and it the notion of getting on the front page of "the new york times" or getting anderson cooper to talk about you or the number one video on youtube or twitter, these are breaking through. >> for more offer the schedule go to booktv.org. >> next, we'll larry from journalist louis uchitelle on manufacturing in america today. he wrote a book titled o'making it" why manufacturing still matters" this is an hour. >> good evening, everybody.

thank you for joining us on this illinois credibly beautiful, warm evening. my name is marc favreau. these are our offices. this is above all a celebration of louis uchitelle on his wonderful new book "making it" i have had the pleasure of work with lou as a writer and striking up a great collaboration so i'd like to congratulate you on the publication. an exceptional response early on and this part is meant to anchor the launch. [applause] >> i want to thank you. i'm not sure this other book have happened without you. >> oh, no. >> you're a good editor. >> so, lou, as many of you now, as a distinguished ped degree and career in writing about

economics. for 25 years he reported on labor and economics nor "new york times," before that he was a foreign correspondent for the "associated press." his last book "the disposable american: layoffs and consequences" a look into the long-term aftereffects of the destroyization, and here is something that is -- i think we have to say it was very much ahead of the curve. the new press pride itself on doing books that are ahead of the curve, what lit the new jim crow or books on the current list, but lou -- i think we started working on this together six years ago and at that point we thought, interesting, book on manufacturing. it is a central topic, fascinating we understood what lou was up to, but who could have foreseen the convergence 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 could not have a better interlocutor than jeff madrick. jeff and lou have known each other for some time. a long time. you may know jeff as a frequent contributor know, in review of book. the senior foal he to century foundation. an author himself of many interest books the most recent of which is a title i like -- >> editor of change. >> i'm sorry, the editor of -- >> publisher, thing. seven bad ideas the subtitle of which i have not committed to memory but has to do with the damage that american economic think can at done inside the u.s. borders and beyond. none of those books were published by the new press but that's okay.

>> so we are very gratified to have these two gentlemen to talk about lou's book and talk about the subjects that underpin it, manufacturing in america and its broader meaning for politics in society and the u.s. think we propose to have jeff and lou speak for half hour or so, and to have a conversation, and at that point i'll open it up for questions, and then we'll break into the terrace and the weather and speak individually about the book. thank you for coming. really appreciate such a wonderful topic. >> thank you very much marc. it's a pleasure for me to be here with my longtime friend, lou uchitelle. he had known me longer because he is a couple years older. he was written a lovely book about manufacturing, and he

touched to some degree about his own experiences growing up with manufacturing. his dad was a manufacturer. he thought of this as a manufacturing country, and that's the backdrop for this book but only a backdrop, because of that manufacturing in the past, but he hopes to be writing about manufacturing in the future. it's accessible as marc suggested to talk about manufacturing again. it hasn't been acceptable for a long time. in part because many mainstream economists have insist we don't have to worry about manufacturing. many observers have noted that technological development has led ininevitably to more output but fewer jobs. we used to have more output and more jobs in another stage in our history. we're going to discuss all of that now, and it's lou's book.

i have some thoughts of my own then i this subject and i'll bring them up, but i'm going 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 have been really discussing this in your work for "the new york times" for years. >> i don't know, 15, 20 years i think. my memory may be playing tricks. you have been very close to the subject. turns out now you're somewhat prescient because the reason this is acceptable again, donald trump won a stunning victory in large part because men who know longer can work in manufacturing are extremely disgruntled. their expectations have been dashed. they're angry, they're bit and are they voted for trump, i believe, out of bitterness, obviously everything is more complicated than that. they've been bitter for a long time. this was the underlying factor

for the silent majority going way back. lou is appreciate slept. lou, why did you write this book? >> did i throw you curve ball? >> you gave me an opening to be modest. i don't -- i have been -- i covered economicked for the "times" for many years, and i found myself, whenever i could get an economic story that involved a factory or manufacturer, i did that economics story. i found that to be quite fascinating. and over time i began to realize that everyplace i went to every familiar trii went to eventualfully 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 engage fled an ideological struggle that -- [cell phone ringing] >> that's one of the modern manufacture -- that's not made in america. >> i came to the conclusion -- i slowly realized, talking to manufacturers, but there was always a public subsidy involved of one sort of another. you couldn't put -- well, there's two -- if you talk about already -- let me just digress. talk about value added and manufacturing, you talk about if you take a sheet of steel that's worth $100 and you stamp it interest a fender that's 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 sector of the economy, particularly finance grew more quickly from manufacturing's share of the economy has dropped to about 12% from the nearly 30% that it was after world war 2 -- in early 50s. and then we went through this long period of an ideal struggle with the soviet union, we -- they their ones subsidizing, the one -- the government-run 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 realize -- look.

