Hi Billy, On Mar 28, 2012, at 1:24 PM, [email protected] wrote: > Ernie : > Tell you one thing, it is overdue to bring back specific forms of > protectionism. > Not to prop up inefficient industries or businesses, but for reasons of > national > security. We simply cannot afford to have all of our electrical transformers > manufactured in Asia or Mexico, nor to no longer have a consumer electronics > business that is maybe 90% dependent on imports from Korea or France, > nor to only have the left overs of a steel industry. > > The solution is simple : A requirement to maintain manufacturing capacity for > all industries identified as necessary for the nation's security, including > economic security. This cannot be sufficient to re-create the manufacturing > base > we once had, but it would guarantee a "floor" for manufacturing jobs and > a future for manufacturing industries.
Great theory, but i have no idea how it works in practice. At some level, *everything* in common use is essential to some part of our economy, and the ability for someone to disrupt it would clearly hurt us. We already have such rules around government and military procurement. How would you extend them? And don't forget there would be enormous political pressure from different industries to either exempt them (to allow cheaper foreign production) or include them (to give them a de-facto domestic monopoly). And don't forget the fact that technology moves at least 10 times faster than government policy. How would you ensure the right new techniques get protected, and -- more importantly -- that the wrong *old* technologies are not? Even the very concept of protection also requires some serious thinking about what we're protecting against. A protacted proxy war with China? A short hot war with Iran? Everything imaginable? > It is assumed that, to be competitive and to satisfy stock holders, that > manufacturing > firms would strive to be efficient, that if robots can do the job, there will > be robots > on assembly lines, etc,. But there is only so far any company can go with > automation; > there would be jobs in these sectors. > > For any kind of solution, free trade ideology has to be scrapped, thrown out, > relegated to history. We need managed trade, as free as feasible, > but not as free as possible. Adam Smith , in terms of modern day realities, > is a really poor guide to any economic policy worth the name. Sure, but your simplistic solution doesn't seem to be a dramatic improvement over the status quo. I'm more persuaded by Steve Denning's take: http://www.forbes.com/sites/stevedenning/2011/08/17/why-amazon-cant-make-a-kindle-in-the-usa/ We need a new concept of business investment that creates the right incentives to companies to "right-source" important technology closer to home. Government has a crucial role to play in helping make that happen, but picking specific industries to protect (for anything other than military hardware) seems likely to do more harm than good. -- Ernie P. > > Billy > > > ========================= > > > 3/28/2012 1:07:33 P.M. Pacific Daylight Time, [email protected] > writes: > Interesting perspective. Anyone brave enough to read the full report to see > if they're on-base? > >> Let’s be clear here: We are not saying that manufacturing is the only form >> of production, or that globalization is bad. For example, the immense >> flowering of the creativity in the wireless/social media/communication >> sectors are clearly a form of 21st century production. The App Economy—the >> development and use of apps designed for smartphones and social media—has >> created nearly 500,000 jobs since the first iPhone came out, and will >> continue to create more. >> >> Second, we’re also not saying that trade is the only cause of job loss. >> Clearly one impact of information technology has been to massively transform >> industries such as retailing, reducing the number of workers needed. >> >> However, the U.S. cannot afford to be in a position of perpetually consuming >> more than it produces. We need to make the shift from a consumption economy >> to a production economy in order to assure long-term prosperity. > > -- Ernie P. > > > http://progressivepolicy.org/hidden-toll_imports-and-job-loss-since-2007 > > Hidden Toll: Imports and Job Loss Since 2007 > > “We have a huge opportunity, at this moment, to bring manufacturing back…but > we have to seize it.” With these words in his State of the Union address, > President Obama signaled that he is getting serious about recapturing factory > jobs that have been lost to imports. Since the speech, the White House has > outlined a series of policy measures intended to encourage companies to > ‘insource’ jobs from overseas, including changes in the tax code and > increasing domestic investment. > > True, many economists, both liberal and conservative, are skeptical that much > can be done to bring back manufacturing jobs. They argue that American > factories have become so efficient that they no longer need to hire many > workers. “It’s totally implausible to think that there’s going to be a surge > in manufacturing jobs,” Lawrence F. Katz, an economist at Harvard who served > in the Clinton Administration, told the New York Times. Christina Romer, > former head of Obama’s Council of Economic Advisors, recently wrote in the > New York Times that “a persuasive case for a manufacturing policy remains to > be made.” > > But this skepticism about President Obama’s manufacturing initiative relies > on faulty official data. In fact, government statisticians are dramatically > undercounting the economic impact of imports from low-cost countries such as > China, as we will explain, in this paper and the accompanying policy memo, > “Trade-related Jobs Lost During the Great Recession.” The reason for this > statistical problem is an important economic concept known as “import price > bias.” > > After doing a preliminary adjustment for import price bias, we find that 1.3 > million jobs have been lost to rising imports since the recession started in > 2007, accounting for one-third of the private nonconstruction job loss. Many > of these are jobs that could potentially be brought back to this country by > appropriate incentives that encourage investment and job creation in the U.S. > We therefore conclude that President Obama’s manufacturing initiative, > combined with other “pro-production” policies, can potentially be a > significant source of domestic jobs. > > We arrive at this hefty figure by adjusting the official data on trade and > domestic production for low-cost imports, which are incorrectly treated in > the national income accounts. Correcting for this import price bias, we find > that nonpetroleum imports rose by $131 billion from 2007 to 2011, adjusted > for price changes, rather than the meager $14 billion rise in imports that > the official data shows (measured in 2011$). > > This uncounted import growth helps explain why federal stimulus measures did > not generate as many jobs as expected. In fact, a hefty slice of fiscal > stimulus—both tax cuts and spending increases—leaked overseas, boosting > imports rather than domestic production. This leakage, in turn, explains why > Obama’s manufacturing strategy is so necessary. We need to reinforce domestic > production in order to reaffirm the strength of the economy. > > Let’s be clear here: We are not saying that manufacturing is the only form of > production, or that globalization is bad. For example, the immense flowering > of the creativity in the wireless/social media/communication sectors are > clearly a form of 21st century production. The App Economy—the development > and use of apps designed for smartphones and social media—has created nearly > 500,000 jobs since the first iPhone came out, and will continue to create > more. > > Second, we’re also not saying that trade is the only cause of job loss. > Clearly one impact of information technology has been to massively transform > industries such as retailing, reducing the number of workers needed. > > However, the U.S. cannot afford to be in a position of perpetually consuming > more than it produces. We need to make the shift from a consumption economy > to a production economy in order to assure long-term prosperity. > > Read the entire report here. > > This entry was posted on Tuesday, March 27th, 2012 at 9:37 am and is filed > under Daily Fix, Policy Memo. You can follow any responses to this entry > through the RSS 2.0 feed. You can leave a response, or trackback from your > own site. > > > > -- > Centroids: The Center of the Radical Centrist Community > <[email protected]> > Google Group: http://groups.google.com/group/RadicalCentrism > Radical Centrism website and blog: http://RadicalCentrism.org > > > -- > Centroids: The Center of the Radical Centrist Community > <[email protected]> > Google Group: http://groups.google.com/group/RadicalCentrism > Radical Centrism website and blog: http://RadicalCentrism.org -- Centroids: The Center of the Radical Centrist Community <[email protected]> Google Group: http://groups.google.com/group/RadicalCentrism Radical Centrism website and blog: http://RadicalCentrism.org
