American Economy Shutting Down Without Policy Changes

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Cities and states across the country have been affected with social and economic ills, chiefly due to our failed ‘free’ trade policy, and a reluctance to address the bleeding of our industrial sector.

Detroit has seen a population drop of almost 25 percent during the last decade, numbers only
comparable to the damage Hurricane Katrina inflicted. Like New Orleans, Detroit also has boarded up vacant homes, not due to a natural disaster, but due to failed U.S. trade policy and little effort by successive administrations to ramp up America’s industrial base in the face of changing global economic conditions.

Due to these job losses (more than 5.5 million manufacturing jobs lost in the past 10 years, according to the Alliance for American Manufacturing), state budgets have been crippled as residents are no longer able to pay income taxes, etc. Former industrial states such as Michigan and Ohio are losing electoral votes, as residents are forced to flee in a hopeless search for jobs and a better life.

Manufacturing is not a ‘sunset’ industry doomed to decline in this nation. Economically developed nations such as Germany and Japan have thriving industrial sectors, leaving little reason for Americans to believe only developing nations can successfully manufacture goods. When a nation imports all of its finished products and only exports raw materials (increasingly the case in the U.S.) it has an economic profile similar to that of an 18th century colony.

While the manufacturing sector has declined during the past three decades to the point where it is causing major economic distress, the U.S. is still the world’s largest manufacturer. Specific action to correct our failed trade policy can bring back jobs, and revitalize our destroyed industrial state along with our state budgets.

Our federal government has been negligent or compliant with the demise of industry in this nation, as there are several obvious steps to be taken to correct our woes and compete internationally. First, we need to create a National Infrastructure Bank to finance high-value, long-term infrastructure projects, such as roads, bridges, high-speed rail, alternative ‘green’ energy projects and other needs that will utilize American manufacturers and improve the nation. Next, we must penalize and deter mercantilist nations such as China that manipulate their exchange rates and implement non-tariff barriers to gain an unfair trade advantage.

Once we have corrected trade policy, and manufacturers hire again we need to provide them with workers by refocusing on technical and vocational education, providing a seamless program that bridges high school and post-secondary education to produce the next generation of highly skilled manufacturing workers (similar programs in Germany are extremely successful).

By implementing such strategies, we can get the economy working again and put Americans back to work making goods and products to improve the country.

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