THE BLOG
03/30/2010 05:12 am ET Updated May 25, 2011

Obama Skirts the Real Jobs Issue: Industrial Employment

A Miller Lite TV commercial currently airing features a young fellow unable to disgorge the word "love" to his adoring female companion. President Obama appeared plagued by a similar inability to say the word "manufacturing" in his State of the Union address, ostensibly designed to exhibit a renewed focus on jobs.

Instead of a call for revitalizing manufacturing, we heard of the need for more "production" in pursuit of exports. Coupled with the speech's unmistakable endorsement of the status quo on trade policy - specific references to South Korea and Colombia that were impossible to miss as affronts to the industrial unions who oppose those deals -- the president's aversion to addressing manufacturing left little doubt that deference to the financialization of the economy continues to trump any hope of reinvigorating industrial employment.

The problem of failing to address manufacturing's decline, let alone forge a national strategy to compete with China for manufacturing preeminence, is that it cheapens the president's talk about jobs in light of the evidence:

• Manufacturing employment has fallen by 2.1 million jobs since the recession began in December 2007, according to the Bureau of Labor Statistics (BLS).

• Manufacturing employment dropped to 11.7 million in October of last year, a loss of 5.5 million (32 percent of all manufacturing jobs) since October 2000.

• In October 2009, more people were officially unemployed (15.7million) than were working in manufacturing.

• Currently, 20 percent of manufacturing and construction workers are unemployed - double the national unemployment rate.

The beauty of addressing this issue rather than avoiding it is that it is a problem, like most others, that Obama inherited, as well as being one for which both parties are responsible. The president could as well urge both parties to unite in addressing the future of U.S. manufacturing as condemn their past errors.

The other virtue of taking up the manufacturing challenge is that it enjoys great favor with the voting public. In a recent USA Today/Gallup poll, Americans were asked what should be done to create more jobs in the U.S. The number one response was "keep manufacturing jobs in the U.S."

So, why the president's obvious reticence?

There is, first of all, the unmistakable indifference of both parties' operatives to the lives of people in places like Gary, Indiana, Detroit, Michigan, Youngstown, Ohio and the southern corridor of metropolitan L.A. For Republicans, this is standard operating procedure. For Democrats, allegedly the party of working people, it's elitism that slouches toward hypocrisy.

This is especially true of the current White House, where any blood knowledge of the human damage being done to the citizens of industrial America is unlikely among the Harvard Boy's Club peopling the inner circle. Indeed, they have been among the bipartisan consensus in Washington that has championed the current trade regime that is hollowing out U.S. manufacturing.

Their unstinting allegiance to globalization as currently practiced has been the stalking horse for Wall Street adventurism in foreign markets, where labor is cheap and profit margins are irresistible, a policy front that has led to the financialization of a U.S. economy in which manufacturing's share of GDP has been cut in half while financial services' share has doubled.

The administration's only nod to this reversal of fortunes has been to acknowledge the problem exists by issuing a "Framework for Revitalizing American Manufacturing," largely a potpourri of diverse policy initiatives launched since taking office that was released late in the week shortly before Christmas, timing that suggested greater interest in its obscurity than its recommendations.

The administration's preferred approach is to focus on the emerging clean energy sector, laudable in its own right, but unlikely to overtake the jump start already enjoyed by China and Germany, unless a commitment is made to protect the development of renewable component manufacturing as these countries have.

As Northeastern University professor Joan Fitzgerald avers in her soon-to-be published book, Emerald Cities: Urban Sustainability and Economic Development:

"Absent industrial policies to develop these new industries, the desire to attract green businesses is just the latest variant on a familiar zero-sum game of smokestack chasing ... If the United States wants to get serious about capturing or recapturing clean energy production such as wind and solar...we have to get over our aversion to industrial policy."

Getting over that aversion would begin with abandoning the weak insistence that our foreign trading partners start "playing by the rules," as the President did his speech, and practicing instead the Golden Rule of Global Competition: do unto others as they are doing unto us.

Right now China, for one, is implementing a full-blown industrial strategy that secures both their emerging clean energy industry and its markets. The faux populism toward the banks that the President displayed in his speech is no substitute for the United States pursuing policies that nurture U.S. markets and restore employment in manufacturing the products of the desired clean energy economy.