Redstate

n/t

Contrast with Romney's actual record and experience as described by the American Spectator (linked on the sidebar of this blog) which notes that his tenure of Massachusetts was overwhelmingly a poor showing:

One could take Romney seriously as an architect of economic redevelopment if he had displayed such skills as Massachusetts governor. Instead, his reign was a parade of economic stagnation and retreat. He even advocated an SUV-tax increase that would have hammered the very same domestic automotive industry he now says he champions.

Full article here.

Thompson is the more ideal choice. Heck, I'd take Rudy over Romney at this point.

since it's McCain's and Huck's weak spot in appealing to autoworkers.

"No compromise with the main purpose, no peace till victory, no pact with unrepentant wrong." - Winston Churchill

"Go ahead, make your jokes, Mr. Jokey... Joke-maker. But let me hit you with some knowledge. Quit now". -White Goodman

If you want a federal policy to strengthen an industry, the primary levers you have are protectionism and doling out federal monies. He wasn't just talking about CAFE standards. Just going by his own website, he's talking about spreading some federal largesse to selected industries. Quote:

What I'll be talking about is ways to strengthen the auto industry. First, with a very substantial investment [read corporate welfare from the federal government], and I'll describe how big it is, in research and development as it relates to the development of new automobiles, high energy, high efficiency vehicles.

Or this:

And that's why I believe it's so important for us to come together to help the ailing auto industry and other industries in this state get back on their feet, and make sure that what was once the envy of the nation as a manufacturing and technology center is once again.

Not from MY tax dollars thankyouverymuch.

www.scottbomb.com
Click here to donate to the Fred Thompson campaign.

The second quote is dipositive of exactly nothing and the first basically says we're going to pump-up funding that NSF, EPA, DoD and nearly every other agency of the federal government is already doing in the R&D area.

And for this we get two front-page missives at RedState?

I say again, Holy doth protest too much, Batman.

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Diplomacy is the art of saying 'Nice doggie' until you can find a rock.

Because the next lines in that statement was...

In addition, we'll be talking about taking head on the extraordinary legacy cost burden which Detroit has, as well as the legal cost burden and CAFE burdens. Everybody keeps on piling anvils on top of Detroit and saying, 'Why are you having a hard time doing a good job?' We'll talk about ways we can alleviate that burden."

Though I can understand why a supporter of JMac would cut the part about CAFE burdens, of course.

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Diplomacy is the art of saying 'Nice doggie' until you can find a rock.

...piles of federal money directed to a targeted recipient? C'mon, docj, you can't really be defending this.

So perhaps it's that I'd like to think that my work isn't "corporate welfare" and that we're actually providing something of value to the taxpayer.

But seriously Charles, is this any different from McCain's claim that he's going to completely overhaul the nation's job training and unemployment systems at no cost at all to the federal treasury? He's going to have to pump money into those programs just like Romney is proposing spending the money on R&D. Same money, different focus.

Chose your poison.

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Diplomacy is the art of saying 'Nice doggie' until you can find a rock.

...instead of "substantial investments" targeted to specific companies in specific industries. If I had to choose which was the more conservative of the two, I'd say it's the former.

As in, direct federal benefits to individuals being "more conservative" than, well, just about anything else.

And I'm still not seeing where this "substantial investment" is targeted to specific companies in specific industries and not an overall national policy, but to each his own.

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Diplomacy is the art of saying 'Nice doggie' until you can find a rock.

"instead of "substantial investments" targeted to specific companies in specific industries"

While you say that, you'd never have vast swaths of the drugs we have in this country without federal investments in research. The drug companies simply aren't going to put in the money to researching this receptor or that enzyme without a specific goal in mind. As it is now, if a scientist uncovers a new recptor, you have other scientists across the country receiving federal grants and some Russian Post-Doc or what have you begins chipping away at the knowlege base.

Whether you like to admit it or not, the federal government is responsible for laying down the foundation upon which the drug industry operates from. A drug industry that is probably our nation's single most profitable and successful industry our nation has.

