NCPA - National Center for Policy Analysis

Manufacturing Can Take Care of Itself

September 10, 2003

Rhetoric on employment is heating up. In particular, we are hearing more and more about the loss of manufacturing jobs. History, however, suggests that manufacturing can take care of itself, says Bruce Bartlett.

It's important to remember that warnings about the death of manufacturing are not new:

  • For example, on April 24, 1983, the New York Times ran this headline: "Whither the Smoke in Old Smokestack Industries?"
  • A few days later on May 8, it hit on the point again with a story headlined: "The Twilight of Smokestack America."
  • There were widespread calls for an "industrial policy" to help American companies compete with those in Japan.
  • Bookstores were filled with tomes such as The Deindustrialization of America by economists Barry Bluestone and Bennett Harrison.
  • Republicans and Democrats alike criticized President Reagan for his laissez-faire approach to this problem.
  • Many demanded that a full cabinet department be established to promote manufacturing with subsidies and trade protection, along the lines of Japan's infamous Ministry of International Trade and Industry (MITI).

The problem then -- as now -- is that there was no serious economic analysis supporting the doom-and-gloom. Bartlett says he firmly believes the current angst over the loss of manufacturing jobs will reverse fairly soon as the economy makes a full recovery from the 2001 recession. A year from now, he predicts, manufacturing will be booming, businesses will be hiring and all the demands for action by government will be forgotten.

Source: Bruce Bartlett, "Manufacturing Can Take Care of Itself," National Center for Policy Analysis, September 10, 2003.


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