i would go to a place like revere copper in rome, new york, and i would sit there with them. look, we use a lot of electricity in making copper rolls. we can't afford that electricity unless we gate break. so every year we go to new york state power authority and ask if we can buy the electricity at cost. as a discount. that's the subsidy. that's my idea of a subsidy. there's also -- the word "subsidy" is not a good word. i'd rather use public spending. 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 buy america clauses, if you get

arrested -- if you get stopped by a policeman and he gives you a ticket you might get out and take a look at his car, probably made by a manufacturer in america. scarsdale are owl fords where i live. don't note about 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? well, public subsidies are everywhere. weaponry is a big part of it. that's the defense department's purchases of weapons. so you have a guy like donald trump, who is going to be very belligerent and so forth and that's totally good for the weapons industry here, and it's not necessarily good -- let me

digress -- -- for the factory workers itch think factory employment and manufacturing was 19 million. the high point in 1979. it fell off a curve. fell almost precipitously after that, and it's now down to around 10 million -- now about 12 million people. if we increased factory output in the country there might be -- there would be an increase in employment but not to the extent -- not to the extent of trump's followers are hoping, and many of trump's followers aren't just -- they're families aren't just aren't unemployed. there's just earning less than they earned or that factories once paid. it was in the reporting in indiana once april. man who had been a factory

worker. he had left factory work, was working a service sector job him wife was working in a service sector job. and she turned to me -- we were driving and she said, you know, my children are not going to live as well as we lived. they can't earn enough in the service sector. the salaries aren't high enough. manufacturing is potentially our high-wage thing because manufacturing value added in manufacturing is usually greater than value-added in a lot of industries. so let me get back to trump for a second him says i'm going to make america great again. what he really means is i'm going increase production of weaponry in this country. and perhaps -- he doesn't say how many people will be employed in that. there won't be very much.

the followers are going to be disappointed. so that's a big part of the current situation. there's something else that is very important here, and that is civil rights. >> lou, let me -- we should 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 subsidizedded in america, but you also say something that it think is very important. virtually all manufacturing is subsidized in the rest of the world. >> absolutely. >> manufacturing dis. >> that's a powerful point that has to be -- you also said to me the other day, subsidies in america are basically chaotic. why don't you address what you mean by that. >> the subsidies are -- we do not have a national industrial policy where we decide what manufacturers should be supported and where the sheather go.

we have a world in which st. louis situation to a factory owner, put your factory in my town rather than kansas city and we'll give you $100 million. this goes up to $100 million. so, that doesn't -- that's a zero sum game for the nation as a whole, but it's -- st. louis is bitter off than sans -- kansas city. ...

the manufacturing that took place in urban centers near african and american neighborhoods or other minority neighborhoods that was quite a bit. those factories however, st. louis for example had a plant in st. louis that was a big employer of people in north st. louis. we are going to move this fact every operation on the 80 miles to missouri. we offered jobs in any of our factories to anyone who loses a job in a factory because of our

move and many people took that offer and relocated to other factories. however, in north st. louis today, there's a younger generation growing up and that generation might be leaving high school and it might have gone to work in a factory but can't anymore, so we have a situation like ferguson. they made factories in st. louis and near ferguson but it doesn't have factories. they weren't well-paid organizing jobs for people in the st. louis area to go to a.

it was fair that i came into contact with the american civil rights leaders said clark, these factories are leaving town and there isn't work for the people they leave behind and the factories are being subsidized to move and they are leaving behind a succeeding generation of people who can't get the sort of works of high schoo work thal educated people once could get and could earn well.

they published a weekly newspaper and he himself says his family was ridged itself upward because his father worked in the fact area for many years and had done well. i said why aren't their movements in the streets and he said we just don't have civil rights leaders tha between one's heathat we once hador we can't e with the migration of factories out of the city. he comes along and says to the people he doesn't care about whether they are downtown or not, he's more worried about the white people were caucasians that don't have the factory jobs and african-americans on the other hand are losing the

opportunity to have manufacturing and well-paying jobs right in the city. one of the things i think you've discovered in your recording is when people are telling you they didn't necessarily offshore to china or move factories to china and so forth in order to save the labor cost. they moved for the subsidization. >> china is a big subsidized or of manufacturing which is fine. it makes 2 million cars a year in china which itself is in china and what it should be going on they should be

negotiating that a million of those cars are made here in the united states and exported to china. and of course that is a very hard negotiation but it's a direction we should be going. right now manufacturing when you think about the value add is only 12% of the american econo economy. it's as other industries and the financial sector in particular they grew as a share of the economy.

