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Outside editorial: Auto industry woes a problem of our own making

Posted: Monday, June 01, 2009

Once-mighty General Motors, which symbolized American preeminence at the height of American preeminence, now symbolizes the steady and frightening erosion of the country's manufacturing capabilities.

The automobile was central to America's economic explosion, particularly after World War II. It made suburbs possible. It got new generations of American men and women to jobs they might never have been able to reach. It made trade and commerce that much easier and ubiquitous. It ushered in an amazing and unprecedented era of individual liberty.

It's not much of a stretch to suggest the automobile lifted much of the world, directly and indirectly. Indirectly, America's economic might became a rising tide the world over.

Competition, complacency and costs are among the factors that now have American-based automobile companies GM and Chrysler on their knees.

But in truth, it is American manufacturing in general that is on the endangered list.

Maybe the country will just notice it now that it's cars. But folks in textile country have seen this coming for years.

Consider this bit of irony: The popular line of "American Girl" dolls are made in China.

And one popular television program recently had to admit that it couldn't rely on American manufacturers to supply its viewers with T-shirts.

How can a superpower remain a superpower if it can't make its own clothing, shoes, appliances and even cars?

"We don't think it can," says Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition.

America consumed $673 billion more than it produced last year - meaning that $673 billion was sucked out the window. And that's been the trend for years and years.

How can that possibly be sustainable?

Answer: It isn't.

"The only loan my parents ever took out was on a house," Tantillo says. A generation later, he adds, we've been programmed that we can consume whatever we want whenever we want.

The core question in all of this is how wealth is created. Some say it's created by trading and financing. Others say by production. They're both right, but only to a point. Trading and financing only get you so far so long. What does pressing each other's pants produce?

Ultimately, a country must produce in order to create wealth.

As Tantillo notes, Americans aren't losing trade advantages due to any lack of abilities to produce. Instead, it's been a combination government trade policies that play us for suckers and give every advantage to foreign competitors; the global self-interests of multinational corporations; and a Wall Street that got fat on foreign capital.

The result of all this is that the United States lost 651,000 jobs in February alone; manufacturing employment is at its lowest level since July 1941; 4.91 million manufacturing jobs have been lost in the past decade; and U.S. output in appliances, carpeting and furniture is lower than it was in March 1978 - despite population growth and exploding consumer demand.

For years, we've been told that America can be just fine without old-school manufacturing. We're seeing that's not the case at all. And the living standards that we've had the past 30 years or so, as we've piled up $15 trillion in private-sector debt, have rested on a house of credit cards.

Our living standards have been based on paper, not production.

Every empire, Tantillo says, has done the same thing: tell itself that it no longer has to do dirty, menial jobs, that other countries can do that for us while we bask in our greatness.

But America's greatness didn't come from shopping and slurping up soft drinks. It came from hard work and good-paying jobs and creating wealth through the sweat of our brows.

The difference between America and history's other juggernauts may be the breathless pace of our decline.

What we're doing is unsustainable over the long term, and unbefitting a supposed superpower.

As catastrophic as GM's and Chrysler's crises have been, they are but a symptom of the larger problem: We need to make things, and increasingly we don't.

It's a problem of our own making.



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