- Jun 6, 2007
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This past August a study came out called "The China Syndrome: Local Labor Market Effects of Import Competition In the U.S." which documented that in local communities that suffered significant manufacturing job losses due to imports from China they also suffered non-manufacturing wages as well as average household incomes materially decreasing plus significant increases in people going on social security disability, regular social security earlier and medicare and medicaid expenditures. This is just further evidence including the statistic that America's trade imbalance last year was a half a trillion dollars, that the loss of middle class "manufacturing" jobs in America is at the "alarm" stage. The American people should let it be known especially to politicians that we've had it we demand this be reversed. This line politicians frequently throw out that the world has changed America is now part of a global economy and the strong manufacturing base America had in the past will never return should not be acceptable. Americans must commit and voice that commitment to using their vote to force this reversal. These stale solutions that American politicians repeatedly offer are no longer sufficient their call for lower taxes, stopping heavy regulation, stopping unpredictable government action don't cut it nor does politicians call for spending more on research or improving its education system. All these supposed answers are too remote they aren't reliable enough to produce the needed effect, a plentiful supply of middle class jobs!
One acceptable solution would be for the Congress and the President to pass laws essentially guaranteeing fifty percent market share for American manufacturers for U.S. domestic markets on industries where the price point of the product sold in the industry is high enough where it can support middle class manufacturing jobs in America. The way Washington does this is through tariffs on foreign imports and unlike any other prior import tariff system this new system will mandate that at least fifty-percent of the tariff monies collected be distributed to American consumers in the affected markets in the form of rebates for purchases from U.S. manufacturers in the affected industry. This rebate twist will mitigate the often heard criticism of protective tariffs that they unacceptably raise prices on the American consumer. Because of the high price point condition on this tariff most purchases made by the American consumer will not be affected. For ordinary American's experience it's envisioned that the tariff if at all will apply to major items purchased for the home like a dishwasher, refrigerator, washer, dryer, air conditioner, water heater, big-screen TV, furnace, lawn mower, snow plow, electric generator, etc.. The vast majority of Americans would support such a tariff even if it means that they occasionally pay modestly higher prices because they know that they don't make these purchases that for many of these items have an in-service life from five to fifteen years and because it will bring back a plentiful supply of middle class jobs and return America to what it should be a country where it's citizens have a good standard of living! The enabling legislation would also mandate that the balance of the tariff monies not going to rebates go to running the program and promotion of American manufacturing like grants, loan guarantees, etc. so that no one can think this tariff idea is another way for Washington politicians to raise money so they can fund pet projects and/or pursue other unnecessary spending. How to do it? This program should be set-up so that a separate organization that is not part of the executive branch of government runs the program and the decision on the tariffs that is what product if any receive tariffs and at what rate are made by a five person ruling board or commission of this organization that are appointed by the President and confirmed by the Senate for ten year terms this would depoliticize the program so America wouldn't see big pro-management to pro-labor swings in the performance of the program!
This is no minor issue Washington politicians really need to get about growing and protecting middle class manufacturing jobs. One industry example that demonstrates that these politicians need to get on a different path is the solar industry. Of late certain politicians of one party have been beating the President over the head for his administration in 2009 giving a $535 million loan guarantee to Solyndra, a solar panel/module manufacturer, that went bankrupt two years later. The American public has heard a lot of ruckus about investigations into this matter; this will be a total waste of time there was no criminal wrong doing there was wrong doing however it was unbelievable irresponsibility in spending tax payer money wrong doing. Specifically, the President's administration didn't grant the loan guarantee for political contributions or any other criminal basis, it was granted because upper staff in the White House and/or Department of Energy were so eager to show that promotion of green jobs is the answer to the un/underemployment problem in America that they ignored good and due diligence business analysis in reviewing the loan guarantee application. The essence of what transpired with Solyndra was that they made solar panels without the polysilicon that most panel manufacturers used which in around 2007 provided Solyndra with a marketing advantage because polysilicon was very high priced because of shortage of supplies and what to a significant degree caused Solyndra's bankruptcy is that polysilicon dropped dramatically in price in recent years because more manufacturing was brought on line. But what was unbelievably irresponsible on the administrations part was that tentative approval to the Solyndra's loan guarantee application was given in March 2009 and final approval was given in September of 2009 and even by the end of March of 2009 it was abundantly clear that a huge amount of new manufacturing of polysilicon was coming on line so the price of polysilicon would drop dramatically and Solyndra's competitive edge would be lost, for example, the Solar Energy Industry Association's "2008 Year In Review Report" which came out on March 19 2009 spells that out clearly on page five. The Federal government shouldn't waste government resources investigating the Solyndra loan guarantee, the Obama Administration will receive it's justice come November 2012 when they discover they lost a significant number of votes because of their poor stewardship of tax payer money as evidenced by their irresponsible loan grant to Solyndra costing the taxpayers to lose a half a trillion dollars!
