Macroeconomics and Backbone of the American Economy - Essay Example

America badly needs to restore its status as a quality manufacturer, but also needs to make way for the financing of individual initiatives taken by small-time entrepreneurs (Cohen & Beranek 4).

Manufacturing has always constituted the real backbone of the American economy. Manufacturing particularly had a percolating impact on the American economy, which means that the creation of one manufacturing job led to the creation of multiple associated jobs in the economy. There is no dearth of skilled and semi-skilled workers in the nation who are competent enough and willing to support a thriving indigenous manufacturing sector. However, the shift in the dynamics of the American economy in the past few decades, turning America from a manufacturing centric to consumption centric economy, thereby allowing the firms to shift their manufacturing operations to low-wage hubs like China and India, has negatively impacted the health of the American economy (Moore 113).

American manufacturing is not mainly about big manufacturing hubs, but rather a network of large manufacturing units, supported by a web of smaller ancillary units. Hence, no wonder a shifting of the thrust of manufacturing operations to low-wage Asian and Latin American countries, has weakened the overall framework of the American economy. As a beginning, President Obama should withdraw the tax and policy benefits to the corporations locating their manufacturing operations in low-wage nations.

When it comes to manufacturing, the restoration efforts not only need to be focused on the large manufacturing units but rather also include the small manufacturers and businesses, which create jobs and sustain communities, while bolstering the overall fabric of the economy. The other thing is that since many large corporations have shifted their manufacturing operations overseas, this has created the opportunity and scope for many small-time manufacturers that compensate for the dearth of resources by imbuing their products with attention to detail and superior craftsmanship (Odaka & Sawai 61). Making large corporations desist from locating manufacturing operations overseas and outsourcing is not that easy. However, what the government can immediately do is to make way for financial help and assistance to the small manufacturers. This will invigorate the essential American economic values and beliefs, which is a nation of manufacturers, innovators, and entrepreneurs.

No doubt, it is in the manufacturing sector where the key to a healthy and vibrant American economy lies. Hence, President Obama should take the initiative to strengthen American manufacturing at all levels, in all the possible ways and means at his disposal. Read More