In a very thought provoking recent editorial, Andy Grove, Intel’s former CEO clearly is calling for a strong federal role in creating jobs. I guess Andy didn’t get the message from the Right Wing Nutjob Teabaggers that the US Government can’t create jobs even though clearly Asian Government policy has been instrumental in creating a vast number of jobs.
No. 1 Objective
Such evidence stares at us from the performance of several Asian countries in the past few decades. These countries seem to understand that job creation must be the No. 1 objective of state economic policy. The government plays a strategic role in setting the priorities and arraying the forces and organization necessary to achieve this goal.
Even more interesting, Andy is calling on the US to fight back to reclaim the millions of jobs lost to Asia and to stop the hemorrhage of high tech and manufacturing jobs to Asia.
The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars -- fight to win.)
Of course, as soon as Andy mentioned taxing something, he’s likely lost the teabaggers and the Republicans will fight this sort of aggressive industrial policy no matter how vital it may be to SAVE the long term US Economy. Yes, SAVE the US Economy. As Andy Grove points out, the US Economy simply isn’t generating jobs.
So what does Robert Reich think about these sorts of aggressive moves to SAVE American jobs. In a recent HuffPost editorial, The Vanishing American Consumer and the Coming Trade War, Robert Reich clearly is not in favor of protectionist oriented actions. So now if anyone starts wants to get tough with Asia - is the Left going to start shrieking about Smoot-Hawley and will the Right scream no new taxes and socialism?
We're unlikely to see a repeat of the disastrous Smoot-Hawley tariffs that worsened and lengthened the Great Depression. But you can forget trade-opening agreements. In Toronto last week, the G-20 leaders dropped their 2009 pledge to finish the Doha round this year. In the U.S., agreements with South Korea, Panama, and Columbia are languishing.
And watch out for under-the-radar protectionist moves. Since the start of 2008, when the Great Recession began, countries around the world have already imposed at least 443 measures to block imports, according to the Center for Economic Policy Research.
So who’s right? Andy Grove is looking at the problem from the perspective of an industrialist, innovator, scientist, and engineer – while Robert Reich is an Economist. Quoting Andy’s article again.
Offshore Production
Consider this passage by Princeton University economist Alan S. Blinder: "The TV manufacturing industry really started here, and at one point employed many workers. But as TV sets became ‘just a commodity,’ their production moved offshore to locations with much lower wages. And nowadays the number of television sets manufactured in the U.S. is zero. A failure? No, a success."
I disagree. Not only did we lose an untold number of jobs, we broke the chain of experience that is so important in technological evolution. As happened with batteries, abandoning today’s "commodity" manufacturing can lock you out of tomorrow’s emerging industry.
Obviously, Andy doesn’t think that an Ivy League economist always knows what’s best for the US Economy in the long run and maybe we need to listen to some of the people on the front lines of the ongoing Economic war with Asia.
Meanwhile, while the Republicans continue grind the US Economy to a standstill, the Asians aren’t sitting idly by and are FIGHTING to WIN. For example, in a clear display of industrial policy to expand domestic high tech production of Semiconductors, the Chinese Government is spending $25 Billion.
http://www.eetimes.com/...
The Chinese government is preparing to spend $25 billion on wafer fabs to boost domestic chip manufacturing over the next five years, according to market research company The Information Network. This is set to boost the proportion of local demand met by domestic wafer fabs and diminish Chinese chip imports
So I guess we can kiss goodbye a good chunk of what’s left of the US Semiconductor industry, because you know that the Republican’s certainly won’t let the White House protect a vital high tech Industry that the US pioneered and save 10’s of thousands of American jobs because that’s just too ‘Socialist’. Meanwhile, will the left be screaming Smoot-Hawley if we fight back aggressively?
A little more searching will turn up yet other depressing examples showing how the US is losing the high tech jobs economic war. My (least) favorite is how just one Asian company, Samsung is planning on investing $6 billion to expand solar cell (photovoltaic) manufacturing. Our response, the US Dept. of Energy is putting up just $125 Million over the next 5 years for Solar Cell manufacturing. I don’t think we’re going to win this one either.