this, that says no more corporate welfare for G.E., for IBM, for these big corporations that are throwing American workers out on the street.

Why are we giving them billions of dollars of taxpayer money and they say, "Thank you; we're off to China"?

VARNEY: What do you think would happen to the Dow Jones Industrial Averages if your proposed legislation went through?

SANDERS: It's hard to say.

VARNEY: Do you care? Do you care?

SANDERS: Of course, I care. Of course, I care. But I can tell you this: look, the objective fact is — and it's hard to argue this — the middle class in America is not doing well.

VARNEY: I do apologize for jumping in, sir. I do apologize. We're out of time. But I do apologize. Thanks for being with us.

SANDERS: Well, thank you very much. Nice to talk you to.

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