Culture Vulture

For more than two decades, Americans have watched with varying degrees of dismay as the manufacturing sector of the U.S. economy – once our backbone and a source of enormous national pride – seemed destined to wither and die. Many domestic manufacturers went up market in search of high value products that required considerable expertise and skill that was less likely to be uncompetitive on labor costs alone. But for many in the businesses of making things, it seemed a dreary future of endlessly spinning around on the automate, emigrate or evaporate mantra.

But in one of the stranger twists of the seemingly “bad news” of historically high oil and energy prices, comes a new scenario, to go along with the related “good news” of greater awareness of the need for conservation and fuel efficiency. That new twist is the growing attractiveness of the U.S. as a place to make and manufacture things.

As Time Magazine put it in a recent article, at $4 a gallon for gas, suddenly the world gets big again. Shipping a container of goods from China has tripled in price in the last eight years. And really, how many trips to far off manufacturing sites in China and other parts of the Far East does the average business executive need before that starts to seem a whole lot less exotic, as well as expensive?

Cost will be the driver, of course, but if it costs just as much to ship stuff in from overseas as it does from the “Rust” belt, or even Vermont, it would seem a lot more attractive, as well as simpler to do that.

If this return of manufacturing to the U.S. does gather steam, the factories that will profit the most are those that are already highly automated, or have a business plan that relies on high tech manufacturing to lock in savings and efficiencies. There will be more jobs, we would think and hope, but the work force will have to be more skilled because their counterparts elsewhere – despite inflationary pressures – will still be getting paid a fraction of what U.S. workers would need to earn.

Still, it is silver lining, potentially – one of several that results from higher energy prices. Maybe now is the time for government officials in Vermont to start thinking about how they might want to explore cashing in on the possibility.

Posted by Andrew McKeever at 09:19 AM | Permalink | Comments (0) | TrackBacks (0)

We were glad to see that the federal government, specifically the Bureau of Land Management, came to its senses before too much harm was done and announced last week it was lifting a freeze on new solar energy developments on public lands, about a month after the original edict went into effect.
The justification for the suspension of processing new applications to build solar power plants in six Western states was that they needed more time to study the environmental impacts of solar energy, and that they were already severely backlogged with pre-existing applications.
While we can appreciate the practicality of wanting to manage an overflow of applications wisely, it’s nevertheless remarkable that offshore drilling for oil gets the rapt attention of the President of the United States, while the solar industry has to push and claw to get a spectacularly ill-timed moratorium on renewable (and non-OPEC) energy reversed. Offshore drilling has its place, but only as one of several initiatives that need to be pushed. You would have thought solar energy would have been right up there at the top.
Solar energy isn’t the magic bullet that will slay the energy predicament we’ve managed to have gotten ourselves into. Wth the connivance of Congress, the White House and the auto industry since that late 1980s, a series of opportunities were missed that could have prevented the debacle of $4 per gallon gasoline. But that’s history now. The issue is what are we going to do going forward.
Amazingly, Congress is doing its share in the dithering dance, leaving town for its July 4th break without getting around to passing an extension — an improvement of the existing legislation was probably too much to hope for — of the solar tax credit. That legislation is scheduled to expire later this year. It could stand an upgrade — an individual who wants to install a solar array on a home would only get at best a $2,000 break on a system that would typically cost a lot more than that. The credit should be augmented substantially, but given Congressional lassitude on all but the most pressing of issues, and the fact that this is an election year, simply renewing the credit for another year or two is probably the most that can be hoped for. Then, with a new administration in the white house, a fuller, more sweeping proposal might gain traction.
It’s non-performance like this that gets Congress its 13 percent approval rating, lower, by a wide margin, than that of President George W. Bush.
Solar power, like all the other alternatives, needs as much federal assistance as possible, ideally via tax credits, to help it get off the ground and develop a critical mass to become cost competitive with fossil fuels. The two lines are converging as the technology gets better, but now is the time to really pour it on, in order to break the bonds of the oil-exporting nations. Unlike biofuels such as ethanol, and especially those derived from corn, solar doesn’t offer the potential boomerang of higher prices for food or some other commodity. But neither is solar power a darling of politically powerful farm belt legislators.
Again, there is no single answer to our energy policy problem, but the fact that the Bureau of Land Management had to be browbeaten into reversing its ill-thought out policy, and Congress is dragging its feet on an obvious piece of legislation, is troubling.

Posted by Andrew McKeever at 09:27 AM | Permalink | Comments (0) | TrackBacks (0)