TONELSON: Is Obama's manufacturing fix too late?

The Washington Times ^ | December 29, 2009 | Alan Tonelson

[Comrade Brother Abu Bubba]

Is Obama's Manufacturing Fix too Late?

by Alan Tonelson Opinion/Analysis

Will the Obama administration's new blueprint for "Revitalizing American Manufacturing" be a case of "better late than never" ... or "too little, too late"? Two weeks after the document's release, the "late" part is the only certain characteristic.

After all, the ongoing economic crisis stems ultimately from chronic U.S. underproduction. Therefore, truly healthy growth (as opposed to the artificial, unsustainable, government-generated variety) won't return until the nation greatly boosts genuine wealth creation. Manufacturing dominates the segment of the economy that creates real wealth (as opposed to the paper variety to which responsible finance is limited).

But the Obama plan and its presidential-level acknowledgment of manufacturing's importance comes more than two years after the crisis began and nearly one year after the president's inauguration. Contrast that delay with the rush to rescue Wall Street, state and local governments, and consumers -- moves whose successes are likeliest to reflate a bigger and more dangerous bubble than the one that just burst.

The shrinkage of the U.S. manufacturing complex, coupled with a double-digit decline in manufacturing output during this past recession, undermines the nation's need for a production-led recovery and threatens President Obama's high-profile hopes of high-wage manufacturing job creation and an export rebound. If Mr. Obama doesn't deal realistically with the global nature of domestic industry's challenges, major political change could be the nation's next leading manufacture

___________________________

Alan Tonelson is a research fellow at the U.S. Business and Industry Council, a national business organization whose nearly 1,900 members are mainly small- and medium-sized domestic manufacturers.

Author of the book, "The Race to the Bottom,"

Mr. Tonelson also is a contributor to the council's Web site: www.AmericanEconomic Alert.org

[Comrade Brother Abu Bubba]

The United States has become a hollowed out country which does not produce anything as a result of foreign "beggar thy neighbor" trade policies (targeting and marginalizing their naive neighbor, namely the United States) during the past 25 years in "The Race to the Bottom".

1. How can any country ever hope to create "wealth" relying strictly on the basis of consumption?

2. How can the United States consume it's way to prosperity?

[steve8714]

The US has been the free market sucker in a world of Mercantilists. Free-market cultists will tell you our standard of living is the highest in the world, but we borrowed our way there. To create wealth you must build something, grow something or dig something up from the ground. Anything else, including the “service-based” economy is just a transfer mechanism. Obama’s manufacturing policy is hollow without the regulatory, tax and tort environment for manufacturing farming mining and energy production to grow. Fat chance.

[caver]

Sir Comrade Brother Emperor King Mullah Your Highness Caesar President Conquistador Knight Prince Czar Dictator General General Secretary Esteemed Leader Lord Abu Bubba

Can we call you Bubba for short?

[JohnQ1]

The posting which followed this one down my screen was:

“U.S. Economic Disaster Worse Than Weimar Or Zimbabwe”

These two postings make a nice package — and THANK GOD more FReepers are coming to understand, day by day, what we have ahead of us. The few who understand and act to right our ship before it sinks, are the only hope of the many “passengers” oblivious to the huge reefs awaiting us.

[JohnQ1]

Almost forgot, “Thank you VERY much for posting!”

[freeangel]

The only thing obamination is capable of manufacturing is LIES. If we could run the country on that amount of manufacturing, we’d be in great shape right now.

[Fee]

Ditto. Highest standard of living in the world, my foot!! In my father’s time (1950’s), his factory income alone can support a house, wife, car and put four kids thru college. Try that in the 1980’s with a professional/office service salary. Taxes and inflation destroyed our buying power and corporate greed of offshoring jobs slammed our salaries to the point that it takes wife and husband income to barely support two kids. The only people who made tons of money during the new economy (paper manipulation and finance) is the small circle in Wall Street. The rest of America barely kept up with inflation.

[Bon mots]

The elephant in the corner is local taxation.

Property taxes are calculated based upon a Mill rate in the Northeast. Here are the mill rates for all cities and towns in Connecticut:Connecticut Mill Rates

So look at Hartford... just over 72 mills. That means, that for every million dollars worth of property you own in Hartford, you have to pay some $72,000.00 per year in taxes.

