Tuesday, August 18, 2009

Why United States needs factories to assure its greatness as a nation

About 40,000 U.S. factories closed shop in the past seven years. At long last, a campaign is underway to reverse that huge decline in industrial power.

Promulgating the case for reindustrializing the U.S. economy is the purpose of a book, “Manufacturing a Better Future for America,” published by a new group, the Alliance for American Manufacturing. The book makes this prediction in its final paragraph:

“If we continue to outsource all aspects of manufacturing – manufacturing processes, jobs, and expertise – then we will wake up one morning to discover that our corresponding economic and military power has been exported as well.”
To prevent that from happening is the goal of the Alliance, a partnership that brings together a large union, the United Steelworkers of America, and a selected group of America’s leading manufacturing corporations, including U.S. Steel.

The United States “is broke because it has stopped producing what it consumes,” writes Richard McCormack, the editor of the 332-page volume, who is also editor and publisher of Manufacturing & Technology News. “The country must restart its industrial engine and produce products that America needs to buy and the world demands.”

A conventional view holds that government is not, and should not be involved in choosing winners and losers in the marketplace. That’s one of the myths punctured in nine chapters written by McCormack and ten other writers. But in fact the U.S. government has been – and is – mightily involved.

Most obvious is the current multi-billion dollar bailout of the investment and banking system to rescue losers from a collapse of their own making. Less recognized and understood is the U.S. government role
-- in establishing and enforcing the rules of global trade and investment for business, and
-- in permitting those rules to turn U.S. industries and their workers into losers.

McCormack identifies the “once dominant and important U.S. industries” – semiconductors, machine tools, printed circuit boards, consumer electronics, autos parts, appliances, furniture, clothing, telecommunications equipment, and home furnishings – as suffering from economic collapse as victims of a global economic system “stacked against U.S. based producers.”

U.S. labor is so productive that competing with low-wage labor is generally “the least of American companies’ worries,” McCormack writes. Instead, governments in Asian lure foreign firms with a wide range of other attractive advantages, such as the following.

“Foreign producers receive subsidies, tax abatements, free buildings, free energy. They don’t havc to pay Social Security, workers’ comp, disability, or health care. They don’t have to match a 401(k) contribution. They are able to avoid more than 100 years of government regulations put on American businesses. OSHA does not exist in most developing nations. They use electricity that would never be allowed to be generated in the United States because of pollution controls.”

I shudder when I hear politicians proclaim that the United States must become more competitive. How? By eliminating (say) Social Security?

Stay tuned for more on a “developing story" ignored by the mass media.


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1 comment:

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