January 26, 2014
Steven Rattner took up large chunks of the NYT opinion section to express confused thoughts on manufacturing. Rattner sorts of meanders everywhere and back. The government should help manufacturing, but not like Solyndra and Fisker. Right, we don’t want help the losers, we just want to help all the companies that got loans and were successful. Does Rattner want to tell us how we would determine in advance which ones those will be?
We want better education. Sure, that’s great, any ideas on how we should do that?
It’s hardly worth going through all the silliness in Rattner’s piece, rather I will just mention the incredible bottom line. Rattner never once mentions the value of the dollar. This happens to be huge. If Rattner has access to government data he would know that manufacturing employment first began to fall in the late 1990s, even as the economy was booming, after the dollar soared due to the botched bailout from the East Asian financial crisis. The run-up in the dollar had the equivalent effect of placing a 30 percent tariff on our exports and giving a 30 percent subsidy for imports. Under these circumstances, it is hardly surprising that manufacturing employment fell and the trade deficit soared.
Rattner’s confusion about trade and the value of the dollar extends to his endorsement of new “trade” deals. Of course agreements like the Trans-Pacific Partnership have little to do with trade barriers, they are about imposing corporate friendly regulations on the U.S. and our trading partners.
Among the top priority for U.S. negotiators is increasing the strength of patent protection for prescription drugs. Insofar as they succeed it will mean that foreigners will have to pay more money to Pfizer and Merck, which means that they will have less money to buy U.S. manufactured goods. That is hurting, not helping U.S. manufacturing . That one should be simple enough even for Steven Rattner to understand.
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