The weekly column from Clark Judge:
Are the Debates About Manufacturing Jobs, Energy Independence and Illegal Immigration About to Become Irrelevant?
By Clark S. Judge: managing director, White House Writers Group, Inc.; chairman, Pacific Research Institute
This is a cautionary posting.
Here is the question: What if the major issues of the last four years became irrelevant to the nation’s fate in the next four? I have three examples in mind.
The decline in America’s manufacturing dominance has become a talking point for everyone from the AFL-CIO to Rick Santorum over the past several years. Usually the finger pointing has been toward overseas labor costs.
I have been skeptical of both the diagnosis and the solution, which typically is to enact protectionist trade policies. But now it turns out that technological and market changes may be bringing manufacturing back to home.
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With such techniques as 3-D printing (basically layering modern materials, layer onto layer according to a design, until you have the created object you want) much of manufacturing could soon change in ways entirely strange to the steel worker or auto plant manager of even a decade ago.
Such techniques represent not only entirely disruptive transformations of manufacturing processes, they require only a fraction of the labor input of standard techniques, which themselves require only a fraction of the labor input of a decade ago.
The result, according to an article in the current Economist magazine (http://tinyurl.com/6pfxvxd), is that site selection for new plants even in industries that have been traditionally sensitive to labor costs, will be increasingly driven by non-labor factors. For example, flexibility – as in being able to build a plant near to the market for its products — will become more important.
The implication — though not one The Economist draws – is that, if we are to bring manufacturing back home, we will need fewer regulatory delays and uncertainties. That applies to plants that use more traditional manufacturing methods, too. But with the ability quickly to place a plant near to a developing market to catch rising demand, rapid regulatory approvals will become a paramount question. In other words, we will need major reforms at EPA.
Everyone knows this one. Fracking and other technological developments have already turned the U.S. into an energy exporter. It is becoming possible, even likely, that we will become a net contributor to the global gasoline market.
Ours isn’t the only country that fracking may be turning into a long-term energy producer. The United Kingdom is another, with recent news reports speculating on it staking out its energy independence for decades to come.
One of the corollaries would be, of course, that current energy exporters — such as the Middle East and Russia – would see their national incomes collapse. Ideally this would mean their ups and down would become irrelevant (or at least less relevant) to the rest of the world.
As with fracking, national and local regulations could derail these developments. Slapping time consuming regulatory delays onto the drilling process or finding reasons to set large territories off bounds to exploration and development could stop or destructively slow everything. Still, by all accounts, regulatory resistance has not become a problem… yet.
For good reason, there has been tremendous concern about the enforcement of our border laws over the past several decades. The Supreme Court has just agreed to review the Arizona immigration enforcement act. Most of illegal traffic into the U.S. comes across the Mexican border and border enforcement has been widely long regarded as lax.
But just yesterday the Pew Hispanic Center reported that this decades-long population movement may have changed. According to this morning’s Los Angeles Times (http://tinyurl.com/7ankwxu), in the last couple of year “[t]he number of Mexican migrants to the United States dropped significantly while the number of those returning home increased, bringing net migration from Mexico to a statistical standstill.”
Why? According to the paper, the reasons include, “the weakened economy, increased border enforcement, a rise in deportations, growing dangers at the border and a long-term decline in Mexican birth rates.” Assuming that “growing dangers at the border” is a reference to the civil war with the drug cartels that is raging in northern Mexico, only two of these reasons have to do with immigration policy.
And one of the five reasons – the declining birth rate – is likely a consequence of a change in Mexico that almost no one in the U.S. noticed. According to a recent study from the Woodrow Wilson Center’s Mexican Institute, Mexico is becoming or may already be a middle class nation. As it does, the lure of slipping across the border to take what most Americans consider marginal jobs will fall, no matter how strongly the U.S. economy recovers.
My point in all this is that, as we debate the nation’s fate in the campaign ahead, we keep an eye on the enduring foundations of our fortunes: The state of our constitutional system, the openness of our economy, the robustness of our social institutions, our place as the essential architect of security and growth on the global scene.