Tonight's lead editorial is about the potential ripple effects of the Delphi bankruptcy and Indiana's need to think ahead about our continued dependency on manufacturing. Here are some related thoughts. And a shot of reality.
Here, by the way (Download NS_10-13-2005_Zone_First_Editorial1.pdf) is a pdf file of tonight's editorial page. Is that something you'd like to see here regularly?
Comments
In regards to our dependency on manufacturing in the "New Economy", I have to say that as a former free-trader (a former libertarian even!), the answer for the USA isn't to continue to sit still and allow the continued liquidation of our manufacturing base. Rather, we need to wake up to the reality that the "free trade" prescription is not always valid, and that it's time for America to be done with it, at least for the time being. Free trade now amounts to a wealth transfer from the poorest Americans and from middle class Americans to the elite Americans, i.e., the captains of industry who sit on each other's boards of directors and approve obscene pay packages for each other all the while importing cheap, docile labor in the form of illegal aliens, and outsourcing the rest of the labor to China. Cui bono, in this Brave New World? Not the American middle or working class.
Once upon a time (a few months or a year a go), I thought I was rather clever for devising the following rather lame witticism: "We can't all deliver pizzas to each other." But as I should have known, there's nothing new under the sun, and G.K. Chesteron (or someone else, correct me if I'm wrong) had expressed the same sentiment in a very similar manner a hundred years a go: "We can't all do each other's laundry."
That is what this "New Economy" so bandied about by the uberclass is really all about: pizza and laundry. If they really believe that America will maintain her greatness into the future on the basis of tastier pizza, better-cleaned clothes (or less buggy software, etc.), they're not smart enough to have made it into the uberclass. No, the ruling class knows that America is headed for a Brazilification, but they don't care, because they don't care about Americans, they only care about their homes in Jackson Hole, their flats in Manhattan, and that cosy little get away in the Caribbean, all protected by gates and/or men armed with guns.
So I believe you're wrong, Leo. If this country is to have a future and to reclaim her greatness, then we must not move beyond manufacturing...we must return to manufacturing.
Jim Wright, former Speaker of the House, also used the pizza line. Regardless of its origin, and regardless of whether it's pizza or laundry, the point is correct. The way that living standards are improved is by increasing productivity, increasing wealth, and providing some means of making sure that the wealth is distributed among lots of people. This used to happen in manufacturing, where productivity increases combined with relatively protected markets and strong unions to make sure that there were a lot of workers/consumers who could buy the stuff they made. As the world's economy has flattened, or whatever trendy term you want to use, this has obviously changed - productivity and wealth continue to increase, but the distribution has gotten all skewed. Where does it end? I used to hear this sort of conversation just among my liberal/labor friends, but I am now hearing it from small business owners as well which makes me think that perhaps the prevailing attitude of "free market at all costs" is starting to change. I'm not suggesting that more government is inherently the solution. However, it is hard to disagree with the proposition that letting multi-national corporations, who by definition must operate with only their own self interests at heart, run the world is not good news for middle class people. Perhaps China and India are going through what the United States went through in the late 19th century - people with near slave wages working in terrible conditions, but who are finally able to improve their situation. If that happens, then their ability to buy the new stuff that is being created in the US and elsewhere would be a good thing for everyone. But let's recall that government intervention was necessary to allow those improvements to occur....
I have a slightly different take on this issue.
I spent over 16 years working in the Industrial sector. I worked in a nuclear power plant, I was an electrician in a steel mill, I was the automation technician at a food processing plant, and I spent several years as the Maintenance Manager at a local factory.
I went to China in 2003 and built a machine that helped take American manufacturing jobs overseas. It was a VERY DEPRESSING trip.
I am currently 38 years old. I made the DIFFICULT decision to return to college and get a Bachelors degree in Business. I have changed careers due to manufacturing downsizing.
I am afraid that we are going to lose a lot of our high paying manufacturing jobs in the next few years. I think that GM and Ford will most likely both have to file bankrupcy...
I think everyone needs to keep this in mind and to ensure they have the skills they need to compete in the new economy.
I think the days of high paying jobs for people with little in the way of education are going to completely disappear...
Look, I'm an accountant, and not only are our jobs not going to India or China at present (though give 'em five or ten years...), there have been INCREASED demands for my services as an accountant in the wake of all of the accounting scandals in the last several years. I mention this only because I feel it's necessary that I point out I'm not concerned about my own job at present, in protesting the transferring of manufacturing to Mexico, India, China, or wherever the labor's cheap.
But if there is no manufacturing done here, Mr. Sylvester, then the need for accountants here will surely dry up. Exactly what will Americans do, if we lose all our manufacturers? Explain to me how it's going to work , Mr. Sylvester. If we make nothing, what will we have to trade? Our services? But the Chinese have always excelled at laundry... Our computer programming? It's already being off-shored to India and Taiwan. Our manufacturing R&D? Well manufacturing R&D is an outgrowth of manufacturing know-how. As our manufacturing base erodes, and Asia's manufacturing bases grow, who will have more manufacturing know-how? The answer is obvious. They will. Already, much of the high tech R&D has been out-sourced, to Taiwan, to mainland China, to Korea. So tell me, Mr. Sylvester, what kind of work will be left for Americans?
I am not disagreeing with you. I just have a little different take.
I went back and re-read my post, I do not want our manufacturing base to go away; I am just telling you what I think is going to happen...
We are losing our manufacturing jobs and it is going to hurt us. I went back to school knowing what is coming...