Posted: March 01, 2011

Rundles wrap-up: Foreign economics

Jeff Rundles

Rundles_Mar11.jpg

Super Bowl Sunday has evolved into something of a national holiday and, as such, a celebration of everything America. There's football, of course, the nation's undisputed No. 1 sport, and television, the nation's No. 1 recreation, and an unbelievable concentration on commercialism, the country's No. 1 activity.

There was something about this year's game, XLV, that I hope becomes the U.S.'s No. 1 goal: a return to our industrial roots. It began just before kickoff with a video celebration of Green Bay and Pittsburgh, the two old industrial stalwart towns whose teams took part in the game. The piece, put together by Fox Sports, focused on the age-old industrial themes of Wisconsin meatpacking (The Green Bay Packers, nee Acme Packers), and Pittsburgh steel, and the image of hard-working, gritty towns that symbolize the Golden Age of American industrial might.

Later, in the second half, came a stunning new advertising campaign from Chrysler, called "Born of Fire," a two-minute commercial featuring purposefully unglamorous yet inspiring shots of Detroit and the rapper Eminem to celebrate the past glory of, and perhaps the resurgence of, the Motor City. The "Imported from Detroit" line Chrysler unveiled is simply brilliant.

There seems lately to be a ton of messages about the country's manufacturing, industrial past, and for the first time in a long time it is being looked at as a national strength. For more than 30 years there has been an attack on labor, manifest mostly through the creation of the pejorative "unions," as if all those engaged in labor had somehow ruined the American Dream.

It's time to take a fresh look. There were, of course, many problems created by the old industrial model; we certainly don't want to return to polluted skies and waterways, for instance. But the blight and decay really showed up throughout the country as heavy industry declined and poverty prevailed in its environs. In its heyday, American industrial mettle created an enormous amount of wealth, on Wall Street and on Main Street, and there's a lesson in that.

While we are as yet far from the tipping point in the U.S., part of that lesson can be seen in the recent national turmoil in Tunisia and Egypt. These countries were or are under totalitarian government, but the people there demanding reform are citing, in part, the ever-increasing economic gap between the elites, the haves, and the citizenry, the have-nots. Such a gap gets ever wider in this country and we shouldn't be so smug to assume that we are immune to social unrest if high unemployment and under-employment persists.

The good news is that the U.S. still leads the world in manufacturing, even ahead of China in spite of conventional wisdom. The United Nations' comprehensive database of international economic data pegged our country's manufacturing output in 2009 (expressed in constant 2005 dollars) at $2.15 trillion, some 46 percent higher than China's $1.48 trillion, giving the U.S. 20 percent of the world's manufacturing output, only slightly less than the 21 percent share we racked up 20 years earlier. And last year American manufacturers added 136,000 workers, the first net increase in the sector since 1997.

Pretty much all of the consumer goods - apparel, electronics, household goods - have moved to China or elsewhere overseas, so manufacturing here looks dire. What we make now is high-tech and big-ticket items, with autos, pharmaceuticals and medical devices leading the way. Our tax and tariff laws and even our regulatory system should be used to foster more of this; the country would be much better off with more taxpayers in higher brackets rather than giving business more incentives to do its work overseas.

We got to be No. 1 in the world in the last century through industry and production, not service. Before us it was the United Kingdom, also through manufacturing. Now China is ascendant, yes, with manufacturing. Even if goods cost more, we'd be far better off - we'd remain No. 1 this century as well - building wealth from top to bottom here through industry.

Let's import - and export - from Detroit and Pittsburgh and Wisconsin and Cleveland and even Colorado. That shouldn't be foreign to us anymore.
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Jeff Rundles is a former editor of ColoradoBiz and a regular columnist. Email him at jrundles@cobizmag.com.

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