Wednesday, February 17, 2010

We don’t make anything anymore and that’s a problem? Really?

captainobvious

I was watching the CBS News national report tonight and saw a story suggesting it might be bad that we don’t make anything in the United States anymore.

When such an obvious state of affairs becomes news, it’s pretty clear why – exactly – our economy is in the toilet. Everything’s made in China these days and even allegedly American companies like Ford are still waving the flag while manufacturing cars in Canada.

That’s an ironic thing about Ford. There are few more cars more distinctly American than the Mercury Grand Marquis, but that’s made in the St. Thomas Assembly plant in Canada (a plant that’s supposed to shut down at the end of 2011, by the way). It’s a messed up world, indeed, when my Toyota was made in Indiana while your Ford might have come from Canada.

It seems we’ve come to a point in time where we design and program things – do all the “high level” stuff that pays well – and rely on cheap labor in places like China to actually build what we need. The sheer irony that the largest communist nation on the planet is also home to the largest, exploited workforce in the world is something to be reserved for another time.

At any rate, the problem with the “design it here and build it there” concept is that that’s simply not sustainable. Want proof? Look at China. That country has become an economic powerhouse for the simple reason that the industrial base there is huge. That economic might and industrial based used to belong to the United States and we let it get away.

Besides, at what point will those countries that are manufacturing everything want to get in on the design end of the process, too? We’re already at a point where we don’t make much, but what happens when we’re not designing anything, either?

While it might take a few years to get to this point, one thing that is undeniable is that our economy is a mess. I was visiting with an economist a few months ago after Obama was going on about job creation this and job creation that in his State of the Union address. My question to her was something that Obama didn’t answer directly – where will these jobs come from? What segment of our economy is strong enough to pull us out of our mess and turn things around in the U.S.?

Her response was a very chilling “I don’t know.”

Sadly, that’s about what I expected. I grew up in a town that prospered in the shadow of two major aluminum plants – Alcoa and Reynolds. This county was a wealthy one, indeed, as long as those plants were running and most everyone thought Alcoa and Reynolds would always be here. However, declining profits, increasing tensions between management and labor and a host of other issues caused those plants to start sending jobs to bauxite fields in Jamaica in the early 1980s. After a couple of decades, those plants were all but shut down and now must of us in Saline County, Ark., climb in our cars and go to work in Little Rock every day.

Saline County never has quite recovered from those job losses and I can’t help but wonder if we’re not looking at the same scenario playing out on a national scale. If manufacturing is handled overseas, agricultural imports are on the rise, tech support jobs are sent to India, and companies like Anheuser-Busch are bought (and “streamlined”) by investors in other nations, where are all those new jobs going to be created?

3 comments:

Don said...

I remember in the 80's saying to a group of my friends that the west should not be applauding the downfall of communism. I thought then that we'll have to compete and defeat the soviets economically now. China wasn't even factored into my equation then.

The Natural State Hawg said...

Don -- Turns out you were right. I don't think anyone imagined fighting economically against a communist country that has the most exploitable workforce to be found anywhere and one that artificially deflates the value of its currency. If we're to prosper again, we've got to do a hell of a lot better. It's simply appalling that we've come to where we are now through a combination of the market-manipulating Chinese, labor and management in the U.S. that hate each other and companies like Wal-Mart going out of their way to save a buck or two by selling sloppily made trash instead of items made here.

Zachariah said...
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