
Manufacturing in the USA has been declining substantially for decades. Back in the 90′s, we saw how Japan got a foothold in some high tech areas like PC Board manufacturing (I saw countless businesses go out of business and it forced me to find other work). We saw NAFTA come in and destroy some jobs, as they were shipped off to lower paying and much lower skilled workforces in Mexico (I witnessed and participated in RCA’s move to Juarez which was devastating to many American jobs and quality suffered).
Yesterday, the Senate Subcommittee called the “Banking, Housing, and Urban Affairs Subcommittee” which is chaired by Sherrod Brown, had three witnesses participate in a hearing called, “The US as a Global Competitor: What Are The Elements of a National Manufacturing Strategy” (click link to see the video, extremely informative). The hearing is started at the 24:30 mark and is fairly long at 107 minutes. Sam Smith at UnderNews posted an article in his “Crash Talk” series and included a link to Mike Lux’s article at OpenLeft that addressed some of this, in particular, Leo Hindery’s testimony.
One of the clear issues that I have been harping on for many years now is that we have intentionally allowed the Corporations to find ways to disallow Americans to manufacture their products and to save a few pennies and enrich the Corporation, by moving them elsewhere (as I have been a first hand witness to the demise of manufacturing, both by first pursuing lower wage areas in the southeast USA, in which I was able to make money, but those up north lost; and by the further movement of these jobs for even lower wages jobs overseas).
We were told that all of this was good for our economy because we were going to move from a manufacturing sector based economy to a “Consumer Spending/Wall Street Economy”.
One of the most important issues is the fact that we invited and encouraged China to join the WTO in 2001. We were promised that they would be fair in their monetary policy and would raise their Yuan value as their economy flourished. Until very recently they did not and even the amount they have raised it is about 5% (which still means its value is around 25% undervalued). This causes a huge deficit in trade and causes the rich corporation owners to send work there as opposed to making stuff here (their purpose is to make the company as much money as possible and they don’t give a rat’s ass about where it is made or if Americans benefit).
It isn’t ONLY the losses to China and other foreign countries, but the major recent losses are obvious because we all know about the automobile industry
tanking and the housing crisis. It is obvious that these sectors will be extremely slow to improve and whatever strides are made will be low. Why? Because the bubble popped… the “Consumer Economy” cannot be supported without a manufacturing base and the “Wall Street” economy is and has been proved to be a huge rip off of the American’s money and way of life.
As we moved into this “Consumer Economy” of debt consumption from manufacturing, there has been a steady drop in the manufacturing sector in America. But in the last 13 months, we have seen it “turbo-charged” (as Scott Paul put it). That is why I find it sadly ironic that Mr Obama tells us in his pretty speeches that this stimulus policy will “add or save” 3.5 Million jobs, even though over 13 Million have been lost. Even The Messiah is disconnected or lying. (Take a hint, he is NOT disconnected).
The numbers are horrific if you take the time to evaluate and understand. When you hear the TV telling you that the unemployment rate is 9.5%, remember that there are factors that they are not taking into consideration. In other words, they are misleading you (purposeful or just stupidity, you determine). Officially, they tell us the unemployment rate is 9.5%, but when you consider every other factor, the “effective unemployment rate” is around 19 – 20%. Not only that, but the hours lost per week is growing and is now around the 33hrs/week mark. Think about that for a minute. 20% unemployment and on average, those people are only working 33 hours per week.
There are several things that we MUST do, if we are ever going to come out of this (and the more I consider and study this, I can only determine that we are “purposefully” set on a course to continue this downward spiral). Being able to get the corporately fed Congress and especially this administration who is in bed with Sachs and The Fed will be a long, tough road to travel. It is even conceivable that it is too late, but I hope not.
We must get rid of these trade imbalances and China’s unfair trade policy it lied to us about. We MUST begin “stimulating” High tech manufacturing (like solar, exotic materials, etc) and we MUST implement a “Buy American” plan that bolsters US manufacturing, but doesn’t alienate other countries that play fairly.
Our past shows us that our current path is leading to doom. Manufacturing simply CANNOT be replaced by a service sector economy. It is idiotic to even consider it, but we are in the middle of it for decades now.
Only 8.7% of our jobs are in manufacturing and only 11.7% of our GDP is from manufacturing. This cannot be sustained if we plan on coming out of this mess. We MUST grow our manufacturing base, but how?
We are never going to go back to hand assembly of little bullshit trinkets and garbage for the “consumer economy”. We must focus on high tech manufacturing like solar, wind energy, exotic materials and other leading edge technologies. But we will be playing catch up because as it is, China produces 80 – 90% of wind and solar products right now. Foreign automobile manufacturing has and is getting even more of a foothold in the USA (which, btw, they generally use their country’s integration firms and by passes American companies that could build their systems, which just grows their sector and takes away from ours).
This is not a “Protectionist Sentiment”. It is only fair because they don’t trade fairly. As Mr Hindery and others have put it when asked why we should implement such a Buy American mentality, “Everyone Else Does It!”.

It is reality. You can see from the screen shot I took that we are hugely imbalanced across the board.
It is obvious that allowing China into the WTO was a huge mistake for regular working Americans, but not for those that profit the most from sending the work there.
I was interested at the 96 minute mark where Mr Brown asked the question how we can attract more young people into manufacturing, especially the high dollar folks that go to Harvard. 1/2 of Harvard’s current Grads go into finance. Why is that and how do we change it?
In many ways, the answers are obvious. Education in this country sucks and pushes people either towards the richest college (if they have money) or into the “service sector” or lower wage jobs. It is the divide of the classes. But there also MUST be a job market for them (at 8.7%, there are lean pickings). It is also compensation, of course. When a Harvard Grad can make 400 times the wages of a factory worker or manufacturing head, it makes sense for them to go where the money is. This divide went from 20-25 times, to about 400 times.
In a nutshell, we have devolved, not evolved. We have seemingly systematically dismantled our manufacturing base, when it is apparent that this very strategy is causing our downfall.
For when it comes down to the bottom line, the countries that “Buy Wherever They Are From” are fed up with our debt, they will stop providing the consumer crap, but will also stop providing essential products we have allowed them to take over manufacturing for us. At the very least, the prices will go so high we can’t afford it anyway.
