With President Obama in Michigan today, it’s a good time to catch up on an editorial we overlooked when it first came out. Drawing on a recent and highly recommended speech by GE’s Jeffrey Immelt, The Holland Sentinel argues, “To renew economy, renew manufacturing“. We’ll excerpt liberally, but read the whole thing.
By now, we assume, most Americans have been disabused of the notion that our economy can prosper by letting people in other countries make all the things we want to buy. For those who didn’t recognize it before, the economic meltdown should have driven home the reality that the hot shots in the financial sector who merely shuffle money around and wager billions on ephemeral investments don’t add any real wealth to our economy; instead they have put millions of Americans at risk. The service sector is critical to our economy, but ultimately America has to make things — things that people in other countries want to buy — to maintain international economic leadership. Ceding sector after sector in manufacturing to foreign producers and concentrating on services has not brought us prosperity.
And the conclusion…
Immelt called for an increase in investment and research and for new public-private partnerships to promote industry, but to us the key to reviving this valuable part of America’s economy may be in fostering a change in the national mindset. As a nation, Americans don’t seem to value the work of making things.
To many bright young people, manufacturing is an old, slow and messy way to get ahead in life. They’re drawn to finance, law and medicine, fields that offer higher social status and a quicker route to financial security than engineering and science. No one makes television series about people working in research labs to find a more efficient way to make a product. The impatience of Americans works against many manufacturers as well. As investors, we demand quick returns from companies rather than long-term growth. In a get-rich-quick world, few people esteem the entrepreneur who slowly and patiently builds a company of real value. Often, the easiest way to meet Wall Street’s demands is to lay off workers and ship their jobs overseas.
A prosperous modern economy requires both strong service and strong manufacturing sectors. We cannot forever continue running huge trade deficits and expect our currency to remain strong and our standard of living to remain high. America cannot give up on its manufacturing sector, and has to learn again the importance of making tangible products of real value.
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