Posted on 02/21/2007 7:13:32 AM PST by A. Pole
"Manufacturing is the key to national power," wrote former presidential candidate and conservative columnist Pat Buchanan. "Not only does it pay more than service industries, the rates of productivity growth are higher and the potential of new industry arising is far greater. From radio came television, VCRs and flat-panel screens. From adding machines came calculator and computers... research and development follow manufacturing."
The increasing frailty of America's manufacturing might was exposed last week as Chrysler announced a restructuring plan that inflicts yet another blow to America's anemic manufacturing base. Under the Chrysler plan, 9,000 U.S. autoworkers are set to become pink slip recipients over the next three years.
The announcement of such a plan, according to Sean McAlinden, chief economist and vice president of research at the nonprofit Center for Automotive Research in Ann Arbor, brings the total number of auto industry jobs lost since May 2005 to 132,000. McAlinden also notes that 64 Americans plants have also been shut down. The sting of Chrysler's plan, though, is just not isolated to the Motor City. Included in the job cuts and plant closings is a plant in Newark, Delaware that employs 2,100 Americans. These employees are now slated for the free-cheese line by early to mid 2009.
What does Chrysler's plan mean for America? It means 9,000 Americans will be thrown into a job market where manufacturing represents only 11% of the U.S. workforce. Because manufacturing jobs are going the way of the dodo bird and service jobs are reproducing like jack-rabbits, odds are many of these blue-collar workers will be forced to become a part of the growing Wal-mart workforce. These skilled laborers will be replacing their high paying jobs and strong benefits, with low paying jobs and miniscule benefits. Such is the gutting of a nation that was, at one time, the world's industrial giant.
It further means that Americans will be seeing their real rages continue to decline and their standard of living fall. It means more American's will turn to credit cards to ease the pains caused by their loss of income and it potentially means both parents will have to enter the workforce, leaving children to be raised by day care associates. How did this happen? When did America take a turn for the worse and turn a blind eye to her manufacturing base? Why has America decided to make high paying manufacturing jobs her number one export? And, most importantly, can we find the way back home?
For the most part, Buchanan's observation that manufacturing is the source of national power is not classified information. All nations, from early America to modern day China, have readily understood that domestic manufacturing equates to global muscle on the international stage. In other words, factories protect freedom and industry fosters independence.
Alexander Hamilton, the man who penned The Report on Manufactures and subsequently provided America with an economic blueprint, eloquently described this principle when he wrote, "Not only the wealth, but the independence and security of a country, appear to be materially connected with the prosperity of manufactures." Was Hamilton opposed to the laissez faire economics of Adam Smith? Absolutely not!
Hamilton recognized the economic potential of the states constituting the newly formed American Union. Hence, Hamilton embraced a national free trade zone and denounced any attempts by the states to impede domestic trade and industry. To Hamilton, a strong nationalist, trade would be free for Americans and Americans only. As for the Europeans, Asians, and all others trying to get into the hottest market in town, Hamilton argued that a cover charge must be imposed. This cover charge, which would be applied in the form of a tariff, would be used to protect America's industry, build her roads, maintain her channels of commerce, and finance her government spending.
More importantly, the tariff, by means of raising the price of foreign goods, would foster American industrial development, raise productivity, increase exports and preserve the nation's economic independence. Economic independence, in turn, would prevent America from being ensnared by foreign wars not her own.
Hamilton's wisdom remained America's economic compass for close to two centuries, and during that time period America was the economic model to the world. As explained by Buchanan in his book Where the Right Went Wrong, "From 1869 to 1900, real wages rose 53 percent, commodity prices fell 58 percent, America's GNP quadrupled, and our national debt fell by two-thirds. Custom duties provided 58 percent of all federal revenues."
