Trained in America; Clothed in China

When ABC reported last week that the $1,400-$1,900+ uniforms Ralph Lauren won the contract to provide to Olympic athletes were made in China, Sherrod Brown not only pushed the US Olympic Committee to try to rectify the issue by the Winter 2014 Olympics, but he introduced a bill to require Federal uniforms to be made in the US (currently, they must be 51% US made).

But the news–which came out just before the Alliance for American Manufacturers released their yearly poll showing near unanimous support for what could be called an industrial policy to support US manufacturing–had a more interesting public relations effect.

For example, after CNN posted a list of US manufactured clothes in response to the uniform news, the sales of Lawson Nickol’s Ohio company, All American Clothing Company, skyrocketed to 14 times what they normally would be.

Brown had a conference call with Nickols (whose company is located outside of Dayton) and Youngstown native Nanette LePore (whose clothes are manufactured in the US, though of foreign–usually Italian–cloth) to talk about efforts to bring back clothing manufacture to the US.

Both make a profit–though not the same margins they’d make if they outsourced to China. LePore noted that Ralph Lauren spends his money on advertising rather than manufacturing. Nickols claimed his jeans last longer, which helps to offset the somewhat four times higher costs. But ultimately they were both sacrificing some profit to keep manufacturing close. For Nickols, it seems like a quality and patriotic issue. It’s patriotic for LePore, too, but manufacturing in midtown Manhattan also gives her much more direct control over her line.

And both mentioned things that would help bring clothing manufacturing back to the US–much of it pertaining to sourcing for lower cost runs.

At this point, we’re largely talking about symbolic gestures: Olympic uniforms, Federal uniforms, jeans made 6 hours away. But the underlying message seems to be (and AAM’s poll backs this up abstractly) that people will seek out things made in the US.

Santorum to “Plant His Flag” in Michigan


I think there are two reasons that Rick Santorum is enjoying another surge in the GOP Primary Reality Show, having won all three caucus states last night, two in a blow-out.

First and foremost, Santorum is the only one of the GOP candidates to be able to somewhat credibly claim to be what Nixon (as best described by Rick Perlstein) an Orthogonian–the outsider who resents the arrogance of the elite.

Nixon’s insights into the possibilities of harnessing voter resentment, Perlstein maintains, derived from his own; indeed, he was a “serial collector of resentments.” As a student at Whittier College, a young Nixon addressed his own painful exclusion from the school’s social elites, the Franklins, by forming his own club of outsiders, the Orthogonians, open to “the strivers, those not to the manner born.” For Perlstein, the Franklin-Orthogonian divide captures perfectly a split between social and economic elites and everyone else (at least among whites) that Nixon manipulated to his advantage.

His signal achievement was in successfully casting his Democratic opponents as Franklins and enlisting many non-elites into the Orthogonian ranks. He thus seeded the ground for the culture wars that sprouted during the 1960s and persisted, in varying forms, ever since. For the white suburban middle class, admiring Nixon involved “seeing through the pretensions of the cosmopolitan liberals who claimed to know so much better than you . . . what was best for your country.” As a presidential candidate in 1968, he gave them a name: “the ‘silent center,’ ” those ” ‘millions . . . who do not demonstrate, who do not picket or protest loudly’ ” and who “lived virtuously.” Within a few years, he fastened on the term that would endure: the Silent Majority.

In last night’s victory speech Santorum took on Obama, repeating over and over that Obama thinks he “knows better” than Santorum’s supporters. He said Obama doesn’t listen. And while that’s not much different from the nastiness and victimization that Newt performed to win the South Carolina primary, coming from a “grandiose” college professor it just sounds off. And Mitt and his Cayman Island tax shelters?

If you ignore Santorum’s self-dealing on PACs and his stint as a lobbyist, you can almost believe that Santorum has faced the same challenges as many Americans.

This year’s Republican voters–the relatively few who are turning out to vote–hate the knowing technocracy Obama is giving them, and Santorum can play on their resentment of that in a way Mitt and Newt can’t.

But Santorum’s wins have, also, been focused (with the exception of Colorado) on Midwestern states. One reason for that, I believe, is his explicit call for manufacturing, pushing to eliminate taxes on manufacturing in this country. Whether or not you believe he would do that, he speaks to the many benefits of manufacturing in a way that resonates in the Midwest. (Nate Silver predicted Santorum’s strength in the Midwest last week.)

And so Rick Santorum has–predictably, in my opinion–announced he plans to focus on MI rather than AZ for the next GOP primary day, February 28 (suck it, bmaz!).

But with the next major contests for the GOP nomination in Arizon and Michigan on Feb. 28, Santorum said on msnbc’s “Morning Joe” Wednesday morning that, “We think Michigan’s a great place for us to plant our flag.”

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We’re Losing More Tech Jobs Than Socks Jobs to China

Some of the more amazing stories about China’s domination of manufacturing these days pertain to the cities in China that make most of just one of the world’s consumer goods, like socks.