I'm not really opposed to spending federal dollars on research. Subsidies are a whole other matter, but research shoves the economy forward and does the research that would otherwise go undone.

"Don't ever be afraid to see what you see." ~Ronald Reagan

Until today Mitt's been my alternate selection after Fred. I'll admit I've been nervous about this position because he is from Taxachuessettes, but I figured I owed him the benefit of that doubt, that he might truly be conservative and only tacted left because of where he was geographically. You're quote has placed him firmly out of contention.

"extraordinary legacy cost burden" can only possibly be code for federally underwriting the inanely stupid pension policies the big three agreed to when negotiating their labor contracts with big labor. And quite frankly, if the big three can't afford those pension funds, neither can the US government. Case closed, stake through the heart.

"extraordinary legacy cost burden" can only possibly be code for federally underwriting

Can it "only" be code for that? Or would not Detroit benefit from non-targeted pension and healthcare reforms and relief from other federal mandates?

But again, I know this is Romney we're talking about and everyone automatically assumes he's going to change his party affiliation on 1/22/09 and turn the Oval Office into an abortion clinic, so I suppose I should expect this sort of response.

FWIW, if Romney were to enact such an underwriting I would be supremely disapointed.

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Diplomacy is the art of saying 'Nice doggie' until you can find a rock.

Your prosed alternative is worse than my analysis of the problems with the Romney plan. Instead of just bailing out the big three you want to help the Dems nationalize my 401k and healthcare. Sorry, not biting.

And I started out by saying Romney was my #2 choice until I read your post. You may think I was being dishonest, but he really was my number 2 choice. Problem is, now I don't HAVE a number 2 choice. Well, I will until the SC polls are over, but I don't expect Tancredo or Hunter to survive past that.

Instead of just bailing out the big three you want to help the Dems nationalize my 401k and healthcare.

Good Lord, man. Can there be no changes to any of these things that don't results in "nationalizing" them? Really?

Sheesh.

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Diplomacy is the art of saying 'Nice doggie' until you can find a rock.

No. Sorry, I wish it were possible. But it ain't happening.

More seriously, I can't imagine anyone who sees a place for vigorous government action coming up with a plan that doesn't involve federal regulatory control of anything. And that's the problem: federal regulatory control.

... of that "federal regulatory control"? More than anything else that's what I think Romney's driving at.

Your point about the Demos not wanting to part with any of that is well made, though. But that's going to be the case for any GOP President this term, no? So, are we just doomed? (For the record, I think we largely are - but that's a whole other argument.)

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Diplomacy is the art of saying 'Nice doggie' until you can find a rock.

not just protectionism and direct subsidy. Since the income tax builds the cost of our government into everything we make and sell, that puts us potentially at a disadvantage to any other country's products that don't use such a system, e.g., VATs.

Within the tax system itself, capital investment is favored over the direct expense of wage payments. A trained, productive labor force is not an asset that shows on your books and which can be depreciated over time rather than expensed on an ongoing basis. Often the fed and states have offered very attractive depreciation and tax credit schemes that "subsidize" investment in capital equipment over a labor force.

Employment law certainly favors the docile machine that never sues, never forms a union, never files grievances, never goes on Workers Comp, etc. How many times have you waited endlessly or gave up in disgust waiting for a "price check" in a checkout line? Thirty years ago, a retail store was divided into sections manageable by one person who did all the stocking, pricing, and stock maintenance and who knew or could immediately access the price of anything in his/her section. That person was usually young and often working a first job, and for some made for a lifelong career. How much of the transition to "night stockers" and UPC readers was based on actual productivity and customer service and how much on tax policie that favored the machines? Likewise, I don't lament that the typing pool has been replaced by the desktop word process, though I certainly would were I single and still working every day! But, how much of the elimination of a whole class of work and a whole career field is attributable to better service and better productivity and how much to tax policy and labor policy that favored the machines. I do know that among the first "clients" in my State's Welfare to Work program were several young women who had not long before been laid off from typist jobs. Yes, we could tout that the automation had made us more productive and reduced our administrative costs, but in reality we just transferred a lot of that cost from one line in the budget to another. Likewise, a lot of industries transferred their labor costs off their budgets and on to the state and federal governments.

