the table that was set for trial. and it isn't just about politics, it's about media, news coverage, the table is set for him in so many ways that all he needs to do is show up because it was this, we were already treating elections like reality tv shows. we already have a media landscape that was much more interested in interpersonal drama between candidates than in in-depth coverage of the issues. we already had democrats, a democrat using the tools of corporate branding. themselves, president obama was a fantastic brand. he used incredibly cutting edge marketing techniques and a lot of us felt there was , that behind the things that he was leading this the change and transformation that there wasn't enough change and that also help set the table for trust. >> watch after words on c-span2's book tv.

>>. [inaudible conversation] >> good evening everybody. please find your seats. thanks for joining us from this incredibly beautiful warm evening. my name is mark, executive editor at the creston these are our offices. we are happy to be tonight, this is above all a celebration of louis uchitelle and his new book "making it: why manufacturing still matters". i've had the pleasure of working with lou over a number of years as his editor and striking up a great collaboration so i like to congratulate you on the

publication, it's been an exceptional response early on in this party is meant to anchor the launch of "making it: why manufacturing still matters" . [applause] >> i want to thank you, i'm not sure this book would have happened . you're a good editor. >> thank you. so lou as many of you know has a distinguished pedigree and career in writing about america and writing about economics. for 25 years he reported on labor and economics for the new york times. before that he was a foreign correspondent for the associated press. his book the disposal of the american layoffs was an impressionist look into the long-term aftereffects of the hs realization and what you've done here is something that is i think we have to say it was very much ahead of the curve. the new press prides itself on doing books that are ahead of the curve, whether it's books on the current list,

but lou had a seat in this case. i think we were working on this together six years ago and at that point we thought interesting, a book on manufacturing. it's an essential topic, fascinating. we understood what lou was up to, who could have foreseen these types of occurrences of this topic with american politics in such an unexpected and not altogether pleasant way. but i think it does open up an opportunity to have a discussion like this and we cannot have a better interlocutor area ask you so much for joining us. and steph and lou have known each other for some time. and a long time. >> you may know jeff as a frequent contributor to the new york review of books. he is a dear fellow at the century foundation. he offered himself up for many interesting booksthe

most recent of which is a title that i like , and editor, i'm sorry. and a publisher, thank you. bad ideas, the subtitle of which i have not committed to memory but has a lot to do with the damage of the american economic thinkinghas done in the us borders and beyond so none of those books were published by the new press . >>. >> there's still time. we are very gratified to have these two gentlemen with us this evening to talk about lou's book but also to talk about the subjects that underpin it. factoring in america. >> this broader meeting for politics in the us. so we proposed to be here tonight is to have jeff and lucy for a half hour or so and to have a conversation and at that point i open up for questions and then we will break and play on the

weather and we can speak individually at that point but thanks for coming, we appreciate such awonderful turnout . >> thanks very much. it's a pleasure for me to be here with my longtime friends . he's known me longer than i've been, he's a couple years older. he's written a lovely esprit de corps. about magic and training about his own experiences growing up with manufacturing. his dad was involved with manufacturing. he thought of this as a manufacturing country. and that serves as a backdrop for this book but only a backdrop because about manufacturing, and he hopes to be talking about manufacturing in the future. it's acceptable as mark suggested to talk about manufacturing again. it hasn't been acceptable for a long time in part because many mainstream economist

that we don't have to worry about manufacturing. many observers have noted the technological development has led in inevitably two more output but fewer jobs and of course we used have more output and more jobs at another stage in our history. you're going to discuss all of that now area and its lou's book, i have some thoughts of my own on the subject of course. and i'll bring them up but i'm going to let lou do much of the talking, especially at the outset. i'm pretty hard to shut up so don't worry, i'll say something but lou, you've been really discussing this in your work for the new york times for years. >> i know, 15 or 20 years i think if my memory may be playing tricks you've been close to the subject and it turns out now you are set i press is because the reason this is acceptable again as you all know is donald trump

