Report shows Michigan economy in 8-year depression

The American Manufacturing Trade Action Coalition (AMTAC) has released a new report titled “Michigan’s Worsening Eight-Year Depression: Paying the Price for $1 Trillion in US Auto-Trade Losses” prepared by Dr. Charles W. McMillion, President and Economist in Head of MBG Information Services.

The report analyzed Michigan’s economic performance and showed that Michigan’s job losses from July 2000 to July 2008 are worse by percentage than the US job losses suffered during the first eight years of America’s Great Depression. 1929 to 1937. It also showed that Michigan experienced worse gross domestic production (GDP) growth from 2000 to 2007 than the United States during the Great Depression of 1929-1936.

“Michigan’s economy is in a long-term depression. The collapse of manufacturing, particularly the automotive sector, is the primary cause,” said AMTAC Executive Director Auggie Tantillo. “America’s current financial crisis and Michigan’s economic woes are no accident. The United States cannot have a trade policy that causes a $2 billion daily deficit and the loss of nearly 4 million good manufacturing jobs in eight years without tearing out a pillar that underpins the economy. By effectively eliminating manufacturing from its economic growth equation, America has become too dependent on the financial bubble to maintain prosperity. To recover and ensure sustainable economic growth, America must have a vibrant, wealth-producing manufacturing base that offers strong middle-class jobs with critical benefits for workers.

“The fastest way to revive Michigan’s struggling economy is to boost manufacturing. It won’t happen unless America fixes its broken trade and manufacturing policies,” said former AMTAC Co-Chair Bob Fogarty.

Noting that a threshold issue for any manufacturer is where to locate production, Fogarty said, “Trade policy decisions made by the federal government determine whether companies will choose to produce in the United States or elsewhere. Michigan simply cannot compete for jobs when Washington policies send producers overseas. If we implement policies that encourage companies to produce in America, Michigan’s large and skilled labor pool will allow the state to compete for jobs on a level playing field.

Finally, the United States cannot increase its production and solve its trade problems without fighting the predatory trade policies of countries like China, Korea and Japan. A good start to accomplishing this task would be to: 1) require reciprocity in all trade agreements, including labor and environmental standards, 2) pass anti-currency manipulation legislation sponsored by U.S. Senator Debbie Stabenow (Michigan ), 3) aggressively enforce U.S. trade laws, 4) eliminate disadvantages to U.S. producers caused by border-adjusted foreign taxes such as value-added taxes (VAT) or general services taxes (GST), and 5) reduce US dependence on imported energy.