ICYMI: KHANNA PUBLISHES OP-ED IN FOREIGN AFFAIRS CALLING FOR A NEW ECONOMIC PATRIOTISM
Washington, D.C. — Today, U.S. Representative Ro Khanna (D-CA) published a piece in Foreign Affairs outlining how the American dream has been downsized. Khanna calls for a new economic patriotism to increase domestic production, bring jobs back from overseas, and promote exports. He argues that an agenda focused on regional revitalization will offer hope to places that have endured decades of decline and also reduce tensions with China.
Click here for the full Foreign Affairs article and see below for excerpts from the piece.
The New Industrial Age By Representative Ro Khanna
"For many citizens, the American dream has been downsized. In recent decades, the United States has ceased to be the world's workshop and become increasingly reliant on importing goods from abroad. Since 1998, the widening U.S. trade deficit has cost the country five million well-paying manufacturing jobs and led to the closure of nearly 70,000 factories. Small towns have been hollowed out and communities destroyed. Society has grown more unequal as wealth has been concentrated in major coastal cities and former industrial regions have been abandoned. As it has become harder for Americans without a college degree to reach the middle class, the withering of social mobility has stoked anger, resentment, and distrust. The loss of manufacturing has hurt not only the economy but also American democracy."
[…] Americans should embrace a new economic patriotism that calls for increasing domestic production, bringing jobs back from overseas, and promoting exports. An agenda focused on regional revitalization will offer hope to places that have endured decades of decline as policymakers watched haplessly and offered little more than Band-Aids to people laid off as a result of automation and outsourcing. A commitment to rebuild the U.S. industrial base does not mean the country should turn its back on the world and adopt the kind of insular economic nationalism that powered the 2016 Brexit vote in the United Kingdom. Instead, the United States can revive important industries while still preserving key trading relationships, welcoming immigrants, and encouraging the dynamism and innovation of its people.
[…] The trade deficit is an important proxy for the decline of the United States' industrial base. In the first decade of this century, as MIT economist David Autor has shown, the United States lost 2.4 million jobs because labor-intensive industries moved to China. Beijing's new trade status and low wages, along with its undervalued currency, incentivized U.S. companies to relocate manufacturing facilities there. Two decades later, the job loss count is up to 3.7 million, owing to the mushrooming trade deficit with China. The deficit reflects the decline in domestic industry: manufacturing accounted for 71 percent of the world's trade in 2020, and nearly 73 percent of U.S. imports from China in 2019 were manufactured goods. Put bluntly, by running a trade deficit with Beijing, Washington creates jobs in China instead of in the United States.
[…] To become a more committed exporter, the United States needs to make more things at home. The administration can unleash manufacturing and production at a level not seen since World War II. First, it should set up a new Economic Development Council, which would report to the president, to invest in and build partnerships with industry. It would have the authority to study the trade deficit and solicit information from across the federal government, academia, and the private sector. This Economic Development Council should convene key agencies—including the Departments of Commerce, Defense, Energy, the Interior, State, and the Treasury, along with the Office of the U.S. Trade Representative—as well as private-sector representatives, to determine the necessary capital investment needed to make the United States the world's preeminent manufacturing power again. In crafting strategies for revitalizing deindustrialized parts of the country, it should look, for example, at the volumes of data that Hanson is compiling on both the economic and the social conditions in distressed economic regions. Executing a broad agenda of reindustrialization requires a coordinating body to ensure that all agencies are working in sync.
[…] Aluminum is another industry in which the United States has lost considerable ground to China. In 1980, the United States was the world's top producer, but it fell last year to ninth place in global aluminum production. China accounts for 57 percent of global aluminum production. In 2001, the United States had over 90,000 aluminum workers; today, it has about 56,000. Cheap and cost-effective aluminum smelting depends on low-cost energy sources, which is why China uses coal plants for aluminum production. The United States can use cleaner green energy to produce aluminum and take the lead in another industry of tomorrow, in the process bringing back tens of thousands of jobs.
[…] The Biden administration's Inflation Reduction Act and the CHIPS and Science Act have revitalized industry by investing hundreds of billions of dollars in key technologies of the future. As a result, a new $20 billion Intel semiconductor factory complex in Ohio will create more than 10,000 jobs in the state. The memory and data storage firm Micron, an American comp"any that also has three locations in Taiwan, will invest $100 billion and create 50,000 new jobs in upstate New York, and Kentucky will be home to a potentially $1 billion Ascend Elements lithium-ion battery facility. The return of these companies to the United States was enabled in part by automation. But they will still create many better-paying jobs than are now available. The United States is already on pace to bring back 350,000 jobs from overseas in 2022. Reshoring manufacturing to the United States is possible.
[…] Reindustrializing the United States need not come at the expense of the rest of the world. The United States and the G-7 should offer an alternative to China's vast Belt and Road Initiative, which finances infrastructure outside China. To do so, Washington should find out what developing countries need and want, respect their right to self-determination, and chart a development future that best serves their people instead of creating debtor countries as Chinese policies have done. Washington should also share technological know-how with friendly low-income countries so they can develop their own modern industries. Not every part of the supply chain can return to the United States, so Americans will need to help partners gain access to the materials and develop the production capability to build the goods the United States still needs to import.
[…] A new economic patriotism calls for a globalization rooted in the interests of ordinary Americans, not the unrestricted version that has shredded the United States' economic and social fabric over the past four decades. Rebalancing trade through domestic production will help lessen tensions with China, realize the promise of a thriving democracy at home, and ensure that globalization works for all Americans, not just some.
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