U.S. manufacturing

It's Okay To Lose Your Job Since You Can Always Buy "Stuff" From China.

Steven Capozzola — Wed, 24 Oct 2012 12:00:03 -0400

Here we go again. In the Washington Post's 'Wonkbook,' Dylan Matthews trumpets the tired old canard that American consumers benefit from the low price of Chinese imports.

Matthews cites a University of Chicago study that tried to estimate how Chinese exports have affected the cost of living for low-income Americans. They found that non-durable goods from China comprise a much bigger share of low-income Americans’ spending than that of wealthier U.S. consumers. Because of this, "from 1994 to 2005, inflation among poor U.S. households grew 6 percentage points slower than among rich households."

Basically, the study is saying that poor America shops at Wal-Mart and CVS. And this is great because those folks can buy low-cost goods there.

It's a great, simple theory. But it also overlooks the overall ramifications of an increased reliance on exports. The wider long-term national cost of our mushrooming trade deficit with China is closed factories, lost jobs, and stagnant wages. In fact, the Economic Policy Institute (EPI) found that the trade deficit with China has cost 2.7 million U.S. jobs, 2001-2011.

On a personal note, I was one of those low-income Americans. When I lost my job in the 2001 recession, I was unemployed for nine months. All I could find in that time was a job at a bookstore. I earned roughly $6.50/hour. After taxes, I was earning roughly $5.35/hour. A typical, non-durable good, like the ones Matthews celebrates, was a regular-sized Speed Stick deodorant. At CVS, it cost $4. So, it was taking me almost one hour to earn the money to buy one household good.

When we lose good-paying jobs, we can’t afford to buy much of any supposed low-cost imports. To me, Matthews blog piece is frustratingly elitist.

One more example: A paper mill worker in Wisconsin is earning $70,000/year, with benefits and healthcare for his family. Thanks to China's massive subsidization of its paper industry, plus its illegal currency manipulation, he loses his job. Now, he's earning hourly wages while working at Wal-Mart or CVS. How does he support his family, pay for healthcare, put his kids through college?

Sorry, Matthews, your viewpoint doesn't hold up in the real world.

China vs. the USA: Olympic muscle and economic clout

Steven Capozzola — Fri, 10 Aug 2012 11:07:28 -0400

It's interesting to see the U.S. competing head-to-head with China for the top of the Olympic medal standings. As Andrew Weber points out in USA Today, for decades this close competition was instead the exclusive battle of the U.S. vs. the USSR.

But times have changed, and nothing confirms more palpably for the American people that China is on the rise as a world power than it's dominance in the 2012 Olympics.

Weber suggests that the U.S. will eventually gather the most medals at the London games, but until the past few days, China was leading in the overall standings.

China's emergance as a dominant Olympic power is a tangible extension of the nation's expanding economic power. With a massive industrial presence on the world stage, including a steel industry that dwarfs any other nation, and a trade surplus over the United States that hit $295 billion last year, there can be little doubt that the People's Republic is a force to be reckoned with.

This doesn't necessarily sit well with the American public. Beijing is home to a repressive regime that utilizes whatever means necessary to hold on to power. And China's leadership employs a host of predatory trade practices to ensure that it undercuts U.S. manufacturers.

When asked about China's persistent trade violations in a recent poll conducted by the Alliance for American Manufacturing (AAM), U.S. voters said they emphatically support tough action on Beijing’s cheating on currency and other trade obligations.

More significantly, a majority of voters (56 percent) no longer see the U.S. as having the world’s strongest economy. A plurality of those surveyed (31%) thought China now holds the top economic spot.

Seeing China at the top of the Olympic medal count can only confirm for many that the People's Republic is the world's new superpower. But America's democratic system is worth fighting for, and 88 percent of voters believe that it’s possible for America to have the strongest economy. In fact, 92 percent believe that it is important for the U.S. to regain that position.

The U.S. currently leads in the Olympic medal standings. But it's a tight race, and one that looks likely to prefigure a lengthy battle on the world stage between the U.S. and China.

Can Apple Start Making Their Product in the U.S. Again? The Answer Is YES.

Steven Capozzola — Thu, 31 May 2012 10:17:29 -0400

Last fall, we pondered whether Apple could start building iPads and iPhones in the U.S. Our conclusion was, YES, Apple could indeed start assembling products in the U.S.