Even further, between 1870 and 1913 the U.S. saw economic growth that reached 4 percent, while industrial might grew at a rate of 5 percent. But beginning with the conclusion of the Second World War, the America First economic policy provided by Hamilton would be sacrificed to a golden calf of free trade and 200 years of economic advancement garnished by Hamilton's America would be erased in less than half a century.
In The Report on Manufactures, Hamilton also wrote, "Every nation... ought to endeavor to possess within itself all the essentials of national supply. These compromise the means of substance, habituation, clothing and defense." In the years since America abandoned Hamilton's economics, one must see how self sufficient she is.
According to Pat Choate, the level of U.S. dependency on foreign goods is down right staggering. The level of American dependency on foreign medicines and pharmaceuticals is 72 percent, computer equipment is 70 percent, communications equipment is 67 percent, semiconductors and electronics is 64 percent, engines and power equipment is 56 percent, and metal working and machinery is 51 percent. Hamilton would not recognize the country he helped create.
With trade deficits well over $800 billion, America has become an economy, not unlike the British of the early 20th Century, which is squandering its inheritance to live for the day. We are living for the moment, while forsaking the future.
And with the Chinese the largest beneficiary of the American trade deficit, China, not unlike the young American republic of yesterday, is using American money to increase her infrastructure, solidify her manufacturing prowess, advance her technology, and, most disturbing, fortify her Red Army. In essence, we are handing Beijing the keys to the store.
America is at a turning point, for she is about to follow in the footsteps of the nation she kicked off the continent some two centuries ago. During the late 19th-early 20th centuries, the same time period Hamilton's America was witnessing unprecedented growth, Great Britain had become intoxicated by free trade libations.
British free traders, who had grown accustomed to cheap goods and food, had forgotten a nation is more than a collection of consumers. And because it forgot her national interest, Britain also left vulnerable her most basic industries.
With cheap food flooding the British market, Britain abandoned her farmers and, as stated by historian Corelli Barnett, "It was the German submarine which reminded the British government after 1914 that the price of cheap food from overseas under the policy of Free Trade had been the ruin of British farmers and the terrifying vulnerability of the British population to a starvation blockade."
What was the result of Britain's flirtation with free trade? A decline in her manufacturing base, which, in turn, caused a decline in Britain's presence on the global stage. That decline is directly linked to the sun setting on the British Empire.
America can avoid this fate if her government, and more importantly, her people decide that it is time to place country before consumerism. While America's view towards Hamilton has changed over the course of many years, the wisdom of Hamilton's economics has stayed constant.
If we are going to stem the tide of America's economic decline and return self-sufficiency to our republic, we need only start by having our elected officials re-read The Report on Manufactures.
Only American sacrifice will prevent the sun from setting on the American Century. Are we, as a people, up for such a challenge?
Phoney free trade, which we have now, is what is bad. Real free trade, fair trade, would be fine.
Clearly though, the advocates for the phoney version wouldn't know true free trade if it bit them in the rear end.
How is China kicking our butt? The standards of living in China are absurdly low while those of us in the United States are sitting quite comfortably. Where would you rather be--China or the United States? If the Chinese factory worker has it so good, are you willing to switch places with him?
Economics IS a science. Fortunately, you people lost the free trade argument. It's over. Free trade won't go away.
One of the first things that come to mind when "manufacturing" is mentioned, is automobiles. And before any revitalization of US automobile manufacturing can occur, one thing must happen.
Detroit must die.
That is, everything about the US automobile industry must be completely redesigned, from the ground up. It cannot do so in Detroit, because everything about the place contributes to the industries complacent inertia, not its innovative momentum.
The management and its culture must be remade from scratch, as does their entire relationship with the automotive unions, whose greed is so great that manufacturing cannot continue except in right-to-work States.
The reason that this didn't happen long ago is because Detroit is in an ideal place for the logistics of auto making. This has sustained it into decrepitude, where other industries had long evolved into new business models.
So, it will continue this way until bankruptcy. Only then can a new organization, no longer beholden to a moribund culture and a grasping union, emerge from the ashes.
