By Arnold Kling
On Labor Day, President Bush announced that there would be a new Assistant Secretary of Commerce charged with addressing the decline in manufacturing employment. This prompted a number of skeptical responses.
Yesterday, Daniel Gross wrote,
The new assistant secretary must persuade American workers that broad, immensely powerful forces are at work against manufacturing in the United States—forces that are beyond the control of even the most powerful government in the world.
Today, in A Manufactured Crisis, Steve Pearlstein writes,
there is no manufacturing crisis that suddenly requires some new bureaucracy, a new round of protective tariffs or another big package of tax cuts.
The same day, in Manufacturing a Crisis, I wrote,
With the political season upon us, you will hear that we are losing manufacturing jobs to China. The new Commerce bureaucrat will be tasked with looking into this. I wonder how the assistant secretary will decide what is the “correct” number of manufacturing jobs that belongs in the United States. I wonder how he or she will decide which of those jobs China ought to give back. It used to be that China had central planners who would do that sort of analysis. But they did away with central planning in their manufacturing export sector, and that is what enabled them to begin to compete. I doubt that we have anything to gain by turning to central planning — or to any form of government management of trade.
For Discussion. Are there any cures for the decline in manufacturing employment that are not worse than the disease?