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America’s Dirty War Against Manufacturing (Part 3) January 20, 2012

Posted by proeconomia in Fiscal policy, Main, On the crisis, Opinion, Science and technology.
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There is actually a third part on this one, and is the best of the three! You must read this, as it again pertain to the prospects of a recovery for the Greek economy. Here are some key excerpts from this part:

(Andrew)  Liveris has just published a book, “Make It in America,” the theme of which is that we can, and must, return manufacturing to American shores. The key insight, he said, is this: “Companies cannot compete with countries. Only countries can compete with countries.””  (emphasis added)

“… the political leaders who shape federal economic policy are responsive to the sectors that have mastered lobbying — oil, agribusiness, finance and drug companies. Manufacturing for decades has been left to take care of itself.”

Yet the notion of a strong economy without strong manufacturing is a fantasy. “We cannot remain the world’s engine of innovation without manufacturing activity,” the president’s National Science Board eported this month. The number of high- tech manufacturing jobs in the U.S. declined 28 percent between 2000 and 2010, according to the report. It attributed the “erosion” of U.S. leadership in part to investment in education and research by Asian governments.

Other sectors can’t replace the employment and wages of manufacturing. Commodity production no longer generates enough employment — automation in agriculture and mining has gone too far. Wyoming produces 40 percent of the U.S.’s coal with about 7,000 miners. “Knowledge work” pays well, but draws on a narrow population: How many lawyers and bankers do we need? Facebook Inc. is a remarkable innovator, but it employs only about 3,000 people to serve a customer base of more than 800 million. Personal services, such as restaurants and retail, pay poorly and rely on income streams from other sectors to pay at all.”

” The failure to support manufacturing has been exacerbated by a failure to make public investments at all. Total public spending on infrastructure in the U.S. has fallen steadily since the 1960s and now stands at 2.4 percent of gross domestic product. (In contrast, urope invests 5 percent of its GDP on infrastructure, and hina invests 9 percent.)”

 

This last insight is especially crucial for us too…

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