one a stunning victory and in large part because a man can no longer working manufacturing are disgruntled. and expectations have been ^ they're angry, they're better and they voted for trump i believe out of bitterness, obviously everything is more complicated than that. even bigger for a long time, this is the underlying factor or even the silent majority going way back. lou turned out to be prescient. lou, why did you write this book? >>. >>. >> you gave me an opening to be modest. >> i don't, i've been covering, i covered economics times for many years and i found myself whenever i could get an economic story that involved a factory or manufacturer, i did that economic story, i found that

to be quite fascinating. >> and over time, i began to realize, that every place i went, every factory i went to , eventually in a conversation with a ceo, there was a subsidy appeared and i don't say that in any negative way. i finally came to the conclusion that manufacturing is a subsidized market activity. and i think until the soviet union collapsed, we were engaged in an ideological struggle that. >> that's one of the modern, that's not made in america at all. >>. >> i came to the conclusion, i slowly realized talking to manufacturers that there was always a public subsidy

involve. of one sort or another. you couldn't, well, if you talk about, let me digress a bit. you talk about value added in manufacturing, you talk about if you take a sheet of steel is worth $100 and you step into offender is worth $120, that's $20 in value added. manufacturing in this country , generates $2 trillion a year in value added. >> it happens to be that other sectors of the economy, particularly finance grow more quickly so manufacturing's share of the economy has dropped to about 12 percent from the nearly 30 percent that was after world war, in the early 50s.

and then we went through this long period of an ideological struggle with the soviet union. they were the ones subsidizing, they were the government ran economy, we were the capitalist economy. we couldn't really explore in our own country the real nature of manufacturing. after that ended, i started to, look, i would go to a place like revere copper. rome new york. >> and i would sit there and they say love, we use a lot of electricity in making copper roles. we can't afford that electricity unless we get a break. so every year we go to the new york state power authority and we ask if we can buy the electricity at cost. at a discount, that's a subsidy. that's my idea of a subsidy. there's also, the word subsidy is not a good word. i'd rather use subsidy as

part of it but public defending. in that $2 trillion of manufacturing value added, a huge share of it is weaponry, the defense department ordering weapons and very often production for under by america clauses you get arrested, you get stopped by a policeman and he gives you a ticket, you might take a look at his car, it's probably made by a factory in america.this scarsdale, there are all fours where i live. >> i don't know what they are in new york, so we have a situation where we are able now at the end of the cold war to examine this. to say what is the nature of manufacturing and what does,

how is it made up? public subsidies are everywhere. weaponry is a big part of it. that is the defense department purchases weapons. so you have a guy like donald trump who is going to be very belligerent and so forth and that really good for the weapons industry here. and it's, but it's not necessarily good and let me digress, for the factory workers. i think that what one, factory employment and manufacturing was 19 million, that was the high point in 1979. it fell off a curve, fell almost precipitously after that. and it's now once again got down to around 10 million and it's now about 12 million people. if we increase factory output in this country, there might be, there would be an increase in employment but not to the extent, not to the extent that trumps followers

are hoping. >> and many of trumps followers art just for their families are just unemployed. they're just earning less then they earned or their factories once paid.it was in the reporting in indiana once where i was with a man who had been a factory worker. he was, he had less factory working, working in the service sector job. his wife was working in a service sector job and she turned to me as we were driving and she said my children are not going to live as well as we lived. they can't earn enough in the service sector. their salaries are high enough area manufacturing is potentially a high wage thing because manufacturing value

added in manufacturing is usually greater then value added in a lot of other industries so let me get back to trump for a second. he comes up and says i'm going to makeamerica great again . what he means is i'm going to increase production of weaponry in this country. and perhaps he doesn't say how many people will be employed, there will be very many as followers of his are going to be disappointed. that's a big, that's a big part of the current situation. there's something else that's very important here and that's civil rights. we should hold up, hold that for later. let me get back to the subsidy idea because i think that's an important issue. you're saying virtually all manufacturing is subsidized in america but you're also saying thing that's important, all manufacturing

