During this last election campaign, I toured a dozen states doing my national radio show in cities and towns in the American heartland and supporting Tea Party candidates in close races.
In too many of those cities and towns, I felt like I was living in “Atlas Shrugged”. Time and again I went past big, boarded up abandoned buildings in which American workers used to toil making wonderful things for the people of this country and the world to enjoy a better life. Typically, along the top of these buildings, you could still see the faded letters of the old company, often including the name of the long forgotten businessman who risked everything to build his dream.
The businesses and the jobs are gone, the dream dead. The Left says it’s because of “globalization”; greedy companies have shipped the jobs overseas in a never ending quest for cheaper labor and increased profits. The Right agrees—the Left has made it impossible for manufacturing to make a profit in the U.S. with high taxes, a myriad of government regulation of every aspect of the business, and impossible environmental restrictions.
Whatever the cause, the America that took the Industrial Revolution to the highest level, mass producing everything from labor saving appliances and radios and TVs, to cars, trucks, and planes, is no more. With swiftness that has taken Americans, and the world, by surprise, America has de-industrialized. We don’t make “Made in America” anymore. The highest value American export product today is trash. Waste paper.
About 42,400 American factories have closed since 2001, 75% of those employed over 500 people when they closed. All told, about 5.5 million American manufacturing jobs have been lost just since October 2000, a 32% decline in one decade
At the end of 2009, less than 12 million Americans worked in manufacturing, a number last seen in 1941.
For awhile, the hope was that the “old” good paying manufacturing jobs would be replaced by good paying jobs in the emerging “high tech” sector.
Didn’t happen. In 2008, 1.2 billion cell phones were made and sold worldwide. Not one was made in the USA. Dell, one of the largest manufacturers of computers, closed its last plant in Winston-Salem in November and laid off 900 workers. Computer manufacturing in the U.S. employs fewer Americans in 2010 than it did in 1975.
Printed circuit boards were perfected in the U.S. after World War II and are used in thousands of products worldwide. 84% of circuit boards are now made in Asia. In 2001, the U.S. ranked fourth in per capita broadband Internet use; today we rank 15th.
What next? Obama has touted the “green economy” as the answer to the need for new good paying jobs. It’s not happening either.
Here in California, a solar panel manufacturer has moved its plant to Georgia to try and lower costs to compete with Chinese manufacturers. Obama’s “stimulus” bill last year included subsidies for “alternative energy”. Unfortunately, it turned out that the successful bidders for these energy projects were too often companies in Spain, China, and Japan. The borrowed stimulus money more often than not stimulated foreign economies. Nearly all the turbines made for “Big Wind” projects are made in China.
This de-industrialization of America is impoverishing America. Underlying the current Recession is a downward trend in the wealth of the country and every person in it. Permanent high unemployment, permanent high numbers of welfare recipients; in short, a permanent underclass of entitled, clueless Democrat voters.
Add to this grim economic picture the wave after wave of illegal aliens displacing American workers and bankrupting local and state government by flooding the schools, hospitals, roads, and prisons.
None of this is inevitable. It doesn’t have to happen.
Germany, a nation of 82 million people, is the fourth largest economy and the second largest exporting nation in the world. Germany ran a trade surplus of $190 Billion in 2009; 30% of the economy is manufacturing and the unemployment rate has topped out at 7.5%.
How does Germany do so well when it is also a socialist state with high taxes and cradle to grave government “services”?
One reason is the favorable tax treatment of profits earned from exports– favorable, as in zero. There is zero German tax on profits made by German companies on products they make in Germany and sell elsewhere. Why did you think Mercedes cars are seen in every country in the world?
Norway, a nation of 4.9 million people, has the highest capital reserve of any nation and one of the soundest currencies. Norway is also a high tax, cradle to grave socialist country. How do they do it? Answer: Norway drills for oil and gas: offshore. This tiny country is the world’s fifth largest oil exporter. They pay for their socialism.
The decline in the manufacturing base of the U.S. is the result of the wrong government policies of the past decades. Obama could coast to re-election in 2012 if he really studied and understood how other countries around the world promote exports, exploit their mineral riches, and avoid the crippling national debt we are building here.