Categorized | China, Politics

A Curve Ball for the Candidates As They Prepare To Debate China


Reposted from Forbes


A Curve Ball for the Candidates As They Prepare To Debate China

Eamonn Fingleton  |  October 16, 2012  |  Forbes

You have got to congratulateCounterPunch on its timing. On the eve of the Obama-Romney face-off on foreign policy, the antiestablishment magazine has published a highly contentious article arguing that American manufacturing is NOT in decline. Thus the United States should stop pestering China on trade. And Obama and Romney should presumably find something else to talk about tonight.

CounterPunch contributor John V. Walsh posits that automation has played a powerful – if hitherto  little noticed – role in triggering a  U.S. manufacturing renaissance since 1980. “Far from ‘losing’ manufacturing, the U.S. has seen a steady rise for decades,” he writes.

He goes on: “The presidential campaign has been marked, as usual, by considerable China bashing with considerable emphasis on ‘loss of our manufacturing base.’ Automation is rarely mentioned by the candidates. In the case of Obama, it is quite amazing that this good news about the continued rise in manufacturing does not come up on the campaign trail since this is basically good for American workers.”

Amazing indeed – except that Obama is not a fool. America’s supposed automation-driven manufacturing renaissance is just a figment of Walsh’s imagination.  U.S. manufacturing prowess been unquestionably  in freefall for thirty years and Obama would be laughed off the stage if he tried to argue otherwise.

Walsh is a Boston-based professor of biology who is not new to controversy but this seems to be his first – and, I hope, his last – sally into economic discourse. A Green party activist who doubles as a contributor to the paleoconservative website, he has previously been known mainly for his antiwar activities.

What’s his evidence? It turns out he relies entirely on a chart at an obscure website. This purports to show that U.S. manufacturing output has tripled in real terms since 1980. Unfortunately the website concerned, which glories in the name, has no previous record of superior economic wisdom. The chart moreover is based on blatantly doctored data.

So what are the facts? According to official U.S. figures, manufacturing’s share of total GDP came to just 12.2 percent last year, little more than half of the 1977 figure of 23.6 percent.

Anyone for whom these figures come as a surprise should take the Amtrak from Washington to New York and  note the industrial activity along the way. Then he or she might usefully ride the bullet train from Tokyo to Osaka. On the one hand, virtually every factory on the Amtrak route has been shuttered. By contrast, the evidence of the Tokyo-Osaka route is of continuing, ever heavier industrial investment. Factories are rarely shuttered in Japan. Rather they are upgraded to ever higher levels of production technology, not least, in many cases these days, automation.

For those who don’t have time to visit Japan, the evidence is staring them in the face in the two nations’ trade figures. Even last year in the wake of a terrible earthquake, Japan logged a current account surplus of $120 billion. That compares with a deficit of $11 billion in 1980. For the United States, the trend sadly was decisively the other way. Although it scored a surplus of $2 billion in 1980, it incurred a deficit last year of $473 billion.

The question for  Walsh is this: if American manufacturers really do lead the world in automation, why doesn’t this show in the place where it matters – the trade balance?

CounterPunch has a well deserved reputation for its pluck in challenging conventional wisdom and is no stranger to baiting even the left-of-center intellectuals who form its reader base. In the past, for instance, its editors Jeffrey St. Clair and the late Alexander Cockburn have often outraged the faithful by lining up with ExxonMobil and ConocoPhillips in casting doubt on the story of global warming. Such efforts have generally been well researched and have addressed issues where there is abundant confusion and plenty of scope for debate. The decline of U.S.  manufacturing is not such an issue and Walsh’s article has fallen far short ofCounterPunch’s usual research standards.

Eamonn Fingleton is the author of In Praise of Hard Industries: Why Manufacturing, Not the Information Economy, Is the Key to Future Prosperity (Boston: Houghton Mifflin, 1999).


3 Responses to “A Curve Ball for the Candidates As They Prepare To Debate China”

  1. Mo says:

    If most of job loss was due to automation then more goods would say made in the USA. It’s just another excuse like Americans need more education and so forth. The real reason Washington refuses to to anything is because countries like China are a dumping ground for dollars. The US gets to export inflation and receive real goods in return even if it means the transfer of technology.

  2. Frank Shannon says:

    Mo’s first sentence is exactly right and is not argueable.

    The root problem on outsourcing is trade and tax policies that are outdated and working against America. Obama keeps talking about what he has done and what he has spoken about but the results haven’t changed and they won’t until policies are changed.

    last night, Romney focused on the policies that need to change and kept reminding the President that his results are not good.


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