That we seem to have avoided another Great Depression doesn’t mean our economy is anywhere near as strong as it should be. In fact, most indicators—from unemployment to private investment—prove quite the opposite. What can be done? How can we ensure the U.S. enjoys not merely a modest recovery but the kind of buoyant prosperity we saw in the decades after World War II and briefly in the 1990s? We put the question to few political economists and will run their thoughts over the next couple weeks.
Several commenters have responded to my recent story (and blog posts) about the decline of U.S. manufacturing by insisting it's no big deal if the manufacturing sector shrinks. The United States will gradually replace current manufacturing-sector work with higher-value-added manufacturing and service-sector work, the argument goes, just as we replaced agriculture with manufacturing during the last century.
One of the themes that came up while I was profiling White House manufacturing czar Ron Bloom earlier this fall was managerial talent. A lot of people talk about reviving the domestic manufacturing sector, which has shed almost one-third of its manpower over the last eight years. But some of the people I spoke to asked a slightly different question: Even if you could reclaim a chunk of those blue-collar jobs, would you have the managers you need to supervise them? It’s not obvious that you would.
The bailout of the auto industry was “throwing bad money after a bad cause,” television talk show host Larry Kudlow warned in National Review. Kudlow’s opinion was shared by conservative economists and politicians. And Tea Party types continue to cite the auto bailout as an example of the Obama administration’s unwarranted largesse toward big business and big labor. But if you compare how the Obama administration handled General Motors and Chrysler with how European leaders dealt with a similar crisis in their industry, Obama’s approach looks tougher and more realistic. That’s at least the ve
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My eye was drawn to the provocative headline, “Alcoa head says weak dollar is bad for US industry.” How could that be? Aren’t American manufacturing firms being hurt by an overvalued dollar that increases the price of their goods made here relative, say, to imports from China? That may be true, I learned, but that is not what bothers Klaus Kleinfeld, the CEO of Alcoa. He is worried because a weaker dollar makes the products that Alcoa manufactures outside the United States more expensive inside the United States. “It is actually hurting us substantially,” Kleinfeld told the Financial Times.
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I just wanted to highlight my latest print piece for readers who come straight to this blog rather than clicking through from the homepage. It's about White House manufacturing czar Ron Bloom, a longtime steelworkers union official and an investment banker before that. Just prior to his current gig, Bloom led the administration's restructuring of Chrysler as a deputy to Steve Rattner, then head of the auto task force. There are details in the piece more relevant to Bloom's current job and the future of U.S.
A few weeks after the 2008 presidential election, United Steelworkers President Leo Gerard got a call from an Obama transition aide frantic for advice on the collapsing auto industry. Gerard put his numbers guy on the call, a former investment banker named Ron Bloom, who proceeded to offer a detailed disquisition on the financial situations of GM and Chrysler. Unlike other experts the transition team had consulted, Bloom was refreshingly blunt about the companies’ prospects, which he deemed grim.
On Labor Day, President Obama appointed Ron Bloom, head of the administration’s auto industry task force, as his manufacturing “czar.” A former United Steelworkers staffer, Bloom recognizes the importance of high-wage manufacturing to the U.S. economy and to the well-being of the Great Lakes metropolitan areas that have been its center for more than half a century. But his experience is mainly in structuring financial deals. Does he understand the non-financial obstacles to reviving American manufacturing?