Washington politicians are missing the whole point about the solar energy industry, they are not looking out for the American people's interests in having manufacturing jobs from this industry. This industry is not yet mature but it will be in a few years and America will by then have lost a strong manufacturing base in this industry. America should without a doubt have such a base in this industry but we won't unless Washington get's a new trade system like what's proposed. If the Wall Street Journal is accurate, America invented solar technology when in 1954 three scientist at Bell Labs created the first silicon-based PV cell and America has been an early country in mass producing solar panels to generate electricity for their citizens as evidenced by the fact that America has been a leader in selling equipment to manufacture solar panels and the components of solar panels. However, as one would expect if they considered the movement of manufacturing in the world, China is growing ever bigger in solar panel manufacturing they have a 28% share compared to a 31% share by the US of the entire U.S. solar panel market in 2010, with respect to key components in the panels China has a 33% share of the U.S. polysilicon market, a 52% share of the U.S. wafer market and a 50 % of the U.S. cell market with the U.S. having a 25%, 3% and 3% share respectively in 2010. From a trade balance standpoint, in 2010, the U.S. had a $400 million trade surplus with China on a total export amount of $1.8 billion, this is the thing though one billion of those exports were from exporting solar manufacturing equipment which are not ongoing yearly sales and China obviously is building up its solar products manufacturing to take market share from U.S. manufacturers. The tea leaves are very clear on this issue unless Washington takes steps to protect a good percentage of market share in the U.S. for U.S. manufacturers their essentially lose the industry to China's manufacturers it may not be for a few year but it won't be that long. Status Quo experts like to say U.S. manufacturers will do well if they use innovation on their products and manufacturing processes and not having to incur transportation costs to get their products to the U.S. market will help them compete, the latter point is obviously very true however that criteria hasn't protected a lot of U.S. manufacturers in the past and for the former point solar products are still developing so U.S. manufacturers can still gain an edge that way but ten to fifteen or so years from today solar products and manufacturing processes will largely be perfected and U.S. manufacturers will then have little advantage over the China manufacturing beast, now is the time for American politicians to stand up and protect a reasonable amount of market share for U.S. manufacturers. It will really be a tragedy if U.S. politicians don't step up here because the solar industry is ideal for creating middle class jobs in America. Solar product manufacturing is not labor intensive, by the very nature of the products involved they lend themselves well to being manufactured through automation so the fact that the U.S. has higher worker wages than China shouldn't make that much of a difference because their shouldn't need to be a lot of workers needed to manufacture the products. Another thing about this industry is that a lot of the experts are saying don't expect a lot of growth from this industry because it needs tax credits from the government to make solar projects viable and governments are in bad financial straights so there won't be the money available for tax credits. If the federal, state and local government officials and executives in the industry show leadership this can be a good growth industry. Solar panels/modules are down in price by like forty percent this year over the next few years as the natural evolution in product and manufacturing processes development continues prices should drop significantly lower, there is a lot of room to get the permit and other regulation related prices lower, installation by design and good management should be able to be brought significantly lower in price; installing a solar power system should be like installing a water heater it should be able to be done in one day. If America handles this industry well residential home owners in the not too distant future should be able to purchase an installed solar power system for their home for ten to fifteen thousand for a small house and twenty to thirty thousand for a big house and that is before any tax credits and if one figures that the price of electricity will ever be increasing the industry should progress to the point that it makes economic sense for a large number of home owners to install solar systems in their house furthermore if the price of solar systems falls like this it may become standard in new construction in many locales across the nation that have good exposure to the sun that new homes there are built with solar power systems attached to the roof which would have the added savings of reducing the cost of constructing these homes because savings could be attained by eliminating the roof tiles on the areas of the roof covered by the solar modules. America needs jobs as described the solar power industry in the country certainly holds the potential to make a difference on this need if only politicians in America would get on the job!
