The drift of Louis Uchitelle's article is utterly wrong. It's also
ridiculous to say, as Thea Lea says at the end, that you can't rebuild the
middle class without manufacturing.
Manufacturing can look after itself -- as and when it's required by the
economy. If America or Western Europe don't do it, then the Chinese will --
and supply the products to us cheaper than we can do. Why should
industrialization be extended in the advanced countries any more than it
has to?
What's much more important is an altogether radicalized educational system
for the increasingly specialized jobs of tomorrow's world. In 1700 in the
UK, when parents had to pay for schooling for their children, literacy was
at 65%. It's only 75% now despite our state school system and enforced
attendance. I don't suppose the literacy rate in the US is any better. The
whole system needs a total overhaul -- unless we want the Chinese to beat
at that, too.
Keith Hudson
.
At 09:45 21/07/2009 -0400, you wrote:
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July 21, 2009 NY Times
Obamas Strategy to Reverse Manufacturings Fall
By
<http://topics.nytimes.com/top/reference/timestopics/people/u/louis_uchitelle/index.html?inline=nyt-per>LOUIS
UCHITELLE
If the Obama administration has a strategy for reviving manufacturing,
Douglas Bartlett would like to know what it is.
Buffeted by foreign competition, Mr. Bartlett recently closed his printed
circuit board factory, founded 57 years ago by his father, and laid off
the remaining 87 workers. Last week, he auctioned off the machinery, and
soon he will raze the factory itself in Cary, Ill.
The property taxes are no longer affordable,Mr. Bartlett said glumly, so I
am going to tear down the building and sit on the land, and hopefully sell
it after the
<http://topics.nytimes.com/top/reference/timestopics/subjects/r/recession_and_depression/index.html?inline=nyt-classifier>recession
when land prices hopefully rise.
Though manufacturing has long been in decline, the loss of factory jobs
has been especially brutal of late, with nearly two million disappearing
since the recession began in December 2007. Even a few chief executives,
heading companies that have shifted plenty of production abroad, are
beginning to express alarm.
We must make a serious commitment to manufacturing and exports. This is a
national
imperative,<http://topics.nytimes.com/top/reference/timestopics/people/i/jeffrey_r_immelt/index.html?inline=nyt-per>Jeffrey
R. Immelt, chairman and chief executive of
<http://topics.nytimes.com/top/news/business/companies/general_electric_company/index.html?inline=nyt-org>General
Electric, said in a speech last month, while acknowledging that G.E. was
enriched by its overseas operations too.
<http://topics.nytimes.com/top/reference/timestopics/people/o/barack_obama/index.html?inline=nyt-per>President
Obama, agreeing in effect, has declared, The fight for American
manufacturing is the fight for Americas future.
The United States ranks behind every industrial nation except France in
the percentage of overall economic activity devoted to manufacturing 13.9
percent, the
<http://topics.nytimes.com/top/reference/timestopics/organizations/w/world_bank/index.html?inline=nyt-org>World
Bank reports, down 4 percentage points in a decade. The 19-month-old
recession has contributed noticeably to this decline. Industrial
production has fallen 17.3 percent, the sharpest drop during a recession
since the 1930s.
So far, however, Mr. Obamas administration has not come up with a formal
plan to address the rapid decline. Instead, it has pursued ad hoc
initiatives bailing out
<http://topics.nytimes.com/top/news/business/companies/general_motors_corporation/index.html?inline=nyt-org>General
Motors and
<http://topics.nytimes.com/top/news/business/companies/chrysler_llc/index.html?inline=nyt-org>Chrysler,
for example, and pushing green energy by supporting the manufacture of
items like
<http://topics.nytimes.com/top/reference/timestopics/subjects/w/wind_power/index.html?inline=nyt-classifier>wind
turbines and solar panels.
We want to make sure that we grow a manufacturing base for renewable
energy,said Matthew Rogers, a senior adviser in the Energy Department,
explaining that this is being accomplished in part by accelerating loan
guarantees from zeroin the Bush years.
