An economy is like a pyramid. Its base is manufacturing and mining and the superstructure above the base is services. e.g., banking, insurance, accounting, legal, etc. These services go to where the manufacturing and mining are. If a country loses is manufacturing and mining, the service industries will eventually be lost as well. It is a well known fact of physics that when the center of gravity moves over the base the entire structure will fall. Remove manufacturing and mining and there is no reason for the services to exist. Everything tumbles down.
Our country has given up too much of its manufacturing and mining base and we need to get it back, and there are reasonable ways to get it back. We need to get creative in how we tax manufacturing and mining companies. For example (and some competing countries do this) we change the tax code to give 100% tax credits on the products that are manufactured or mined in the US that are exported to other countries and increase the taxes on products manufactured or mined in other countries that are imported by the US. Another example, how about meaningful tax incentives for those companies that invest in plant and equipment. How about improving R&D and training credits for those companies willing to invest in innovation. There are a myriad of other ways to bring manufacturing and mining home. We just need to get creative.
There is a major stumbling block in our way to bringing manufacturing and mining back home that our creativity will need to address. The CEO’s of our public companies are myopic. They can not see farther that the next three months and, certainly, a year is a very long time for them to look. (If questioned, those CEO’s will say “but, we have a five year plan”. Sure they do, but their plan is just like a battle plan in war. It goes out the window as soon as the first bullet is fired.) They are judged every time they report earnings. Two or three bad quarters in a row can cost them their job. They have little incentive to look out very far. The result is short term thinking and planning. Any incentives for them to invest heavily will need to provide bottom line sheltering to avoid increased costs and expenses that erode current profits.
When I am talking about manufacturing and mining. I am talking about TANGIBLE products. I do not include “manufacturing” software for companies like Facebook, Twitter, Snap Chat, etc. For the most part, these companies and those like them provide nothing in the way of REAL gross domestic product. They are forums for those who want to brag or whine about their situation. And, since we are here, there is a big to-do going on right now about misinformation on Facebook as regards the effects of the Covid-19 vaccines. If you are dumb enough to go to Facebook for medical advice, then maybe your genes should get excluded from the pool. If you don’t have a doctor to consult, contact your county health department. EVERY county in the nation has one and they are free. There will be those that will say that Facebook is the only way they have to keep track of their family and/or friends. Well, that is BS. Start your own family and friends web site. You can do everything on your own site that you can do on Facebook and without concern over whether or not you meet Facebook’s terms of service. If you have something you think the whole world should know, start your own blog…it might even be therapeutic.
Sorry (not) for the rant re: social media and coming back to economies and the US economy in particular, the increase in investment by manufacturing and mining companies will also produce a commensurately large number of high paying jobs, both within the manufacturing and mining companies themselves and the additional companies that support them with products used in manufacturing and mining. Often times more jobs are created in the support industries than in the industry they are supporting. No need to explain the effect on the economy of these job producing efforts. It should be obvious even to a casual observer.
I have only touched the surface of the need to bring manufacturing and mining home. It is important for the long term health of our nation. We are smart and creative. With appropriate focus, we can get this done.