In the late '90s, unions and liberals opposed permanently normalizing trade relations with China. But orthodox economists and even more orthodox editorialists heaped scorn on all these ideas, which died quiet deaths -- even as the governments of nations that have supplanted us as the world's manufacturers (most notably, China) adhered to domestic content regulations and invested heavily in strategic industries, to the betterment of their citizens.Read the entire column
Today, 20 years after we decided not to have an industrial policy, we have an industrial base that employs an ever-smaller number of Americans. What has kept us afloat during the current decade hasn't been our productive capacity but the inflation of our assets -- the rising value of our homes, against which we've borrowed to purchase the things we could not afford out of our stagnant paychecks. To the extent that the United States had a macro-economic strategy, it was Shop Till You Drop.
So we've shopped. And now we've dropped.
Obama has suggested boosting America's economy with "green collar" industry, by having the government invest in that much the way it once invested in steel and other heavy industry. It makes sense to me.