Bobo is getting all concern-troll. In “The Lost Decade?” he gurgles that insular thinking and rigid ideas are holding the United States back from productive engagement with its most important problems. Mr. Nocera, in “Factory Field Trip,” says a visit to brand-new manufacturing facilities in North Carolina offers reasons for optimism, but it also suggests a long road ahead. Mr. Bruni, in “Doors Swinging Open,” says to meet Energy Maburutse is to get a crucial reference point for what we in America call hardship. Here’s Bobo:
If you want a big swig of despair, listen to the people who know something about the global economy. Roger Altman, a former deputy Treasury secretary, is arguing that America and Europe are on the verge of a disastrous double-dip recession. Various economists say it will be at least another three years before we see serious job growth. Others say European banks are teetering — if not now, then early next year.
Walter Russell Mead, who teaches foreign policy at Bard College, recently laid out some worst-case scenarios on his blog: “It is about whether the international financial system will survive the next six months in the form we now know it. It is about whether the foundations of the postwar order are cracking in Europe. It is about whether a global financial crash will further destabilize the Middle East. … It is about whether the incipient signs of a bubble burst in China signal the start of an extended economic and perhaps even political crisis there. It is about whether the American middle class is about to be knocked off its feet once again.”
The prognosis for the next few years is bad with a chance of worse. And the economic conditions are not even the scary part. The scary part is the political class’s inability to think about the economy in a realistic way.
This crisis has many currents, which merge and feed off each other. There is the lack of consumer demand, the credit crunch, the continuing slide in housing prices, the freeze in business investment, the still hefty consumer debt levels and the skills mismatch — not to mention regulatory burdens, the business class’s utter lack of confidence in the White House, the looming explosion of entitlement costs, the public’s lack of confidence in institutions across the board.
No single one of these currents prolongs the crisis. It is the product of the complex interplay between them. To put it in fancy terms, the crisis is an emergent condition — even more terrible than the sum of its parts.
Yet the ideologues who dominate the political conversation are unable to think in holistic, emergent ways. They pick out the one factor that best conforms to their preformed prejudices and, like blind men grabbing a piece of the elephant, they persuade themselves they understand the whole thing.
Many Democrats are predisposed to want more government spending. So they pick up on the one current they think can be cured with more government spending: low consumer demand. Increase government spending and that will pump up consumer spending.
When President Obama’s stimulus package produced insufficient results, they didn’t concede that maybe there are other factors at play, which mitigated the effects. They just called for more government spending. To a man in love with his hammer, every problem requires a nail.
Many Republicans, meanwhile, are predisposed to want lower taxes and less regulation. So they pick up on the one current they think can be solved with tax and regulatory cuts: low business investment. Cut taxes. Reduce regulation. All will be well.
Both orthodoxies take a constricted, mechanistic view of the situation. If we’re stuck with these two mentalities, we will be forever presented with proposals that are incommensurate with the problem at hand. Look at the recent Obama stimulus proposal. You may like it or not, but it’s trivial. It’s simply not significant enough to make a difference, given the size of the global mess.
We need an approach that is both grander and more modest. When you are confronted by a complex, emergent problem, don’t try to pick out the one lever that is the key to the whole thing. There is no one lever. You wouldn’t be smart enough to find it even if there was.
Instead, try to reform whole institutions and hope that by getting the long-term fundamentals right you’ll set off a positive cascade to reverse the negative ones.
Simplify the tax code. End corporate taxes and create a consumption tax. Reshape the European Union to make it either more unified or less, but not halfway as it is now. Reduce the barriers to business formation. Reform Medicare so it is fiscally sustainable. Break up the banks and increase capital requirements. Lighten debt burdens even if it means hitting the institutional creditors.
There are six or seven big institutions that are fundamentally diseased, from government to banking to housing to entitlements and the tax code.
The Simpson-Bowles report on the deficit was an opportunity to begin a wave of institutional reform. But that proposal died because our political leaders are too ideologically rigid to take on big subjects like tax reform, which involve combining Republican and Democratic ideas. The failure to seize that moment was one of the Obama administration’s gravest errors.
