Jon Rynn

 

Recent Posts by Jon Rynn

  • We Need FDR-Style Proposals to Solve All Our Big Problems

    Jan 3, 2012Jon Rynn

    fdr-signing-papers-150The New Deal took on many interconnected issues all at once. We need to do the same.

    fdr-signing-papers-150The New Deal took on many interconnected issues all at once. We need to do the same.

    Both Democrats and environmentalists seem to be searching for new sources of support, according to articles from Thomas Edsall and Leslie Kaufman. For Democrats, the problem is the state of mind of the “white working class,” while for environmentalists the problem is to convince the public that something should be done about climate change. In both cases, the dilemma is the same: the solutions offered do not solve the existing problems, and the public knows it. The working class would likely be wooed if someone proposed a government-led policy of putting millions of people to work rebuilding our infrastructure and the manufacturing base. The general public would likely back policies to prevent global warming if someone advanced a credible program of building a carbon-free economy. Both could be combined in a program that would employ tens of millions to build sustainable transportation, energy, and urban infrastructure, as I have proposed. It will take a holistic -- and therefore credible -- plan to convince voters.

    Edsall’s article, and much of the discussion surrounding it, neglects to mention an obvious problem: working class voters are working class because most of them, throughout history, have had manufacturing jobs, and in the United States, those manufacturing jobs have been disappearing by the millions. The Democratic Party, for all of the policy proposals that address the decline of manufacturing, has never put forward a convincing plan to revive manufacturing and the millions of jobs that would go along with it. Surely if the central plank of the Democratic Party was to revive manufacturing -- and if there was a credible plan to do so -- then much of the white working class would come streaming back.

    Part of the problem is that the Democratic Party never faced such daunting projects like rebuilding the core of the national economy. When FDR or even LBJ were president, the United States was the manufacturing colossus of the world. Their problem was to redistribute wealth, create a safety net, and increase demand for a never-ending supply of domestically manufactured goods and good, middle-class manufacturing jobs. There is no precedent in the United States for what needs to be done now -- a focused industrial policy led by the government.

    Sign up for weekly ND2.0 highlights, mind-blowing stats, and event alerts.

    But the New Deal offers a political lesson on the importance of an interlinking set of policies that cut across issue areas, a lesson that can help both the Democratic Party and the environmental movement. FDR’s programs incorporated labor policies in the form of the Wagner Act, legalizing the activities of unions, which helped lead to a thriving middle class. It included conservation policies, such as the Civilian Conservation Corps, that employed millions of people who helped to rebuild forests, parks, and agricultural areas. There was the TVA, which used a holistic approach to build up the economy of an entire region based on an energy plan. It included the first plans for a national road system, which eventually resulted in the Interstate Highway System. The mortgage industry, and thus the basis for the later housing industry, was virtually created from scratch. Social Security and the first welfare programs were designed to give people a safety net. Glass-Steagall and the Pecora Commission restructured the financial system.

    The parallels are clear for what is needed today. We need millions of green jobs, and tens of millions of jobs, period. We need energy plans and a rebuilding of the agricultural system, and we need an interstate transportation system, this time centered on electric rail. We need a different financial system, perhaps centered on public banks. But what we probably most need is to interconnect all of these issues and create a base for a majority coalition of the electorate, just as the public came to support FDR’s programs under the label of the New Deal.

    Similarly, policies for overcoming global warming and other environmental catastrophes will need to be incorporated into a wider rubric, perhaps a "Green New Deal," that encompasses manufacturing, jobs for the tens of millions who are unemployed or underemployed, renewable energy, transit, rebuilding infrastructure, and financial reform.

    The point is not to idealize the New Deal or deify FDR. We need to learn the lessons of American history that can be useful for us today. We now face a linked set of economic crises, as did progressives in the 1930s. A program that says, “We will hire tens of millions of people” lets people know that the problem, unemployment, will be solved. A program that says, “We will build the wind farms and solar panels and transit and buildings that will make our economy carbon-free” informs people that the proposers of this kind of program know how to solve the problem. A truly believable plan has to convince people that both outcomes will be reached.

