From Big News Network
The coronavirus crisis has turned the fact that we don't make anything in America anymore from a topic for philosophical and political debate into a crisis in our hospitals causing people to die and endangering our front-line health care workers.
Even worse, there's nothing to catch us as and after we fall, because we don't have a manufacturing base to fall back on like we did the last time a crisis like this happened-in the late 1930s.
Most of our medical supplies and prescription drugs now come from China, for example, and that's producing a crisis in our hospitals because China isn't exporting N95 masks, ventilators and respirators like they were just six months ago.
Back in the day, the British knew that manufacturing was the core strength of a nation, which is why they forbade the colonists in 1770 from manufacturing most items that could be imported from Britain, and famously forbade the good people of India from even turning their own cotton into cloth and clothing (thus Gandhi's spinning wheel as a logo for protest).
The colonists of America overthrew the economic tyranny of the British, and in short order (1791) Alexander Hamilton presented to Congress a detailed and specific plan to turn America from an agricultural backwater to a manufacturing giant. It included recommendations that:
- We must discourage the import of foreign-made products and promote the manufacture of American-made goods by taxing imported finished goods (a tax called an "import tariff").
- We must encourage the import of foreign raw materials, and the export of finished goods, with low tariffs on these items.
- We must invest government money-extensively-in infrastructure that would build our monetary and industrial base. We should be protectionist and hardworking, and refuse to cede to anybody our right to make whatever we damn well wanted.
Hamilton was so successful that 100 percent of the income of the federal government from our founding to the Civil War came from tariffs-and we learned to manufacture just about everything we needed in this country as a result. His policies were continued after the Civil War-tariffs represented two-thirds of all federal revenues from Reconstruction to World War I, and as government exploded in size to fight World War II, tariff revenue still represented a third of all federal income.
Import tariffs on manufactured goods averaged -- from 1791 until the 1980s -- around 30-40 percent. As a result, we made things here.
The benefit of "making things" is that you add value more rapidly than is possible in any other way. You get richer-both individually and as a nation -- faster than by any other means.
Turning a $50 ton of raw cotton into $5 million worth of designer clothing can be done with only a few tens of thousands of dollars' worth of labor and a million dollars' worth of machinery/factories. Turning a few dollars' worth of iron ore into millions of dollars' worth of luxury cars is incredibly profitable.
The move away from domestic manufacturing is also a national security issue. We can't manufacture a cruise missile without parts from China, and the Pentagon largely runs on computers made in that country. But, even worse, virtually all of the generic drugs sold in America are manufactured in China or India, and both supply lines are in peril because of the coronavirus crisis. Ditto for hospital protective gear and sophisticated machinery like ventilators.
For all that, you can thank the Reagan and Bush Sr. administrations, which negotiated NAFTA, and the Clinton administration (and a Republican Congress), which gave Permanent Normal Trade Relations to China.
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