Some key points:

1. Labor costs are not the key factor. As Michele Nash-Hoff (President of ElectroFab) and Curtis Ellis (of the American Jobs Alliance) have explained, labor is a small part (probably less than 10 percent) of Apple’s cost of manufacturing, far less than capital equipment and components. With wages rising in China, and U.S. manufacturing workers actually being far more productive, the labor cost differential become very small.

2. Apple is the rare product that competes on quality, not price. While it may or may not cost more in total to assemble iPads in the U.S., Apple is not competing against dozens of similar products. And so, retail price is not the key criteria because consumers are already buying iPads due to their unique quality and attributes, not "low sticker price."

3. Thanks to high productivity and top quality, U.S. manufacturing offers its own cost-savings and benefits. U.S. manufacturers are recognized as being the most productive, efficient, and safe in the world. A state-of-the-art U.S. manufacturing facility would offer its own cost savings by virtue of its incredibly productive and streamlined assembly processes.

Okay, so why are we analyzing the Apple production process today? Because Apple CEO Tim Cook was quoted this week at an All Things Digital Conference as saying he'd like to see his company make more components, and possibly assemble them, in the U.S.

Specifically, Cook said:

"There are things that can be done in the U.S., not just for the U.S. market but that can be exported for the world...On the assembly piece, could that be done in the U.S.? I hope so, again, one day."

There are stumbling blocks to a possible reshoring of Apple products, though. Andrew Nusca at Between the Lines says that American companies can always "go overseas for greater flexibility, lower price and sheer speed." He also cites the potential shortage of skilled high-tech workers in the U.S. who can tackle the logistical and competitive needs of such competitive, state-of-the-art production.

But these are battles worth fighting. For starters, a high-tech facility COULD produce in the manner required by Apple for rapid market response. And as for worker skills needed in such a high-tech industry, the Alliance for American Maufacturing (AAM) has repeatedly urged that the U.S. needs to prioritize such training in order to compete successfully in the 21st Century.

All of this is a battle worth fighting, and a very necessary one if the U.S. is to maintain a solid middle class economy. Apple can do it, and so can the U.S. The question is who will take the big step first?

Professor Romer Needs Manufacturing 101

Scott Paul — Thu, 09 Feb 2012 10:10:21 -0500

Christina D. Romer, the former chairwoman of President Obama’s Council of Economic Advisers, took U.S. manufacturing to task recently in a New York Times op-ed. Headlined “Do Manufacturers Need Special Treatment?” Romer suggests that support for manufacturing needs to “go beyond the feeling that it’s better to produce ‘real things’ than services.”

She’s asking the wrong question. Manufacturers don’t need special treatment. But what they do require is a level playing field.

Romer is taking the academic view of manufacturing, and that’s a problem. In the comfortable confines of a dusty textbook, her views may be fine. But in a cutthroat real world filled with competition, cheating, and harsh mercantilism, the textbook view is very limiting. Unfortunately, Romer sides with the safe, mathematical view, which means she’s added her name to the long list of economists who just don’t “get it.”

Case in point: Romer uses arcane jargon like “market failures…efficiency grounds…positive externalities” to justify her view that there is something wrong with manufacturing. In her op-ed she explains that service work is just as important as manufacturing: “American consumers value health care and haircuts as much as washing machines and hair dryers. And our earnings from exporting architectural plans for a building in Shanghai are as real as those from exporting cars to Canada.”

Really, the bottom line is jobs. Extolling the virtues of a hair salon misses a fundamental point. Manufacturing supports more jobs, and pays better, than the service industry. And those architectural plans being “exported”—how many jobs do they support, and what’s to prevent that architectural work from being outsourced as well?

Romer makes three arguments against manufacturing. First, she says that “Government intervention can be justified on efficiency grounds if the free market won’t work well.” But U.S. manufacturing advocates aren’t asking for a handout. Instead, they’re saying that we don’t have a free market at work. In reality, we have market failure. There simply isn’t a free market when countries like China violate world trade laws and act in a protectionist manner.

I admire Romer’s intellect, but I am shocked that she doesn’t see this evidence of a market failure. Our trade deficit in manufactured goods, which has quadrupled since 1998, isn’t a market failure? (Theory suggests that our trade balance should be trending toward equilibrium.) The fact that, on paper, U.S. steel and semiconductor production is far more efficient than Chinese production, but our market share is declining, isn’t a market failure? The fact that productivity of U.S. manufacturing workers has gone up while wages have not isn’t a market failure? And, the fact that dollars invested in the American economy by venture capital are producing diminishing employment returns, as Andy Grove has noted, isn’t some sort of a market failure? Only if you haven’t been looking.

