U.S. Economy Cannot Evolve Without its Backbone

Despite reports of the manufacturing sector expanding for the sixth month in a row in January, the nation’s industrial decline is readily apparent in the fact that manufacturing makes up just 12 percent of the economy, down from a post-war high of 28 percent in 1953.   

Without a strong and vibrant manufacturing base, the U.S. economy will continue to weaken over time.  Throughout history, manufacturing has been the backbone of any strong nation.   

"The reality is, in recent times, every great empire has been built on a manufacturing economy," Lynn Tilton, CEO of Patriarch Partners, told Yahoo News‘ Tech Ticker. "The fall of every empire has been the failure to remember that one fundamental fact."   

The fall of the nation’s manufacturing base is resulting in the devolving of the American economy, she said.  While America must look outside of manufacturing for other opportunities, it can’t completely abandon the industry because not everyone is built for a job in the service industry.   

The nation’s industrial decline is evident in places like Detroit and Youngstown, Ohio, former industrial hubs reduced to dilapidated factories with sky-high unemployment rates.  But, America’s manufacturing woes run much deeper and broader than the auto making and steel industries.

Through the purchase of important and strategic American corporations, and from insourced intrusion into the American domestic markets, foreign-based companies have built up a huge influence over entire industries. According to data collected from the Internal Revenue Service, certain industries have become completely monopolized by interests overseas.  

Without a change in policies, it is a trend that will continue.  But, American policymakers could commit to developing a strategic industrial policy, like every other industrialized nation in the world.   

“We've never systematically used government incentives to help U.S. industry compete across the board,” John Hofmeister, former president of Shell Oil Company and founder and CEO of Citizens for Affordable Energy wrote in a Wall Street Journal Op-Ed piece. “It's time we did, like everyone else. Use the unspent hundreds of stimulus billions to create millions of competitively priced manufacturing jobs in America. We've never had more people available, ready and willing to work. Let's practice the "globalization" we taught everyone else.” 

One U.S. lawmaker has presented a plan to do just that.  Sen. Sherrod Brown (D-OH) is trying to gain support in congress for a new, comprehensive National Manufacturing Policy, which would incentivize domestic manufacturers to keep well-paying jobs in America. 

The bill would enforce existing trade rules so that America no longer hemorrhages jobs overseas because of unfair trade practices and establish a $30 billion Manufacturing Revolving Loan Fund to help small- and mid-sized manufacturers transition to the clean energy economy through retooling and expand the Manufacturing Extension Partnership. 

“We can revive American manufacturing through investments in clean energy,” Brown said in a statement when the legislation was introduced. “This bill will help our manufacturers retool, put our auto suppliers back to work, and produce clean energy technologies.”