The March 23 editorial “America must get back to making things” was music to my ears, but a number of factors make this more difficult than you might imagine:
1. The United States was among the first to enact and enforce industrial environmental laws.
That led chemical companies and some others to relocate part of their production to Third World countries.
2. Hubris and complacency by management and union leaders allowed foreign companies to gain a foothold in important consumer markets. Think of the auto industry.
3. The ravages of WWII and sometimes the factors mentioned above allowed U.S. and foreign companies to build overseas more modern plants at less construction and operating costs.
4. The change in attitude on Wall Street and board rooms that profit was no longer one goal but the only goal. Moreover, if real profit did not increase, then let’s figure out how to fool the public. Tricks like creative accounting and one-time charges, never blaming shortcomings on themselves, acquisitions that make no economic sense are all examples.
5. Nonmonetary restrictions and impediments on foreign competitors allowed obsolescent American products to continue to maintain their domestic market.
The most important change needs to be to No. 4. Without that, basic industries will never come back. If it is cheaper from somewhere else, we must be willing to accept a lower profit margin.