    These ideas may seem politically impossible, but all great changes seem impossible before they happen. It is possible to propose policies, and the Democratic Party could propose programs that would be guaranteed to put the working class, and the rest of the employable population, to useful, well-paying work. Environmentalists could propose policies that have a reasonable chance of correcting civilization-endangering environmental problems – which would also involve putting everyone who wanted a job to work. Let’s think outside the box.

    Jon Rynn is the author of the book Manufacturing Green Prosperity: The power to rebuild the American middle class, available from Praeger Press. He holds a Ph.D. in political science and is a Visiting Scholar at the CUNY Institute for Urban Systems.

    Share This

  • We Need a World War II Effort to Tackle Global Warming and the Great Recession

    Dec 12, 2011Jon Rynn

    earth-150If the government doesn't go bold on the environment, the economy and the earth will continue to suffer.

    earth-150If the government doesn't go bold on the environment, the economy and the earth will continue to suffer.

    The news from the world of global warming science is grim. We need to keep the planet from warming by more than 2 degrees centigrade or the climate could become extremely dangerous. To stay below that level would require a drastic decrease in greenhouse gas emissions in the next several years. Many commentators, from Al Gore to Thomas Friedman to Lester Brown, have argued that we need a World War II type effort to prevent the worst of global warming. Such an effort would have the bonus effect of reviving the economy. When FDR was confronted with a world war, he converted as much as one third of the economy to that effort, with the federal government in the lead. The result: fascism was defeated along with what was left of the Great Depression. Can we do something similar today?

    When World War II started, the federal government converted several industries, including the automobile industry, to make tanks, planes, and other military goods. A planning department was set up, and all resources that were necessary for the war effort were carefully counted and controlled. At the peak of the war, about one third of all output (GDP) in the United States went into the military. One third of today's economy would be about $5 trillion dollars.

    While there is a debate about whether the war actually ended the Great Depression, it certainly finished off the scourge of high unemployment. The construction of new machinery for the factories laid the groundwork for the post-war boom, as well as enlightened policies like the G.I. Bill, which paid for college for returning soldiers and made housing loans available through the government.

    Today we have a different problem, but it could become just as deadly as a world war. Modern global civilization will become difficult if not impossible to maintain if the planet overheats, according to a new report. Our society is not designed to deal with increasing sea levels, indefinite droughts in some areas and unpredictable deluges in others, forests destroyed by warm weather pests, dead oceans, and disappearing glaciers that lead to the destruction of many of the world's most important rivers.

    So what would a World War II-type program to prevent global warming and end the Great Recession look like? As I argued in my book, Manufacturing Green Prosperity, we would need to spend on the order of one trillion dollars per year, for 20 years, in order to build the necessary transportation, energy, urban, and agricultural infrastructure. And by "we" I mean "we the people" -- that is, the federal government.

    I recently completed a chapter for a book about a green energy economy that should come out in 2012, and I proposed that with a budget of $1.2 trillion dollars per year we could employ about 24 million people, of which over 5 million would be manufacturing jobs. A revival of manufacturing sparked by this program is vital to ending the Great Recession.

    Sign up to have the Daily Digest, a witty take on the morning’s key headlines, delivered straight to your inbox.