Yeah - those greedy bolt turners should be content to work 12 hours a day and live under an overpass - no vacation, no health care, no retirement. After all, if they had any gumption they would see that they got the education and training after work that they need to become CEOs, CFOs, doctors, lawyers and engineers.
Certainly if they were willing to forgo that bottle of beer after work, they would be able to buy a house and pay for their own health care.
To a degree like psychology or history are science. Economy is what people do.
there you go.........trying to bring both intellegence and reason combined with facts into a thread....shame on you :)
"Let us put aside the scarecrows of the twin deficits and face up to the real problems that threaten U.S. growth and prosperity: excessive and wasteful government spending and taxing, including in particular the real time bomb in Social Security, Medicare and Medicaid programs; concealed taxes in the form of mandated expenditures on private business; excessive and misguided regulation of individuals as well as businesses; the changes in tort legislation that are discouraging innovation; and not least, the recent increase in protectionism and the threat of a further major increase. [emphasis mine] We should and can do something about these problems, not allow ourselves to be diverted by politically convenient scarecrows."
Found here
I only know of Duncan Hunter from what I've read here. He seems like a credible candidate; however, if he's not a free trader he won't get this FReepers support.
last time i checked, trade IS economics...been that way since the stone age....like it or not
He is a fair trader and that is one of the reasons he has my vote.
Are you trying to tell me that a person working a manual labor job is worth the same amount of compensation as an individual with a coupla masters degrees, leading a multi million (or billion) dollar, publically owned corporation? If that were the case, then the person with a high school diploma (or less) should be able to walk right off the line and into the board room. Man, you just gotta wake up here. If you believe this is the case, then the employees at chrysler should just buy out the company, it is for sale. Then the people on the plant floor can just run the company, design the products, plan and lay out the assembly floor, and save a bunch of money. After all, the greedy executives are just drawing high wages. they never actually earn their money, or answer to anyone, right? If you want to earn more cash, GET A DEGREE........
Period. Socialism + ANYTHING is a recipe for pain (and 'anything' includes free trade). Taxes and regulations are killing America's manufacturing base. It isn't China or some other crap country that is doing it through eeeeevil free trade; to blame are the redistributionists within America - the same thing is happening in all western countries.
The answer is not to add more taxes and/or more regulations to simultaneously protect American jobs and socialism. The answer is to excise the socialism. Right now, US industry is dragging a 2 ton iron ball around behind it, a huge handicap. Sure, you can get some nannies to ease the weight of the iron ball (subsidies), but that just adds weight to the chains of other sucker taxpayers. Reduce the burden altogether - get rid of harebrained ponzi schemes (prime example - social security) and other entitlements, and shrink government make to its constitutionally limited form.
All too often, low cost has a high price.
The most obvious example is the manufacture of weapons for the military overseas, often in nations that aren't friendly to us. That goes against common sense itself, but the persuit of ever-higher profits at any cost isn't logical.
Economics is a science in the same way that psychology is a science. It isn't just adding and subtracting numbers and predicting mathematical outcomes; it is, at its root, human behavior.
The founding fathers, as evidenced by the Constitution, had a pretty good grasp on human behavior.
Despite ungrounded claims that market economy and representative republic are inherently compatible, they are in permanent opposition fueled by differing interests of owners and workers.
There are two ways to solve it, either you compromise and maintain delicate balance by having some degree of redistribution or you impose forceful solution in favor of one side.
The forceful solutions are being practiced in Latin America where the societies oscillate between authoritarian oligarchies ("excise the socialism")and populist regimes ("excise the" market mechanisms).
And can your hero with couple of degrees "walk right off the" board room into the actual work place and do a good job?
See my tagline.
Thanks for ping.
What is called 'free trade' is actually thousands and thousands of pages written in 'government to government' deals made by lobbyists.
I did. Two of them actually. My job moves to Mumbai in six months. Any other words of wisdom?
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