All this talk about manufacturing. Old-time rustbelt liberals have an infatuation with this word “manufacturing.” It’s so Twentieth Century; reflecting the notion that making things you can drop on your foot is the only kind of productiveness that’s “real,” that otherwise you have some sort of mirage economy.
It’s a fundamental mistake. What determines marketplace value is people’s willingness to pay – whether it’s for a tangible manufactured item or, equally, an intangible that “merely” makes them feel good (a song, for example). Production of either creates equivalent economic value.
America still actually does quite well in manufacturing; our output continues to rise. But we’re doing it with ever less labor, because of technological and productivity advancements. That’s a good thing, the basic source of worldwide improved living standards. Once, it took almost the entirety of available human labor just to feed ourselves. Raising farm productivity enabled us to shift a lot of that manpower to making other things, thus expanding wealth. Now we can manufacture what we need with less labor too, empowering yet a further shift of human effort toward other endeavors, in services and intangibles, likewise growing our wealth. Thus (like farming before it) manufacturing’s importance in the world economy, and as a source of jobs, inexorably diminishes.
And anyway, manufacturing is not our “comparative advantage,” by which economists refer to what a nation does best. It’s the other stuff, where creativity reigns, that can keep America on top. Our future does not lie in manufacturing, and the President’s fixation on it is just wistfulness for a past that isn’t coming back.
He also continues to bleat about “sending jobs overseas.” It’s the same misguided mentality. America’s businesses can’t employ anybody if they can’t stay competitive by keeping costs as low as possible in a global economy. And America’s long term economic health is not served by attempting to keep people employed at high wages doing things that other nations can do more cheaply. That must fail. We have to be doing stuff that’s better or more valuable than what other nations can do, capitalizing on what is again our true competitive advantage in creativity.
Obama also keeps emphasizing economic inequality and unfairness. Well, life is unfair, but that’s not our real economic problem. That some people are doing very well is not the cause of other people struggling, nor is it that the former don’t pay enough taxes. Nobody pays enough taxes – not if we’re to continue spending as we do.
Actually, taxes high enough to sustain that spending level would cripple the economy, so that wouldn’t be sustainable either. I have confidence in the ability of America’s people and businesses to be economically productive and competitive, but that will be cut off at the knees if we can’t get a grip on out-of-control spending and ballooning debt. About this, the President was conspicuously silent.
All in all, Obama had much to say about things that aren’t our real problems, and nothing to say about the things that are.