Except for some industries in which we must have some capacity for national security, I certainly don't advocate subsidies just to keep the industry around, but there is more than one way to define that level playing field that people are always talking about.

In Vino Veritas

No plan, no matter how many Ph.D.'s (assuming that you believe Ph.D. = competence) any committee has, it never has the intelligence of the market where hundreds of thousands of consumers provide informational feedback to the system on a daily (if not more frequently) basis. Therefore all planned economies are doomed to failure before they begin.

and well said.

The transition from manufacturing to services largely happened in the Seventies and Eighties.

Should we try to bring back manufacturing? You're arguing that we should, not from economics but from national security.

For what it's worth, I happen to think that you're on the right track. Economics and foreign policy intersect in critical ways, in a world that is characterized by geopolitical rather than ideological struggles.

But I'm not at all convinced that we should try to bring back manufacturing except as an instrument of foreign policy. All the laws of economics argue against it, which means we'd damn better have a good reason to take such a big risk.

This is an ongoing problem requiring a lot more debate (which we'll get), and a lot more leadership from the political class (which we might not get until it's too late).

nt

Yes, that's everybody's gut reaction.

Problem is, it doesn't work. I happen to live with/rent from somebody who is a government contractor in R&D but who has to deal with an industry that by definition works only for the government because its sole purpose is the defense of our country, and is safe from economic forces because of that. The manufacturing processes are inefficient, and on the basis of our regular conversations, their engineers don't understand the basic physics and chemistry of the processes they are managing and are incapable of following fundamental troubleshoot procedures. The contracts are overpriced, and when the manufacturer screws up because of their incompetence, the government has to pay for it.

We can and should look at the issues AChance raises in his post, but I don't think that will be enough for the smokestack industries (which I will use instead of manufacturing, because PCs are also a manufacturing process but aren't under the same pressures as steel etc.) to come back.

Which means we need to deal with those realities and figure out how we continue to make it in this country. Demanding protection for industries that didn't adapt to changing environments is just another form of sticking our heads in the sand and ignoring the problem. Which means if you vote for Romney on that basis, you will actually only exacerbate the problem. But hey, if you want to vote for somebody who wants us to take over pension funds the big three can't afford... Well, it will still suck to be stuck with that policy, but I guess I can't stop you.

I recall having read that manufacturing output in the U.S. is increasing dramatically(2006 was a record year if I remember correctly) and that the loss of manufacturing jobs was a result of great increases in worker productivity. I'll try to find the article that I read.

The naive forgive and forget.
The foolish forget but do not forgive.
The wise forgive but do not forget.

I can't speak to whether it's growing rapidly, but I would guess that high-technology components for export are doing very well.

Ditto Boeing Commercial Aircraft Division, which makes large airliners. Their most direct competitor, Airbus, is getting slaughtered by the strong euro.

Also certain industrial categories like machine tooling and heavy equipment.

But remember, manufacturing is maybe only $2 trillion out of a $14 trillion economy. Do you think it should be more like $5 or $6 trillion out of 14? If so, what other industries should we displace?

Why does it need to be displaced? Why can't we work on across the board reforms that allow us to grow manufacturing while maintaining the rest of the economy?

Remember, I'm with you on target support for the auto industry isn't going to help Michigan or the rest of the country in the long run (say, no more than 20 years for the current situation).

Let's say you wanted to double the size of the manufacturing sector (which actually is a whole lot of different sectors), from about $2 trillion to maybe $4 trillion.

You're talking about making the US economy about one-seventh again as big. That's well over 10% at a time when organic growth is trending in the neighborhood of 3%. (And we'll see if we get slugged on growth this year due to recession.)

I'd like nothing more than to see that happen. My own personal milestone for the US economy is to see per-capita GDP run upward from its current $45K or so to more like $60K. Net of population growth, that would require about twice the increase you're talking about.

The problem is, who's going to put in the capital to make that happen?

