Obama’s Reactionary Jobs Plan

The president’s State of the Union speech lays out a misguided economic agenda.

Does it bother anyone else that the president of the United States seems to believe that our collective future entails assembling battery parts in a government-subsidized factory for $9 an hour? Is that really what Americans envision for their kids -- an assembly line? Because when you look past Barack Obama's mesmerizingly hollow rhetoric, what he's proposing is a return of jobs that progress and prosperity have left behind.

In his State of the Union speech, the president laid out a vision that we've heard countless times. In his world, billionaires and their high-powered accountants are sticking it to the middle class. It's a place where wealth is static and one person's success always diminishes another's fortunes. The president explained that "it's not a bigger government we need but a smarter government that sets priorities and invests in broad-based growth."

Many news accounts of the SOTU focused on the first part of the president's contention, not the second. "Set our priorities"? So Washington is not only regulating safety and keeping an eye on big banks and making things fairer but also planning the economy now? Seems like an awfully outmoded way to approach a dynamic and unpredictable world.

What are Obama's priorities, anyway? The president proposes that politicians set up "manufacturing hubs" to assist the private sector in "restoring" and "bringing back" low-paying manufacturing jobs. And who better to create centers of inefficient production and unsustainable boondoggles than an institution that spends $1 trillion more than it brings in every year? Can't think of anyone.

The president, a man who once lamented the rise of job-killing ATMs, mentioned manufacturing eight times in his speech. But these jobs never "left" (they were phased out), and one hopes they never come back. America is producing about 80 percent more than it did 30 years ago with nearly 8 million fewer workers needed. Technological advances and a boom in productivity have not only made life more tolerable for the average American worker, opening up far better opportunities for them, but also been a godsend to consumers.

Yet there he was, praising companies for "bringing back" jobs from Mexico. Aren't we lucky. And now he's on a Ross Perot-style "Made in America" tour, framing green energy companies—which struggle to constitute a sliver of the economy without help—as the future. Obama should heed Paul Krugman, who once explained in his book Pop Internationalism that "international trade is much more a matter of (usually) mutually beneficial exchange than it is of competition and rivalry." Protectionism might be politically beneficial, but economists—as Obama likes to say—see very little real-world advantage.

Even if we concede for argument's sake that luring back outmoded jobs to the United States is smart economic policy, how does the president propose to make the United States more attractive to these companies? By making labor more expensive through Obamacare and piling on an unprecedented number of regulations, raising taxes, making energy more expensive and, just in case anyone was still interested, instituting a $9 minimum wage to ensure that any teen interested in working his way through college will never find a job, that's how.

But the problem isn't a lack of manufacturing jobs. It's that, by almost every measure, the entrepreneurial class is shrinking in America. Democrats may romanticize massive collective national efforts of the past, but individual risk and unexpected innovation are what change the world. The last thing we need is another crony "manufacturing hub."

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Ken Shultz||

    "Does it bother anyone else that the president of the United States seems to believe that our collective future entails assembling battery parts in a government-subsidized factory for $9 an hour?

    Well, it doesn't bother the unions or their cronies in government.

    If America were nothing but $9 an hour unionized factory workers, they'd think that was paradise.

    P.S. I've worked in a factory. That is soul crushing work. Put a couple days in--feel the dread of the morning, when you have to go back--and then you'll understand why union workers seem to be so angry and vile all the time.

  • R C Dean||

    Bingo, Ken.

    Obama doesn't care what kind of future your kid has, as long as it involves paying mandatory union dues.

  • ||

    I worked on an assembly line manufacturing windows in 1990. I was 18. Helped to pay my $1000 race bike.

    I KNEW that wasn't my future but I guess Obama is so clueless and aloof about excellence he figures keeping people in any job is success.

    His $9/hr quip continues to baffle me.

    He truly is an empty suit without a shred of enlightened or innovative ideas.

    To quote Red Foreman: Dumbass.

  • ||

    For what it's worth, my two experiences on the factory floor entailed a different causal chain: The unions made the experience a living hell for anyone more productive than the median worker. Otherwise, the work would have been boring but quite easy.

  • Red Rocks Rockin||

    If America were nothing but $9 an hour unionized factory workers, they'd think that was paradise.

    And apparently, Obama thinks all these factory workers will have college degrees and will be pleased as punch to work for $9 an hour.

  • Ken Shultz||

    He was talking the other day about getting them out of high school classes and learning on the factory floor.