    Here are the federal programs needed to create a full-employment green economy, along with the annual budget required:

    1. An Interstate Wind System that would generate all of our electricity, which is currently provided mostly by coal and natural gas plants at $150 billion

    2. An Interstate Electricity Grid that would be able to carry all of this electricity throughout the continent at $85 billion

    3. Solar photovoltaic panels that would generate a quarter of our current electricity needs, which would make up for the electricity that the wind system would require at $150 billion

    4. Geothermal heat pumps under all residential buildings that would provide all heating and cooling needs at $50 billion

    5. Weatherizing half of the homes in the country at $25 billion

    6. A 17,000 mile Interstate High-Speed Rail System at $30 billion

    7. An expanded freight, medium-speed, and commuter rail system at $25 billion

    8. A vastly larger transit system at $60 billion

    9. A 100 percent organic agricultural system at $10 billion

    10. Recycling/reusing almost everything at $100 billion

    11. Last but not least, housing half of the population in dense, walkable neighborhoods, which would cost $500 billion per year if 100,000 250 unit apartment buildings were constructed

    At the end of this 20-year program of economic reconstruction, the United States would emit virtually no greenhouse gases. As added benefits, it would not use petroleum, whose supply is shrinking and on which the U.S. is very dependent, nor would it destroy the water, soil, and forests of its ecosystems. We could also implement a "government as employer of last resort" system so that everyone who wanted a job could have one.

    Even this program would not actually be at the level of a World War II-type effort, since $1.2 trillion constitutes less than one tenth of the economy, whereas the real WWII effort required one third. We could double the rate by doubling the budget to $2.4 trillion, which might be required to avoid out-of-control global warming -- particularly if, as I suspect, it took 10 years to accumulate the "political will" to implement such a program (assuming it could happen at all).

    The good news: it is technologically feasible to create a thriving civilization without emitting greenhouse gases. The bad news: there will have to be major shifts in economic, and therefore political, power in order to build a sustainable civilization.  We have a much different political constellation than in FDR's era. In 1941, the top 1 percent constituted a much smaller portion of national income and thus had less power. There was an 81 percent top tax rate in place, which peaked at 94 percent in 1944-5 (and was still 91% in 1963).The Democrats, a significant percentage of whom were truly progressive, were dominant in Congress, and FDR sat in the White House. This was all accompanied by a very strong set of left-wing movements and institutions, including strong trade unions.

    And how would all of this be paid for? There are several ways to come up with $1.2 trillion. First, we can do it the same way that the government did for the Iraq war or the financial bailout: we could simply go into debt (preferably through a public infrastructure bank). World War II was paid for with debt -- which was brought down very quickly because of the post-war boom. Second, the top 1 percent makes about 24 percent of national income, which in 2009 was about $12 trillion. So we could obtain, say, half of the needed $1.2 trillion by imposing a 25 percent tax on that income bracket. We could pay for the whole thing with a 50 percent tax. Third, we currently spend almost $1 trillion on the military. The Defense Department keeps its budget high not because we need such a large military, but because it has created a "military-industry-congressional complex" that doles out money to almost every congressional district in the country -- and creates good factory jobs. Most of the 6 million people either employed directly by the Department of Defense or indirectly through the industrial complex could be converted to working on our number one national security issue: creating an economy that will not implode.

    Ultimately, an economy cannot thrive if the ecological foundations on which it rests are collapsing. That is where we are heading, and unless the government steps in directly, and in a big way, there will be no nation to secure.

    Jon Rynn is the author of the book Manufacturing Green Prosperity: The power to rebuild the American middle class, available from Praeger Press. He holds a Ph.D. in political science and is a Visiting Scholar at the CUNY Institute for Urban Systems.

    Share This

  • How the Top One Percent Ripped Off the Bottom 99 Percent

    Oct 11, 2011Jon Rynn

    wall-street-150As the financial sector sucks up more and more money, the rest of us are left making less and less.

    wall-street-150As the financial sector sucks up more and more money, the rest of us are left making less and less.

    Occupy Wall Street has put a spotlight on the vast and growing economic inequality in the United States. It now takes its place as a top progressive priority -- perhaps the highest priority it has experienced since the Great Depression.

