02.14.11
Not Made in China: US Senescence
From the New York Times, Louis Uchitelle’s conclusion that losing the manufacturing base wasn’t such a good idea.
Quotes from various “experts,” easy observables by anyone on the street:
Losing an industry or ceasing to manufacture a particular product, in this case stainless steel flatware, has indeed become a fairly frequent event. Just in the last few years, the last sardine cannery, in Maine, closed its doors. Stainless steel rebars, the sturdy rods that reinforce concrete in all kinds of construction, are now no longer made in America. Neither are vending machines or incandescent light bulbs or cellphones or laptop computers.
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Concern is increasing that this decline has gone too far. “I think there is a growing recognition that a diminished manufacturing sector will undermine our economy,??? says Mark Zandi, chief economist for Moody’s Analytics. (Unintentional knee slapper by ‘economic expert.’ Correction: “Has undermined the economy through mass unemployment and diminished buying power.”)
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How did the nation get into this situation? It gambled, in effect, that by importing more from foreign suppliers and from American companies that had set up shop abroad, consumer prices for manufactured products would fall, without any sacrifice in product quality. Low-wage workers abroad would make that happen.
American manufacturers, on the other hand, would be the world’s best innovators, developing sophisticated new products here at home and producing them, at least initially, in their domestic factories.
The first part of the arrangement worked very well. Consumer prices did fall as imports flooded in — from foreign manufacturers, of course, but also from factories newly opened abroad by American multinationals … The second part of the arrangement, however, has been more problematic. As it turns out, the United States is not the only path-breaker.
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The loss of manufacturing capacity, measured in lost workers, is startling. From the high point in the summer of 1979, through last month, employment in manufacturing has fallen by 8.1 million, to
11.6 million, with most of the drop in just the last decade. While consumers have benefited from lower prices, made possible by unrestricted imports, on the other side of the ledger are tens of billion of dollars in lost manufacturing wages.Something else is gone, too. “We had a storehouse of knowledge and skill built up in these workers and we can’t use it now,??? says James Jordan, president of the Interstate Maglev Project, promoting a high-speed rail technology that uses special magnets to levitate and propel trains. Maglev was invented in the United States … [but not used here].
Uchitelle’s piece, of course, forgets one big thing.
The US still manufactures weapons. Lots and lots of weapons. And that’s about all.
Furthermore, weapons manufacturing is not constrained by any of the things which have destroyed domestic product-making in the US.
It is not subject to death spiral pricing competition; its workers are not constantly downsized for cheap overseas slave labor. And it is underwritten entirely by the US taxpayers even if the taxpayers can afford it less and less.
There is no network of Walmart superstores pillaging the business, offering equivalent dirt cheap Chinese made kit for every missile, armored vehicle, landmine and drone manufactured in the States.
Diminished buying power and lost wages have no effect on US weapons manufacturing. Sacrifice is for everybody else.
Uchitelle’s story frets that the US will cede “innovation” due to loss of domestic manufacturing. Unless you count Mark Zuckerberg, future Nobel laureate, Pulitzer prize winner and global bringer of freedom to oppressed populations worldwide.
It has not lost “innovation,” if that’s what one calls it, in arms manufacturing.
There are General Atomics drones for every future possible application in global assassination, new varieties of cluster bombs, elaborate grenade launchers for blowing up people hiding behind rocks, and robots galore, to no discernible effect, for the forever war in Afghanistan.
It’s a great game for those on the winning side. For most of us, however, not so much.
The most highly read story on the blog early this year has been Not Made in China: US Bullshit Manufacturing. (Basically because of Internet random event. A high traffic sight, WhatReallyHappened, linked here after a few Twitters. Paradoxically, I don’t use Twitter anymore, being obsolete in my mental processes.)
From it:
[While] what production of durable goods in the US that remains is charted, it — along with the fortunes of the middle class and the new mass of unemployed — cratered in 2009. However, military production did not.
It went through a minor dip and then soared.
This is immoral. It destroys any argument on fairness and shared burden and consequences being a part of US society.
It is also economic treason.
The related series: US Bullshit Manufacturing.