    America used to be like that! That's a society where people used to get married right out of high school. Makes for beautiful music...

    http://www.youtube.com/watch?v=utVR3EgQkHs

    ...and a terrible life.

    I worked my way through boarding school in a factory (once I turned 16). It was better than cleaning out chicken coops and bailing hay, but I'd have killed myself if I'd thought I had to stay there forever.

    Obama's selling the American nightmare as if it were the American dream!

  • Mike M.||

    What else is new? This has been the utopian dream of just about every grim communist that has lived in the past hundred years: armies of peasants slaving away in the factories and the fields on behalf of the greater glory of the state.

  • ||

    It's a feature, not a bug.

  • grey||

    HIs State of the Union should have said Soul Crushing as a title. The hairs on the back of my neck stood up as he started talking about Pre-K federally subsidized education. Parents need not apply to raise their children anymore.

  • Heroic Mulatto||

    Parents need not apply to raise their children anymore.

    Why not? It's worked so well in the UK.

  • XM||

    Manufacturing is supposed to be one of the few high paying jobs that doesn't require a college degree. In the days of yore, a kid out of high school could gets jobs assembling parts in factories and eventually earn a decent income. Or so I'm told. California was apparently a manufacturing gold mine in its heydays.

    The president isn't likely to say "we need more investors, bankers, and computer engineers in this country". Manufacturing is where all the normal, middle class folks are at.

  • Red Rocks Rockin||

    In the days of yore, a kid out of high school could gets jobs assembling parts in factories and eventually earn a decent income. Or so I'm told.

    Sorry, but technology has nuked most of these kinds of jobs. As I keep saying, no factory owner is going to hire 50 workers--and give them the presumed union-negotiated benefits--when he can buy a machine that does the work of 45 people and hire 5 people to maintain it.

    Factory owners figured out 40 years ago that they could pack up and move overseas, or shut down entirely, and there wasn't a damn thing the union could do to stop them. See Hostess for the most recent example.

    Not to mention that Obamacare would cause most sane budding entrepeneurs from setting up the kind of mass-scale manufacturing operation that most of these people worked in the mid-20th century. Sorry, but that world isn't coming back. It's gone.

  • Rick Santorum||

    Sorry, but technology has nuked most of these kinds of jobs.

    You mean "outsourcing," not "technology."

    unions have been projecting that glorious past into the future ever since!

    Ken, you're such an idiot. Less than 10% of the private sector workforce is unionized.

  • Ken Shultz||

    Life was kinda different after World War II, too, what with the rest of the industrial world, from Europe to Japan, all a smoldering ruin--except for the United States.

    Yeah, it took until the '60s and '70s for the industrial capacity of the world to catch up, and unions have been projecting that glorious past into the future ever since!

    Sorry, but you want the old system back again? You'll need to make the rest of the industrialized world a smoldering ruin again, and it'll happen. Guaranteed. But if that isn't your plan, then you're gonna have to compete internationally--with places like China (that makes everything for less than we can) and places like Germany (that tends to be far more productive per worker than we are).

    If we can't compete with that, then we'd be foolish to listen to Obama and squander so much effort trying. The winning strategy involves leveraging our advantages--not tilting at windmills.

  • Chris Mallory||

    Too bad we all can't be high paid Cosmotarian scribblers like David Harsanyi. Then we could import more 3rd world savages to do the work we think we are too good to do.

  • DarrenM||

    3rd world savages? Someone's off their meds.

  • The Late P Brooks||

    Cosmotarian scribblers

    DRINK!

  • Virginian||

    I love how we're supposed to have a new manufacturing boom without comprehensive reform of the regulatory environment, particularly environmental regulations. You can't build new factories here. You just can't. The lawsuits and red tape will consume all your capital before you even break ground.

    Look, progressive scum, you can't have it both ways. Either you want draconian environmental protection laws, or you want a vibrant manufacturing sector. But you can't have both.

    American workers are the most productive in the world, and if there were a free market here there would be tons of manufacturing jobs. But no one can build a factory anymore. Because factories are icky and gross. Everyone should either work for the government, for socially responsible companies making things white progressives like, or for nonprofits. Anything that involves oil, heavy metals, chemicals, etc. shouldn't be built here. But we're also going to complain about outsourcing.

  • ||

    Look, progressive scum, you can't have it both ways. Either you want draconian environmental protection laws, or you want a vibrant manufacturing sector. But you can't have both.