    Underlying this greater and greater inequality is a shift of wealth from manufacturing to the top 1 percent and the financial sector. Over the past 40 years, the sectors of the economy that grew in output share grew very little in employment share -- making more money but paying it to a small group of people. The sectors of the economy that grew in employment share did not grow in output share, meaning that a growing number of workers had to share in a smaller pot of profits. From 1969 to 2007, the richest 1 percent has grabbed 15 percent more of the income of the United States, to a total of about 24 percent. Meanwhile, the manufacturing sector has lost a similar 15 percent of gross domestic product (GDP). This has led to a downward shift in income for the bottom 99 percent.

    Let’s look at the shift among sectors of the economy in a bit more detail, because as finance has risen, so have other lower pay sectors. A good way of looking at the health of an economy is to see if there is a difference in how much income a particular sector, such as manufacturing or finance, pulls in -- that is, how much of the economy (GDP) it constitutes versus how much employment it accounts for. You might think of this as what percentage of the economy each working person receives, viewing each sector as a whole. I will call this the “the ratio”: that is, the ratio of the GDP (value-added) share of the economy to the percentage of the employment share of the economy for a particular sector; I will always compare 1968 to 2009 (all data sourced from the Bureau of Economic Analysis).

    Manufacturing has historically been the quintessential middle class sector because its share of GDP declined slightly, from 28 percent to 25 percent, between 1948 and 1968 in tandem with its share of employment (its ratio was 104 percent in 1968). Thus someone working in the manufacturing sector made an average income for the economy as a whole -- that is, he or she was right smack in the middle of the middle class. Since 1968, the employment share of manufacturing has been heading down by .38 percent per year, so that it is now 8.7 percent, while its share of the economy is 11.2 percent. The average employee is making about 30 percent more than the average for the economy, most likely because so many of the low-skill jobs were outsourced (along with most high-skilled ones).

    At the same time, the finance, insurance, and real estate, or FIRE, sector increased its share of the economy from 14.2 percent to 21.5 percent, while the employment share only rose from 4.4 percent in 1968 to 5.7 percent in 2009. So this sector went from a ratio of 322 percent to 376 percent; for finance alone, the ratio almost doubled from a fairly middle class 116 percent in 1968 to 197 percent in 2009. Real estate always had a ratio of about 1000 percent, which is one more reason, perhaps, that society should not encourage real estate bubbles. Overall, the pot of money has exploded without an increase in payrolls.

    Sign up to have the Daily Digest, a witty take on the morning’s news, delivered straight to your inbox.

    So FIRE took about half of the share of GDP that manufacturing lost while barely increasing employment. The rich got richer.

    On the other hand, in what is called “accommodation and food services,” or basically hotels and restaurants, the share of the economy moved from 2.2 percent to 2.7 percent in the 41 years between 1968 and 2009, but its share of employment rose from 4.5 percent to 7.2 percent; the ratio fell from 49 percent to 33 percent. The “health care and social assistance” sector, dominated by the health care industry, saw its ratio decline from 73 percent to 63 percent; its share of GDP rose from 2.8 percent to 7.5 percent, but its employment soared from 3.8 percent to 11.9 percent. The other sector that saw a major decline was retail, which actually saw a decline in economic share from 7.9 percent to 5.8 percent at the same time that its employment share increased slightly from 9.9 percent to 10.8 percent. Call this the “Walmart” effect: driving out mom-and-pop stores, leading to a greater efficiency, but lowering the average wage from 79 percent to 54 percent of the economy-wide average.

    If we combine these employment “growth” sectors, GDP share moves from 12.9 percent to 16 percent between 1968 and 2009 but the employment share grows from 18.2 percent to 29.9 percent. The ratio fell from about two-thirds of the average to less than half. More and more Americans are employed by sectors that aren’t bringing in a large share of the economy.

    So where did the employment and economic output of the manufacturing sector go? When it declined, most of the income went into FIRE and the top 1 percent, and most of the employment -- such as it is -- went into lower paying service jobs or has ceased to exist.

