We Won’t See Mass Prosperity Until We Rebuild Manufacturing

[marmar]

from New Deal 2.0:



We Won’t See Mass Prosperity Until We Rebuild Manufacturing
Tuesday, 09/6/2011 - 1:48 pm by Jon Rynn |


While there are many similarities between our time and the Great Depression, there is a crucial difference: In the late 1930s, the United States produced over one-third of the world’s manufactured goods, while in 2008, the American manufacturing share was down to 18 percent after being trashed by outsourcing and imports. By increasing demand for products through government action, FDR was able to set the country up for the “Great Prosperity” from the end of WWII until the 1970s. Now, even with a large second stimulus, we will not be able to experience a new era of prosperity until we rebuild the manufacturing sector.

Recently, a crop of articles has appeared that argue that “our economy will thrive only when we make what we invent,” as Susan Hockstein, President of the Massachussetts Institute of Technology, recently concluded in a New York Times op-ed. Hockstein is challenging the idea that the United States can somehow be a world-class source of innovation without actually producing the new products. As she points out, in the past, “with design and fabrication side by side, insights from the factory floor flowed back to the drawing board.” She echoes the research of Professors Pisano and Shih, from an article in the Harvard Business Review, in which they wrote, “The U.S. has lost or is in the process of losing the knowledge, skilled people and supplier infrastructure needed to manufacture many of the cutting-edge products it invented.” When engineers could go down to the factory floor and look at the results of their design decisions, it was much easier to create yet more innovations. A major criticism of a corporation (such as GM) used to be that the design engineers would take their designs and “throw them over the wall” to the factory floor without worrying about how the designs fared in a factory setting. Now we throw the designs over the Pacific Ocean to China.

By contrast, as John Gertner writes in the New York Times Magazine, “As the former White House economic adviser Lawrence Summers put it, America’s role is to feed a global economy that’s increasingly based on knowledge and services rather than on making stuff.” The benefits of separating production and innovation have been accepted as conventional wisdom for the past few decades, exemplified by Summers’s statement.

But reintegrating innovation — that is, science and engineering — with production — skilled production workers and operations managers — is necessary. Back in the Great Depression, the Russians bought American factories and imported American engineers to create their industrial system. (Germany also helped, much to their later regret.) Now, after decades of closing down factories, throwing engineers and skilled production workers out of work, re-orienting those professions to military work and much of the educated class to finance, the U.S. is in the position of a developing country. We must try to catch up to Europe and Asia in any way that we can. ..............(more)

The complete piece is at: http://www.newdeal20.org/2011/09/06/we-wont-see-mass-prosperity-until-we-rebuild-manufacturing-57537/

[DJ13]

1. K&R

[madrchsod]

2. we won`t see that anytime soon...if ever.

[MineralMan]

3. That's a very long process. I don't think we have enough time

to wait for that. If we do, there won't be any recovery. In the meantime, there are a lot of things that need to be done, and a lot of people with the skills to do them. Looks like that's the place to start, if you ask me.

[banned from Kos]

4. Dow Chemical CEO writes "Make it in America" - Obama's manufacturing guy

http://online.wsj.com/article/SB10001424053111904009304576530390334217146.html

[sam11111]

5. "knowledge and services" econ ---- the no manufacturing model

1. Services are lo pay

2. Knowledge jobs can only hire a blessed few smart folks not our 28 million jobless. See link belo.

Good post mar.
Without tarriffs too tho we are sunk.

[RaleighNCDUer]

6. We will not begin to rebuild manufacturing until we abandon "Free Trade"

in favor of "Fair Trade".

Our manufacturing base cannot compete with enslaved labor. Until we impose penalties on nations and corporations which use slave labor, which pollute with impunity, which have no regard for worker safety, we will continue to be at a disadvantage. Such penalties would not restrict them from doing business with us, but would encourage them to upgrade their manufacturing ethics if they want to do business with us. As a side effect, companies would no longer outsource from the US, because there would no longer be an advantage for them to do so.

Foreign companies do not necessarily have preeminance due to their doing what they do 'better' - it is ONLY because they do it 'cheaper'. Take away the cheap, and we're back in the game.

[Romulox]

7. I wouldn't walk across the street to buy something made by scabs in the cheap labor South.

I'm afraid it's not terribly realistic, this idea that we'll wait until the Rust Belt is decimated, largely by race-to-the-bottom competition with the at-will South, and THEN we'll re-dedicate ourselves to buying domestic? "But LOOK! It's made in a non-union plant in Mississippi!"

Don't hold your breath. :shrug: