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Morning Brief: Strategy Needed for U.S. Manufacturing

by Jonathan Masters
February 8, 2012


U.S. manufacturing doesn’t need “special treatment,” but a coherent set of policies comparable to what U.S. competitors are providing for their economies, writes Stephen Ezell for the Innovation Policy Blog. Improving the competitiveness of U.S. manufacturing means a comprehensive approach that includes policies regarding technology investment, tax, trade, and talent.

International Trade and Investment

Comparing International Export Credit Agencies

A new Government Accountability Office (GAO) report examines the role the Export-Import Bank plays in supporting U.S. export-related jobs and trade compared with the export credit agencies of other G-7 countries. The report suggests the Obama administration develop strategies for engaging the participation of emerging market countries, especially China, in export credit issues, and re-examine the high domestic content requirement for supporting U.S. exports.

The United States is not losing its trade competitiveness, writes Benjamin Mandel in a paper for the New York Federal Reserve. He argues that the falling U.S. share of global trade has less to do with domestic productivity shortcomings than with the growing economic might of countries abroad. In particular, decreased U.S. sales of machinery and transportation goods, as well as falling commodity prices played a role. Other economists, including Nobel-prize winner Michael Spence in this paper for the Council on Foreign Relations, have argued that the United States faces deeper challenges in the tradable sectors.

International trade and investment. Read more from leading analysts on the debate over next steps in U.S. trade policy.

Debt and Deficits

State Income Taxes on the Chopping Block

Several U.S. states are in the process or likely to propose a reduction or elimination of their income tax (WSJ) as a way to spur private investment and attract more jobs. Some evidence suggests many states that have pursued this approach have economically outperformed states with higher taxes, and still been able to fund services such as education and public safety at adequate levels.

Debt and deficits. Read more from experts on the challenges in reducing U.S. debt.

Education and Human Capital

Sacrificing Creativity for Standardization

This piece from the Chronicle of Higher Education argues it’s unwise for the United States to embrace a education system model oriented toward regimentation and standardization—as in many Asian countries—at the expense of a diminished focus on creativity and individualism.

Education and human capital. Read more from experts discussing ways to improve U.S. education and immigration policies.


The Plight of BlackBerry

For the New Yorker, James Surowiecki discusses the precipitous decline of RIM’s BlackBerry in the world of smart phones, suggesting that it failed to evolve with the “consumerization of IT.” Where some products have successfully targeted businesses first, then consumers (telegraph, typewriter, PC), many new technologies (iPhones, social media) are forging a reverse path from consumers to businesses.

Innovation. Read more on how the U.S. capacity to innovate could play a chief role in economic growth.

Post a Comment 1 Comment

  • Posted by Aly

    Hi Johnathon – I work for a structural steel manufacturer/supplier here in Houston, TX. I was actually reading Steven’s article just yesterday, so your post title caught my eye. As a Texas manufacturer, I thought it was interesting that you noted cutting state income taxes as a way to grow investment and job creation.

    Anyhow, thanks for sharing! – Aly

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