Tom Piatak

August 19, 2008

While our leaders ponder the burning question of how deeply into the Caucasus we want to extend NATO, evidence continues to mount that the economic strength that allowed America to triumph in the Cold War, and that has allowed a large American middle class to flourish, is continuing to ebb away as a result of globalism.  Yesterday Louis Uchitelle reported in the New York Times that the decline in the dollar has brought about an increase in American exports, but that this increase has been largely limited to an increase in commodity exports—Uchitelle cites “corn, wheat, ore, and scrap metal”—and not a corresponding increase in the export of manufactured goods.  One of the reasons for this is, as Fanklin Vargo of the National Association of Manufacturers relates, that “We have achieved a worldwide manufacturing base, and we are not going to shut down our factories overseas.”  Indeed, the percentage of multinational corporations’ operations taking place in the United States has declined from 75% in 1999 to 70% today.  An increasing reliance on commodity exports is not a formula for either political or economic strength, and our leaders would be well-advised to focus on preserving our manufacturing base and the middle class manufacturing helped create, rather than indulging in the fantasies of globalism.