An American Lion

Elbe River, Dresden, GermanyI know that I tend to harp on small business issues--I don't pretend to be the "expert" that I would normally pretend to be on most other issues. I think this is a very, very good example of what I'm talking about when I say that we need small businesses in this country to be unleashed:

My wife and I have a small company (just above Kenmore Air Harbor on Lake Washington, FWIW) that designs and develops high tech embedded electronics devices- most recently a computer to monitor scuba diver's gas saturation. But it could just as easily be medical devices or products for any specialized industry not large enough to be on the radar of an Apple or Samsung. There is considerable economic activity at this not-mass-market level. We are engaging in entrepreneurship in a way that would not have been conceivable when we started our careers (we're about 60). We design on very capable computers, we can access vast technical information databases online, we can send files over the internet and have finished circuit boards to test in days. We make products that can compete technically with the biggest companies, but just address smaller markets. We are a technology version of the family farm. We could be ads for the new "knowledge based" economy. Yet businesses like ours are threatened by the collapse of US manufacturing capacity. 

Why? In the short term, because businesses at our scale, dealing in the thousands and not millions, need skilled assembly that can be done locally, we need skilled machinists and prototyping facilities to be available here, not on the other side of the world. The personal interchange and creative interaction that comes from a designer working directly with those who do the manufacturing is invaluable. The best designs come from working closely with those who know intimately the processes that go into creating the product. 

In the longer term, losing manufacturing is a path to losing our creative edge. It's a fantasy to believe we can educate some kind of technical elite absent a connection to the physical reality of making things. The kind of technical secondary education common in Europe, yet almost absent in the US, creates people who do know how to build things. Some of them will have great ideas, and will put them into practice. Meanwhile, I watched my daughter's high school drop all shop classes rather than modernize them, and ramp up "technology" education- mostly by teaching kids how to use Word and Excel. This is so profoundly wrong as to bring tears of frustration to this high tech entrepreneur. Not everyone in society is destined to be a designer or developer. We need skilled manufacturing for a healthy society and economy, and that takes workers with the right skills. 

Andy Grove got it right in his recent comments: losing manufacturing jobs puts at risk both our society and the wellsprings of our creativity.

That all comes from a post by James Fallows, who has been following the issue of manufacturing and small business creation, albeit from a more "international" perspective than I have been following these issues until recently.

The gist of the post is, why aren't we training more young people in the vocational arts? Why aren't we sending more of them through schools that teach them useful skills?

Allow me to inform you that there is a prevalent attitude in America, one that says "my kid is too special to go to a vocational school." Yes, your son is bright, all right. He's bright enough to get D's at a state college in Party Town all the way upstate, but maybe, just maybe, we'd all be better off if he was getting B's at a school that taught him how to fix cars with a computer or diagnose problems with a piece of fancy medical equipment. Really, how much is his Business Administration degree going to be worth when he's graduating after five and a half years, all fattened up and stupid from being falling down drunk in the quad every Tuesday night?

Now, as a practical matter, I want to see the couple making that particular product succeed. I don't wish upon them Microsoft status, but I think that they should be allowed to make a fantastic living, create a solid company that employs a few dozen or even a few hundred people, and they should be able to sell it if that's the right path to take and they should have a partnership arrangement with their state and local government as well as the Federal government. Certainly, they should pay taxes and be a good corporate citizen. Government, on the other hand, is there to help deliver infrastructure to their door and to keep things running in the place where they are located (sell libertarian nonsense elsewhere, please).

The Federal government has decided to get into the health care business. Good for them. Now, let's hope that the health care costs of this small company are not ridiculous, bloated, and confiscatory.

Overall though, simply making things isn't enough. There are very good examples of how being able to make wonderful things have helped here in Germany. The problem is, Germans don't consume and spend as much as they hope or expect others to consume the goods that they make and spend on the services that they provide. A society cannot be all one or the other; you can't be a simplistic manufacturing society without also having a robust consumer mentality and the ability to convince people to buy things even though times are a little tough.

I keep revisiting the idea of austerity, and yes--if you simply stop spending money, your austerity affects others. People who are hoping for consumer spending to be there are going to go without it. I do think profligate spending and reckless financing of debt are what we need to get away from. We certainly do not need more companies that exist solely to refinance the debt of people who spent too much for a decade and never cut back.