    Apparently you can if you're manufacturing solar panels in California:

    Solar industry grapples with hazardous wastes

  • ||

    While I can't disagree with environmental regulations being a major hindrance here, I am going to go out on a limb and say that "labour law," properly understood, is a far greater contributor to the manufacturing decline that you discuss.

  • Virginian||

    No, because the laws are much clearer with labor law. Environmental laws give such wide latitude to the courts, which means the judges. The Greens in this country are masters of making sure the right judges see the cases they want them to see. Then it gets tied up in court for years. It's probably the worst out in California, but it's bad everywhere. A single environmentalist judge can torpedo a deal, and any money you already laid out isn't coming back. Labor law is a huge hurdle, but you can see it, prepare for it. Environmental law is a tripwire connected to a giant bomb.

  • Nuked||

    The nuclear industry is a great example of this. We licensed basically all of our nuke plants within 20 years of the first plant breaking ground (around 1957).

    Now, it takes a decade (and millions of dollars payed to the NRC to graciously review the plant proposal) to get a permit to build and then another decade to build it when you factor in all of the regulatory delays and lawsuits. This is if the plant gets through this process at all. This process makes the risk of investing in building a nuke plant almost unbearable for a utility.

    The nuclear power industry is the extreme of inefficient massive over regulation and as far as I can tell, it is not doing a damn thing. Plants don't update their safety hardware because any change to design requires a massive study by the NRC for any change no matter how small, and likely a lengthly shutdown of the plant.

    Nuclear power could easily (and should be) the cheapest form of energy the United States has. Instead they have squandered this industry for the last 30 years slowly regulating it into an uneconomic risky investment.

  • ||

    But does a large, relatively transparent cost necessarily do less harm than a large, opaque cost if the latter is not so widely applicable? I don't doubt that the environmental regulations are more problematic in specific industries, but the labour regulations are binding everywhere that legal employment takes place. Moreover, not all of the labour regulations, broadly understood, are so transparent. The ACA alone is causing massive disruption in this area (and I would certainly consider the demands on employers to be definitionally relevant).

    Perhaps I should have been more forthcoming in how broadly I define "labour law," including not just the usual minimum wage and union nonsense, but unemployment insurance, safety regulations, employer liability, medical, etc...

  • RickC||

    I would agree if you used the term industry and especially particular types of industry. When was the last fuel refinery built? Remember the whole discussion after Katrina about how we needed to not have so much of our refining capabilities along ground zero of hurricanes?

    However, since the subject was manufacturing and manufacturing jobs the simple fact is that those types of jobs are gone and Obama is a reactionary for wanting to bring them back. Automation and technological advances put a end to jobs standing on the production line. I say hurrah as both my wife and I have worked at those type jobs for short periods in the past. They suck.

  • RickC||

    Also, I don't understand why people conflate, as Obama does all the time, our manufacturing output and manufacturing jobs. Mark Perry had an article(2011) in the WSJ that included data from 2009 that showed our output that year at $2.155 trillion. That's was 45% higher than China.

    http://online.wsj.com/article/.....21570.html

    Also, here's an article from 2012 that puts 2009 as being the low point for outputs and that there had been a 20% increase over the three years since. The simple fact is that manufacturing continues to expand all the time but the low level jobs are no longer there.

    http://www.facethefactsusa.org.....angs-back/

    It's the same old "buggy whips" argument.

  • ||

    Exactly. The only way that the US will keep or restore significant numbers of manufacturing jobs is if "we" allow compensation for those jobs to fall to a much lower, market-clearing level. Since the total cost of those workers is so much higher than merely their wages -- or even their total compensation -- this makes for a low wage indeed. Employers will just keep "hiring" robots instead, with HR consisting of engineers and some skilled blue collars.

    It's funny to me, because I've tried explaining all of that to (former) fellows on the assembly line; half were too oblivious to know anything about micro and the other half were basically UAW stooges. Eventually I just gave up, tended to my process, and listened to them complain about not having a dental plan.

  • DarrenM||

    Personally, I'm looking forward to the time when half the population is working on farms again doing everything by hand. Of course, I'm sure we would still be allowed oxen to pull the plows. Then again, those are jobs someone else could do, so it might be best not to.

  • buybuydandavis||

    " how does the president propose to make the United States more attractive to these companies? "

    His own personal charisma, of course. It made him President, after all. Surely the world's corporations will flock to be nearer The One.

  • Bill||

    Sadly, this is the way politicians think. They want to court the companies and offer them special deals to get them to come to their state. Instead of just making the business environment better so that many businesses come on their own.

