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Deindustrialization Masters Level Course Worth of Info

June 7, 2012

Amazingly breathless and link-laden challenge to our recent “pro-manufacturing” rhetoric.

So here’s the problem with Gene Sperling’s “complacency line” about fairly steady overall national manufacturing employment job numbers from 1965-1999, of 17.3 million: it obscures an awful lot of American history, and not just economic history. He concedes that throughout these years, despite these absolute numbers, manufacturing’s share of overall jobs was declining. Yes, in rough, gross numbers the jobs lost in the old industrial regions, in New England and the rustbelt, were made up in other regions, especially in the South and the Southwest, and manufacturing jobs grew in the new computer and electronics industries, but these were also, and there is a direct relationship between them, the years of urban decay, weakening blue-collar institutions, intense racial troubles, and the rise of the world’s largest prison population. That population was gathered, disproportionately, from the people of color who might have held many of the old industrial jobs which migrated to the most business friendly parts of the U.S., then to Mexico, then to Asian destinations. And let us not forget that beginning in 1980, wealth and income distribution began their migration into the upper reaches of the society, and the pay of CEO’s began its fantastic multiplication from the line workers’. Is it fair as well to note that the “balance of power” in society and the political system also changed during these years, with the “status” of unions and workers falling, and that of business leaders and entrepreneurs rising? And that some of the crucial tools that government used during the Great Depression – direct job creation via the WPA and CCC – were no longer seen as available during the Great Recession in 2008-2009, as the Democrats seemed to have now agreed with the Republican Right, and the business lobbies, that “only the private sector can create jobs” – but when it’s not feeling “uncertain,” when it’s “in the mood.”

This article runs very deep – lots and lots of resources and references embedded within… Essentially, it is an argument about how America has been deindustrialized, but there is much more to this diatribe than that.

“The lesson is obvious: the great economic powers of the last five hundred years have each gone through a late-development era in which earlier reliance on seafaring, manufacturing, or bourgeois commerce yielded to a cocksure faith in finance and a financial services economy. Not once, though, did this lay a framework for continued national retention of status as the world’s leading economic power. Quite the reverse. For the overall national economy, financialization has been a stage of decay, not triumph. An important yet small elite flourishes, but the average citizen is a loser. The odds are that the latest of these stages in the United States will have a similar effect – and that the political and governmental failure in the late 1980’s and early 1990’s to deal with financialization and its abuses will leave a bad taste in the mouths of twenty-first-century Americans.”

Wow, I am having fun with this, but it is going to take more than a passing glance to clearly articulate all the insights. So far, I could say something like “Arrrrrrrrrrrggggggggggghhhhhhhhhhh!!!!! We’re DOOMED!” But that would hardly be useful.

As a prelude to the awful 2011 summer debates in Congress, the New York Times ran an article on the “War of Ideas” over the reasons that 25 million Americans are unable to find full time work – or any job at all. In this article, the Republican and business framing timbers stand out in bold relief: it’s not the private sector’s fault, it’s all government’s doing. According to Speaker John Boehner, who talks to the “job creators”: “…they’ll tell you the overtaxing, overregulating and overspending that’s going on here in Washington is creating uncertainty and holding them back.’” Representative Jeb Hensarling, from Texas, said there was a lack of confidence “‘…from an administration where regulators have gone wild…’” The regulation complaints were seconded by John Engler, head of the Business Roundtable, who brought down the gavel by stating that “‘the private sector is the only hope for future job creation.’” The concluding two paragraphs spoke of the Democrat’s “Make It in America” legislation for high speed rail and other transportation projects, tax breaks for research and development, and a call for “government to develop a national manufacturing strategy,” but ended with a resigned sigh that Republicans would block the efforts and that they were long term in nature, and no help for the currently unemployed. (Here at

“The private sector is the only hope for future job creation.” Let’s think about the ramifications of that assertion, which carries with it the power of a papal declaration on matters of economic theology, with no disrespect intended, because in America, conservative economics carries a theological intensity. What it tells us as far as the Democrats who buy into it go – whom I believe are a two-thirds majority in the party – is that not only have they accepted the fact that the “era of big government is over,” they have also the erased from memory the time when government itself created jobs directly, in the WPA and CCC of the New Deal. The broader meaning of the fiat that the private sector is the only legitimate “job creator” is the reduction of the government role to lowering taxes, removing regulations and weakening the remaining termite riddled supports for organized labor, even at a time when economic reality cries out for direct job-demand creation programs. The ideological force field against government action is so powerful that even when terrible economic circumstances meet a promising efficiency-productivity-innovation program – as in reducing businesses and homes energy costs via energy efficiency improvements – the connection can’t be made. (See the McKinsey & Company study from July of 2009 here at… ).

Nor can the connection be made over something as logical as a National Infrastructure Bank, where members of both parties, the AFL-CIO and the U.S. Chamber of Commerce seem to be pulling in the same direction. That’s because once the parties actually sit down to try to work out the details, all the boundary problems between the public and private sector arise to prevent consensus (as well as the Republican political policy to give the Democrats no political victory with economic implications that could resonate the way the New Deal once did). If the private sector is going to contribute the bulk of money in the form of loans to the bank for projects, then how will they be repaid at interest: out of the national purse, or from the project’s revenues themselves? If the latter, that dramatically limits the nature of the possible projects, and raises the issue of the continuing privatization of traditionally public services, like education, as well as the old danger of private powers bending “public infrastructure” to their own narrow economic ends…


From → Economics

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