At this moment, the primary sources of global capital are current-account surpluses in countries like China, and sovereign wealth funds in places like Dubai, Norway and Singapore.

There probably is enough capital in those sources to drive an additional $2 trillion in US GDP. But you'd have to concoct quite a business case to get the commitments.

My guess is that it would have to concentrated in export-led sectors.

I know this is rather a flip thought-experiment. But you started it! ;-)

Would you have to grow the manufacturing sector in order to help it get it's feet back on the ground? I mean, couldn't measures such as Romney is hinting at simply bring down the cost for doing business and thereby solve their dilemma?

"Go ahead, make your jokes, Mr. Jokey... Joke-maker. But let me hit you with some knowledge. Quit now". -White Goodman

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by the U.S. government under Reagan

Do you have contrary information?

The legislation for the loan guarantees was passed in 1979.

http://www.time.com/time/magazine/article/0,9171,951519-4,00.html

http://books.google.com/books?id=ebDpzdAftfEC&pg=PA260&lpg=PA260&dq=reag...

Title says it all. Reagan changed his opposition during the election, and administered it. He didn't slow it down (rather closing borders to imports to protect the auto industry). And the bailout had significant GOP support in Congress:

>Reagan won the support of moguls of corporate America by endorsing a tax cut for the corporations and supporting a federal bailout for the Chrysler Corporation.

—William C. Berman, America’s Right Turn, JHU Press, p. 78 (1998).

>The effort was bipartisan and it continued into the 1980’s.

Eduardo Porter, Auto Bailout Seems Unlikely, NY Times (April 14, 2006).

>Those were almost precisely the words that Reagan, who campaigned against government interference in business, used later to support the Carter administration’s bailout of Chrysler.

Diane Curtis, United Press International (March 19, 1981).

>Governor Reagan has bowed to the old trend in his election rhetoric—in his belated and mistaken support for the Chrysler bailout and for Federal aid to New York City

Milton Friedman, Election Perspective: Reagan’s Crossovers, Newsweek (Nov. 10, 1980).

>This was Reagan the Politician talking, a man who pays as much attention to survey data as Jimmy Carter, the man who in this campaign has changed his position from “no” to “yes” on the Chrysler bailout, from “no” to “maybe” to “yes” on federal aid for New York City and from “no” to “probably yes” on price supports for farmers.

Lou Cannon, The Two Reagans: Conflicting Images;The Contrasting Sides of Reagan: Politician Versus True Believer, Washington Post (Oct. 11, 1980).

The world is becoming a very, very dangerous place and some nations which have gotten fat and complacent will get "flushed down the toilet". Creative Destruction, I guess, although Second Dark Ages is closer to the truth.

Agreed, Governments don't do economics well, but economists don't do war well. And war's what's on our plate for decades to come. I don't care if a President Romney seizes the MI car plants and renames them the Red October Tank Works, provided he keep them running. I'd prefer that he create a climate in which our Blackhedds scented money to be made in building the plants that build tanks and guns and carriers and bombers and computers and missiles and God knows what, but beggars can't be choosers.

BTW, did you hear anything about the Pentagon being sold some counterfeit , defective computer components? Made in China.

National security is DYI, no matter what it costs.

...but let me make one try at a counterpoint anyway.

National security is DYI, agreed.

But national security, in an age of asymmetric warfare, doesn't necessarily depend on hardware and technology.

I realize with this comment I'm open to the "there's nothing new under the sun" retort. Yes, I'm asking the question whether national security is qualitatively different in the 2st Century than ever before.

Feel free to bluster and splutter. But give it some thought, too.

potential adversaries out there and the only way to keep them potential rather than actual is to maintain a force to meet them while hoping we never have to use it. We have used technology to beat our swords into plowshares, probably a good thing, but we now have little ability to make plowshares. The absence of private manufacturing in the Country means everything we need in defense, public construction, and the like is either going to come from offshore or come from a domestic company that exists solely to do business with government. If you think government is inefficient, try a company that exists solely because of government. It doesn't have the internal controls that government has and after it has a contract or two owns enough legislators/congressmen that nobody would dare peek under its skirts.