Let’s consider why we need government policy in manufacturing in the first place. I borrow this from Jared Bernstein of the Center for Budget and Policy Priorities, and formerly the Vice President’s economic advisor. Bernstein says that manufacturers face barriers to entry, expansion, and innovation that no single, private firm can solve. For example:

Research Barriers: R&D can be prohibitively expensive, and hard to capture profits (e.g., advanced batteries);

Coordination Barriers: No single firm could coordinate national projects like the internet or smart electrical grid;

Innovation Barriers: Firms need help morphing academic innovations into the production process;

Credit Barriers: Markets will underinvest when returns are particularly uncertain;

Exports: Firms need the federal government to push back against unfair trade practices.

I want to especially emphasize Bernstein’s last point. Enforcing the rules of trade that we already have on the books--a key piece of President Obama's manufacturing agenda—does not mean asking for “special treatment.” In reality, China is using market-distorting practices on a massive scale. Until China halts this mercantilism, we can’t have a free market. And common sense tells us that enforcing these rules should be the status quo. It should be standard practice.

Sadly, Romer argues against the importance of manufacturing. I’d like to point her to the Brookings Institution’s Howard Wial and Jonathan Rothwell, who recently did an outstanding job of emphasizing the importance of a strong manufacturing base to our national ecology of innovation, research, and development. Similarly, there’s also the award-winning work of Wally Shih and Gary Pisano, who made this same connection in a 2009 Harvard Business Review piece. If our nation values expertise in engineering, science, and technology, it must value manufacturing.

But most egregiously, Romer completely ignores perhaps the most important attribute of manufacturing: its jobs multiplier effect. Put simply, and to paraphrase the President's former manufacturing adviser Ron Bloom, a community that attracts an auto assembly facility will also attract a Walmart. But, the opposite is never true. A typical manufacturing job supports four or five other jobs in the economy, directly and indirectly. Manufacturing plays an outsized role in our exports, and factories are often the largest local source of revenue for the public sector.

Finally, we must look at the argument that policy prescriptions are not effective. Much of what President Obama is proposing would actually undo current disincentives such as the higher taxes that manufacturers face in the U.S. (which can drive them abroad), the lack of skilled workers to fill jobs, insufficient public investment in infrastructure, and a lax overall enforcement of trade laws. The President is proposing smart policies--but they hardly rise to the level of industrial policy.

What Ms. Romer needs to do is explain the phenomenon of Germany’s thriving industrial sector. Despite strong industrial unions, high wages ($48/hour in manufacturing vs. $32/hour in the U.S.), and thick regulations, Germany is able to keep its global share of manufacturing and exports steady while China rises and the U.S. falls.

How does Germany accomplish this? Its economic policies are shaped around supporting manufacturing. The United States, with better access to natural resources, immense human capital, and breathtaking entrepreneurship, should be outperforming Germany on a per capita basis, but we are not.

Fortunately, President Obama appears to have rejected Romer's advice. If not for any of the above reasons, then for this one: from a strategic (though perhaps not economic) point of view, the U.S. does not want to depend on China to supply our military with parts, computer chips, rocket propellant, surveillance equipment, or anything else, really. If we lose the capacity to manufacture any of our key national security components, we really will have no choice. And China--which has ignored Romer's advice--will have won this argument, which is far from academic.

OUT: Outsourcing. IN: Insourcing.

Scott Paul — Wed, 11 Jan 2012 16:50:48 -0500

Insourcing. That’s at the top of my trending list for 2012. But, how do we make reshoring—bringing job back from overseas—real? For America to have a thriving economy and lower unemployment, we need to create more good-paying jobs. And to do that, we’ll have to win back some of the jobs that have been shipped overseas for the past decade.

President Obama, to his great credit, gathered about a dozen businesses and many more experts at the White House to strategize on how to bring manufacturing jobs back to America. Within the past year, major consulting firms have published a litany of reports urging businesses to take a look at reshoring. This week, the White House issued its own report.

There is no doubt that some progress has been made. American manufacturing jobs have grown over the past two years—the first time that’s happened in more than 15 years. Our nation gained 23,000 manufacturing jobs in December alone. Other manufacturing indicators—sales outlook, growth in output—have also been in consistently positive territory. The Center for Automotive Research predicts that the auto industry and its suppliers alone could add 167,000 American jobs over the next three years.