is subsidized in the rest of the world. >> absolutely. >> that's a powerful punch that i think has to be obscured. you also said to me the other day subsidies in america are basically chaos so why don't you address what you mean by that? >> these subsidies really do not have a national industrial policy where we decide what manufacturers should be supported and where the efforts should go. we have a world in which st. louis says to a factory owner, put your factory in my town rather than kansas city and we will give you $100 million. some of this work goes up to $100 million so that, that's a zero-sum game for the nation as a whole. >>

advantage of the considerable value added that manufacture makes possible. so that's another aspect of the thing that i found quite disturbing. and then in cities like st. louis and new york as well, the manufacturing that took place in urban centers near african american neighborhoods or other minority neighborhoods, that was quite a bit. those factories, however, st. louis for example, have a general motors plant those in north st. louis that was a big employment of people in north

st. louis. where closing come work on a this factor operation only 80 miles to win seville, missouri. we will give come with our jobs in any of our factories to anyone who loses a job in st. louis factor because of our move. and many people took that offer and relocated to other factories. however, in north st. louis today there is a younger generation growing up and that younger generation might, leaving high school, mitochondria worked in a factory. it can't anymore so we have a situation like ferguson, emerson electric had factories in st. louis and near ferguson that had headquarters campus in ferguson but it doesn't factories. part of the tension i think is that there just weren't

well-paid unionized factory jobs for people in the st. louis area to go to. what bothers me is that, and i talked to a number, i went to st. louis to do the urban manufacturing because my blood brother happens to live in st. louis. my mother grew up in st. louis. my grandfather settled there in 1900. i won't get into his business but honest. i could stay with them why did the reporting. it was there that he came into contact with african-american civil rights leaders who said,, look, these factors are leaving town, they should factories are all going and there isn't the work, there is a at work for the people they leave behind. and yet these factories are being subsidized to move and

they are leaving behind a succeeding generation of people who can't get that work, the sort of work that high school educated people once could get and could earn well. there was a guy named doctor donald, a dentist who publishes the african-american weekly newspaper. he himself says his family leverage itself because his father had worked in a factor in the area for many years and had done well, but i said, why aren't their movements in the streets? and he said, well, we just don't have the civil rights leaders that we once had, or we can't seem to associate civil rights with the migration of factories out of the city. and i think you can apply that

to new york as well. trump comes along and he says to the people, well, he probably doesn't care about whether the factories are downtown or not. he's more worried about the white people or the caucasians that don't have a factory jobs. the african-americans, on the other hand, are losing the opportunity to have manufacturing and well-paying jobs right in the city. i better stop there for a second. >> one of the things, come if i got this wrong, just going back to subsidies for a moment. one of the things i think you discovered in your reporting or people were telling you that they didn't necessarily offshore to china or blu move factories o china and so forth. in order to save the labor costs. they moved for the subsidizati subsidization. >> china is a big subsidize or

of manufacturing, which is fine. general motors, for example, makes 2 million cars a year in china which it sells within china. what should be going on when obama and now trump meet with the chinese, they should be betting surface, not banging their fists. they should be negotiating that 1 million of those cars are made here in the united states and exported to china, and that would of course, that's a very hard negotiation, but it's a direction that we should be going. right now manufacturing, when you think about value-added, is only 12% of the american economy. in 1950s it was 28% and it's been a steady decline year after

year as other industries, i.e. service industries and the financial sector in particular, grew as a share of the economy, manufacturing dropped as a share. i even have a chart that shows this. jeff told me not to show charts. the blue line is private goods producing. the yellow line is at the service sector, and this great line, which was once way below manufacturing, has now passed it, and that's finance. that's real estate, all sorts of brokerage. those lines should be reversed. the government should do it. it shouldn't be done by dating kansas city to pay factory mortar locating kansas city rather than st. louis. it should be done with the

national industrial policy that distributes the subsidies in some coherent way. i'm afraid -- well, i'll stop there. >> i'd love to get to that because we need to get to your proposals for restoring at least to some extent manufacturing bulimic of activists of rights issue which is very provocative. especially urban blacks lost the possibility to get decent jobs with only a high school education. what made trump's election made very clear is that whites also lost, and we have known in the data, we've been talking about it a long time. whites also lost the opportunity to get good jobs with pensions that were sustainable and permanent for the same reason, and they are angry as heck. >> yes. >> so i think one of the great errors, and i am surely among

