Made in America now a strategic matter
For the last two decades, America’s political and economic elite have talked eagerly of “globalization.” But now the tide has turned. Suddenly, everybody is talking about “deglobalization.”
Deglobalization means focusing on making things here at home in America. It means reducing our dependence on hostile powers such as China for strategic goods. It means not relying on dirty, polluting, unreliable, overpriced ocean vessels to transport every screw, nut and kitchen appliance across 6,000 miles of ocean before we buy it.
Most of all, it means investing in the industries that create good jobs at home, for American workers and their families.
For years, politicians promised that globalization would make America rich, provide cheap imports and lead to democracy overseas. Economists claimed that Americans would “move up” the economic food chain and into hightech jobs. And they pledged this even as millions of Americans in the heartland lost factory jobs — and could find only alternative part-time work in big box stores and restaurants.
But now, globalization has suffered three hammer blows in quick succession.
First, the COVID pandemic left Americans scrambling for personal protective equipment, drugs and ventilators.
Second, after the United States began to emerge from the pandemic, we found that global supply chains were so screwed up that car companies could not get parts — and had to lay off workers.
And third, Russia invaded Ukraine. Now the world faces new shortages and price hikes for three vital commodities: oil, natural gas and wheat.
In the wake of these disruptions,
leading figures on Wall Street are suddenly
speaking out — and calling for deglobalization. Influential
investor Howard Marks of Oaktree Capital Management observed that, after 30 years, the “pendulum of globalization” is now swinging in the other direction — toward onshoring and greater national selfsufficiency.
Marks recognizes that offshoring has “led to the elimination of millions of U.S. jobs and the hollowing out of the manufacturing regions and middle class of our country.” He hopes that reshoring will “increase the competitiveness of onshore producers and the number of domestic manufacturing jobs, and create investment opportunities in the transition.”
Meanwhile in Washington, members of Congress on both sides of the aisle have been calling for a reversal of globalization. Sen. Marco Rubio, R-Fla., labeled globalization a disaster, and observed that “lower prices alone can never make up for the fact that you lost the stability and dignity that comes from a good-paying job.”
Sen. Sherrod Brown, D-Ohio, also criticized globalization. Following recent factory closures in Ohio, he said, “Corporate greed … left us reliant on other countries — too often our economic competitors.”
Globalization is regression to a global mean. In other words, it drives down U.S. wages, toward the global mean wage.
As the pendulum now swings back toward deglobalization, Washington must overcome a multinational mentality favored by the corporate elite. A renewed emphasis on national self-sufficiency and higher-wage jobs is the only certain means to ensure America’s future prosperity.