    Counter to conservative ideology, the economic role of the government has actually gone down -- at least when measured, as I have been doing here, by value-added data, which eliminates the effect of transfer payments. From 1968 to 2009, the share of employment for the federal government decreased from 9.7 percent to 3.8 percent, and its GDP share went from 6.9 percent to 4.3 percent, while for the state and local governments the employment share rose from 11.7 percent to 14.4 percent and GDP share went from 7.6 percent to 9.3 percent. So much for “big government." FIRE’s share of GDP is at 21.5 percent, while government at all levels is at 13.6 percent. Sounds like “big finance” to me!

    All of these statistics point to the need to understand the “natural history” of the economy. The health of a particular sector of the economy is a relevant political issue, as is how we might change the relative importance of each. I have argued previously that manufacturing is at the center of the economy. If we were to move from a manufacturing sector with 9 percent of employment to 20 percent, the economy would add over 14 million jobs. To achieve a change like that, we need to redirect our resources from the “economic royalists” and top 1 percent to the bottom 99.

    Jon Rynn is the author of the book Manufacturing Green Prosperity: The power to rebuild the American middle class, available from Praeger Press. He holds a Ph.D. in political science and is a Visiting Scholar at the CUNY Institute for Urban Systems.

    Share This

  • China "Cheats" -- and So Should We

    Sep 13, 2011Jon Rynn

    CB013130If the U.S. wants to tackle climate change and stay competitive in the global economy, it needs to stop playing by the old rules and start making new ones.

    CB013130If the U.S. wants to tackle climate change and stay competitive in the global economy, it needs to stop playing by the old rules and start making new ones.

    The looming global warming catastrophe could be worse, in the long term, than any war, social collapse, or single famine in human history. We need to scale up renewable technologies as quickly as possible -- by any means necessary. And that is exactly what the Chinese are doing. According to Steven Lacey at Climate Progress, while world solar cell manufacturing capacity was only 100 MW in 2000, it is now 50,000 MW –- and China by itself accounts for 57 percent. But this puts Americans, including Lacey and other environmentalists, in a peculiar position. On the one hand, we desperately want more solar and other renewable technologies. But on the other hand, by scaling up so fast, the Chinese might wipe out the American solar panel industry. Instead of trying to stop the Chinese from doing what they are doing, the U.S. needs to learn from them.

    The environmental community has tended to contradict itself when it comes to rolling out renewable technologies. On the one hand, leaders such as Al Gore and my personal favorite global visionary, Lester Brown, call for a World War II-style mobilization to quickly convert our civilization so that we can avert ecological calamity. But the means advocated, such as putting a price on carbon, are not up to the task. We can't afford to wait to see if the market will do what is necessary.

    The Chinese are not putting a price on carbon. In fact, they won't even negotiate a target for how much carbon they will output by 2020 or any other date. But they are doing something much more important: They are showing the world how you scale up a technology with a World War II type of effort. Some call it “cheating,” but if this is cheating, let's have much more. What are the Chinese doing right?

    First, China has a five-year plan. In the U.S., corporations have five-year plans, and so does the Department of Defense. But imagine a president giving a State of the Union address announcing such a plan. There would be cries of “socialism!” I say, socialism, shmocialism, whatever works. The longer the time range, the better. Congress is now debating a multi-year transportation bill; the same should be done for the entire energy sector.

    Sign up to have the Daily Digest, a witty take on the morning’s key headlines, delivered straight to your inbox.

    Second, many Chinese “banks," if you want to call them that, make money virtually free, and often don't even get their “loans” back. The government gives companies land –- which, by the way, Lincoln and the Republicans gave to railroads when obstructionist Southern Democrats were out of the way during the Civil War. Where would the U.S. be today if the railroad industry hadn't received a huge boost at the dawn of the industrial era, or if the Internet hadn't received a similar boost 100 years later?