the last to know this because a lot of people, one of the errors of the clinton campaign was not to recognize the white component of this decline and address the needs of the white people in the rust belt. as as a person who is writing at child poverty, i'm writing about blacks in the city, but talk a little bit about white loss of jobs. >> i didn't understand myself in the years that i traveled a lot in the midwest. i don't know why i traveled so much in the midwest. i always found excuses to go to the midwest to do whatever economic story i was doing, but i kept running across, i would go always to the union. well, let me put it this way. every time i visit a factory, within a mile of the factory was a local union headquarters, and the factory workers at the end

of the shift would come into the union headquarters to talk. there was actually beer there and there was a lot of conversation and the unions played a role in representing them. but as the factories disappeared, as the unions weekend in membership and as a factories disappeared, all that also disappeared. now, where am i going with that? i think the union membership has plummeted. i think when you to have, in order to have resurgence in manufacturing in this country we really need a resurgence in union membership. because the two go together. and in the negotiating of subsidies for manufacturing, the union should be involved in th that.

>> so what do we do? what are your proposals about restoring manufacturing? you're talking about a national industrial policy. you write in the book about having actual goals to increase manufacturing share. i think getting back to your civil rights issue, i do find this fascinating though i regret the left-wing of america seems to have ignored what seems to them right wing whites who are suffering. in economics generally there is, i would call it something of a prejudice, but i skepticism that subsidizing manufacturing makes sense because it's an inefficient way to deal with the economy. there are better ways to deal with it. let it decline, but other industries take their place. when you have a civil rights issue as lou brings up quite

successfully, you talking about i kind of negative externality to the decline of manufacturing. you are creating poverty which in turn in william wilson's terms leads to an isolation, not a culture of poverty, an idea that i am particularly, that a particularly dislike, but a concentration of poverty that leads to social isolation which reinforces the so-called pathologies of the inner city. so why not invest, even if it's inefficient in manufacturing, to prevent that from happening because that festers? that's my own thought and i want to piggyback on -- >> the investment has been so localized that it's counterproductive. it doesn't increase manufacturing to spend $100 million or give a factor $100 million to come to one down rather than another.

the national policy should set goals. the subsidies should come entirely from the federal government. they should have some job goals involved. there should be unionization. afl-cio union should represent factory workers. they should be a public discussion of what is going to happen if we don't bring back manufacturing. i think of it this way. we can live through it in our generation and our children probably can live through it, and i'm not sure about my granddaughter who is here, but we're going to get to the point where right now we buy stuff from china. we pay china in dollars. china takes the dollars and invests them in treasuries, u.s. treasuries and securities, and

we then take the dollars that invest and go back and buy stuff from china. at some point, i'm using china, asia, at some point there's going to be, the chinese are going to say no, there's going to be a shift from the dollar as the international currency to something else a is the international currency and that of course happen between world war i and world war ii with the pound, the british pound and the u.s. dollar. when that shift takes place, what are we going to do? we can't pay, we can't import with dollars as easily as we could. we will either have to go back to making stuff ourselves or we will decline as a nation, as britain did, for example. >> let's get to your proposals.

>> oh, good, the gin. [laughing] >> that's hard, the proposals. >> my rediscovery government at the foundation is doing a conference in washington on this and we would love to add your proposals starless on june 13. i know -- [inaudible] >> i know you have an objective increasing manufacturing to a certain proportion of the economy. so go through, if there's an election campaign that the two candidates are running, one should be saying manufacturing measured as value added his own 12% of the economy here my proposal is to raise it to 18 or 19 or 20% of the economy, which is more or less where it is in the european countries. it's higher in asia, north of 30%.

