Now is the winter of our discontent (A repeat of Vol. XXV, Art. 35 – Three years ago today.)
Here’s what our “recession” really looks like:
– The United States has lost approximately 42,400 factories since 2001.
– Dell, Inc., one of America’s largest manufacturers of computers, has announced plans to drastically expand its operations in China with an investment of over $ 100 billion over the next decade. Dell has announced that it will be closing its last large U.S. manufacturing facility in Winston-Salem, North Carolina, in November. Approximately 900 jobs will be lost. In 2008, 1.2 billion cellphones were sold worldwide. So how many of them were manufactured inside the United States? Zero.
– According to a new study conducted by the Economic Policy Institute, if the U.S. trade deficit with China continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone.
– As of the end of July, the U.S. trade deficit with China had risen 18 percent compared to the same time period a year ago. The United States has lost a total of about 5.5 million manufacturing jobs since October 2000. According to “Tax Notes”, between 1999 and 2008 employment at the foreign affiliates of U.S. parent companies increased an astonishing 30 percent to 10.1 million. During that exact same time period, U.S. employment at American multinational corporations declined 8 percent to 21.1 million.
– In 1959, manufacturing represented 28 percent of U.S. economic output. In 2008, it represented 11.5 percent. Ford Motor Company recently announced the closure of a factory that produces the Ford Ranger. In St. Paul, Minnesota. Approximately 750 good paying middle class jobs are going to be lost because making Ford Rangers in Minnesota does not fit in with Ford’s new “global” manufacturing strategy.
– As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time less than 12 million Americans were employed in manufacturing was in 1941. In the United States today, consumption accounts for 70 percent of GDP. Of this 70 percent, over half is spent on services. The United States has lost a whopping 32 percent of its manufacturing jobs since the year 2000. In 2001, the United States ranked fourth in the world in per capita broadband Internet use. Today it ranks 15th. Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.
– Printed circuit boards are used in tens of thousands of different products. Asia now produces 84 percent of them worldwide.
– The United States spends approximately $ 3.90 on Chinese goods for every $ 1 that the Chinese spend on goods from the United States.
– One prominent economist is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040.
– The U.S. Census Bureau says that 43.6 million Americans are now living in poverty, and according to them, that is the highest number of poor Americans in the 51 years that records have been kept.
– So how many tens of thousands more factories do we need to lose before we do something about it?
– How many millions more Americans are going to become unemployed before we all admit that we have a very serious problem on our hands? How many more trillions of dollars are going to leave the country before we realize that we are losing wealth at a pace that is killing our economy? How many once great manufacturing cities are going to become rotting war zones like Detroit before we understand that we are committing national economic suicide? The deindustrialization of America is becoming a national crisis. It needs to be treated like one.
America is in deep, deep trouble, and it’s time we did something about it. But what? Can we just reopen all those factories that the multinationals have shuttered? The CEOs and directors of those companies transferred our manufacturing facilities to overseas sites without a second thought about the carnage they were leaving behind. They’re not about to return either because low foreign wage scales were the tipping point. Those company officials were like rats fleeing a sinking ship.
Good riddance to those carnivores. And good luck to the Chinese and other Asian nationalities. Americans will do more to help those lowly-paid foreign workers than those greedy multinational executives ever will. Our patented container ships will bring higher incomes to those workers
We’re not the “sinking ship” that those fleeing executives make us out to be – or that they’ve caused us to be. We were always a maritime nation, and when the half-asleep politicians in Washington finally heed the wake-up call, we’ll resume our legitimate role as masters of the sea lanes.
But building warships isn’t the answer. We have more of those unproductive vessels than the rest of the world’s navies combined, and we’re still taking on water – like a “sinking ship”.
Merchant ships are productive vessels. Ships carrying cargo, not weaponry, are the vessels that have traditionally produced wealth for a country and for its citizens. That’s how a country makes money. That’s how economies grow and that’s how “recessions” are ended. That’s how “depressions” are ended, too, as we learned in the 1930s when FDR’s Emergency Shipbuilding Programs took root.
The cargo ships turned out by our revitalized shipyards – not the warships – eventually gave us an economy that was the envy and the economic crutch of the entire post-war world. As Irving Berlin saw it, “We did it before and we can do it again,”and although (when the truth is finally revealed) we really had a choice in the 1930s, this time we have no choice. This time it’s “sink or swim”.