Home Economics I Know! Let's Make America Poorer!

I Know! Let’s Make America Poorer!

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This doesn’t really sound like the greatest of ideas to be honest, that the country should be made poorer. But that is what is being suggested here:

The country, once a manufacturing powerhouse, is populated by corporations that have moved manufacturing overseas and lost their ability to produce domestically, leaving little behind except shell companies that employ relatively few people. The United States no longer produces even the essentials, from personal protective equipment to our smartphones and laptops.

The huge short-term profits of this trend, coupled with impressive decreases in the prices of certain consumer goods, soothed many Americans. But the country lost sight of the critical requirements of a vibrant economy — which is good jobs.

Err, no. Manufacturing output is up at peak levels. OK, maybe not exactly this year but certainly better than those apparently golden years of the 60s and 70s.

Nope, that ain’t stuff made abroad and imported by American corporations. That’s value added inside the US. And that understates it too – now the canteen is done by outside contractors that’s a service, not the manufacturing it was when done in house in a manufacturing plant. So too the CAD work, design and all the rest.

And, of course, jobs, good or otherwise are a cost. Think on it. If we could gain everything without having to labour for it we’d be better off or not?

Quite.

If products are going to be successfully manufactured in the United States, there must be sustained purchases by the government at the federal, state, and local levels, certainly for medical supplies but also in other industries.

After all, taxpayer money should not be used to subsidize foreign production. Companies that are given federal aid for crises should be required to move a significant percentage of their sourcing and production back to the United States. Stopping predatory pricing by foreign manufacturers is also necessary to ensure stable demand.

And in order to do this we’re going to make everything not only made in the USA but also more expensive. Predatory pricing here meaning “Cheaper than our folks”. Which does, of course, make everyone who buys the stuff – or is forced to – poorer of course.

So, that’s the plan. Just because a real, grown up, economy makes stuff that can be dropped on feet therefore everyone should be made poorer. It is a grand plan, isn’t it? Can’t think why anyone hasn’t recommended it before.

Dan Breznitz is a co-director of the Innovation Policy Lab at the Munk School of the University of Toronto and the author of the forthcoming “Innovation in Real Places: Strategies for Prosperity in an Unforgiving World.” David Adler writes frequently about industrial policy, as well as liquidity and financial frictions.

Well, actually, people did think of it before. Economists then examined it and filed it in the drawer market “Damn Stupidity”. But then what’s idiocy when there’s a book to sell?

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