Message to Hillary: We Still Make Stuff

All three major political candidates have been known to stretch the facts a bit during their campaigns.  Hey it's politics... should we be surprised?  But some manufacturing-oriented facts feed into the common misperception that manufacturing in the U.S. is at death's door when the opposite is true.  The Cato blog takes on a recent twisting of the facts, which in politically-neutral fashion could have been said by pretty much any candidate.

This presidential campaign has featured more than its share of misleading statements about trade and manufacturing. Nowhere has that been more on display than when the two Democratic candidates have been hustling for votes in what used to be the nation’s industrial heartland of Ohio and Pennsylvania.

On the eve of today’s crucial Pennsylvania primary, here is how the Boston Globe described a scene at a Hillary Clinton event in the western side of the state:

“We need to still be a manufacturing nation,” she said at a rally in downtown Pittsburgh yesterday, as a woman in the crowd shouted “Right on!” “I don’t think a country that doesn’t make things can remain strong and vibrant and leading in the global economy.”

Uh, yes we still do make "things."

Right on? Not exactly. Implied in Clinton’s remark is that manufacturing has been in decline and that we are in danger of becoming a nation “that doesn’t make things.”

One huge problem with her statement is that manufacturing output in the United States has continued to EXPAND in recent decades. According to the Federal Reserve Board, America’s factories produced 30 percent more in real output in 2007 than a decade earlier and three times more than in the 1960s.

Yes, thanks to productivity gains we do use fewer humans to make the 3x output, and we need to be sensitive to that fact.  Just as we did when rapid gains in farming productivity reduced the need for farmers, we need to invest in retraining displaced knowledge assets in order to fully utilize their brainpower.  But let's also not call that a "decline in manufacturing."

Comments

[Bryan]

I wonder if the Fed's statistics are a bit misleading.

Do they include goods that merely undergo final assembly in the US, but whose components are manufactured elsewhere?

Do they include goods that are manufactured and assembled elsewhere but are shipped to the US in bulk and then broken down and repackaged in the US and, therefore, classified and sold as "finished" goods in the US?

[Jim Huntzinger]

Great comments Kevin! This is a message we all need to understand – not just folks in manufacturing. This is not to say we need not be prudent and vigilant – we should, and that is part of the purpose behind embracing lean – it strengthens our competitiveness. But as we do, and should, become lean in all facets of business, the result will be less folks involved potentially in manufacturing. Being successful at lean is doing more with less. But it should also allow firms to extend their resources in pursuit of new ideas, services, and products – in turn; we should be able to create more with less. And this can be a very good thing for a free and capitalistic society – wealth creation.

At the Lean Accounting Summit, I am working on getting a gentlemen for a keynote speaker for 2009 who has been researching the very points that you point out above – that the United States is actually very strong and has continue on the same trajectory for decades and decades. I have seen him speak several times and he has a great message – and one based on facts and data. Which that should bode well for the lean folks – fact-based analysis. Keep up the great work, Kevin, and we must have faith in our system and have it underpinned by good fact-based analysis followed by well-thought experimentation, reflection, and then try again – PDCA.
Thanks,
Jim Huntzinger