That wailing siren you hear this Memorial Day is a national security alert set off by the U.S. Senate Armed Services Committee. Their investigation into counterfeit electronic parts “uncovered overwhelming evidence of large numbers of counterfeit parts making their way into critical defense systems....And, it found overwhelming evidence that companies in China are the primary source of counterfeit parts.”
The gaps in the U.S. Department of Defense’s knowledge base and the reliance on a supply chain of unvetted independent distributors of electronic parts are just the tip of iceberg. The problem isn’t just about reporting; it’s the fact that the health of our manufacturing base and our defense industrial base are inextricably linked. And, as the Industrial Union Council’s (IUC's) "Manufacturing Insecurity" study makes clear, both are in critical condition.
The nation’s technical, innovative and industrial capacities are essential to our economic and national security. Most would be surprised to learn that the percentage of manufacturing jobs lost over the previous decade is worse than the Great Depression. A decade of record trade deficits, the closure of more than 50,000 manufacturing facilities and the loss of 6 million manufacturing jobs are measures of our nation’s diminished industrial and innovative capability.
None of this happened by accident. Other countries have a manufacturing strategy that represents their national interest in generating jobs, income, industries and technology. They back it up by aligning their trade, tax, training and investment policies. We do not. Instead, we are told that under our system consumers win, you can’t pick winners, and Buy America laws are protectionist. In other words, our competitors have a strategy and we do not.
Actually, we do have a strategy, a perverse, offshoring one, designed by Wal-Mart, Wall Street and transnational corporations that is devoid of U.S. interest. After our nation took this wrong turn, it led to the decline of manufacturing. In a recent speech to the Center for National Policy, AFL-CIO President Richard Trumka identified the consequences:
First is the direct loss of jobs, purchasing power and tax base. The second threat is our diminished capacity to meet our own national defense manufacturing needs, especially in times of crisis. The third threat is the vulnerability of our economy to supply chain disruptions arising far from our shores.
It doesn’t have to be this way. In a nation that spends nearly a trillion dollars a year on defense, we should expect to know where our parts are made. We should not be surprised when global supply chains are interrupted by tsunamis in Japan or by the Chinese government cutting the supply of rare earth metals. Our trade, tax, investment and procurement policies, the globalization of production and the failure to have a national manufacturing strategy have helped create this situation.
What we created can be fixed. There are lessons to be learned from other nations. There are needed investments in our public and energy infrastructure that will create jobs while making us more competitive. There is common ground to be found in "A Charter for Revitalizing American Manufacturing" for action on trade, taxes, training and investment. And there is a truth to be remembered this holiday.
Sustainable prosperity in this world rests on national manufacturing capacity. So does our national security.