The President Says Manufacturing Is Back, But Is It?

Unless the president gets trade policy right, and starts to tackle some uncomfortable truths about trading partners like China and Japan, America will be stuck with little more than a marketing campaign in place of serious manufacturing policy.
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President Obama has been out and about the country test-driving his State of the Union message before the big speech Tuesday evening. We can now be sure the president is going to tout his economic record, and he's going to point to the American manufacturing sector to do it.

But it will take some selective reasoning to pull that off.

While he has been a vocal advocate of the country's manufacturing sector during his time in office - and instituted some solid policies to support it - the picture President Obama paints of the sector is a little too rosy.

So let's deconstruct the rhetoric a little bit.

When the president spoke to a crowd of autoworkers at a Ford plant in Michigan, he said:

"After a decade of decline, American manufacturing is in its best stretch of job growth since the 1990s."

And he's right. But here's what was left out: While the economy has gained 786,000 manufacturing jobs since February 2010, it lost 2.3 million of them during the Great Recession, and nearly six million over the course of the aughts.

In effect, American manufacturing jobs fell down a flight of stairs - and the president, ever the optimist, is congratulating it for climbing back up a few steps.

And here's the other thing: It's not robots, automation, or productivity gains that hold back job creation in our manufacturing sector. It's our trade deficit and competitive posture.

We've racked up record trade deficits with China during the Obama years, and we've underinvested in our own infrastructure. The "strong dollar" monetary policy, coupled with a failure to hold China accountable for its market-distorting currency manipulation, has stifled strong job creation in our productive sector. And while the low-wage and service sectors of our economy have recovered all of the jobs lost during the Great Recession, manufacturing is barely a third of the way back.

That's not good enough. We should be competing in the mile swim - not settling to be merely treading water.

But let's get back to that presidential rhetoric. Here's one more thing the president said to the Michigan autoworkers, this time on the subject of the 2009 government rescue of Detroit:

"Every car you sent off the line brought you that step closer to doing the right thing by your family and giving something to your kids, and having a sense of security in your life. So plants like this one built more than just cars -- they built the middle class in this country. And that was worth fighting for."

It certainly was. And the president deserves a heap of praise for successfully executing Washington's rescue of the domestic auto industry, which saved a ton of good-paying jobs - not only at GM and Chrysler but all along the auto supply chain. Up to a million of them, by some counts.

So it's perplexing that Mr. Obama's trade negotiating strategy with Japan - so far, at least - could put all of those hard-fought jobs at risk again in the last years of his presidency. The administration is rushing to complete the Trans-Pacific Partnership, a major new trade agreement. But it refuses to address the critical issue of currency manipulation, which Japan and other mercantilist nations used to gain an artificial advantage against our car makers and their suppliers.

I hope President Obama is listening to the voices of real people in manufacturing, rather than parroting the lines of a marketing campaign meant to persuade us all is well in this corner of the economy. The Alliance for American Manufacturing has done so; we've asked factory workers, small business owners, and manufacturing communities to weigh in on the real state of manufacturing. And believe me, the real world paints a far different picture of where we are and just how far we have to go.

So when the president takes the podium on Tuesday night, what will his big idea be to spur a true resurgence in manufacturing? Free community college to gain skills? That's a start. Investing in infrastructure? That would constitute progress. Creating more innovation hubs? Also helpful.

But, on their own, none of those polices are game changers. Unless the president gets trade policy right, and starts to tackle some uncomfortable truths about trading partners like China and Japan, America will be stuck with little more than a marketing campaign in place of serious manufacturing policy. That's better than drowning, but nothing to stand up and cheer about.

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