Wednesday, December 8, 2010

Putting America Back to Work

Our Future Should be Built on Our Past Success

Valley Railroad Bridge
The Valley Railroad was once a branch of the B&O that ran all the way to Rockbridge County.

Mcormick's Mill
Agriculture was revolutionized by Cyrus McCormick, who built his first reaper at his Father's mill in Augusta County. The operation moved to Chicago to become the International Harvester Corporation.

Fishersille Mike shares this piece: Hard Choices All Around [click to read]. The bottom line is that it is time to start making things again. He references This Article by William Gross [click to read].

"The global economy is suffering from a lack of aggregate demand. With insufficient demand, nations compete furiously for their share of the diminishing growth pie.

In the U.S. and Euroland, many policies only temporarily bolster consumption while failing to address the fundamental problem of developed economies: Job growth is moving inexorably to developing economies because they are more competitive.

Unless developed economies learn to compete the old-fashioned way – by making more goods and making them better – the smart money will continue to move offshore to Asia, Brazil and their developing economy counterparts, both in asset and in currency space."

Drive past the once flourishing DuPont plant in Waynesboro and this will soon start to sink in. Once this complex employed thousands. Today a few hundred workers make Lycra. To qoute Billy Joel: "We're all in Allentown now."

Well we’re living here in Allentown
And they’re closing all the factories down
Out in Bethlehem they’re killing time
Filling out forms

Standing in line

Well our fathers fought the Second World War
Spent their weekends on the Jersey Shore
Met our mothers at the USO
Asked them to dance
Danced with them slow

And we're living here in Allentown.
But the restlessness was handed down
And it's getting very hard to stay.

Well we're waiting here in Allentown
For the Pennsylvania we never found
For the promises our teachers gave
If we worked hard
If we behaved.

So the graduations hang on the wall
But they never really helped us at all
No they never taught us what was real
Iron or coke,
Chromium steel.

– Billy Joel, 1982

But 'living in Allentown' is not an option. The decline of the American economy cannot support our large urbanized population.

"The constructive way is to stop making paper and start making things. Replace subprimes, and yes, Treasury bonds with American cars, steel, iPads, airplanes, corn – whatever the world wants that we can make better and/or cheaper. Learn how to compete again. Investments in infrastructure and 21st century education and research, as opposed to 20th century education are mandatory, as is a withdrawal from resource-draining foreign wars. It will be a tough way back, but it can be done with sacrifice and appropriate public policies that encourage innovation, education and national reconstruction, as opposed to Wall Street finance and Main Street consumption."

Some of the developments that make American plants less competitive are not bad. American mills in the Nineteenth Century employed children, often in dangerous environments. A system that has made life better for the workers is not a bad thing. High corporate tax rates, unsustainable pension plans and redundant Federal oversight that discourages production are very bad things.

We needn't reclaim all manufacturing. We need to find opportunities to excell as new technologies develop and master their development. New processes and craftmanship should fill our vacant plants and find market share enriching customers around the world.

Producing our own energy is essential. Increased nuclear capacity must be developed along with our own oil, gas and coal resources. Controlling energy costs is essential to our future productivity.

Localized production, small and home businesses and artisan farms are part of the answer too. Less centalization of such things as food production is good and renders us less susceptable to worldwide economic chaos.

The 1904 Saint Louis World's Fair and American Superiority

This Article by Guy Sorman in City Journal caught my eye. In 1904 the robust American economy was recognized as a world leader, but Sorman quotes a study showing the American economy coming into its own by 1820! He goes on to point out how egalitarian American ideals actually created the first mass market. Joseph Schumpeter's “creative destruction” is also mentioned as a reason for economic prosperity as the new constantly replaces the old and the market reallocates resources accordingly.

That translates into new innovative technology and methods. Eventually we'll be driving hydrogen cars and seeing advances in healthcare delivery. Government mandates won't accomplish this, changing economies, innovation and market demand will.

I once did a reconstruction of the Nineteenth Century town of Ellicott's Mills, first terminus of the Baltimore and Ohio Railroad outside of Baltimore. The Ellicott Brothers had migrated from Bucks County, Pennsylvania and settled on the banks of the Patapsco River. There they convinced Charles Carroll [the signer of the Declaration of Independence] to diversify his plantation agriculture. They intruduced wheat, flour mills, limestone mining and many other innovations and that is a model of what happened throughout the young Republic.

Our real cultural diversity as a 'Nation of Nations' fuels discovery and innovation. In spite of the professed loathing of so many world rulers for our Nation, the best and brightest still want to come here.

Model
Ellicott's Mills is typical of many American communities in the Nineteenth Century. Model by Mr. Kirchman.

Sorman points out that the U.S. economy and its spirit of enterprise still set the pace for the rest of the world. We must not invoke change that diminishes that.

The First Terminus of the B&O Railroad

B&O Station
B&O Station.

Patapsco Hotel
Patapsco Hotel.

Bridge
Arch of the old railroad bridge.

Floods
Floods of the Twentieth Century.

Bridge Cornerstone
Cornerstone of the railroad bridge...

Bridge
...still carrying Chessie System trains today.


1 comment:

dolly said...

Interesting Blog! I work at the B&O, and if you don't mind, I'm going to link this on the B&O Railroad Museum's official Facebook site. Thanks for featuring us!

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