The world economy has many rigidities. The worst ones are in people’s heads.
Here’s Mr. Nocera:
If you want to feel optimistic about the state of manufacturing in America, you ought to spend a day with Stephen Gray. Then again, if you want to feel depressed about the state of manufacturing in America, you ought to spend a day with — yep — Stephen Gray.
Gray, 46, is chief executive of Gray Construction, a family-owned company, based in Lexington, Ky., that builds factories for big firms. As a result, far more than most people, he has his finger on the pulse of manufacturing in this country.
Not so long ago, Gray told me, the future looked grim. Manufacturing companies were canceling construction projects. The 10 or so factories Gray was building were nearing completion, yet there was nothing new in the pipeline. Gray was forced to lay off employees. The recession was taking a terrible toll.
But, in the summer of 2010, Gray Construction began to turn around because manufacturing itself began to turn around. There were six big jobs up for bid, including a Siemens factory in Charlotte, N.C., and a Caterpillar plant in Winston-Salem. Gray won them all. It now has 22 projects in various stages of development. With the two North Carolina plants nearly done, Gray asked me if I wanted to tour them. I said yes.
It is impossible not to be impressed with modern manufacturing plants like the Siemens and Caterpillar facilities. They are, first of all, immense; the Caterpillar plant in Winston-Salem, for instance, which will make gigantic axles for its mining trucks, is 850,000 square feet. Both plants use complex robotics, yet still convey the brawn we associate with manufacturing, with giant cranes that lift — in the case of the Siemens plant — the 280-ton gas turbines the plant will soon be making.
Secondly, these plants offer something that has become increasingly rare: middle-class jobs that don’t require a college degree. The jobs pay between $20 and $30 an hour, plus benefits, allowing a skilled machinist to make a decent middle-class living.
The key word, of course, is “skilled.” One reason Siemens and Caterpillar chose North Carolina is that Charlotte and Winston-Salem have community colleges that stress manufacturing skills. In Winston-Salem, Forsyth Tech, a local community college, was involved in wooing Caterpillar and created a program, in cooperation with the company, to make sure its graduates have the machining skills the company needs. Job training was part of the incentives packages that were dangled in front of the companies to lure them to North Carolina.
When I asked Richard Voorberg of Siemens why the German company chose to put its new plant in Charlotte instead of, say, China, he said that for highly skilled work, the labor cost differential wasn’t very big and that, in any case, factors like shipping costs and efficiency mattered more. “For this kind of manufacturing,” he said, “the U.S. can compete with China.” Gray Construction’s backlog of projects suggests that other manufacturers — many of them foreign companies — have come to the same conclusion.
That’s the optimistic part.
Now for the depressing part. Despite the size of the factories, the tens of millions in investments the companies are making, not to mention the millions in incentives and tax abatements that Charlotte and Winston-Salem used to land them, neither Siemens nor Caterpillar is going to employ that many people. Caterpillar is getting an estimated $14 million in incentives, yet it will employ only 500 or so workers in Winston-Salem. Siemens doesn’t expect to employ more than 800 people in the Charlotte facility. The same robotics technology that makes these plants so efficient also means they don’t need many people on the factory floor.
At the airport, on my way back to New York, I saw a headline from that day’s Winston-Salem Journal: “Lost,” it read, “108,000 Jobs.” The article was about a study, conducted by the left-leaning Economic Policy Institute, that claimed that North Carolina had lost that many jobs, most of them in manufacturing, “due in part to the trade deficit with China.”
In particular, North Carolina’s once thriving furniture industry has been decimated in the last decade. But I saw another example just down the street from Caterpillar: a Dell factory that had employed more than 900 people — and had only been open four years — shut down in late 2010. The Caterpillar factory won’t even replace the lost Dell jobs next door, much less put a dent in all the jobs lost in the last decade.
Manufacturing is terribly important. “More than any other sector, manufacturing creates additional jobs in the supply chain,” says Andrew Liveris, the chief executive of Dow Chemical, who has been pushing for a national manufacturing strategy.
