The New Dependency: Others Make, We Take

No rubber gloves are manufactured in the United States any more. The last factory making them, in Massillon, Ohio, closed

No rubber gloves are manufactured in the United States any more. The last factory making them, in Massillon, Ohio, closed a couple of years ago and moved production to Malaysia and India. Two hundred American workers were out on the street, which no doubt posed a bit of a problem for them, if not for the people running the country.

The Republicans and the larger business interests in general-if that’s not the same thing-have apparently made a back-of-the-envelope calculation and come up with the conclusion that the present level of unemployment will not hurt them in the next election, and having hundreds of thousands of college graduates out of work or afraid they will shortly be out of work keeps a lid on wages.

Keeping pay down has other unforeseen but certainly welcome benefits. As affordable public higher education is being made a thing of the past by the Party of Reaction, students are graduating with ever-higher debt loads. This means they can’t afford to take low-paying public-service jobs. In the last 10 years, law school tuition has, for example, risen 134 percent on average, so that young lawyers leave school with an aggregate debt of $80,000. Public-interest law will pay them about $36,000 a year-or less than half what they can get from a private law firm. This means fewer lawyers to represent the jobless and near-jobless, the screwed-over and messed-over persons who smoke cigarettes and eat at McDonald’s.

That’s the bright side of the rubber-glove factory moving to a distant low-wage nirvana. On the not-so-good side is what might happen if there were an emergency of some kind and the container ship from India carrying the gloves was late getting here. We have made ourselves dependent for many of our daily needs on goods we no longer make or perhaps even can make for ourselves. “More than half of the manufactured goods that Americans buy are made abroad, up from 31 percent in 1987,” writes Louis Uchitelle in The New York Times. Economist Virendra Singh, in an article entitled “Return of the Great Sucking Sound,” makes the point with a different set of numbers. She noted that “the market share of local U.S. manufacturers in the domestic market” declined from 86.7 percent in 1991 to 68.4 percent in 2002. This decline, she wrote, “indicates the rising penetration of imports into the U.S. market for manufactured goods.” She estimates that the American manufacturing industry lost 1.9 million actual and potential jobs “due to the rising tide of imports.”

Economists seem to be willing to kiss goodbye to some of these exported jobs without a hiccup of regret. The mill people in the Carolinas may have a different view, but some economists say that textiles are such a low value-added industry that their loss doesn’t mean much-a sentiment probably not shared by the men and women left jobless and almost hopeless. For the rest of us who are luckier, we still have to wonder about what happens when America reaches the point where it no longer has the equipment or skills to make a sheet or a blanket or the material for our clothes.

Can we assume that there will never be a significant interruption in the manufacture and delivery system of goods essential to daily living and/or the military? When you think of the military, you think of high-tech, modern-battlefield death-gizmos, but the soldiers still have to wear boots. We make the rockets, but who makes the boots?

It is time for the Department of Commerce or the Pentagon to assemble a list of ordinary objects-humble but indispensable objects-which are no longer made in the United States. Despite our thinking of ourselves as complete and self-sufficient, there has never been a time when all that America needed was supplied in America. Yet the question remains: How much dependency? What is safe and what is rash? For example, do we permit a situation to develop in which we no longer can grow enough food to feed ourselves? Would that be wise? How close are we coming to such a situation?

Another list which needs compiling is that of the skills which have been lost or are dying out because of the export not only of jobs, but whole industries with their associated trade secrets, specialized skills, crafts, tricks of the trade, etc. If you are one of those doctrinaire cretins who believes a universal free market will make everything come out even, then you wouldn’t want such a list, because it would suggest that one might need to intervene in the natural workings of the world. On the other hand, if you have doubts that the free market can cure cancer, then you will want any information telling us where we are in what looks like a slow-gathering crisis.

There are so many questions which the big shots don’t address at all or spin off into platitudinous outer space. For instance, are the Bush tax cuts contributing to unemployment? They tell us the reason that rich people ought not to pay taxes is because they will invest that money in ways that will “create new jobs.” Sounds good, but as of now we’re down about three million jobs since George W. Bush lightened the already light load the rich were carrying. Yet maybe Mr. Bush is right. The rich really did invest their money in job creation-in China. If the rate of return on manufacturing-plant investment is greater overseas-otherwise why would any company move abroad? -then it stands to reason that these people are not going to put their money in low-profit American businesses when China beckons.

Yet it does no good to exaggerate the Chinese aspect of things. Let’s not have an economic version of the old yellow peril. A country like Mexico is probably hit by the Chinese more than we are. Jobs once exported south of the border are now being exported from Mexico, where the cost of labor is higher than in Beijing. A million of our job losses cannot be blamed on moves abroad, but on increased productivity-that is, more product from fewer workers.

That said, the questions remain, to which others must be added, like: How are we ever going to pay for all this stuff we import? We owe more than $2.5 trillion to the rest of the world. This debt is primarily financed by foreigners lending us the money through their purchase of U.S. Treasury bonds. They continue to buy even though the interest rates that the bonds have been paying lately are quite low.

They buy American securities in part, at least, because they believe that money parked here is safe, though they may not feel as comfy if the administration succeeds in the dollar devaluation it seems to be trying to pull off. One gets the feeling that Washington’s answer to the job-export problem is devaluation, which makes American goods cheaper abroad and imports more expensive here. That would create an inflationary surge in the United States, damaging savings and pushing up interest rates even as it lessened the value of foreigners’ investment in U.S. government bonds.

If, as a response, foreigners start selling the bonds or simply stop buying them in the quantities they have, we might find ourselves floating around in the pickle jar. You can’t say. Too many questions are unanswered; the lists are not compiled. But we are in a situation which has no parallel in our past.

One thing is sure, and that is that we must be careful about pissing off other governments and alarming foreign business people. We may not yet be in a situation where we must depend on the kindness of strangers, but there’s no sense pushing it.

The New Dependency: Others Make, We Take