    Third, the Chinese import foreign technology and require foreign companies that set up factories in China to train Chinese engineers. Ever since the British tried to prohibit their engineers from traveling at the beginning of the Industrial Revolution so that Britain could maintain its dominance, other countries have been trying obtain -- or, as the originating country calls it, steal -- new technology. In a way this, is all part of a 1,000-year cycle, as the West gained many important technologies like the compass, printing, and gunpowder from the Chinese, who are now borrowing technology back.

    Fourth, the Chinese are producing hundreds of thousands of engineers for their expanding manufacturing economy. Forty percent of the engineers in the U.S. are involved with manufacturing, according to a New York Times piece by Louis Uchitelle. Uchitelle reports that the Chinese manufacturing sector has either just grown larger than the American one or will shortly do so. As manufacturing declines here, it becomes much less attractive to have a career as an engineer. In China, on the other hand, being an engineer is a clear way to make it into the good life.

    The point is not to idolize China. Far from it -- China is in a race to see whether it can switch to clean technologies before its dirty ones overwhelm its ecosystem and cause its economy to collapse, and its currency is much too low. But nations have always learned from other nations. Sometimes, the “teachers” cry “unfair!” when the “students” don't play by the rules. One hundred years ago, the British complained that the Americans were always copying their inventions.

    But innovation is not simply a matter of technology; it is also a matter of policy. If something works, use it, even if it offends conventional wisdom. In fact, particularly if it offends conventional wisdom. That's what happened during the New Deal era of the 1930s, when the old policies were clearly failing and new ones had to be put in place (for instance, instead of tinkering with market rules in order to develop the Tennessee Valley, the TVA rebuilt the whole area). With global warming and other environmental problems, such as the end of cheap oil, threatening civilization, we need policy innovations even more than we need technological ones.

    Jon Rynn is the author of the book Manufacturing Green Prosperity: The power to rebuild the American middle class, available from Praeger Press. He holds a Ph.D. in political science and is a Visiting Scholar at the CUNY Institute for Urban Systems.

    Share This

  • We Won't See Mass Prosperity Until We Rebuild Manufacturing

    Sep 6, 2011Jon Rynn

    workers-200No matter how large a jobs effort the government puts forward, revitalizing the manufacturing sector holds the key to long-term success.

    workers-200No matter how large a jobs effort the government puts forward, revitalizing the manufacturing sector holds the key to long-term success.

    While there are many similarities between our time and the Great Depression, there is a crucial difference: In the late 1930s, the United States produced over one-third of the world's manufactured goods, while in 2008, the American manufacturing share was down to 18 percent after being trashed by outsourcing and imports. By increasing demand for products through government action, FDR was able to set the country up for the "Great Prosperity" from the end of WWII until the 1970s. Now, even with a large second stimulus, we will not be able to experience a new era of prosperity until we rebuild the manufacturing sector.

    Recently, a crop of articles has appeared that argue that "our economy will thrive only when we make what we invent," as Susan Hockstein, President of the Massachussetts Institute of Technology, recently concluded in a New York Times op-ed. Hockstein is challenging the idea that the United States can somehow be a world-class source of innovation without actually producing the new products. As she points out, in the past, "with design and fabrication side by side, insights from the factory floor flowed back to the drawing board." She echoes the research of Professors Pisano and Shih, from an article in the Harvard Business Review, in which they wrote, "The U.S. has lost or is in the process of losing the knowledge, skilled people and supplier infrastructure needed to manufacture many of the cutting-edge products it invented." When engineers could go down to the factory floor and look at the results of their design decisions, it was much easier to create yet more innovations. A major criticism of a corporation (such as GM) used to be that the design engineers would take their designs and "throw them over the wall" to the factory floor without worrying about how the designs fared in a factory setting. Now we throw the designs over the Pacific Ocean to China.

    By contrast, as John Gertner writes in the New York Times Magazine, "As the former White House economic adviser Lawrence Summers put it, America's role is to feed a global economy that's increasingly based on knowledge and services rather than on making stuff." The benefits of separating production and innovation have been accepted as conventional wisdom for the past few decades, exemplified by Summers's statement.

