A new report from former homeland security secretary Tom Ridge and former assistant secretary Robert B. Stephan contends that the loss of manufacturing, along with fraying infrastructure, is leaving our nation more vulnerable to natural disasters. The report was sponsored by the Alliance for Manufacturing, which advocates a more aggressive trade agenda.
This report is part of a growing chorus of opinions and commentaries lamenting the erosion of our industrial landscape -- a chorus that I deem long overdue. There is growing awareness that manufacturing really is vital to our economy, and that foreign competitors are employing predatory and often illegal means to wrest away our leadership in key manufacturing sectors.
I believe it is also fair to say that the public is becoming more aware of the direct connection between the flood of foreign imports and the loss of jobs in this country. The recent flap about U.S. Olympic Team uniforms made in China hit a nerve with a lot of people. I don't believe 10 years ago anyone would have cared where those uniforms were made.
The standard response of most economists to this sort of anxiety is that trade is what it is, and that government should not become engaged in trying to promote and protect specific economic sectors. They contend that government should not be in the business of picking winners and losers in the economy, except where national security is clearly at issue.
But think that argument really misses the point. I agree we should not yield to protectionism, but on the other hand the best defense is a good offense. Our government should not be in the business of picking winners and losers -- it should be promoting investment, R&D and exports across the board. We need a tax system that rewards productive investment. We need an education system that prepares people for real world jobs, especially in manufacturing.
And there is no reason in the world why we should not create and encourage a joint public-private Buy American campaign. There is certainly nothing un-American or uneconomic about encouraging positive behavior. Every time I go to the grocery store (okay, many it's not that often) I see signs advertising organic foods. Many consumers are willing to pay more for food grown without chemical additives. It is a perfectly legitimate marketing angle.
We need a counterpart for manufacturing -- call it organic manufacturing -- in which consumer products are clearly labeled American Made, and consumers are invited to perhaps pay a little more for "home-grown" manufactured products, knowing those products will be top quality and safe, and also that they are helping keep jobs in the U.S.
Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. Jerry is available for speaking engagements.
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