Here are five things the President should highlight in the State of the Union address to ensure that the significant trickle of reshored jobs becomes a genuine trend:

Adopt insourcing tax incentives, such as extending a domestic manufacturing tax credit for clean energy and enlarging a deduction for US manufacturing activity. Also, improve the research and development tax credit by making it more generous for innovation that is actually commercialized in America. Finally, adopt a federal tax incentive for companies that reshore high-paying jobs.
Work to balance our trade account by continuing aggressive trade enforcement, where a major hat tip should be given to the Obama Administration for its support of domestic industries. But, the Administration must also work to stop China’s currency manipulation and lower our record trade deficit with that nation.
Invest in infrastructure to make our economy more efficient, our businesses more competitive, and to create some demand for manufactured materials.
Apply Buy America laws to make sure that our manufacturers get a reasonable preference for federal procurement on everything from commemorative wristbands to major bridge reconstruction. The Department of Transportation does a good job of applying the Buy America laws on the books, but other agencies need to step up, and loopholes need to be closed.
Invest in our workers to ensure we have skilled human capital on the factory floor, in the research lab, and in the executive suite. Our educational system is built towards guiding every child into a four year college and every MBA onto Wall Street. That shouldn’t be the case. We must rebuild our vocational education system from the ground up, or we will never make manufacturing great again.

There are also factors beyond our control that can help—or hurt—these efforts to reshore jobs: namely, the value of the dollar, shipping costs, and consumer preferences. But, if you think we can’t be a manufacturing powerhouse as a high-wage nation, then think again. Germany, where average manufacturing wages are in some cases double that of American wages, has balanced trade with China (we have an annual $272 billion deficit) and over 20 percent of its economy in manufacturing (we have 11 percent).

It’s clear from the job numbers, as well as voter sentiment, that Made in America is starting to make its way back. But we want reshoring to be more than a slogan—we want it to be our national policy.

Pentagon bought 1 million counterfeit parts from China

Steven Capozzola — Tue, 08 Nov 2011 13:13:13 -0500

America's defense supply chain put at risk by purchase of counterfeit, salvaged products from China.

The U.S. Department of Defense has been buying counterfeit electronic parts from China.

A Senate Armed Services Committee investigation led by Sens. Carl
Levin (D-MI) and John McCain (R-AZ) has reviewed more than 100,000 pages
of Defense Department documents along with material from more than 70
companies. Their finding: In 1,800 cases, the U.S. Department of
Defense has purchased counterfeit electronics from China. In all, the
purchases run to more than 1 million parts.

The suspect components include salvaged and recycled parts that were
"burned off old circuit boards, washed in rivers, dried on streets and
sanded down to remove identifying marks."

The components were subsequently installed in such key defense
systems as the Air Force's C-17 airplane, the Marine Corps' CH-46
helicopter, and the Army's (THAAD) missile system.

Alliance for American Manufacturing (AAM) Executive Director Scott
Paul says this sourcing from China has made the U.S. defense industrial
base more vulnerable.

Said Paul:

"We commend Senators Levin and McCain for investigating this critical
issue. The Department of Defense isn't helping our defense industrial
base when it permits sourcing from China. And now we are paying the
price in more ways than one.

"DoD has adopted a penny-wise, pound-foolish approach to trade with
China. The American people would be appalled to learn that their tax
dollars are being spent on suspect parts that put U.S. soldiers at
risk. Taxpayer dollars should be used to purchase safe, high-quality,
American-made goods that support key jobs in important industrial
sectors.

"This investigation is a good start, but to preserve our national
security, Congress must insist that DoD stop sourcing critical
components from China."

AAM has investigated concerns that deindustrialization now poses a
threat to U.S. national security. For example, research by Michael
Webber of the University of Texas at Austin found that 13 of 16 key
defense industrial sectors have experienced "significant erosion"
without any signs of recovery. Webber explored this issue at length in a
chapter of AAM's recent book 'Manufacturing a Better Future for America.'

CLICK HERE to read Michael Webber's investigation into the overall erosion of America's industrial defense capabilities.

CLICK HERE to read more on counterfeit defense parts from China.

Should GE's Jeffrey Immelt Really Be Leading Our Job Creation Strategy?

Scott Paul — Fri, 21 Jan 2011 10:06:35 -0500

There is no swifter way to alienate working class voters than to name an outsourcing CEO to lead your jobs strategy. Yet that’s exactly what President Obama is doing.

General Electric CEO Jeffery Immelt has fooled the media and the White House into believing that he cares about American manufacturing jobs. I have a hard time imagining a worse pick, unless Obama would have tapped Immelt’s predecessor Jack Welch, who seemed fine with the idea of putting factories on barges in search of the lowest wages in the world.

