How to Kill Manufacturing; and How to Restore It

Tired of all the out-sourcing? Wonder why all our stuff is made in China? Well, Jeff Pope over at Pajamas Media brings up the real reason our manufacturing base is being crushed – and it applies equally well to our mining and agricultural industries:

* Companies used to have personnel clerks whose primary function was to make sure employees were paid accurately, vacation time was accounted for, and payroll tax deductions were made. They have been replaced by multitudes of advanced-degreed and six-figure paid HR professionals. We have diversity audits, sensitivity training, gender awareness programs, and all manner of support and grievance processes. As a result, every employee must be treated as a potential minefield of liability — an artificially generated risk managed at great expense to meet the mandates dictated by government at state and federal levels, and all with reams of accompanying reporting.

* Health insurance that used to focus primarily on illness and injury now, by state and federal mandate, covers all manner of other costs such as smoking cessation, obesity counseling, gender counseling, drug abuse treatment, depression, mental health, etc. These costs are added on top of the already ballooning cost of basic care by politicians who run to a microphone to announce that they have provided help for your smoking habit — and without raising taxes!

* Environmental regulations that are so extreme that spilling a can of paint thinner becomes an “end of life as we know it” event. Common sense good stewardship long ago lost out to very, very expensive measures frequently unrelated to a real threat. Try breaking a CFL in the middle of an environmentally compliant facility or getting all the permits needed to build a facility that will in any way use chemicals.

* Corporate legal departments used to be primarily involved in contracts and tax preparation. Now add to that whole staffs to either manage litigation or stifle any activity that could lead to liability in the fertile imagination of a tort lawyer. If a stock drops, a label falls off, a risky abuse of the product can conceived of, or any of a thousand other real or imagined risks, a company lawyer is called in to advise. Tort lawyers increasingly attempt to construe personal liability of corporate management in order to pressure them to settle claims, all without constraint from the government or the courts. Protection is expensive, and non-productive.

We’ve tied down the wealth-creating part of our economy with a maze of red tape, lawsuits and political correctness. Our economy is buried under a blizzard of paper. One must realize that we can make a hammer here in the United States just as well as the hammer can be made in China – but they are made in China because once you add up all the costs of doing business in the United States it simply makes more sense to make it in China. In order to revive manufacturing, farming and mining in the United States, we simply must cut out all these additional costs.

We need to go through the entire federal register of regulations and review each one to determine if they really are helpful, or if they’re just mindless bureaucratic mandates put in place to make someone feel good, or allow a politician to claim they did something regarding the political fad of the moment. The safety of the workers must be assured, the quality of the products must be kept high – but we really must get a handle on this or our economy will continue to die.

We also need to go after the lawyers – we’re suing ourselves in to economic oblivion. Every time a lawyer manages to extract money from a company it makes all other companies go in to defensive mode – gumming up the works and making it ever more costly to produce. After a while, this also adds to the incentive of getting out of the United States and shipping the factory over seas.

“Congress shall make no law” should be our watchword for a decade as we reform our economy. We need a Special Assistant to the President for Repeal Affairs; someone who will go through the laws and regulations determining which have to go. Congress should hold hearings bringing the regulators in to testify as to why each and every regulation is vital…and if something isn’t vital, it should be legislated out of existence. The regulators, themselves, should receive statutory instruction that their primary job is to ensure the smooth transaction of business – that, when it doubt, they should let the practice continue until Congress and the President decide otherwise.

If we will free up our economy the growth we’ll see will be phenomenal. And it will be real growth – meaning a real increase in national wealth, year by year, as factories, farms and mines are opened and expanded. There will be jobs for the middle class, again; pressure will be taken off the illegal immigration issue as we once again start to have labor shortages; our national defense will be more secure as we become less dependent upon foreign sources and more capable of producing what we need here at home. There is no downside to this – and only economic death if we keep going as we are.