One acceptable solution would be for the Congress and the President to pass laws essentially guaranteeing fifty percent market share for American manufacturers for U.S. domestic markets on industries where the price point of the product sold in the industry is high enough where it can support middle class manufacturing jobs in America. The way Washington does this is through tariffs on foreign imports and unlike any other prior import tariff system this new system will mandate that at least fifty-percent of the tariff monies collected be distributed to American consumers in the affected markets in the form of rebates for purchases from U.S. manufacturers in the affected industry. This rebate twist will mitigate the often heard criticism of protective tariffs that they unacceptably raise prices on the American consumer. Because of the high price point condition on this tariff most purchases made by the American consumer will not be affected. For ordinary American's experience it's envisioned that the tariff if at all will apply to major items purchased for the home like a dishwasher, refrigerator, washer, dryer, air conditioner, water heater, big-screen TV, furnace, lawn mower, snow plow, electric generator, etc.. The vast majority of Americans would support such a tariff even if it means that they occasionally pay modestly higher prices because they know that they don't make these purchases that for many of these items have an in-service life from five to fifteen years and because it will bring back a plentiful supply of middle class jobs and return America to what it should be a country where it's citizens have a good standard of living! The enabling legislation would also mandate that the balance of the tariff monies not going to rebates go to running the program and promotion of American manufacturing like grants, loan guarantees, etc. so that no one can think this tariff idea is another way for Washington politicians to raise money so they can fund pet projects and/or pursue other unnecessary spending. How to do it? This program should be set-up so that a separate organization that is not part of the executive branch of government runs the program and the decision on the tariffs that is what product if any receive tariffs and at what rate are made by a five person ruling board or commission of this organization that are appointed by the President and confirmed by the Senate for ten year terms this would depoliticize the program so America wouldn't see big pro-management to pro-labor swings in the performance of the program!
This is no minor issue Washington politicians really need to get about growing and protecting middle class manufacturing jobs. One industry example that demonstrates that these politicians need to get on a different path is the solar industry. Of late certain politicians of one party have been beating the President over the head for his administration in 2009 giving a $535 million loan guarantee to Solyndra, a solar panel/module manufacturer, that went bankrupt two years later. The American public has heard a lot of ruckus about investigations into this matter; this will be a total waste of time there was no criminal wrong doing there was wrong doing however it was unbelievable irresponsibility in spending tax payer money wrong doing. Specifically, the President's administration didn't grant the loan guarantee for political contributions or any other criminal basis, it was granted because upper staff in the White House and/or Department of Energy were so eager to show that promotion of green jobs is the answer to the un/underemployment problem in America that they ignored good and due diligence business analysis in reviewing the loan guarantee application. The essence of what transpired with Solyndra was that they made solar panels without the polysilicon that most panel manufacturers used which in around 2007 provided Solyndra with a marketing advantage because polysilicon was very high priced because of shortage of supplies and what to a significant degree caused Solyndra's bankruptcy is that polysilicon dropped dramatically in price in recent years because more manufacturing was brought on line. But what was unbelievably irresponsible on the administrations part was that tentative approval to the Solyndra's loan guarantee application was given in March 2009 and final approval was given in September of 2009 and even by the end of March of 2009 it was abundantly clear that a huge amount of new manufacturing of polysilicon was coming on line so the price of polysilicon would drop dramatically and Solyndra's competitive edge would be lost, for example, the Solar Energy Industry Association's "2008 Year In Review Report" which came out on March 19 2009 spells that out clearly on page five. The Federal government shouldn't waste government resources investigating the Solyndra loan guarantee, the Obama Administration will receive it's justice come November 2012 when they discover they lost a significant number of votes because of their poor stewardship of tax payer money as evidenced by their irresponsible loan grant to Solyndra costing the taxpayers to lose a half a trillion dollars!