this is private goods producing. the yellow line is the service sector and the gray line, which is one way below manufacturing has now passed it. it should be done with a national industrial policy and in some coherent way i'm afraid i will stop there.

especially they lost this ability to get decent jobs in the high school education. they also lost the opportunity to get good jobs with pensions that were sustainable and permanent do for the same reasons. one of the air first was not to recognize the components of this and address the needs and the rust belin therust belt as a pes running back.

when i traveled 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 to the union. every time i visited a factory within a mile was the local union headquarters and factory workers at the end of the shift would come into the union headquarters to talk to and there was a lot of conversation and the union played a role in representing them but as the

factories weekend in membership and the factories disappeared all that also disappeared. it plummeted and i think in order to have the resurgence in manufacturing in the country, we need a resurgence in the union membership. you talk about the goal to increase manufacturing share.

it would seem then to the right wing that it was something different. i will call it something of a prejudice that skepticism subsidizing manufacturing made sense because it is an inefficient way to deal with the economy. when you have the civil rights issue that is brought up quite successfully. you are creating which in turn leads to an isolation, not a culture of poverty that the idea

that a concentration of poverty leads to social isolation. so why not invest even if it is inefficient in manufacturing to prevent that from happening. the investment has been so localized and counterproductive to spend $100 million to come to one town rather than another. the national policy should set goals. the subsidy should come entirely from the federal government. they should have some job goal involved and it should be the unionization that should represent factory workers and a

public discussion. i'm not sure about my granddaughter that is here but we are at the point right now where we buy stuff from china. we pay china in dollars and they take the dollars and invest them and u.s. treasuries and securities and we take the dollars they invest at some point it is going to be they will say no, it is going to shift from the dollar to

something else and that of course happened between world war i and world war ii. when that shift takes place what are we going to do? making stuff ourselves or a decline as a nation. let's get to your proposals. we would like to add your proposals on june 13.

i know you have an objective. so go through what to say that if there is an election campaign one should say manufacturing and measuring as value added was only 12% of the economy and that my proposal is to raise it to 18, 19 or 20% of the economy which is where it is in the european countries. i would say no more. all federal subsidies have to be channeled through federal agency which decides who gets what and with the goal of increasing

manufacturing as a share of the economy back up to 19 or 20%. i would leave out the child's part of it. manufacturing employment cost to 19 million in 1979. that was the high point in the period and it's come back up now to about 12 million. what i would do and i'm afraid of trump mentioned it i don't think that you 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. trump said things about that and he certainly isn't rushing to do that. he's cutting taxes to people instead of raising them. we should be having a much more progressive income tax and he is very vague about what he's going to do as far as public works or concerns. but he won on that score. he held out the promise particularly to the non-hispanics of getting them work. in the projects we don't hear him talk much about those projects but that could be a

source of employment. to ship them to china that is the beginning of the trade war. the larger problem is we have the capacity to make much more around the world. you have to subsidize purchasing

a. i say this in chapter two i think almost any skill can be taught to someone with a high school education. my father got out of high school for the textile brokers from one factory to another. i often give them supervisors that are rolling their eyes if they need they have a shift because of the lack of skilled workers and they find ways to train them. people get trained on the job

were trained in junior college courses. to take one example they are good at it and he manufacturing. again over the years there are more apprenticeship programs. as they took al over the vocatil high schools which were in a sense of apprenticeship programs that closed across the country.

they are sort of combine high schools that have opened in essentially vocational training with enough work to go to college so you can do so. the high schools are sort of central schools. they are busing in from different districts to get this vocational training.

when i went to high school we had a shot glass and women at home economics. if they don't have seemed to recognize that you've got the idea of working with your hands. they are back a little bit having politicians talk about the jobs. they are coming back from a very low level for something that has

the value added in the ability to generate enough income. do you think there's any chance the government could do what you would like it to do as a subsidization policy or is this feudal? >> trumpets too crazy or dangerous and is a very bad start but then this president should say we do need more factory jobs. they are not paid as well as quotations are if you will.

