The New York Times is good this morning to point out that the Obama administration doesn’t have a plan for a critical apart of the economy: manufacturing.
Of course, manufacturing industry has been gutted in this country over the last few decades, but that’s accelerated since the recession started. Another two million jobs have vanished, and the U.S. now has fewer factory jobs per capita than any other industrialized country but France (off four percentage points in just a decade, the Times says). How the mighty have fallen.
And you’re dreaming if you think that’s going to change anytime soon. Obama campaigned on rebuilding the country’s manufacturing base—like all the politicians do—but has no coherent policy on how to attempt to do so.
So far, however, Mr. Obama’s administration has not come up with a formal plan to address the rapid decline. Instead, it has pursued ad hoc initiatives — bailing out General Motors and Chrysler, for example, and pushing green energy by supporting the manufacture of items like wind turbines and solar panels.
The Times mentions the stacked playing field faced by home-grown manufacturers trying to compete with China, which has unfairly pegged its currency to the dollar. But, oddly, it barely otherwise touches on trade, which has had a big role has in hollowing out the industry.
Obama himself campaigned for a re-evaluation of our trade policies, but that was largely political wool pulled over the eyes of Rust Belt voters in the swing states.
But this next paragraph is a good summary of why manufacturing is so critical, and not just to those working in the factories:
Manufacturing has long been viewed as an essential pillar of a powerful economy. It generates millions of well-paid jobs for those with only a high school education, a huge segment of the population. No other sector contributes more to the nation’s overall productivity, economists say. And as manufacturing weakens, the country becomes ever more dependent on imports of merchandise, computers, machinery and the like — running up a trade deficit that in time could undermine the dollar and the nation’s capacity to sustain so many imports.
And his is sort of a wryly funny keep-them-honest clause attached by reporter Louis Uchitelle:
“We must make a serious commitment to manufacturing and exports. This is a national imperative,” Jeffrey R. Immelt, chairman and chief executive of General Electric, said in a speech last month, while acknowledging that G.E. was enriched by its overseas operations too.
As to that last bit:
And foreign taxes paid on profits earned overseas would not be deductible in this country until the profits were repatriated, a restriction that might discourage locating factories abroad.
So there’s some sort of idea, for what it’s worth. That’s hardly going to turn the tide.
Nice that the Times points all this out.Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at email@example.com. Follow him on Twitter at @ryanchittum.