It’s encouraging, for sure, that manufacturers again see America as a place where they can build things profitably. But my day in North Carolina suggests that the road back to true manufacturing prosperity is going to be a long one indeed.
And now here’s Mr. Bruni:
Like many college freshmen, Energy Maburutse is adjusting to a new world. For him it’s not merely strange. More like wondrous.
That ceaselessly humming appliance in his dorm-room window? In Zimbabwe he had never seen an air-conditioner. That sweet treat in the student cafeteria? Frozen yogurt is another first — and one reason he has almost gained his freshman 15 already. He now weighs about 80 pounds.
Most amazing to him is the electric wheelchair in which he spends his waking hours. It’s nicer by far than any from his past. Because of it and the ramps and automatic doors at Lynn University here, he can move his hunched, twisted body from place to place without constantly asking for help. That, too, is a revelation.
“I can’t stop smiling,” he told me. “I’m free.”
To meet him is to get a crucial reference point for what we in America call hardship and an example of how profoundly a life can be changed by the right intervention and the right determination. His is a miserable story that became a miraculous one.
He was born 21 years ago in a rural village in Zimbabwe that still doesn’t have electricity or plumbing. Crippled, he never walked, so his mother would carry him four hours to the nearest medical clinic. It was a trip they made often, because his bones kept breaking.
The clinic’s workers berated and even slapped her, certain she was being negligent. In reality Energy had osteogenesis imperfecta, known as brittle bone disease, but it wasn’t diagnosed until he was 5.
He didn’t know there was such a thing as a wheelchair until he got one two years later at a school for disabled children where his mother, intent on his education, managed to place him. The school was far from home. Saying goodbye, his mother told him: “Make me proud.”
He was at another such school, King George VI, in Bulawayo, Zimbabwe, when my friend Elinor Burkett, an American journalist, happened to meet him in 2006. The school’s band, Liyana, caught her attention and deeply touched her, and she got to know its members, including three disabled boys who played marimba — Energy, Goodwell and Honest.
They confessed a fantasy: college in America. It was like “an ant dreaming of becoming King of the jungle,” Energy wrote in a recent class assignment.
Burkett connected them with the United States Achievers Program, administered by embassies. It helps disadvantaged foreigners apply to, and get scholarships from, American universities.
Each boy was admitted to a school, and Burkett lobbied each school for as much aid as possible. She hit up friends, strangers and foundations for the additional thousands necessary for the boys’ living expenses, a process she’ll repeat until all three have diplomas.
People are generous when faced with concrete situations rather than abstract causes. At Lynn University faculty members and students made sure Energy got a television and a mini-fridge. One of Burkett’s friends pays for his iPhone. His wheelchair was donated by UCP Wheels for Humanity; United Parcel Service delivered it free. His Kindle he won in a card game.
Around campus almost everyone greets him by name. He stands out, given the big chair and tiny body in it. His legs are stuck in a lotuslike position; he can’t straighten them all the way. He has no idea how tall he is.
Over the years his spine has curved badly. Some of his vital organs are compressed. With painful corrective surgery he could live a long life, and he hopes to get an operation this summer, from a doctor at Johns Hopkins Medical Center whom Burkett took him to see. Now that he has medical insurance through school, it just might happen.
He studies hard and frets all the time. He can’t fail, not if he wants to realize his goal of a job as a human rights advocate — maybe with the United Nations, maybe with Unicef — and of some sort of arrangement by which he can live in America or anywhere but Zimbabwe, where there are no ramps, astronomical unemployment and unfathomable poverty.
He told me that he’s surprised by the casual work habits of many of his fellow students.
“Americans are so relaxed,” he told me. “So rich.”
He pointed to a mop leaning against his room wall. Like most mops in this country, it can be wrung by a sliding mechanism on the handle. He thinks that’s hysterical — absurd. In Zimbabwe everyone wrings mops with their hands.
He had just returned from a class in which he’d given a presentation on global warming, a phenomenon he hasn’t thought much about. In Zimbabwe other issues, like hunger, crowd it out.
I asked him if anything about his new life disappointed him. He stared blankly at me. To him, the question made no sense whatsoever.