And I know, I'm not providing any answers; I don't know what they are, but I do know that there is a problem.

In Vino Veritas

You that sure it's an "age" of asymmetric warfare and not a passing moment? I'm not. Neither are good pals like China, Russia, N. Korea, Iran, etc, etc, etc.

So to be on the safe side, I'd like to have a huge manufacturing base inside the US borders. This is an entirely proper thing for the US Government to foster, which is why I like what Romney said, regardless of whether he was speaking politically or economically or, like me, paranoidly.

Whether this is attainable through something called Federal Industrial Policy is another matter. I (dogmatically speaking) don't know, but if there's another way to do it, speak up.

So, Red Staters far and near, do you agree there's a necessity for this country to invent, design, manufacture, field and maintain massive, old fashioned, pre-post-modern, military kick-arse? And if so, then how?

Dang it! Blustering and spluttering again!

...policy, which I'm not uncomfortable doing because the subject is manufacturing.

I don't believe that conventional land power is what will be decisive in the first half of the 21st century.

I think it will be naval power.

We won't be facing Russia in a land war. As regards continental Europe, they have no need to occupy the territory. They have the Europeans by the short hairs now because Europe has no alternative energy sources to Russian natural gas.

We will face China in confrontations over sea lanes. China intends to become the dominant global manufacturer. They have 50% of all the world's manufacturing capacity now, and they want 100%. As the decades pass, their key strategic objective will be to protect their access to markets from Africa (where they will soon establish de facto colonies) to Latin America as well as the Pacific.

We still have a pair of key naval shipyards (Electric Boat in Groton, and the one in the Chesapeake, I forget who it is). We still can make carrier-borne aircraft.

I don't know anything about warfare (except how important it is to prevent it), so I have nothing insightful to say how a naval conflict with China would play out, circa 2030 or so.

I do think that lack of industrial capacity isn't going to be the decisive factor. Intelligent leadership (or lack thereof) will.

but not a lot. The one "in the Chesapeake" is Norfolk, VA. I think that it may be the only one left that can do the really big stuff like carriers. Direcktor in Bridgeport, CT can make fairly large ships. Alaska bought two 235' fast catamaran ferries from them a few years ago. There are several yards on the Gulf Coast that can build large civilian and naval vessels. We bought a 400' ferry from one in Pascagoula, MS a few years ago. That yard also does at least frigate and destroyer class naval vessels. There are also builders and repair yards in Washington. I don't know just what their capabilities are, but they are capable of big ships. There are also even a couple of yards here in Alaska that can build but because of market conditions do only repairs. The key for any of them is the size of their drydocks. As long as there is a drydock of adequate size in which to assemble a ship, the labor force can be brought in and a ship assembled. Actually, many modern ships are built from modules that may be assembled many miles away and far inland - waterfront property is scarce and expensive.

The key to all of them that can build and repair large vessels is that they are wholly dependent on government contracts. There is almost no civilian market for American flag vessels except those that belong to a government or those that are mandated by the Jones Act. American bottoms are hideously expensive, take forever to build, and the business is, charitably, somewhat corrupt. It is a standing joke that the quoted price from any shipyard is the price to get your ship into their yard, not out of it and change orders, cost overruns and the like are the norm on new construction.
In Vino Veritas

If Romney is talking R&D, he's barking up the right tree.

If American wishes to maintain its wealth, it will invest in technology. If it doesn't, the world will kick the crap out of us and leave us wallering in mediocrity.

This is the reality of having an inferior educational system and even more inferior students with a very expensive workforce. We can still staff the top positions with the most skilled in the world, but we need to move forward with R&D. It's a race. We have to be the ones setting the curve.

Right now, our nation simply does not produce the number of engineers necessary to compete in the future, if you ask me.

"Don't ever be afraid to see what you see." ~Ronald Reagan

But it is none of the government's business to either manage or pay for R&D. That needs to be left up to private industry.

Education is another issue. The main problem with education is our lousy K-12 system which puts HS grads way behind their competitors elsewhere in the world.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman