Manufacturing Policy Key to Economic Recovery

by James Parks, Aug 24, 2010

Unlike our nation’s economic competitors, such as China and Germany, which have national policies geared to increasing their economic development, the United States does not. While we admonish such countries to consume more and export less, they are figuring out ways to increase exports and consume less—and, in turn, are growing their economies far faster than the United States.

In a recent letter to President Obama, Sen. Sherrod Brown (D-Ohio) and a group of bipartisan senators wrote that the key to turning our economy around and creating good new jobs is a national industrial policy that would emphasize long-range actions to rebuild our manufacturing base, which has been decimated over the past few decades. In short, they urged the adoption of a national manufacturing policy.

The loss of manufacturing plants and jobs has stifled economic opportunity for middle-class families and compromised our ability to compete in the 21st century economy. Indeed, for the last several decades, administrations have passed up critical opportunities to formulate a rational and comprehensive manufacturing policy. Continued apathy will undermine our country’s ability to achieve energy independence and place our military readiness at risk.

One-third of American manufacturing plants have shut down in the past 10 years, and today only 1,000 U.S. factories employ more than 1,000 workers, according to the Alliance for American Manufacturing (AAM). And we are losing high-tech workers at a faster rate than traditional manufacturing jobs, AAM says.

An emphasis on manufacturing is not only good policy, it’s popular. In a recent poll by Mark Mellman and Whit Ayers, 86 percent of the respondents say they back increased government support for manufacturing. A whopping 95 percent believe Congress and the president should spend more time creating jobs, and 85 percent believe they should focus on creating manufacturing jobs.

Writing at Huffington Post, Jared Bernstein, economic adviser to Vice President Joe Biden and director of the Obama administration’s Middle Class Task Force, points out just how effective an industrial policy can be. He says the administration’s investment in the auto industry paid off in new jobs.

In the year before we took office, the auto industry shed 431,300 jobs. But in the 13 months since GM and Chrysler emerged from bankruptcy, auto industry employment has increased by 76,300, a huge reversal…close to 40,000 come from the suppliers. That’s the fastest year over year growth that they’ve seen in a decade.

They’re good manufacturing jobs, right here in America, staffed by highly productive men and women doing two important things: they’re building great new vehicles, and they’re writing a new chapter in the history of the American auto industry.

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