The Dems' Misguided Rust Belt Stimulus

August 16, 2010

The Democratic Party has pinned a lot of its hopes on a "pro-manufacturing" agenda.  This is a bad idea because promoting manufacturing is an unachievable goal and an unnecessary task, says Eli Lehrer, senior fellow at the Heartland Institute. 

Manufacturing, as most people think of it, is declining just about everywhere: 

  • All G-8 members have fewer factory jobs than they did 25 years ago; so, surprisingly, does China where new private and quasi-private export-driven factories have replaced inefficient state-run plants.
  • The few places that show relatively recent "manufacturing" job gains -- Canada and Russia -- have continued to shed assembly line jobs but covered those gains with big increases in energy-price-spike-fueled resource extraction jobs. 

Most of the United States' manufacturing base (and, indeed, most of the manufacturing base in all large countries) deals with food and consumer products: 

  • Over 60 percent of all manufacturing jobs in the United States involve these grocery store items.
  • The jobs devoted to producing them will not leave the United States unless some breakthrough results in an enormous reduction in shipping costs.
  • The United States is far more efficient than any other country in producing these things.  

Even if the strategy works, it is unlikely to win many votes directly: 

  • Quite simply, people don't really want manufacturing jobs.
  • Jobs with a lot of similarities to manufacturing work -- processing credit card payments, troubleshooting computer systems, running polymerase chain reaction cycles -- are good places to move displaced manufacturing workers but will rarely if ever get counted as "industrial" jobs.  

Trying to boost manufacturing may help Democrats in November, but it's not a good idea for the country, says Lehrer. 

Source: Eli Lehrer, "The Dems' Misguided Rust Belt Stimulus," Finance, Insurance & Real Estate News, August 5, 2010.

 

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