Post by graybeard on Nov 15, 2011 4:30:51 GMT -6
Manufacturing America’s New Middle Class: Henry R. Nothhaft
By Henry R. Nothhaft - Nov 14, 2011 www.Bloomberg.com
Given how desperately the U.S. needs jobs, it’s amazing how little effort Congress and the president devote to revitalizing manufacturing, the most potent of all job creators. For more than 30 years now, economists and policy makers have instead worshipped the false God of “comparative advantage,” believing that the U.S. could prosper by specializing in innovation while letting China and other nations do the manufacturing.
But the worshippers of this economic religion, built entirely on the altar of innovation, delude themselves if they think that high-tech manufacturing is of little value today. After all, we still live in a world of things -- from cars and cutlery to computers and cell phones -- and somebody still has to make them. If the U.S. doesn’t, then obviously it buys them from countries that do.
That explains why the $30 billion trade surplus in high- tech products that the U.S. enjoyed 10 years ago has become a $56 billion deficit.
The consequences of America’s offshoring craze run far deeper than trade deficits. The wholesale transfer of production offshore has also weakened the nation’s engine of employment, crippled its ability to bounce back from the recession and seriously eroded not only middle-class prosperity, but also our capacity to invent the products, and make the medical advances, of tomorrow.
Recovery From Recession
In the past 30 years, average real weekly wages for men in the U.S. have fallen by a staggering 28 percent. The loss of manufacturing has also exacerbated capitalism’s natural boom- and-bust cycle. After the first seven post-World War II U.S. recessions, it took an average of only four months for employment levels to return to their pre-recession levels. But after offshoring became widespread in the 1980s, recovery from recessions started to take much longer. After the 1990-1991 recession, it took 19 months to return to normal. After the 2000-2001 bust, with even more manufacturing jobs offshore, it took 30 months for employment to reach pre-recession levels. ...
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I shouldn't have been surprised that he didn't mention VAT or tariffs at all; just reduced taxes.
GB
By Henry R. Nothhaft - Nov 14, 2011 www.Bloomberg.com
Given how desperately the U.S. needs jobs, it’s amazing how little effort Congress and the president devote to revitalizing manufacturing, the most potent of all job creators. For more than 30 years now, economists and policy makers have instead worshipped the false God of “comparative advantage,” believing that the U.S. could prosper by specializing in innovation while letting China and other nations do the manufacturing.
But the worshippers of this economic religion, built entirely on the altar of innovation, delude themselves if they think that high-tech manufacturing is of little value today. After all, we still live in a world of things -- from cars and cutlery to computers and cell phones -- and somebody still has to make them. If the U.S. doesn’t, then obviously it buys them from countries that do.
That explains why the $30 billion trade surplus in high- tech products that the U.S. enjoyed 10 years ago has become a $56 billion deficit.
The consequences of America’s offshoring craze run far deeper than trade deficits. The wholesale transfer of production offshore has also weakened the nation’s engine of employment, crippled its ability to bounce back from the recession and seriously eroded not only middle-class prosperity, but also our capacity to invent the products, and make the medical advances, of tomorrow.
Recovery From Recession
In the past 30 years, average real weekly wages for men in the U.S. have fallen by a staggering 28 percent. The loss of manufacturing has also exacerbated capitalism’s natural boom- and-bust cycle. After the first seven post-World War II U.S. recessions, it took an average of only four months for employment levels to return to their pre-recession levels. But after offshoring became widespread in the 1980s, recovery from recessions started to take much longer. After the 1990-1991 recession, it took 19 months to return to normal. After the 2000-2001 bust, with even more manufacturing jobs offshore, it took 30 months for employment to reach pre-recession levels. ...
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I shouldn't have been surprised that he didn't mention VAT or tariffs at all; just reduced taxes.
GB