  • grey||

    But if you just make consistent, equally applied, and reasonable rules of the road and otherwise leave the businesses alone, then you can't pick winners and losers, if you can't pick winners and losers you can't have cronies. If you can't have cronies you can't enter public service middle class and emerge wealthy and powerful. If you can't leave wealthy and powerful, then why go into public service at all? If you have no incentives for public service we won't get the quality of people we're getting now.

  • mgd||

    If you have no incentives for public service we won't get the quality of people we're getting now.
    Yet another argument for "consistent, equally applied, and reasonable rules".

  • Adamsmith1776||

    Reminds me of an event I went to a year ago to discuss the coming development boom in Tysons' Corner Virginia. All these politicians showed up to congratulate themselves on removing the zoning barriers and other red tape they created in they created in the first place, so that the development could occur. Had they thought about it for a minute they would have realized that tons more could be happening if they got out of the way in the first place.

  • grey||

    Wouldn't it be nice to see ribbon cutting ceremonies and celebrations everytime the government stopped doing something? Everytime they de-regulated a business, removed 'licensing', cut a tax, or stopped an entitlement there should be some sort of celebration of the official(s) responsible. That way they can feel that work is as equally important as writing new law.

  • Thomas4||

    my best friend's mom makes $70/hour on the internet. She has been out of a job for 5 months but last month her income was $18311 just working on the internet for a few hours. Read more on this web site http://www.FLY38.COM

  • theakeman||

    The President lacks fundamental business concepts - http://modeltstocktrends.blogs.....ience.html

  • DrAwkward||

    Remember when the DC ruling class was apoplectic 20 years ago because America was "losing out" to Asia wrt memory chip manufacturing. This was because we didn't have the proper centralized industrial policies. Turns out these products quickly became commodities with extremely low profit margins, which Americans can easily buy at low prices. Politicians interested in planning our industries ALWAYS gravitate to the loser. Do I need to say solar panels?.

  • grey||

    The only problem with central planning is we haven't had a leader smart enough, but now we have Obama and we can enjoy our new even more centrally planned health care system. Sure, central planning has countless failed examples, but this time it will work. If not, well, shut up commrades he has a mandate.

  • Stacy56||

    like Frank responded I am taken by surprise that a person can make $9582 in 1 month on the internet. did you look at this website http://www.FLY38.COM

  • Staup||

    Can I ask you guys a question? I am not trying to be antagonistic. I have Libertarian values, but I am not Libertarian. I am really a liberal..... So, I am interested, do you guys really believe that that we would be better off with no government intervention at all, especially economically? Do you think monopolies or economic crashes would never happen in a completely free market, and that every crash or monopoly in the past is the result of government intervention? I understand that government is abused and causes problems, but if it could be corrected, would that be the answer? Or do you believe it could never be improved and the free market is truly the answer for everything? I am not trying to start an argument, just interested in your honest views.

  • Red Rocks Rockin||

    So, I am interested, do you guys really believe that that we would be better off with no government intervention at all, especially economically?

    This is a strawman argument. Most libertarians are not anarchists.

    Do you think monopolies or economic crashes would never happen in a completely free market,

    Another strawman. Being libertarian entails the recognition that economic downturns are inevitable, even in a completely free market environment.

    that every crash or monopoly in the past is the result of government intervention

    Monopolies are enabled by government, particularly in highly-scaled societies. Stating that libertarians believe that every crash is the result of government intervention is also a strawman.

    I understand that government is abused and causes problems, but if it could be corrected, would that be the answer?

    There are limits to human scale. Simply adding another government agency or program to engage the problem doesn't get to the root of what caused the problem to begin with. For example, Dodd-Frank does nothing to prosecute the financial executives that committed fraud during and after the housing bubble.

  • Staup||

    Thanks for your thoughts, I appreciate them.

    I disagree about monopolies. I have looked into this heavily myself and know that the usual Libertarian ideology, which you profess, is false.

    Otherwise, thanks again.

  • ||

    I disagree about monopolies. I have looked into this heavily myself and know that the usual Libertarian ideology, which you profess, is false.

    Well, you couldn't have looked hard enough if you haven't found The Myth of Natural Monopoly.

  • Staup||

    Honestly, we'll just agree to disagree. I should have written: "I believe it is false."

    I haven't read that book. I have read a lot on the issue, and honestly, it usually comes down to someone married to the free market, Lib, point of view pointing out some kind of government control or intervention in the past which really allowed the monopoly to happen. The problem with that argument is that it is usually unprovable. Pointing it out in a book or paper with shaky evidence is not causation.