Xunming Deng, a physicist and the chairman of the Xunlight Corporation,
sees himself as a beneficiary of what he describes as the Obama
administrations more flexible loan guarantees. His factory in Toledo,
Ohio, with 100 employees, is in the early stages of making solar panels,
and Dr. Deng is already planning to quadruple the plants size. He has
applied to the Energy Department for a $120 million loan guarantee. If he
gets it, he will not have to pay the hefty fees charged for loan
guarantees before Mr. Obama took office.
Getting rid of that fee makes the loan guarantee very attractive and very
helpful,Dr. Deng said. We cant grow as fast without it.
Beyond energy, the administrations approach gradually outlines the
elements of a manufacturing policy what
<http://topics.nytimes.com/top/reference/timestopics/people/s/lawrence_h_summers/index.html?inline=nyt-per>Lawrence
H. Summers, director of the National Economic Council, described as a
number of things to support manufacturing.
The auto bailout, for all its improvisations, served notice that the
administration would probably rescue any giant manufacturer it deemed too
big (or too iconic) to fail, and would help the suppliers of failing
giants transition to other industries.
The Buy America clause in the
<http://topics.nytimes.com/top/reference/timestopics/subjects/u/united_states_economy/economic_stimulus/index.html?inline=nyt-classifier>stimulus
package pointedly favors the purchase of American-made goods for
infrastructure projects. The Commerce Department is adding $100 million,
more than double the current outlay, to a program that helps American
manufacturers operate more effectively. And trade agreements negotiated by
the Bush administration agreements that would make the United States more
open to imported manufactured goods have been allowed to languish in Congress.
The administrations policy is evolving in the right direction,said
Representative Sander M. Levin, Democrat of Michigan, who is particularly
concerned about auto imports. I think they have essentially shed the
political chains that prevented government from having a role in
manufacturing. They are working their way toward what makes sense.
Not everyone agrees.
Bush and Obama,Mr. Bartlett said scornfully, one is as bad as the other in
terms of manufacturing policy.
He acknowledged that the recession was the immediate reason for the demise
of his familys business. But what really did it in, he said in an
interview, was the competition from less expensive Chinese circuit boards
less expensive, he argued, because the Chinese undervalue their currency
and this administration, like the ones before it, lets them get away with it.
Our orders went from $8 million at an annual rate to $4 million, which was
not enough to make money,he said.
Mr. Bartlett, who is co-chairman of an organization called the Fair
Currency Coalition, said that Chinese competitors charged only $1 for each
printed circuit board sold in this country, while he charged $1.40. Like
many economists and government officials, he says he believes the Chinese
currency is artificially undervalued. As a countermeasure, he said the
Obama administration should impose a 40 percent tariff on imported Chinese
goods.
I can compete against Chinese entrepreneurs, and Chinese labor cost is not
that big a factor,he said, but I cannot compete against the Chinese
governments manufacturing policies.
Manufacturing has long been viewed as an essential pillar of a powerful
economy. It generates millions of well-paid jobs for those with only a
high school education, a huge segment of the population. No other sector
contributes more to the nations overall productivity, economists say. And
as manufacturing weakens, the country becomes ever more dependent on
imports of merchandise, computers, machinery and the like running up a
trade deficit that in time could undermine
<http://topics.nytimes.com/top/reference/timestopics/subjects/c/currency/dollar/index.html?inline=nyt-classifier>the
dollar and the nations capacity to sustain so many imports.
One tactic for strengthening the manufacturing sector, in the
administrations view, would be a shift in tax policy. The research and
development tax credit, which is now subject to renewal by Congress, would
be made permanent, encouraging much more R.& D. among manufacturers, a
senior Commerce Department official argued. And foreign taxes paid on
profits earned overseas would not be deductible in this country until the
profits were repatriated, a restriction that might discourage locating
factories abroad.
The goal is to arrest manufacturings dizzying decline. It was the pillar
on which we built the middle class,said Thea Lee, policy director for the
<http://topics.nytimes.com/top/reference/timestopics/organizations/a/american_federation_of_laborcongress_of_industrial_organizations/index.html?inline=nyt-org>A.F.L.-C.I.O.,
and it is hard to see how you rebuild the middle class without reviving
manufacturing.
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Keith Hudson, Bath, England, <www.evolutionary-economics.org>,
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