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Making It In America

Washington’s special genius is for gridlock. As we’re seeing in the health care debate, the entire system is designed to frustrate action — even when Democrats have a popular president, 60 votes in the Senate and a large majority in the House. Moneyed interests trump party loyalty. Partisan politics trumps national purpose. Congressional rules and egos favor dithering and delay.

But at least on health care, the administration is leading the charge. We haven’t even begun an adult conversation about the fundamental question of America’s global economic strategy. What is the economy we will build out of the ashes of the old?

Obama has raised the subject. He understands that we can’t go back to the old economy — and shouldn’t want to. We can’t go back to borrowing $2 billion a day, largely from the Chinese, to serve as consumer to the world. We can’t go back to an economy in which finance captures 45% of the nation’s profits.

We can’t keep shipping good jobs, technology, and manufacturing capacity abroad and expect to sustain a broad middle class at home. We’ve got to start making it in America again. As Obama has declared, “The fight for American manufacturing is the fight for America’s future.”

As Louis Uchitelle in the New York Times reports, the United States now ranks behind every industrial nation except France in the percentage of overall economic activity devoted to manufacturing. We’ve been shedding manufacturing jobs for years, and the recession has been brutal, with nearly two million industrial jobs disappearing since it began.

If the U.S. wants new energy to be the centerpiece of a new economy in which — in the president’s words, the U.S. “consumes less and produces more,” then it will have to have an industrial strategy.

A new global strategy is essential. But getting there won’t be easy. Just as the insurance companies impede sensible reforms in health care, and big oil and coal block vital changes in energy, and Wall Street guts vital reform of finance, global corporations and banks will spend a lot of money to defend the unsustainable trade policies of the old economy.