number of important briefs <\/a>in the last few weeks warning about the disappearance of American manufacturing and the potential long term implications that would have on this country\u2019s future.<\/p>\nThompson lists some deeply troubling data on the decline of American manufacturing. When Ronald Reagan took office in 1981, manufacturing made up nearly 25 percent of the economy, compared to 12 percent today. Today, one third of our manufactured goods come from overseas, versus a tenth in the 1970s. In the past eight years of the Bush administration, the U.S. share of global economic output dropped from 31 percent to 27 percent, while our merchandise trade deficit doubled to $800 billion. Those trends are driven by the erosion of domestic manufacturing and the auto industry is biggest component of that sector.<\/p>\n
Thompson, who is no liberal, chides devotees to the Republican economic model that goes something like this: \u201cderegulate everything and then stand back so the market can work its magic.\u201d That model has presided over decline of the U.S. shipbuilding, electronics and steel industries and it\u2019s about to work its magic on the auto industry. \u201cWe are destroying the foundation of our economy, not to mention the arsenal of democracy. If America loses what\u2019s left of its auto industry, or its aerospace industry, or its chemical industry, our superpower status will ebb away,\u201d Thompson writes.<\/p>\n
America\u2019s aerospace industry remains a global leader because the government shovels money into it to maintain the huge U.S. arsenal. \u201cIt gets a lot more money from taxpayers in a typical year than the auto industry is going to get from any federal bailout, and much of the aerospace sector would cease to exist in the absence of government support.\u201d Its not that foreigners are better at manufacturing than we are, they\u2019re just better at protecting their manufacturing base, Thompson says. In 1981, Reagan cancelled subsidies to commercial shipbuilders, by the end of his second term the industry had collapsed, now U.S. trade moves on foreign built ships.<\/p>\n
The long term implication is that soon the U.S. will no longer build anything. Most U.S. job growth in this decade has been to provide services to consumers. If the country is ever to get out of this economic mess, it will need an industrial base that can provide goods for a global marketplace. Wall Street has been kneecapped and the consumer is shriveling as jobs and wages are cut. At some point the U.S. must go back to actually making things of value.<\/p>\n
As Thompson says, the U.S. needs leaders who grasp that \u201ceconomic growth generated by making world-class products is more sustainable than growth generated by having lots of lawyers.\u201d<\/p>\n
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