***********.bloomberg.com/news/2012-01-18/america-s-dirty-war-against-manufacturing-part-1-carl-pope.html
***********.bloomberg.com/news/2012-01-19/america-s-dirty-war-against-manufacturing-part-2-carl-pope.html
***********.bloomberg.com/news/2012-01-20/america-s-dirty-war-on-manufacturing-part-3-commentary-by-carl-pope.html
“I’d love to make this product in America. But I’m afraid I won’t be able to.”
My host, a NASA engineer turned Silicon Valley entrepreneur, has just conducted a fascinating tour of his new clean-energy bench-scale test facility. It’s one of the Valley’s hottest clean-technology startups. And he’s already thinking of going abroad.
“Wages?” I ask.
His dark eyebrows arch as if I were clueless, then he explains the reality of running a fab -- an electronics fabrication factory. “Wages have nothing to do with it. The total wage burden in a fab is 10 percent. When I move a fab to Asia, I might lose 10 percent of my product just in theft.”
I’m startled. “So what is it?”
“Everything else. Taxes, infrastructure, workforce training, permits, health care. The last company that proposed a fab on Long Island went to Taiwan because they were told that in a drought their water supply would be in the queue after the golf courses.”
So begins my education on the hollowing-out of the American economy, which might be titled: “It’s not the wages, stupid.”
The conventional wisdom is that wages and union contracts simply made American cars too expensive. During the auto- industry collapse of 2008, the news media bombarded the public with data about how much higher labor costs are in Detroit factories compared with those in non-unionized Southern states. The New York Times reported, for example, that at GM “the average worker was paid about $70 an hour.”

Trouble is, that figure was wrong.
In 2007, the average hourly wage in a unionized Detroit auto plant was $29. The average hourly wage in a non-unionized Toyota plant in Kentucky? $30. In Japan, Toyota paid assembly- line workers about $22 an hour. True, that’s less expensive.
Ideology, for one. A national industrial policy is anathema to many conservatives. When solar-panel maker Solyndra LLC went bankrupt after receiving $535 million in federal loan guarantees, opponents of industrial policy eagerly cooked the failure into a “scandal.” The attack was not only a partisan shot against the Obama administration, which had signed off on the loans. It was intended to preempt and disqualify federal support for manufacturing in the future.
There are at least two reasons. First, for the Tea Party and its financial backers, like the Koch brothers, weakening the federal government is ideologically more important than strengthening the national economy; if a unified, competitive national economy requires a strong, powerful federal government, the trade-off is not worth it to them. Second, the political leaders who shape federal economic policy are responsive to the sectors that have mastered lobbying -- oil, agribusiness, finance and drug companies. Manufacturing for decades has been left to take care of itself.
Commodity production no longer generates enough employment -- automation in agriculture and mining has gone too far. Wyoming produces 40 percent of the U.S.’s coal with about 7,000 miners. “Knowledge work” pays well, but draws on a narrow population: How many lawyers and bankers do we need? Facebook Inc. is a remarkable innovator, but it employs only about 3,000 people to serve a customer base of more than 800 million. Personal services, such as restaurants and retail, pay poorly and rely on income streams from other sectors to pay at all.
Henry Ford paid his workers $5 a day so they could afford to buy his cars. But they also patronized the grocers and carpenters of Detroit. We spent the last two decades paying our grocers and carpenters with cheap second mortgages -- a strategy bound to collapse.