Suppose I want to put up a modest factory in Hartford. This investment will be approximately $10 million - not a lot by today's standards.

I'll even give them the benefit of the doubt and say that they will only assess my $10million factory at 70% of its appraised value... then my taxes would only come to about $500,000.00 per year.

Before I have sold a single product, I have to deal with the following clowns:
1.) The tax collector with his property tax bill in excess of $500,000.00 PER YEAR for basically NOTHING.
2.) Inspectors
3.) Unions
4.) The illiterate, lazy and thieving denizens of the Hartford ghetto who possess zero work skills
5.) Crime
6.) RWA (Water Authority) and Outrageous Sewer Tax

The worst sin of all is the confiscatory level of taxation. There is no way in hell I would put a factory or any business that did not need to be in Hartford, in Hartford.

I don't know about you, but you have to stay up pretty late at night to figure out how to make an extra $500,000.00 - just to hand it over each year to the tax collector - whether or not you manage to make a profit!

Would you put a $10,000,000.00 investment in Hartford?
That's the problem. Nobody in their right mind would. If they did, they would quickly lose their shirt.

Hartford, like all Connecticut cities was once a boomtown.

Most of these once prospering and humming factories were taxed out of existence or out of town. The factories have been replaced with the black Democrat welfare plantation of useless vote-lever-pullers.

Cities of prosperity - like Detroit - converted into violent slums. You cannot fix it without cutting welfare completely and local property taxation, excessive red-tape and unionization.

[Paul Ross]

After all, the ongoing economic crisis stems ultimately from chronic U.S. underproduction.

Shhhhhhhh. Don't want to wake up the Chinese-Import lobbyists.

[meyer]

#8 - good post!

[1rudeboy]

In my father’s time (1950’s), his factory income alone can support a house, wife, car and put four kids thru college. Try that in the 1980’s with a professional/office service salary.

That's right! In terms of standards-of-living, we should all wish to return to the days of 1000 sq. ft. houses with no air conditioning, no washing machines or dishwashers, and a wife who stayed at home with nothing more important to worry about than her kids coming down with polio.

[1rudeboy]

Alan Tonelson just not quite bringing himself to criticize Obama ping.

[expat_panama]

Manufacturing dominates the segment of the economy that creates real wealth (as opposed to the paper variety to which responsible finance is limited).

Wow, so the Washington Times says only things from a factory have value and anything else is worthless.   A century ago when my dad was born people used to say factories were worthless because we don't really need anything we can't eat.   100 years later we've replaced farm hubris for factory hubris.

[expat_panama]

#8 - good post!

What, we want our clocks turned back?   Forget it!

Too many people gripe how things just aren't what they used to be but the hard reality is that things never were what they used to be --but that's ok because they're better.

[Mase]

From reading the Op-Ed, it appears that Tonelson isn't recommending anything other than old style protectionism as a remedy. He blames free trade deals yet says nothing about tax policy, regulation, unions or tort reform. To Tonelson, giving government more power, when they're the cause of the problem, is the solution. That any conservative would buy into this, lacking any additional details from Tonelson, is unfortunate.

[Mase]

In my father’s time (1950’s), his factory income alone can support a house, wife, car and put four kids thru college.

Yeah, now if we could just figure out a way to bomb all those European and Asian factories back to their 1945 status, we could all be living the good life again that having no competition brought to us.

[1rudeboy]

Here's what gets me: we have probably the most anti-manufacturing President in the history of the office sitting there, and Tonelson has the audacity to say, "let's wait and see."

In other words, he wants to see who gets the next government hand-out. What a fraud.

[expat_panama]

Tonelson isn't recommending anything other than old style protectionism...

We seem to be getting a lot of that bilge from the Washington Times.  They may be a paper going to great lengths to distance themselves from the leftist WaPost, but I'm afraid that being 'only liberal' is not good enough.

[Mase]

Good point. Obama’s declared war on business and industry like no other president in recent history and Tonelson wants to wait for the results? Good grief. He's advocating for more government hand outs while hoping for tariffs and other restricitions. He's a fraud and an idiot.

[Mase]

I don’t understand the Washington Times either. What’s next, adding David Frum to their editorial staff?