if i were a candidate i would propose doing that. i would say no more, i will pass a law that says no more competing one city against another. all subsidies have to be channeled through a federal agency which decides who gets what and with the goal of increasing manufacturing as a share of the economy back u to 9 or 20%. i would leave out the jobs part of it. i would have to say that manufacturing employment got to 19 million in 1979. that was the high point in the post-world war ii period and that it dropped to 10 million edits come back up now to about 12 million, and you hear the candidates talking about raising employment in manufacturing from

its present levels without ever mentioning how high it once had been. i would not try to force employment into manufacturing. what i would do, and i'm afraid trump mentioned it, i certainly didn't vote for him and i don't think he can bring it off, but the best way to raise employment is through public works. we should build a high-speed railroad between new york and san francisco. that employment -- that is employment intensive. trump said things vaguely about that. he certainly isn't rushing to do that. he's cutting taxes for people instead of raising them. we should be having a much more progressive income tax, and he's very vague about what is going to do as far as public works are concerned. yet he want i think on that score.

he held out the promise -- he won -- particularly to non-hispanics of giving them work. one in manufacturing and two in the nonexistent public works projects that he talked about. you don't hear him talk much about this project but that would be a source of employment. >> let me ask you about a major concern of people. if we subsidize a lot more won't there be retaliation by other nations, a trade war that could lead to -- >> well, if we decide we have to, gm, we forced gm to make 1 million of those cars here and ship them to china instead making 2 million cars in china, that's the beginnings of a trade war. i don't have, i think there has to be a recognition answer has to be a negotiation.

the larger problem is that we have the capacity to make much more in factories around the world man the buying public will have to purchase these things and perhaps we have to subsidize purchasing. >> you talk a little bit about -- declining manufacturing left us without the skills. >> i'm very skeptical about the skills this is and i say so in chapter two. i think almost any skill can be taught to someone with a high school education, and there was a time when that's the way it was. my father got out of high school and he became a broker, textile broker moving fabric from one factor to another.

other people, when i go to the factory and talk about a skills shortage i often get people in a factory supervisors rolling their eyes. i have yet to find a factory that cut a shift because of lack of skilled workers. they find ways to train them. people get trained on the job or they get trained in junior-college courses. there's ways to train workers. >> we are particularly bat at apprenticeship programs here. germany, to take one example com, istickled that added and te a manufacturing dynamo, although i think they use their own federal policies to suppress wages. but don't you think apprenticeship would help us in america? >> it would be a wonderful thing. again over the years that were more apprenticeship programs 20

years ago than there are today. there are now attempts at apprenticeship programs. in fort wayne indiana for example, it took all the vocational high schools which were in a sense apprenticeship programs, have closed across the country but in some cities, cincinnati, for example, the indianapolis area they had sort of combined high schools of open. they are essentially vocational training with enough work so that when you finish the high school, if you want to go to college you can do so. these particular vocational high schools are sort of central schools. people are bussed in. they're supported by six or seven school districts and children are bused in from these

different districts, the ones that want to go to get this vocational training. some of those people i get the vocational training also go on to college but the majority don't. these are very well-equipped schools. this one has an airplane and it that you dismantle and you put back together and cars and all sorts of equipment that's rather expensive. when i went to high school we had shop class and women had home economics. i learned to print. i mean i learned to print the declaration of independence because it didn't seem to recognize -- but you get the idea of working with your hands. that sort of thing is disappeared from high schools all over the country. >> manufacturing jobs have come back in the last couple of years to some degree. >> very slightly. they are back a little bit. i mean, the politicians talk about manufacturing jobs.

