Manufacturing real change in U.S. economy

The government is in the process of spending $800 billion for 'stimulus' of the economy.

Everyone certainly hopes they are successful in jump-starting the economy with their combination of tax cuts and spending, even though we may not all agree on the precise formula for what should be tried.

But at some point, we should also be able to agree that the current crisis points up some fundamental weaknesses in the American economy that need to be addressed. We should not let the politicians off the hook with short-term solutions.

I know, I know. We need a temporary fix. And spending some money right away on construction and tax cuts may do the trick, but unless you intend to repeat the bailout process again in five or 10 years, you had better come up with a better plan for the long term.

Let's face it: Spending billions of dollars on construction of roads is "economic stimulus' to the same degree that giving a baby a pacifier is "nutrition." It shuts the baby up and maybe even puts it to sleep, but if the baby continues to be deprived of real food, it will wake up later in even greater pain and in even greater danger.

The baby is us, folks, and we are being lulled to sleep by some high-class nannies -er, I mean, politicians - in Washington, D.C.

But that's nothing new. For years, Americans have been living high on the hog, and didn't seem to worry too much about tomorrow. When growth was almost automatic every year, there was no reason to doubt our esteemed leaders. But now, things have changed. Fat and sassy has turned to lean and hungry, and people are wondering where the once-great American storehouse of wealth has gone.

Of course, the answer is obvious: It's gone overseas.

The argument for globalization probably made sense if you were looking at it from the industrialists' point of view. American manufacturing had limited growth potential because the overseas markets could not afford to buy our products. The solution for capitalists was to boost foreign economies by growing manufacturing overseas. As soon as the foreign nations had good-paying jobs of their own, they would be able to buy American products.

Of course, it turned out a little different in practice. It was so much cheaper to manufacture overseas that many of the good-paying jobs went there, and most of the manufacturing, and now America's economy is the one suffering. It didn't matter to the international corporations that create the majority of world trade; they could make money no matter where the stuff was manufactured, and they could make more money if the stuff was made cheaper. The only people who were really hurt were the American workers, who saw their high-paying jobs as creators of products replaced by low-paying jobs as sellers of products.

Practically the only sectors that remain strong in the United States these days are the ones that can't be exported - things like health care, education and construction. So now that we are in crisis, the government is trying to breathe life into the economy by ramping up construction.

Believe me, I'm all in favor of construction, but we have to remember that these are not new jobs. They are just tomorrow's jobs that we are moving forward to today by borrowing from our children. Highways and airports will be built automatically when they are needed, but building them does not make the economy more sound. Indeed, if we go too deeply into debt to build them, they may have the opposite impact.

What we really need is new jobs - jobs that don't run out when the stimulus money has been spent - and that means creating new manufacturing. You remember manufacturing, don't you? Or maybe you aren't old enough to remember when "Made in the USA" was on the bottom of everything you bought instead of "Made in China"?

How about if President Obama, who was elected to bring about 'real change," tried something new instead of continuing the failed policies of the previous seven administrations? Why not use our children's money to buy them something they can use - a viable future.

What the government ought to be doing with part of that $800 billion is making it available in the form of loans and outright grants to entrepreneurs who promise to create manufacturing jobs. In the 19th century, Congress stimulated the economy of the country with the Homestead Act - allowing citizens to earn ownership of big chunks of land if they would work it.

Today, we need a Manufacturing Revitalization Act that would allow American citizens to use government money to create jobs. If you have a great idea for manufacturing widgets, and have a business plan that demonstrates your understanding of the market for widgets, then Uncle Sam will build you your widget factory. If you keep manufacturing for a certain number of years and create a certain number of jobs, then after five years or 10 years, the facility is deeded over to you.

Is that socialism? Heaven forbid. Socialism deters ingenuity; this program would reward it. And if your manufacturing scheme fails, then the government will have a manufacturing plant available under the same terms to the next person who is willing to invest their own blood, sweat and tears to make their dream come true.

This program would create real jobs, it would create real stimulus for the economy, and -guess what - it would also power the construction industry for the next 10 years as we invested in rebuilding our manufacturing sector from the ground up.

Now that's change you can believe in.

n Frank Miele is managing editor of the Daily Inter Lake and writes a weekly column. E-mail responses may be sent to edit@dailyinterlake.com