    I believe monopolies are an occasional consequence of a true free market. It's a problem for those married to the free market, something they usually can't resolve with clear evidence.

    I lose respect for those followers when, instead of acknowledging it, they stick to their guns, against clear evidence, and instead of suggesting a compromised solution, criticize everyone instead. It gets us nowhere.

  • DarrenM||

    It sounds like you had already decided to disagree before even considering counter-arguments. I expect you've found 'bad' arguments in favor of a free market which you then use to justify ignoring the sound arguments. You've probably bought into the common strawman arguments you've read on leftist websites, too. If you have faith in the altruism, wisdom, and benevolence of those in power, I'm not surprised you think this way.

  • ||

    The problem with that argument is that it is usually unprovable.

    If you would have taken the effort to read the essay, there are explicit data points about how prices increased in various utility markets once vibrant competition was suppressed and govt.-mandated "natural monopolies" took over. (Of course that part of the industry which wound up with the monopolies lobbied the govt. enthusiastically.)

    You did not come here motivated by skepticism, with the felt need to debate, learn & provide some high quality criticism: you came to tell off all the benighted peasants who are "married to the free market".

    In short: you came to troll.

  • Staup||

    I love this, I ask for your honest opinion in an effort to try to understand your point of view, and I get called a troll.

    Worthless. Clearly, you are the problem with this country. In essence, you just act a like a baby because someone has a different opinion than you.

    I will take a look at your article, but trust me, "data" doesn't prove anything. I do research for a living and can make data look one way or the other depending how I feel that day.

    I am very skeptical of anything you provide, because I have read a lot about the issue and have never seen anything compelling, or even objective. I was hoping for someone to provide an explanation in their own words instead of just sending me a link. I was hoping to hear a debate from a different perspective.

    I didn't get that and was honestly a fool for expecting that.

  • dbobway||

    Ask the 15 million unemployed who actually want work that question! When they were working 5 years ago we were bringing in 6 trillion more dollars of revenue with those hideous "Bush" tax cuts!

    2 Health insurance control an entire state's business. How many auto insurances in that state? Auto insurance makes good money yet there rates are at an all time low and ,what, 95% coverage.

    The Govt' is growing faster than private sector an produce nothing!
    Thats a wrong way street!

  • Tobias4||

    If you think Alfred`s story is unimaginable..., last munth my cousins step dad basically also brought home $5919 sitting there sixteen hours a week an their house and their classmate's aunt`s neighbour has been doing this for three months and got more than $5919 in there spare time on their computer. follow the information from this site, http://www.FLY38.COM

  • Tristan34||

    my best friend's mom makes $60/hour on the internet. She has been out of a job for 9 months but last month her check was $20409 just working on the internet for a few hours. Read more on this web site http://WWW.FLY38.COM

  • dbobway||

    The pay stub!

    Pre-paid income taxes.

    No independent product producers! They are all tax cheaters!

    Control! Make your minimum wage and we the Govt' will provide you with all your (needs)your wage won't provide. Then if you get get sick we'll tell you whether your worth saving.

    We are the country who pay farmers not to grow food when there is hunger in the world! We grow food in ways to create "re-newable" energy which increases pollution in our waterways. We buy energy from countries who turn around and kill our own people with it
    instead of producing our own!

    Change those 3 policies and we create jobs, give the world food instead of bombs and clean up our rivers. Whats so wrong with that?

  • Udolf41||

    If you think Vincent`s story is impressive,, one week ago my brother's mom in law worked and got paid $7370 working fourty hours a month from their apartment and they're friend's ex-wife`s neighbour done this for 8-months and errned over $7370 part-time at there mac. applie the information here, http://tiny.cc/uqtnsw

  • ||

    The transformation of every ghetto into Silicon Valley`s through education is on the presidents mind. He will not rest until every black youth has a Master’s Degree and is in the upper economic strata. Others have tried and failed but they were not Obama.

  • Vernon||

    my best friend's step-sister makes $74/hour on the computer. She has been without work for eight months but last month her paycheck was $19194 just working on the computer for a few hours. Here's the site to read more http://www.fb26.com

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Video Game Nation: How gaming is making America freer – and more fun.
  • Matt Welch: How the left turned against free speech.
  • Nothing Left to Cut? Congress can’t live within their means.
  • And much more.

SUBSCRIBE

advertisement