Are You Talkin’ to Me?

Of the many economic mantras and national narratives our leaders repeat and, as a consequence, we have internalized, perhaps none is more sacred to our self-image than this one: “American ingenuity, the American worker and American industry were responsible for the greatest period of economic growth in human history!”

Even as these words are uttered our mind’s eye turns to images of bustling factory floors, heavy machinery, sparks flying, the blue flame of a welder’s torch, workers in overalls, automobiles on the assembly line, and so on.

Our happy reverie is interrupted only by the inspiring words, “… and we can do it again!”

There’s just one problem.  It may not be true.

Writing today in the New York Times, Stephan Richter, editor and publisher of The Globalist, looks at Detroit’s current woes and takes on the sacred cow of American industrial supremacy.

Most of us have accepted as fact the notion that American manufacturing and industrial output have declined primarily because of globalization and the outsourcing of production to lower cost environments. Were it not for that, we tell ourselves, we’d still be cock of the walk.

In fact, the American prosperity, wage growth and industrial might about which we wax so rhapsodic was the result of what has turned out to be a harmful mix of organized labor’s effectiveness (and complacency), management’s complicity, ownership’s avarice and, crucially, a lack of global competition.

We were the big man on the global campus mid-20th century, but once other countries recovered from the war (i.e., WW II) their ability to produce, innovate, invest and train workers began in some industries to overtake our own. We no longer had the playing field to ourselves.

Remember the 70’s? Who was making the world’s best cars? Not us.

And how long has it taken the industry to recover? Look at Detroit today.

Bottom line, according to Richter: we need to focus on skills training and innovation with a sense of shared purpose and a sense of urgency. Ownership and management need to reinvest profits, rather than diverting enormous earnings to their own compensation packages. Labor needs to recognize that a lack of flexibility could once again kill the goose.

Above all, we need to disabuse ourselves of the notion that we are inherently better and therefore, by definition, will once again be the best.

Indeed, if we don’t take action, our only response to continued decline will be to assume the false swagger of the local tough and say to others as they pass by, “Are you talkin’ to me? “

To which the reply will be, “Yeah, and what are you gonna do about it?”