    But reintegrating innovation -- that is, science and engineering -- with production -- skilled production workers and operations managers -- is necessary. Back in the Great Depression, the Russians bought American factories and imported American engineers to create their industrial system. (Germany also helped, much to their later regret.) Now, after decades of closing down factories, throwing engineers and skilled production workers out of work, re-orienting those professions to military work and much of the educated class to finance, the U.S. is in the position of a developing country. We must try to catch up to Europe and Asia in any way that we can.

    It won't be easy. On the one hand, Hockstein points out that "to make our economy grow, sell more goods to the world and replenish the work force, we need to restore manufacturing -- not the assembly-line jobs of the past, but the high-tech advanced manufacturing of the future." On the other hand, Gertner reports that advanced electric car battery makers are forced to buy Korean companies and import Korean engineers in order to get up to speed with cutting-edge technology. A battery maker tells him, "That's where the know-how was -- it was nonexistent in the U.S."

    Sign up to have the Daily Digest, a witty take on the morning’s key headlines, delivered straight to your inbox.

    While the increasing recognition of the importance of manufacturing is encouraging, we are still witnessing the very beginning of the effort to tackle solutions. Hockstein calls for more research dollars from the Federal government and support for more graduates and skilled workers in advanced manufacturing fields. While these are a good start, they won't solve the underlying problem. What we need is an industrial policy, a coordinated set of initiatives that the government pursues to make up for the many market failures we are currently experiencing. But as Gertner points out, "Even now, as unemployment ravages the country, so-called industrial policy remains politically toxic. Legislators will not debate it; most will not even speak its name."

    Further to the left on the political spectrum, writers such as Leo Hindery recognize that "America's manufacturing sector must be a cornerstone of the nation's economy and thus one of the essential drivers of the recovery we are still searching for." He calls for a requirement that government purchase goods made in America, a tax credit for rebuilding existing American factories, eliminating the tax credit for off-shoring factories, and enacting a temporary trade tariff, among other policies. He also advocates for a national infrastructure bank and extending various programs to help with the creation of a green energy economy. In a similar vein, Dave Johnson of the Campaign For America's Future writes about a multi-pronged set of policies to revive manufacturing: deal with the trade imbalance with China by pushing it to stop making its currency artificially weak, have the government purchase American-made goods, implement a price on carbon in order to encourage a transition to a green economy, and create an industrial policy, for instance with tax incentives and training programs. He also argues that the president could embark on many of these policies now.

    While all of these proposals would be a giant step forward politically, and in fact are probably beyond the limit of feasibility in this age of rabid Republican opposition, unfortunately they only begin to put us on the path to a world-class manufacturing system. The Koreans, Chinese, and Japanese directly subsidize companies, make it easy for scientists and engineers to get degrees, aid the import of technology, help companies work together, and engage in many other techniques for building manufacturing industries. According to the New York Times, a partial cause of China's rise as a solar energy producer and the simultaneous decline of the United States comes from "free or subsidized land from local governments, extensive tax breaks and other state assistance... China has focused on building the competitiveness of the country's manufacturers." Since labor is a small part of solar panel costs, cheap labor has not been a key to success in China.

    We could combine the ideas of a second stimulus, building a green infrastructure, and rebuilding the manufacturing economy by creating environmentally sustainable transportation, energy, and urban national systems, as I have argued. There are myriad examples of countries pulling themselves up the ladder of manufacturing competency, including the United States. The reality is that in order to be wealthy in the long-run, an economy must be based on manufacturing. As hard as it will be to move the politics of this country toward that reality, in the end it will be easier than making pretend that manufacturing is not important.

    Jon Rynn is the author of the book Manufacturing Green Prosperity: The power to rebuild the American middle class, available from Praeger Press. He holds a Ph.D. in political science and is a Visiting Scholar at the CUNY Institute for Urban Systems.

    Share This

Pages