i think that we have to have a policy and i think that we have to use in the national industrial policy to raise factory production to 18 or 19% from the present of%. we should go back to ship building for example. we have none of the container ships that brought over the progress we once did a. if through the next potential candidate to say my goal would be to make any factoring to 15% of gdp for the president or 18%

of gdp and that's where it is in most countries. we were the object to the public money in getting a factory to relocate from one city to the other in the bidding process we would force him to channel money into raising the national outp output. i think hillary clinton more or less had some of this but didn't get very far with it.

he almost is under pressure to start a war to make use of all the weapons he's making a. a. they are subsidy wars and they are a form of the trade war and they should forget his toes and we should fight them better so that would be a proposal that i draw from your book.

somebody has to sit down and negotiate that deal if there will be compromises maybe 500,000 will be required to ship from here. we should use the numbers and build up the manufacturing to 17 or 18% of gdp using those numbers never mind about 31% or more. the world trade organization is supposed to have a subsidy war. i don't think that they had some bits actually operated mostly in favor.

the above subsidies and nations to promote certain kinds of manufacturing investments. we don't recognize subsidies. they are often free-trade. they are there over the place and somehow or another the trade organization just doesn't see them. manufacturing runs on the subsidies and public monies in

defense spending and that. let's recognize that and start giving up who gets what. it's a lovely discourse that will make it into the public conversation. they go and talk to factory workers and factory managers and factory owners and it gives us a perspective that we rarely get and i think generally i hope this will influence the nation in the right direction. [applause]

[inaudible] we managed to keep a the bigger share of the manufactures ar bee so far that has not been a problem. it is a problem in the sense that trump looks around or i'm making this up and say look at all these factories making weapons i have to do something with them and he does.

that could become a national security issue. >> we are importing and we think that we may afford but in fact it's got 20% imported parts, and that is a big deal and that doesn't exist in world war ii so maybe it makes it complicated to fight a war because we can't make them without importing the parts. and the others can't make their weapons without parts from us. [inaudible] we could model the policy.

one of the programs with the national association of manufacturers. those are two separate questions and i open one chapter with a description how they think things up at the end of the speech. it's two or three or four trips.

it would likely be supported when i started covering the meetings, they had most of the production here than the multinationals became the dominant force. two thirds of the factory output and this comes out of the factories owned by multinationals and they are the ones that are also operating

overseas. i will take another example along the mexican border it's like eight auto assembly plants in mexico. we can only ship them to 20 and they also ship cars north for those factories and countries. hillary clinton got rid of nafta and then she did and and i think we have to get rid of nafta and free trade agreements and we have to say to the

multinationals you have to make more stuff here. in the office she was on the manufacturing council we make in america or so in america when i visited in michigan chemical plant with government money and we make in china what we sell in china and we just are not going to export unless we have to. it should be more of what he sells in china. he shouldn't have 13 factories which is what they have plus the research center. does that answer your question?

>> the members are dow chemical and all these others that have shifted. it's about how much manufacturing should be done in america. it used to but it never does any more [inaudible] people that are worse off than they were years ago those are

the people that voted for trump manufacturing the percentage of the amount and what will that accomplish a. back in 1931 it came from an article [inaudible]

it is aristocratic preferences but not realizing [inaudible] 1931 [inaudible]

then there's also the fair trade manufacturing is not going to solve the jobs problem. it's the simplest needs for people who manufacturing. the java solution has to be another part of the new deal which is the construction of public works which is more employment intensive than manufacturing. if we try to justify the manufacturing on the grounds of more employment we should drop out and think in terms of a longer period chipping away steadily over the generation at the value of the dollar and it

will cost us the ability to import as much as we do. the government policy was able to run around 30 to 32%. the union members therefore by what should i say other areas of the economy in order not to get the unions out. it came to an end in about 1967 and indecisive way when ronald reagan went on strike he tired

of them and that gave power to the firing it has a bigger multiply your events and other industries and effects and creates more services. it can be disputed but it's documented and that is number one and number two there is a chicken and egg question the unions start to lose their power because manufacturing and big companies.

there is a case to be made manufacturing has been too little and too much ignored by the government. i think training has been too much ignored by the government. so i just wanted to add that. the unions are to the service oriented in a lot of communities are going to want those jobs, so how will we decide how we pull them out so it's not such a big gap?

that will be an endless political discussion of who gets what factories where they go and the service sector for a different reason. that has to be said first and the first order of business. maybe you want to add something. the knot in the big cities but in a smaller town.

preserving manufacturing is still without jobs. the problem is productive but it has lagged as a nation because companies are not investing as much and manufacturers tend to invest in more products and technologies if you've tried it out and then went back to the research center that still exists to some extent in places but it's a guiding idea most

importantly we have books in the corner [inaudible] [applause]