they are up 500,000. of brahma -- obama promised racing i've hundred thousand a navy was million, i've forgotten, but they're coming back from a very low level. at 19 billion, and it's a low level for something that has the value added, the ability to generate a lot of income. >> so what did you see as the future then for this nation and this economy? do you think there's any chance that government would do what you would like it to do as a vigorous manufacturing policy or is as futile? >> i think trump is too crazy or too dangerous. he's a start, a very bad start, but the next president should say look, we do need more factory jobs. it is true, i mean, if you look

at some of the numbers, african-americans are not paid as well as caucasians are, if you will, but their rate of increase in wages for african-americans has been greater than it has been for caucasians, white people, working people. i think we have to have a policy that slowly trains people. i think we have to use national industrial policy to raise factory production to 18 or 19% from the present 12%. we should go back to shipbuilding, for example. we make none of the container ships that bring over all this produce. we once did. we make warships but we do not

make civilian cargo ships of any nature in this country. the last one closed in new orleans. i think we have to slowly, through apprenticeship programs and through the next presidential candidate has to say, my goal will be to raise manufacturing measured in value added to 15% of gdp from the present 12, or 18% of of gdp from the present 12. and that's where it is in most countries. we will object to the wasting of public money in getting a factory to locate, to relocate from one city to the other in this bidding process. we will force money, we will channel money into raising national output. trump didn't have the sense to do it. i don't know how, bernie sanders i think might have but he didn't. i personally would've voted for

sanders. i voted reluctantly for hillary clinton. i think she more or less had some of this in mind but didn't get very far with it. i'd like to see a trump like person from the left get up and say here's my goal and here's how i will use public money to do this, and i won't just do it with weaponry, which would you make plenty of in our factories. i mean come he almost is under pressure to start a war to make use of all the weapons he's making. go ahead. >> does it make sense, i think probably -- i don't see market. here he is. i'm looking for time. [inaudible] >> i think what is the think you're saying is that our subsidy wars. >> yes. >> and there's of the world, as opposed to come at the art form of trade wars and we should recognize those.

>> yes. >> and we should fight them better. so that to me would be a provocative proposal that i draw from your book. let me leave that as -- >> we should be making come again, going back to gm, gm, it's a company we build out. it should be making 1 million of us to million cars that it makes in china should be made here and shipped to china. how do you do that? well, barack obama, trump, trump successor, somebody has to sit down and negotiate that deal. there will be compromises. maybe it will be 500,000 cars that gm will be required to ship from here, but that's the way we would go. we would slowly build up, we should use the numbers. we would slowly build up manufacturing to 17 or 18% of gdp using those numbers,

nevermind the 31%, 30% or more in places like china and south korea. >> one other point about this and then i will let it go. the wto is proposed to end the subsidy wars. some people think it's operated mostly in favor of america, but i think, you know, and i borrow from people like danny rodrick here, and economist who writes interesting about this stuff, we need a looser arrangement to allow subsidies, nations to promote certain kinds of manufacturing investment that they couldn't otherwise do. and we had a looser arrangement ironically under bretton woods. >> and when the world -- >> why do we finish up on that. >> i was going to save the wto in some magic way says we don't

recognize in, we don't recognize subsidies, that they are outlawed in free trade. they are not outlawed they are there all over the place and somehow or other the wto doesn't see them. so it would be helpful if the wto said the manufacturing runs on subsidies and on public money, i.e. the thin spending and that -- defense spending and let's recognize that as sort divvying up who gets what. and will be, we might get a workout of that. i mean, i don't know quite how we solve this problem, but we don't even face it right now. >> let me sum up by thanking you for writing what i think is a lovely discourse that i'm glad will make it into the public conversation. it's from the heart. lou does one of those things that people don't do very often

anymore. he actually goes

when i visited in michigan and they were building a chemical plant with government money, and

we make in china what we sell in china. we are just not going to export and less we have to. well, he shouldn't be allowed to do that. he should make an american more of what he sells in china. he shouldn't have come in china, 13 factors which is what dow chemical has plus a research center. does that answer your question? [inaudible] >> the nam stuck in the middle of these guys and its dominant members are dow chemical and ge at all these others, and it's shifted with them. it's the great to pre-trade agreements. it never raises the issue of how much manufacturing should be done in america. it used to but it never does anymore. >> they also are not favorable to unions. >> well, that, too.