Let’s look at GE’s jobs record. You would have difficulty finding a company that has outsourced more jobs and closed more American factories than GE. While they have slashed their American workforce to fewer than 150,000, GE has dramatically expanded its global presence, now employing over 300,000 workers worldwide. Yes, GE has brought a trickle of jobs back to the U.S. over the past two years, but it still outsources more than it insources. And those executives at GE are not clueless—they realize the value of good publicity as it announces new hires at a time like this. But they do not devote nearly the same amount of publicity to their factory closings.

Immelt’s prescription for boosting manufacturing harkens back to the days of bloodletting as a medical procedure: bad policy with consistently poor results.

In a speech to the Detroit Economic Club in 2009, Immelt berated “Buy American” policies while acknowledging that GE lived under domestic preference regimes in China, France, and other nations. In Immelt’s mind, it is fine for China and France to require to GE to make what it sells in their nations, but it’s not OK for America to do the same.
Immelt essentially rules out any enforcement of our trade laws in his Washington Post op-ed today through a spurious claim that distorts the issue. So China can cheat all it wants, and Immelt wants us to do nothing. Trade enforcement is not “erecting barriers,” as Immelt alleges. Rather, trade enforcement is about removing distortions from the free market. Immelt reveals his true stripes with this ridiculous assertion. It’s a dangerous statement, and it demands an immediate and forceful rebuke from the White House.
Immelt supported two of the most disastrous economic policies of the post-World War II era: financial deregulation and China’s entry into the World Trade Organization with few, if any, consequences for breaking the rules.

The result of policies Immelt has supported: one-third of our manufacturing workforce gone in a decade. 50,000 shuttered factories. At least $245 billion in real wage and salary losses for manufacturing workers. Record trade deficits with China. In short, our worst decade in manufacturing history—by most measures even worse than the Great Depression.

Blue collar workers in the Industrial Heartland—swing states like Pennsylvania, Ohio, Michigan, Indiana and Wisconsin—will not be impressed. The President would have been well advised to select a business leader committed to pragmatic policies to revitalizing manufacturing. Intel’s former CEO Andy Grove, U.S. Steel’s John Surma, Nucor’s Dan DiMicco, or Chandra Brown of United Streetcar—which built an industry out of nothing—would all have been far superior choices. And, leading thinkers on manufacturing strategy like Leo Gerard of the United Steelworkers should be intimately involved.

The White House jobs council will fail unless it embraces ideas that will get our economy moving again and that enjoy widespread support. Here’s a good list for them to start with:

• Eliminate our trade deficit through boosted exports, vigorous trade enforcement, and penalties for China’s cheating on currency, subsidies and intellectual property. Congress and the Administration should approach the trade deficit with more vigor—it will make balancing the federal budget a whole lot easier.
• Investment in our nation’s crumbling infrastructure that goes well beyond the Recovery Act projects. Where’s our next Hoover Dam, Golden Gate Bridge, Erie Canal? The answer right now, unfortunately, is somewhere in China. We need to think big on high speed rail, a smart grid, universal broadband, and more efficient transportation arteries and hubs.
• Buy America policies—perfectly within our rights—that ensure tax dollars are reinvested in American workers. [http://americanmanufacturing.org/content/buy-america-works]
• Focusing on skills and training for industrial careers. Germany begins preparing its manufacturing workforce at age 16. We warehouse those kids. It’s no wonder we are falling behind.
• Revitalizing our innovation base, which is also moving offshore. We need federal investment to connect our great research universities, domestic manufacturers, and best private labs to make sure that the next technical breakthrough is not only invented here, but made here.
• A better tax structure for domestic production. Taxes for manufacturers who keep their production and income in the U.S. are high compared to our competitors. We should not give a blank slate to corporations, but rather target tax breaks to companies committed to investing those savings domestically.

Some of these ideas have already been embraced by the President and Jeffrey Immelt, but key aspects of this plan have been summarily rejected by Immelt in the past. If the President really wants a game changer on jobs, he picked the wrong guy with the wrong ideas to lead the effort.

Blowing in the Wind: Aggressive Steps Needed for Clean Energy Manufacturing

Steven Capozzola — Mon, 02 Nov 2009 16:16:48 -0500

On Friday, the Wall Street Journal trumpeted the news that a Chinese firm will be the exclusive supplier to one of the largest wind-farm developments in the U.S. and that the developer of the project would be seeking U.S. taxpayer assistance. The 36,000-acre West Texas development announced that it would purchase 240 2.5-megawatt wind turbines from Shenyang Power Group, a five-month-old alliance with operations in China.