Washington politicians are missing the whole point about the solar energy industry, they are not looking out for the American people's interests in having manufacturing jobs from this industry. This industry is not yet mature but it will be in a few years and America will by then have lost a strong manufacturing base in this industry. America should without a doubt have such a base in this industry but we won't unless Washington get's a new trade system like what's proposed. If the Wall Street Journal is accurate, America invented solar technology when in 1954 three scientist at Bell Labs created the first silicon-based PV cell and America has been an early country in mass producing solar panels to generate electricity for their citizens as evidenced by the fact that America has been a leader in selling equipment to manufacture solar panels and the components of solar panels. However, as one would expect if they considered the movement of manufacturing in the world, China is growing ever bigger in solar panel manufacturing they have a 28% share compared to a 31% share by the US of the entire U.S. solar panel market in 2010, with respect to key components in the panels China has a 33% share of the U.S. polysilicon market, a 52% share of the U.S. wafer market and a 50 % of the U.S. cell market with the U.S. having a 25%, 3% and 3% share respectively in 2010. From a trade balance standpoint, in 2010, the U.S. had a $400 million trade surplus with China on a total export amount of $1.8 billion, this is the thing though one billion of those exports were from exporting solar manufacturing equipment which are not ongoing yearly sales and China obviously is building up its solar products manufacturing to take market share from U.S. manufacturers. The tea leaves are very clear on this issue unless Washington takes steps to protect a good percentage of market share in the U.S. for U.S. manufacturers their essentially lose the industry to China's manufacturers it may not be for a few year but it won't be that long. Status Quo experts like to say U.S. manufacturers will do well if they use innovation on their products and manufacturing processes and not having to incur transportation costs to get their products to the U.S. market will help them compete, the latter point is obviously very true however that criteria hasn't protected a lot of U.S. manufacturers in the past and for the former point solar products are still developing so U.S. manufacturers can still gain an edge that way but ten to fifteen or so years from today solar products and manufacturing processes will largely be perfected and U.S. manufacturers will then have little advantage over the China manufacturing beast, now is the time for American politicians to stand up and protect a reasonable amount of market share for U.S. manufacturers. It will really be a tragedy if U.S. politicians don't step up here because the solar industry is ideal for creating middle class jobs in America. Solar product manufacturing is not labor intensive, by the very nature of the products involved they lend themselves well to being manufactured through automation so the fact that the U.S. has higher worker wages than China shouldn't make that much of a difference because their shouldn't need to be a lot of workers needed to manufacture the products. Another thing about this industry is that a lot of the experts are saying don't expect a lot of growth from this industry because it needs tax credits from the government to make solar projects viable and governments are in bad financial straights so there won't be the money available for tax credits. If the federal, state and local government officials and executives in the industry show leadership this can be a good growth industry. Solar panels/modules are down in price by like forty percent this year over the next few years as the natural evolution in product and manufacturing processes development continues prices should drop significantly lower, there is a lot of room to get the permit and other regulation related prices lower, installation by design and good management should be able to be brought significantly lower in price; installing a solar power system should be like installing a water heater it should be able to be done in one day. If America handles this industry well residential home owners in the not too distant future should be able to purchase an installed solar power system for their home for ten to fifteen thousand for a small house and twenty to thirty thousand for a big house and that is before any tax credits and if one figures that the price of electricity will ever be increasing the industry should progress to the point that it makes economic sense for a large number of home owners to install solar systems in their house furthermore if the price of solar systems falls like this it may become standard in new construction in many locales across the nation that have good exposure to the sun that new homes there are built with solar power systems attached to the roof which would have the added savings of reducing the cost of constructing these homes because savings could be attained by eliminating the roof tiles on the areas of the roof covered by the solar modules. America needs jobs as described the solar power industry in the country certainly holds the potential to make a difference on this need if only politicians in America would get on the job!
