2 Viewpoints on Reviving US Manufacturing
For anyone that follows the Wall Street Journal, you might have come across a couple of articles centered on the debate of how to revive US manufacturing. Since the President’s State of the Union address, this topic has received much discussion and there are many worthwhile points of view. Although the complete first article is only viewable online with a WSJ subscription, I couldn’t help but call attention to these articles. They are important because they represent opposite ends of the manufacturing solution spectrum.
The first article, Manufacturing Decline, was printed in Review and Outlook on February 18th. After delving into a brief history of the changes in manufacturing and outlining the recent and impressive advances in manufacturing productivity (103% since late 80’s), the article enters into a discussion of how the government’s “habit of misallocating scare resources” to less productive sectors has hurt the chance for possibly more meaningful growth in manufacturing. The author seems to favor allowing the market and its “millions of investors and consumers” to allocate resources rather than look to the proposed plans of some of the current presidential candidates. A simple summary would call this an antigovernment intervention perspective.
The second article, Dow Chemical's CEO on How to Revive Manufacturing, was released in yesterday’s Letters section. Written by The Dow Chemical Co.’s Chairman and CEO Andrew N. Liveris, author of Make It In America, this article highlights the benefits of government assistance/intervention in industry. He first mentions how public/private collaboration can provide industry with a firm grasp on “the rules of engagement”- taken as legislation in my reading – thus allowing companies to confidently create long term investment plans that are in line with government policy. Mr. Liveris later highlights how the job losses in manufacturing represent losses in some of our most promising industries, signifying a greater qualitative loss than is perceived when looking at employment figures. He caps off his discussion by stating “I see the ways we can collaborate, educate and cooperate with government to drive innovation and increased competitiveness. It is time to recognize the issues, plan a steady and strategic path forward and to act.” Again, a simple summary would call this a pro-government intervention perspective.
If you subscribe to the Wall Street Journal, I highly suggest you take the time to review these articles on two major fields of thought in this interesting debate.