From 1791, when our nation’s first Treasury Secretary Alexander Hamilton created an 11-point plan for American manufacturers, all the way until just the last few decades, the United States protected its manufacturing base with high tariffs on imports and government support for domestic industries.
This “protectionist” approach to trade transformed the United States into the world’s largest exporter of manufactured goods, which built and sustained an enormous middle class of Americans working in factories collecting high wages.
Then the forces of globalization crept in, extolling the virtues of a world economy free from national boundaries and protections for domestic manufacturing.
Over the last decade, 50,000 manufacturing plants in the United States have closed down and five million manufacturing jobs have been lost. They didn’t disappear, they just moved away to low-wage factories like Foxconn, in foreign nations.
Before Reagan won the White House, the United States was the world’s largest importer of raw goods and exporter of manufactured goods as well as the world’s largest creditor. But today, we’re the world’s largest exporter of raw materials and importer of manufactured good. No surprise, we’re also the world’s largest debtor.
When manufacturing dies, the economy goes with it.