But a new study from the Economic Policy Institute makes it clear we haven’t just lost textile jobs to China, we’ve lost high tech manufacturing jobs too. The study finds, for example, that since China joined the WTO, the outsourcing of tech manufacturing to China has been the biggest driver of our trade deficit with China.

Within manufacturing, rapidly growing imports of computer and electronic parts (including computers, parts, semiconductors, and audio-video equipment) accounted for more than 44% of the $194 billion increase in the U.S. trade deficit with China between 2001 and 2010. The growth of this deficit contributed to the elimination of 909,400 U.S. jobs in computer and electronic products in this period. Indeed, in 2010, the total U.S. trade deficit with China was $278.3 billion—$124.3 billion of which was in computer and electronic parts.

Global trade in advanced technology products—often discussed as a source of comparative advantage for the United States—is instead dominated by China. This broad category of high-end technology products includes the more advanced elements of the computer and electronic parts industry as well as other sectors such as biotechnology, life sciences, aerospace, and nuclear technology. In 2010, the United States had a $94.2 billion deficit in advanced technology products with China, which was responsible for 34% of the total U.S.-China trade deficit. In contrast, the United States had a $13.3 billion surplus in ATP with the
rest of the world in 2010.

As a result, those parts of the country where such tech jobs had been concentrated have been inordinately affected.

The trade deficit in the computer and electronic parts industry grew the most, displacing 909,400 jobs—32.6% of all jobs displaced between 2001 and 2010. As a result, the hardest-hit congressional districts were in California, Texas, Oregon, and Massachusetts, where remaining jobs in those industries are concentrated.


The three hardest-hit Congressional districts were all located in Silicon Valley in California, including the 15th (Santa Clara County, 39,669 jobs, 12.23% of all jobs in the district), the 14th (Palo Alto and nearby cities, 28,866 jobs, 9.0%), and the 16th (San Jose and other parts of Santa Clara County, 26,478 jobs, 8.72%).

Now, to a great degree, we already knew this. IBM sold its PC division to China in 2004. And whereas stories of abusive conditions for those who make branded goods used to focus on sneakers, they now focus on Apple’s products.

But it also ought to be a wake-up call. It took some time for the upheaval caused by NAFTA to thoroughly devastate the Rust Belt and parts of the south. And while CA may be large and diverse enough to recover from the loss of these jobs, in other places (surprisingly, perhaps, NH, which lost the highest percentage of its jobs to China), they’re not.

Plus, there’s the whole problem of lost capabilities. As this manufacturing goes to China, we lose the symbiotic effect of having people manufacture–say–iPhones down the road from the folks losing designing the new ones. Thus, while in the short term it may be easy for Steve Jobs to churn out new products sending this stuff to China, in the post-Steve Jobs era, particularly with this lost symbiosis, it may be harder to continue to innovate.

But don’t worry. I’m sure working class Californians will be just as happy in their service jobs as Michiganders are. Which is to say, not that much.

Finally! Our Declining Manufacturing Base Becomes a National Security Issue

I have long argued that the way to address the big problems our government is currently all-but-ignoring, not least jobs and climate change, is to talk about how our current policies put us at significant national security risk. If nothing else, by demonstrating how these are national security issues, it’ll provide a way to reverse fear-monger against the Republicans trying to gut our country for profit.

Which is why I’m happy to learn that the intelligence community is assessing whether the decline in manufacturing in the US represents a national security threat.

The U.S. intelligence community will prepare a National Intelligence Estimate on the implications of the continuing decline in U.S. manufacturing capacity, said Rep. Jan Schakowsky (D-IL) citing recent news reports.

Our growing reliance on imports and lack of industrial infrastructure has become a national security concern,” said Rep. Schakowsky.  She spoke at a March 16 news conference (at 28:10) in opposition to the pending U.S.-Korea Free Trade Agreement.The Forbes report referenced by Rep. Schakowsky was “Intelligence Community Fears U.S. Manufacturing Decline,” by Loren Thompson, February 14. The decision to prepare an intelligence estimate was first reported by Richard McCormack in “Intelligence Director Will Look at National Security Implications of U.S. Manufacturing Decline,” Manufacturing & Technology News, February 3.

Note that Schakowsky is a member of (and until January, was a Subcommittee Chair on) the House Intelligence Committee. It’s possible her own requests generated this concern.

But the concern is real. As our manufacturing moves to places like China and (significantly for this context), Korea, we’ve lost certain capabilities. Indeed, when Bush slapped tariffs on steel in 2002, a number of tool and die factories moved to Korea where they could still access cheap steel while still supplying the US market. And in recent years, the loss of highly-skilled manufacturing process capabilities has meant we face challenges in sourcing some of our key military toys.

While it shouldn’t be the primary reason to invest in manufacturing in this country, ultimately if we keep losing it we’re going to have problems sustaining our military machine.

Most of the folks running DC may not much care that our middle class has disappeared along with our manufacturing base. But convince them that our declining manufacturing base might imperil their cherished military might, and they might finally wake up.