FLU: Good post. However, there are some areas where you broad brushed it somewhat.
One of the things that enabled Japan, Inc. to become as “competitive” as they were in autos, technology, etc was the fact that the US essentially picked up the tab for their defense and, in so doing, also ensured (with the US Navy) that they would have an uninterrupted source of resources, materials and supplies (including oil) for their use.
Combine this with a completely protected domestic market (Japan employs some of the most brutal tariffs and import control systems in the world) and unstinting governmental support from bureaus like MITI (Ministry of Int’l Trade and Industry) and you have a situation whereby the Japanese can effectively undercut and under price their American competitors. Admittedly, Detroit in the 1970s was a lethargic, backward looking dinosaur that set itself up to be overtaken, but still.
I remember the semiconductor dumping scandals of the 1980s and I also remember my dad, who was an aerospace engineer, telling me stories about having to keep an eye on Japanese engineers because they thought nothing of a little friendly industrial espionage and would take photos of whatever plans or specs were laying around.
We’ve steadily watched our competitive advantage shrink and largely because we haven’t done anything to stop it, but, the story isn’t that simple, either. Those Japanese vehicles that are produced in the US enjoy certain tax, trade and manufacturing advantages that their US counterparts don’t. Combined with the legacy costs of US auto manufacturing, it becomes prohibitively expensive to compete, especially in an industry that is as cutthroat as the auto industry.
We remain tremendously innovative and creative and productive. Our colleges and universities are among the best in the world. And, I for one am actually all for protectionist trade measures right now and mainly because our competition could care less about the rule of law, or intellectual property rights, or just playing fair. I work in high technology and emerging technology and with one of the top ten research universities in the country (UCSD). I disagree that the majority of Americans are just sitting on their asses eating fast food and watching “Springer”. Our labor forces and the population at large have been let down by our government and its high time Uncle Sugar stepped in and stepped out and started using his muscle in a fashion that helps and not hinders US competitiveness.
I don’t embrace the European model of protectionism as I find it self-defeating, but I do think the US should be willing to tell other countries and trading zones to piss off and that we should start taking advantage of rising wages, ballooning resource costs and economic dislocation in countries like China, India, Japan and Russia. They’d screw us over in a heartbeat and have in the past. I say we return the favor.
I also say that we use this stimulus money to retrain American workers, rehab the infrastructure (including vital industries like energy, power and steel) and get us back to building things. There was a point that the entire world was built with American steel. No reason we can’t do it again.
