Kevin L. Kearns on Free Trade: ‘We Need to Shake the Whole System Up, and with Bernie and Hillary, You Don’t Get That’


Kevin L. Kearns, president of the U.S. Business & Industry Council, joined SiriusXM host Stephen K. Bannon on Friday’s Breitbart News Daily to discuss the effect of free-trade policies on America’s “Main Street companies.”

Kearns reviewed the history of his organization, which was founded in 1933 by John Edgerton, past president of the National Association of Manufacturers, as “a vehicle of lobbying and expression for domestic, mainly family-owned manufacturing businesses.”

Edgerton’s break with the National Association of Manufacturers continues through his organization today, as Kearns said the U.S. Business & Industry Council sees things differently than NAM and “other business organizations which are dominated by big business.”

“They pay their dues, they get to call the tune, and so you have all these multi-nationals who are pro-free trade organizations, companies, trying to steer the Hill, trying to steer American trade policy in their favor,” he explained. “My companies are Main Street companies, if you will – smaller manufacturers, maybe between 50 and 800 employees, who really are the centers of life in the towns and cities where they’re located.”

Kearns said:

My owner/managers go to work every day in their factories, and they know the people that work for them, they go to the same churches, schools, et cetera. It’s a completely different perspective from some guy in Scarsdale taking a helicopter down to 34th Street, and going across midtown, and laying off 50,000 people he doesn’t know.

Bannon asked him to respond to the coastal-elite criticism that his industries are clinging irrationally to life, after fundamental and irreversible shifts in the economic landscape rendered their business models obsolete – “dinosaurs and the meteor’s already hit,” as he put it.

“It’s a good question. It’s a fair question, in this sense: I’ve run this place for 23 years. My membership is about half what it once was. NAFTA, CAFTA, the accession of China to the World Trade Organization, have put so many of my members under,” Kearns replied. “However, we’ve got a whole bunch of companies that are surviving and thriving. I think there is a future, especially if we bring manufacturing back to the United States.”

“There’s one candidate who wants to do that,” he said, adding:

All three candidates – counting Sanders, and Clinton, and Trump – say, you know, we’re against the TPP. It’s not enough to be against the TPP. You need an industrials strategy for the nation. You need a plan going forward. If the TPP doesn’t pass, which looks unlikely right now – so what? We still have a trade deficit in excess of $500 billion. Things would go on that way. We’d continue to borrow money from foreigners to pay to buy their goods.

“We need someone to break the cycle,” he urged.

Kearns explained that past trade deals put his organization’s members at such a disadvantage that many companies decamped to Mexico and overseas, gaining cost advantages that enabled them to wipe out competitors who remained in the United States. He said the U.S. was in a “very deep hole.”

“We have these massive trade deficits every year, which we have to pay for,” Kearns warned. He went on:

The average person doesn’t do national income accounting, but we have to pay for trade deficits. You hear all the time from the other side, “Trade deficits don’t matter.” Our national debt has roughly doubled under Barack Obama; it’s $20 trillion now. That has to be paid for. Unless we start creating wealth in this country again – and there are three main ways you create wealth: you do it through manufacturing or resource extraction. You know, services – okay, you’re my broker. I cook your hamburger. I mean, there’s no creation of wealth there; it’s just an exchange of wealth that someone else has already created.

“We need to bring back our industrial base by cutting the trade deficit,” he stated, continuing:

If I were president for a day, or if I were advising one of the presidential candidates, I would say you get out of these lousy deals that we’re in, you adopt a national industrial strategy, so you know consciously what industries you want to be in. If there are some you can let go, but a large continental nation, you know, we don’t have to let that many go.

Kearns said restoring America’s industrial base would create good jobs and get wealth circulating again, which would, in turn, increase the tax base and help our government make good on its commitments to the public, like Social Security.

“You have $72 trillion in an unfunded liability, with sort of government-created confetti bonds in some account. You know, it’s all flim-flam accounting,” he said of Social Security.

Kearns provided an example of deficit danger:

Our trade deficit in goods last year – that is, what we could have made here, but imported – is $800 billion. That’s four million new jobs, right off the bat. Those four million people, they go to lunch, they use accountants, they shop here and there, and they pay taxes, as opposed to consuming taxes, in the form of various welfare benefits. That’s a couple of trillion dollars circulating through our economy.

“We need to shake the whole system up, and with Bernie and Hillary, you don’t get that,” he advised. “We’re sort of where we are now.”

“If TPP doesn’t pass – although I’m sure Hillary’s going to do what Bill did with NAFTA. He put in a side letter on the environment, a side letter on labor, and he pushed the thing through Congress. She will do the same thing,” Kearns predicted. “She doesn’t want to alienate her Wall Street buddies, who are salivating over this. She’ll tweak it here and there, and boom, we’ll be in the Trans-Pacific Partnership.”

Bannon noted that the Obama administration has also been pushing hard to pass TTIP, the Transatlantic Trade and Investment Partnership, which is a European version of TPP, before the next president takes office, but Kearns predicted that “they’re not gonna get it done.”

Kearns recommended listeners visit the USBIC’s website,, for more information.

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