>> i want to point out that the polling for the election was polling the wrong people. up until the last minute hillary clinton was winning. they didn't poll the tens of millions of working people who were worse off than they were ten years ago, 20 years ago, or that their parents were. those of the people they uphold because those of the people that voted for trump. now, you want to increase the percentage of manufacturing, the percentage of the amount in the united states. what will that accomplish? there's a manufacturing, more and more production with fewer and fewer workers. you can't reverse that.

now, back in 1931 in the middle of the depression came from an article, john maynard keynes -- i know you know. [laughing] saying that -- [inaudible] fifteen hour workweek. even in the middle of the depression he saw that, but aristocratic preferences come he wondered what the working class would do with the rest of their time, not realizing they could appreciate all the cultural and wonderful sports and so forth, things in life. is your point of view at all reflect what keynes thought in

the middle of the depression, 1931, the prospect of how much employment manufacturing can result in, and if it's more and more automated then it's not going to result in a lot more. and then there's also fair trade, specialization in one area of the world, specialization in something else some other area. isn't that part of the international picture? >> look, manufacturing is just not going to solve the jobs problem. there's less and less need for people in manufacturing. i don't want to overemphasize it but the jobs solution has to be another part of the new deal which is the construction of public works, which is much more

employment intensive than manufacturing. i think we should come if we're trying to justify more manufacturing in america on the grounds of more employment, we should drop that. we should think in terms of much longer. which is the trade deficit, which is shipping away steadily over generation or two at the value of the dollar -- shipping -- i will cost us the ability to be able to import as much as we do because -- >> during the depression and thereafter until maybe the late 1970s the governmen the governmy was very favorable to unionization, and unions rose to something around 32% of -- >> below 10%. >> and they gave the union members and, therefore, by --

what should i say, other areas of the economy in order to keep the unions out, to raise wages all over the country. so that all came to an end in the late, about 1967, and decisively at the end when ronald reagan, when the air flight, the air -- >> air-traffic controllers. >> he fired him. that gave clear tolerance to every, firing every union -- >> let me just flesh out a couple of quick things that lou is written about. what is manufacturing probably has a bigger multiplier that other kinds of industries. it affects what industries. it creates more demand for goods and services. it's been documented. they can be disputed but it's been documented. that's number one.

number two, it's really hard for me, there's a chicken and egg question with unions. the union start to lose the power because manufacturing and the companies, because of the competition from japan and so forth, began to lose the dominance of their markets. so i think that was part of it. i think the legal battles by ronald reagan was part of it, but i think they're still a case to be made that manufacturing has been too little, too much ignored by the government. i think training has been too much ignored by the government. so i just wanted to add that. >> i would add that there's been too much ignored by the unions. unions are very heavily service-oriented, teachers unions or all sorts -- [inaudible] >> those of the want that a survive and we haven't had anything about it. >> go ahead.

[inaudible] >> a lot of communities are going to want those jobs. how are we going to decide how we dole them out? are there any prospects of raising wages in the service sector significantly so there's not such a big gap? >> well, if we have a national industrial policy, that will be an endless political discussion of who gets what factories, where they go, and then there will be the question of the service sector. they should be represented also but for a different reason. but the national industrial policy first has to be, that has to be set first. that has to be the first order of business i think, and that should be the pacesetter in salaries even for the service sector. i mean, that's a sort of simple answer to it.

maybe you want to add something? [inaudible] >> a further comment. >> the places where trump one, not in the big city but in the places he won, the smaller towns, one in four private-sector jobs right now is manufacturing jobs. so preserving manufacturing is still very much about jobs in the parts of the country that we don't we spent a lot of time in. then one more question i have is, manufacturing role in innovation. i think a shared problem is not the manufacturing if a productive but that productivity has lagged as a nation because companies are not investing as much and manufacturers tend to invest more in new products, new technologies and that raises wealth and we really kind of lost that. >> there used to be a rule he put a factory near the research center and it took which in fit

it and take it across the street to the factory and tried it out and then you went back to the research center. that still exist to some extent in a few places, but it's more, it's a dying idea. >> i want to thank lou and jeff and i want to say this conversation hasn't ended. we can get more informally and most and poorly we have books there if you like a copy, and thanks to you all for coming out. [applause] >> thank you, lou. [inaudible conversations]