The U.S. economy has suffered a gouging at its core. Today, amid questions over whether or not it is sliding into recession, “the nation’s manufacturers are in full-blown depression. In the last year, 837,000 production jobs were lost, and more than 1 million since 1999” (Los Angeles Times, Aug. 12). Yet this situation has not made headlines. Few economists seem concerned.
Why is manufacturing so important? The core of a nation’s wealth has always been founded on how that nation uses its natural resources. The service sector also depends on this. But while service productivity “surged” by 2.8 percent since the first quarter of the year, manufacturing industries lost 49,000 jobs in July, and productivity fell by 0.2 percent.
Few have paid attention since, overall, productivity and growth have remained positive. Gerard Jackson, editor of the New Australian, believes that the Federal Reserve’s relaxed policies over the last ten years, coupled with recent interest rate cuts, have severely distorted global investment patterns; Asia overinvested in manufacturing capacity while the U.S. went on a consumption binge.
No great nation has ever remained great without a strong industrial base. This carries special significance in the defense industry.
Despite technological advancement, “No great power can survive unless it can defend its interests with top-of-the-line ships and aircraft. Yet, while the U.S. obsessed on e-mail, stocks and websites during the 1990s, other countries continued todevelop defense-capable technologies” (ibid.).
Middle East Newsline warned July 28 that the U.S. is on its way to losing its premier role in the world’s aircraft market. The U.S. presently constructs half of the world’s commercial aircraft—down from 90 percent in the 1960s.
U.S. obsession with consumption has left the country vulnerable to becoming dangerously dependent on other manufacturing nations.