Like presidents before him, Barack Obama is ramping up efforts to stoke a manufacturing renaissance ? and he wants generations accustomed to factory layoffs believing in a turnaround.
But a long line of similar initiatives has been disappointing. And the Obama administration has had its fits and starts, as well, in addressing an economic problem that has become entrenched over the decades.
Continue ReadingLast week, the president?s new commerce secretary, John Bryson, seemed determined: The government, he said, will ?help American businesses build it here and sell it everywhere,? adding that the middle class cannot be sustained without a strong manufacturing base.
?As you and I know, business people are generally pragmatic, not partisan,? Bryson said in a speech at the U.S. Chamber of Commerce. ?When they don?t see this same intensely focused commitment to practical results in Washington, they get frustrated.?
Few would argue with the statements, yet the depth of the problem means the administration could struggle as others have to show tangible results under its watch. With voters expecting recoveries before the next election, a Commerce Department official acknowledged that the renaissance simply cannot happen overnight.
Manufacturing as a percentage of gross domestic product fell below 25 percent in 1969 and has never recovered, according to the Bureau of Economic Analysis. Last year, the sector represented just 11.7 percent of the economy, after being eclipsed by finance, insurance and real estate in 1986. Putting it on an upward ? or even a flat ? trajectory would reverse a four-decade trend.
Some policymakers celebrate the surge in manufacturing productivity ? proving it?s possible to do more with less ? but the consequence is fewer Americans working assembly lines that pay, on average, more than $47,000 a year.
About 5.5 million factory jobs have vanished over the past 15 years, according to the Bureau of Labor Statistics. Just 11.76 million Americans now work in manufacturing, the lowest sustained level since the months leading up to the attack on Pearl Harbor 70 years ago.
The administration largely wants to reverse this phenomenon by improving policy coordination, which ? despite the expressed urgency in Bryson?s speech ? can be a tedious process.
It took four months after the departure of Ron Bloom as the president?s assistant on manufacturing policy for the White House to put a new leadership structure in place.
Bryson and Gene Sperling, director of the National Economic Council, were named last week as co-chairmen of the Office of Manufacturing Policy.
Sperling, a veteran political and economic hand, was also an NEC director under President Bill Clinton. And Bryson, an experienced business executive, was the longtime chairman and CEO of Edison International, the parent of Southern California Edison.
Dedicated NEC staff will provide support, while the Commerce Department has established a program office to coordinate and implement the $500 million advanced manufacturing partnership the president announced this summer.
But in an era of tight budgets, partisan feuding and Chinese expansion, the initiative might not be the needed game changer, said Scott Paul, executive director of the Alliance for American Manufacturing.
?It?s hard to see what could really be accomplished,? he said. ?And our export goals are largely a factor of macro events like exchange rates [and] demand overseas ? that have little to do with policy coordination.?
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