Despite Fresh Rhetoric About Saving U.S. Manufacturing, Obama Is Quietly Pushing Failed Bush Trade Policies
Stay up to date with the latest headlines via email.
With jobs at the forefront of every voter's mind, President Barack Obama and key members of his administration have been publicly promoting new trade policies to make sure that U.S. companies don't send manufacturing jobs overseas. It's a politically and economically sound strategy—but unfortunately, it's all talk. Behind the scenes, the administration is still pushing for the same failed Bush-era trade policies that sent millions of American jobs abroad and created global imbalances that helped fuel the financial crisis.
After witnessing the outrageous Congressional hurdles presented to Obama's efforts to pass a jobs bill, the administration is understandably looking for an inexpensive, politically popular way to create jobs in America. Encouraging companies to make more of their goods in the United States creates jobs directly and indirectly, since additional jobs associated with the services for manufactured goods become needed. The plan also eases international capital imbalances that funneled trillions of dollars into the Wall Street casinos, making the entire global economy less susceptible to financial shocks. It also happens to poll very well, something Obama adviser Rahm Emmanuel clearly understands.
"In coming weeks, the president will expand his push to create clean-energy jobs to include more traditional industries such as automobiles and railroads."Made in America" will become the "big theme," Rahm Emanuel said in an interview with the Wall Street Journal.
The numbers on American manufacturing are grim. In October 2009, more people were officially unemployed (15.7 million) than were working in U.S. manufacturing. That hasn't happened since the Great Depression. And much of the damage has been dealt in the past decade alone -- 5.5 million manufacturing jobs, nearly 32 percent of the U.S. total, have been lost in the United States since George W. Bush took office in 2000.
Rebuilding an economy based on manufacturing makes our society less susceptible to the risks created by Wall Street speculation, and spurs further economic activity outside of manufacturing itself. We can't have a stable economy without a sturdy manufacturing base-- without it, our prosperity is dictated by the whims of big financiers. By 2007, nearly 40 percent of U.S. corporate profits were coming from finance, leaving a feeble base to support workers when Wall Street crashed. Fortunately, for each dollar invested in manufacturing, another $1.43 of economic activity in industries linked to manufacturing is created—a multiplier effect that makes the sector an efficient way to create jobs.
There are few political slogans more popular on the left or the right than "Let's make things in America again!" House Democrats began to talk about rolling out a massive "Making it in America" strategy after getting briefed on a poll by the Melman Group and the Alliance for American Manufacturing. The poll revealed that 74 percent of self-described Tea Party supporters would support a "national manufacturing strategy to make sure that economic, tax, labor, and trade policies in this country work together to help support manufacturing in the United States." The top concerns of most Americans, including Tea Party supporters, is not the size of the federal budget deficit, but our relationship with China, which includes a massive trade imbalance that neither major political party is directly challenging.
After seeing this poll, Scott Paul, executive director of the Alliance for American Manufacturing, said Democrats in Congress were eager to help revive the American manufacturing base. Nancy Pelosi then pressed the White House to adopt a more formal strategy and was seen leaving the White House with a folder labeled "Making It in America."
So House Majority Whip Steny Hoyer consulted with the Obama team and announced a play to roll out 18-20 bills focused on promoting manufacturing in the United States. Roll Call labeled it a "Hail Mary" eager to show they can do something on jobs. It's political gold, since Republicans will have a hard time obstructing measures strongly supported by their own political base. And the plan is cheap—it doesn't impact the budget much, since most of the bills deal with simply re-routing government subsidies to companies that make products here, rather than paying them to companies that offshore jobs.