President Obama sketches out a plan to substantially reduce unemployment and reinvigorate the economy in this week's address. To be sure, the President needs a plan. But he does not mention why he is focusing primarily on domestic manucturing, a strategy that, in my opinion, requires a bit of explanation.
Though our international trade deficit is problematic and unsustainable, we are, by no means, obligated to tackle the issue by suddenly becoming a manufacturing nation. Nor is that really possible, to the extent that would be necessary, in the 21st century. Manufacturing jobs disappeared overseas (decades before the current recession) not because of faulty policy or American decline, but because international labor became relatively cheap and plentiful. Today, we can no longer compete with Chinese production of pencils and McDonald's toys - our standards of living are simply too high - and that's OK.
To improve our balance of trade and to reactivate the economy, we need to focus on what we do best in this century. As Tom Friedman has argued, now is the time to be "stapling a green card to the diploma of any foreign student who earns an advanced degree at any U.S. university." The nation's system of higher education is surely one of its greatest assets; we must use it to our advantage in the global competition for talent. In the last decade, our own Silicon Valley has spawned multi-billion dollar companies such as Twitter, Facebook, and Google. These are the U.S. exports of the 21st century, and we can maintain a stronghold in this market by continuing to invest in technology start-ups. And our financial sector, while demonized and reviled, remains a global leader and major contributor to net exports.
The fact is, we need not be ashamed of our Chinese-made pencils, or, for that matter, our Chinese-made iPads. Manufactured goods were an important part of our nation's economic development, but we might best build a future upon eduction, research, financial services, and high-tech design - sectors in which we currently excel.
with ya on this buddy. i'm slightly too lazy to look up obama's specific manufacturing agenda, but it's probably along the lines of steny hoyer's "make it in america" agenda/wordplay. so, yes, I don't think we need to open factories to churn out plastic crap. but! what about like, shoring up the auto industry? that ww2-era horse is still paying dividends, right?
ReplyDeleteand on that note, check out newspeakmusic.org for an awesome album I can't believe I haven't listened to yet. "requiem for a GM plant in ... " is the track that is topical to this rambling comment, but check out the first track too!!
American colleges and universities are definitely hard to match. Who would be impressed to hear that someone graduated from Keio University? Probably only the Japanese. But Harvard? That's very a different story.
ReplyDeleteAbout the details of the manufacturing initiative though, I think it's unfair to assume that Obama is going around advocating for the mass-production of pencils and plastic toys. Although I'm no expert in Obama's manufacturing initiative, his strategies seem very sophisticated and future-oriented to me. From what I've read, this plan will
> invest in clean energies to run manufacturing companies more efficiently
> rebuild domestic manufacturing stability in the national security industries
> produce more efficient and advanced manufacturing materials to save time and unnecessary labor
> compete with the international race over advanced robotics manufacturing
> produce diverse and numerous high-quality jobs for the average Americans
Obama's last point is interesting because it goes straight back to your idea of using the US educational prestige to revitalize the economy. The Advanced Manufacturing Partnership funds leading American universities to research creative and futuristic solutions for making the American manufacturing businesses more efficient and cutting edge. If he advertises these opportunities well, I'm sure many brilliant foreign minds will come study in America. Not a bad deal for us!
@Jacob - The auto industry is totally an area where we could claim a good chunk of the global market, or even dominate it, as we once did. This is especially true as consumers and governments smart up to the benefits of fuel efficient vehicles. A powerful new market is developing, and we can corner it now if we invest in smart, progressive companies that will design and manufacture the next generation of cars. To this end, have you seen the new fuel efficiency standards agreed upon by President Obama, auto industry leaders, and environmental groups? Some promising stuff. Also, cool music. I'm listening right now. You should check it out.
ReplyDelete@Sato - Don't get me wrong: AMP is absolutely a productive and necessary mechanism to rebuild the economy, and there are definitely some manufacturing projects that America needs to take on (see above paragraph). You're right that, thankfully, President Obama's game plan is much more sophisticated than a silly, doomed effort to outpace China's production of plastic junk. I suppose my main point is that there are other ways of addressing our trade deficit and increasing exports besides making more stuff. Sure, if we can attract brilliant minds, save the environment, and create jobs by bringing certain manufacturing sectors home, then by all means, that is what we should do. I only worry when politicians hone in on the idea that goods used in America "should" be made in America and that we shouldn't rely on other countries to build things for us. This battle cry will win a few votes, but it will create dangerous inefficiencies if accepted as doctrine.