Question: Why aren’t American firms building this clean energy project?

President Obama has made it a priority to expand U.S. production of clean renewable energy, which has the potential to create millions of new, good -paying manufacturing jobs. Aggressive steps should be considered – including domestic sourcing requirements similar to Buy America – to ensure that these jobs are created here in the U.S. and not in countries like China that have a record of providing massive subsidies to its domestic manufacturers, including to steel and glass, in order to undercut U.S. producers.

AAM Executive Director Scott Paul has submitted a letter to President Obama emphasizing the lost opportunity for domestic U.S. manufacturing. In part, the letter notes:

I am deeply concerned that if not done properly, our efforts to rejuvenate our manufacturing base in this country could be unseated by subsidized imports from countries seeking to capitalize on new demand for clean energy products in the United States, such as wind turbines and solar panels.

I was shocked to learn of the massive 36,000-acre West Texas wind farm development that will rely solely on wind turbines manufactured in China. The developer will be seeking federal tax credits and support from the Stimulus package. According to an October 30, 2009, article in the Wall Street Journal, “the project should create 2,800 jobs – of which 15% would be in the U.S. The rest would flow to China, where Shenyang employs 800 people.”

Simply put, U.S. producers can and should be building the same turbines as the Chinese firm. The WSJ cites Elizabeth Salerno, a spokeswoman for the American Wind Energy Association, who says that in the first three quarters of 2009, there were 33% fewer announcements of U.S. turbine-factory expansions than in the comparable period of 2008.

In this case, it means another lost opportunity to revitalize U.S. manufacturing.

Someone To Craft Manufacturing Policy

Steven Capozzola — Thu, 20 Aug 2009 09:57:19 -0400

Bloomberg News reports that the Obama administration may elevate Ron Bloom, head of the government’s auto task force, to a job that would set U.S. manufacturing policy more broadly.

The U.S. desperately needs a national industrial policy, including strong enforcement of U.S. trade law. Bloom would have his work cut out for him, but it could be a helpful step by the Obama Administration toward helping the nation's manufacturers.

You Either Support America’s Manufacturers Or You Don’t

Steven Capozzola — Wed, 19 Aug 2009 16:49:50 -0400

The National Association of Manufacturers (NAM) has done it again. In contrast to their stated interest in supporting American manufacturers, they’ve criticized someone who wants to strengthen U.S. manufacturing.

In a recent item, NAM praises Dan Ikenson’s criticism of Washington Post columnist Harold Meyerson. In a column fretting about declining U.S. manufacturing, Meyerson had noted that “Since 1987, manufacturing as a share of our gross domestic product has declined 30 percent.”

Facts are stubborn things, and that 30% drop-off since 1987 happens to coincide with a decline of roughly 6 million U.S. manufacturing jobs and a loss of more than 40,000 U.S. factories in the last decade alone. However, Ikenson isn’t bothered by this decrease in manufacturing’s share of GDP. He says it’s simply a reflection of the “rapid growth of other sectors of the economy.”

Unfortunately, these “other sectors” aren’t producing new jobs either.

Citing Ikenson is a funny proposition, though. He’s the same fellow who has dismissed ongoing $700 billion annual U.S. trade deficits as not having “anything to do with trade policy.” In fact, Ikenson embraces the trade deficit because “as the U.S. economy slows down, the trade deficit is growing smaller.”

Not everyone wishes for a slower U.S. economy, however—not least the 5.3 million manufacturing workers who’ve lost their job in this decade alone.

Key CEO’s such as G.E.’s Jeffrey Immelt now suggest that dismantling U.S. manufacturing is a mistake. In a recent letter to shareholders, Immelt went so far as to say that the “popular 30-year notion that the U.S. can evolve from being a technology and manufacturing leader to a service leader is just wrong.”

Immelt’s words are echoed by Nucor Corp. CEO Dan DiMicco. In an interview with 60 Minutes, the steel manufacturing executive said he favors creating “new jobs here in America, not overseas, not in China, not in Europe.” DiMicco has some actual hands-on experience with American industry and he believes that supporting U.S. manufacturing could very well “benefit the U.S. economic engine, get it started again.”

There seems to be a problem, though, when some of the nation’s leading CEO’s say there’s a manufacturing crisis while their trade association shares a different view.

Bottom line: trade deficits matter, lost jobs matter, shuttered factories matter.