One of the most important books of the past two decades. This is the first, most comprehensive study of the social costs of the loss of the manufacturing sector to the US economy since the process of globalization went into high gear in the mid 1980s. The deregulation, “free trade,” open borders and privatization policies pursued by President Reagan and Prime Minister Thatcher in the UK led to today’s global financial casino and all the woes it helped cause in the series of financial crises culminating in the Wall Street debacle of 2008. Hidden and overlooked by obsolete statistics in the US government, the lobbying of global corporations and their “free trade” economists is the tragedy of this unnecessary loss of domestic production. This hollowing out of the USA and the resulting loss of millions of high-paying manufacturing jobs to China, Mexico, India and other low-wage countries is documented in painful, shocking detail.
For 20 years, I have pointed to reasons the USA has experienced “jobless growth” – rooted in the abstractions of macroeconomics theories and methods. The faith in “free trade” has prevented government agencies from making use of futurists’ broader forecasting and planning methods used by most global corporations. Their economic advisors’ market fundamentalism warned against “industrial policy” except for that covertly practiced by the Department of Defense and activities in the name of “national security.” Thus, the “hollowing out” of US manufacturing has continued for two decades at the behest of global corporations and their investment bankers. President Bush I famously held that it did not matter whether the US manufactured computer chips or potato chips, while President Bush II’s chair of the Council of Economic Advisors, Gregory Mankiw, maintained that outsourcing was good for American workers who could take their severance pay and 401Ks and become day traders on the stock markets.
Add to these idiocies the stout denials by economists that increasing capital-intensive technological change, automating manufacturing and services would create the structural unemployment we see today. Conventional measures of output per capita masked this technological unemployment as beneficial “increases in productivity” for decades, as we have pointed out for years on the Calvert-Henderson Quality of Life Indicators (www.calvert-henderson.com). Unfortunately, Obama administration economic advisors are mostly steeped in conventional theories and models which continue to serve Wall Street and corporate interests at the expense of workers and individuals (see the excellent reports at www.prospect.org).
– Hazel Henderson