Dear President Obama:
Congratulations on your succession to the world’s toughest job.
Once again, the U.S. Constitution guided this country through a process that has toppled scores of rulers and regimes throughout history – the simple transfer of power. The presidential campaign was long and hard-fought, and though the mix of candidates promised to make this an extraordinarily historic election, the result guaranteed it.
As you ready yourself to engage history, the nation faces one of the most severe set of problems in recent memory. We are at war. We are in debt. Our children lag much of the world in education. Our financial institutions are failing; our borders insecure; our manufacturing base shrinking. And yet, despite the complexity of the problems that confront us, we need to embrace the future – not fear it. As you assemble your cabinet and advisors to seek the solutions that will move us forward, I am compelled to add a few words in support of America’s economy and its manufacturing base.
When developing countries seek to emerge from poverty and join the world’s advanced economies, it is no accident that they first develop basic manufacturing industries. Countries develop their extractive industries for energy and materials. They learn to make steel and other engineered materials so they can build machine tools, mining and construction equipment to develop infrastructure, and scores of other types of goods. The manufacture of goods, in turn, leads to a basic underpinning of any successful economy – the formation of capital.
Capital formation is the creation of productive assets that expand an economy’s ability to produce more goods and services. It is a process that happens on Main Street, not Wall Street. The role of manufacturing in true wealth creation is inescapable and indispensible. Since 2000, however, one in five U.S. manufacturing jobs (that help form capital, pay well and offer benefits) has been lost. Given that, it is no surprise that the rate of real per capita GDP growth in this country has slowed steadily since 2003.
And yet, the U.S. continues to treat its industrial base as a pariah. The men and women who form metal, build machinery, mold plastic, machine parts, produce microchips and perform countless other jobs are the collective backs upon which this country was built. It is hoped you will vigorously pursue policies that will help get them their jobs back. Manufacturing may not be the entire backbone of our economy, but it is at least worth a couple of vertebrae, bones too infrequently found in Washington, sad to say.
Unlike the automakers, most manufacturers are not looking for handouts, just a level playing field. Government bailouts of private institutions, whether for the financiers or the automotive sector, are a poor solution in the long run. A strong financial sector is important, but predatory lending, mortgage-backed securities and paper profits do not create true wealth. Manufacturing does.
Mr. President, as you suggested during your campaign, the interests of Wall Street and Main Street do indeed intersect, but to those of us who live outside the Beltway, Main Street and its manufacturing base are conjoined.
Dean M. Peters, Editor