Made in America seems to be all the rage in the Capitol right now. Rahm Emanuel promised us that we'd be hearing a lot more from the White House about this over the next few weeks. House Speaker Nancy Pelosi previewed the House Democrats' "Make it in America" plan to the President a few days ago. It's perhaps the only issue on which liberals and Tea Party supporters agree. Jeep has launched an ad campaign (which, by the way, looks a lot like a video we premiered in 2007) to link the idea with its new Grand Cherokee. So, what exactly is Made in America?
More on that later. But now, it's important for you to know what BP didn't make in America: the blow-out preventer on its failed rig. When the blow-out preventer on the Deepwater Horizon rig needed to be modified, it was sent to China. According to the UK's Guardian newspaper:
BP ordered the owner of the Deepwater Horizon rig, whose explosion led to the worst environmental disaster in US history, to overhaul a crucial piece of the rig's safety equipment in China, the Observer has learnt. The blow-out preventer - the last line of defence against an out-of-control well - subsequently failed to activate and is at the centre of investigations into what caused the disaster.
Experts say that the practice of having such engineering work carried out in China, rather than the US, saves money and is common in the industry.
Wow. If China can't keep cadmium and lead out of children's bracelets, it's hard to understand why BP--flush with profits--would trust a Chinese firm to overhaul a key component in the Deepwater Horizon rig simply to save money. This is, after all, a life or death issue for oil rig workers. If the modification in China led to the failure of the blow-out preventer, what a monumental miscalculation it was, costing lives and causing our nation's most severe environmental disaster.
Which leads us back to Made in America. American workers and businesses can certainly make blow-out preventers, as well as thousands of other manufactured products. But for too long, Democrats and Republicans have neglected this critical sector of our economy.
So it should come as no surprise that a new poll by Mark Mellman and Whit Ayres shows that going into the 2010 election cycle, both Democrats and Republicans face a deeply unhappy electorate who are unified in their concern over the loss of American manufacturing jobs and the lack of work being done on the issue by Congress. When asked about prospective economic solutions, pro-manufacturing policies won overwhelming support across demographics including non-union households, independents, union households and Tea Party supporters. The responses in the poll echo a June 21, 2010 article in the Financial Times, which quotes a projection that in 2011 the United States will lose its status as top nation in factory production to China, "thus ending a 110 year run as the number one country."
In the poll of 1,000 likely general election voters, "We have lost too many manufacturing jobs" is the top concern among independents and working class voters, even compared to government debt, loss of life in Iraq and Afghanistan, the high cost of health care, illegal immigration, or terrorism. Some key findings:
Support for a national manufacturing strategy is growing among serious economists and business leaders as well as labor leaders. Andy Grove, the former CEO of Intel, wrote a BusinessWeek cover story on this very topic in its July 5 issue. Leaders of Fortune 500 companies such as Bill Ford of Ford Motor Company and Dan DiMicco of Nucor have argued that manufacturing should be boosted to 20 percent of our Gross Domestic Product. Jeff Immelt of General Electric has acknowledged that his company--and America--have simply outsourced too much production and should refocus on making things here again.
So let's get to it. Congress, pass a manufacturing strategy, and reverse what Harold Meyerson has called an American "anti-industrial policy."
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I wonder if considerations have been made by those in Congress, to tying corporate and or high income tax levels to unemployment rates? If your taxes will go up as a result of layoffs or outsourcing jobs, wouldn't that cause at least a little reflection?
Tax consequences for job losses strikes me as a workable incentive to increase American employment.
Productivity adjusted labor cost in non-high tech areas is typically 100% or more in America compared to developing nations, and in some areas 300% or more. What that means is that Made in America manufactured goods will cost more, if it is something that can also be manufactured elsewhere. So prices will rise and unless everyone's income also rise with it (which has not been the trend), America is relegated to consuming less (in quantities, not dollars), ergo a lower living standard.
The way to create jobs is domestic, and has not much to do with world trade. President Obama pointed out that the financial debacle caused America 8 million jobs in the last year alone. The quickest way to get jobs back (and it does not rely on asking foreigners to buy American) is to take the trillions back from the Banksters, and spend it on RENEWING America's infrastructure. NO we are not talking about building bridges to nowhere, but genuine American inventiveness - liners for the millions of miles of broken drainage and sewers (no trenching required), high tech road resurfacing (solar and long lasting concretes), innovative mass transit (ring trains and such) - all of which can be exported once proven in America.
And the beauty of it is that infrastructure jobs cannot be exported.
The argument is: "it will cost more. Therefore, we cannot do it Here, because Somewhere Else in the world there must be a place that Will Sell for Less."
The folks who pursue that argument naturally take for granted that, "when we make it Somewhere Else, we can sell it Here." And, since the price is lower Somewhere Else, the profit will be higher.
But as we can by now VERY plainly see... if you do not "make it Here," then the people who (want to, AND BY THE WAY are ready and willing and able and trained to) "make it Here" do not have jobs, therefore do not have money in their pocket, therefore cannot buy it no matter what the price. "Your profit? ZERO."
It is likewise specious to argue that "the guv'mint should pay everybody to rebuild our bridges, etc." Why? Because, actually, "the guv'mint" cannot support anyone. Instead, everyone supports "the guv'mint." Again: "the guv'mint" is not an endless supplier of money. Instead, everyone pays capital (taxes...) to support "the guv'mint."
Nope... we cannot "choose the nice things we want to work on." We have to MAKE EVERYTHING. Or be able to, in ways that are truly competitive with foreign suppliers (who, after all, must pay transportation costs AND tariffs). (Yes, I said "tariffs.")
But you have to look at the real cause and effect. China's stated policies and actual practice has not changed in the last 20 years. In those same 20 years, America enjoyed unprecedented prosperity, where unemployment was not a problem. The evidence is clear that the unemployment was not caused by China's policies. China's trade numbers with America is a rounding error in the scheme of total U.S. GDP.
There are many things in society that only the government is capable of providing. Policy guidance and funding of infrastructure are squarely on the top of the list. If you believe otherwise, you are in the fringe.
We also need to support our existing businesses. For example: the amount of press Apple got over a minor issue for a phone is absurd and does not help keep American jobs.
And, I am confident that we can do this without (!)ing in our own baby-pen. I'm quite sure that, next time the Olympic Games come to town, we won't have to shut down our cities for two months waiting for the pollution to clear.
It's important for Americans to remember: "we're talking about AMERICA here." Don't tell one of the largest and most resource-laden and proudest and most well-equipped nations on earth that "we can't do it." Or, "we can't afford it."
There was a time when a German general told an American general that the American general had no choice but to surrender. I still remember the reply:
"N - U - T - S !!"