How do we bring manufacturing back to the US?

Since 2000, America has lost over one third of its manufacturing plants.
It is a cumulative problem, one issue after another, more and more regulation with no single law or regulation responsible for destroying it.

Once this manufacturing capability is lost, it is difficult to revive the sector. After we lose the expertise to build a prototype, it takes little time before designers even consider building a new product in this country.

In 1952, one third of US employees worked in factories, producing everything from makeup to televisions. Now no televisions are built in this country and Dell Computer just shut down their last US manufacturing facility in North Carolina. In 1965, manufacturing accounted for 53% of the US economy and in 2004 it accounted for only 9% - and it far less in 2010.

During the last couple of decades America got so good at building new homes, our energy, enthusiasm and innovation was mostly directed at this business. But we never exported any of these new homes overseas. We borrowed heavily from outside the country and built far to many McMansions rather than new factories to export goods to the rest of the world.

A lack of manufacturing is not only an economic issue, it is a security issue. The Allies might very well have lost World War II absent our ability to massively convert and scale up our manufacturing from autos and civilian goods into armaments, able to give us more airplanes, tanks and ships than the enemies had.

With reference to our college graduates, today only 5% of all graduates are degreed engineers. And of that measly 5%, half of those are foreign students that usually return home after their education.

Here are a few changes that would be a start to turning things around:

1) Outlaw unions in our manufacturing sector. Virtually no new plants start out unionized here anymore, but the threat of successful plants being unionized in the future is a deterrent to make the initial start-up investment here.
2) Do not require overtime until employees reach 50 hours a week.
3) Do not tax the profits on anything manufactured here and exported outside the country. Right now every industrial country in the world has a manufacturing tax advantage over the US. For all manufacturing here that produces products that remain here, reduce the corporate income tax to only 20%.
4) Do not make employers pay for unemployment insurance. The penalty for hiring someone is that if the world changes and you can’t afford to employ them anymore, often even if they are terminated for cause, the employer gets saddled with the costs of their unemployment benefits. This makes no sense to me.
5) Make all manufacturing employment "at will". If an employee is not performing, he or she can be replaced with a worker who can get the job done. Make it easier to hire, easier to fire, easier to manage and let successful and growing manufacturers better manage their labor costs.
6) Make all prototype costs for products built in the US free from taxes. If the prototype is built here, it greatly increases the chances of building the ultimate product here as well. Today most companies that need a prototype automatically send it to China with no thought of having it prototyped here.
7) Stop subsidizing silly college degrees (like Ethnomusicology, Sociology, Gender Studies) and narrow down the few college majors that government subsidizes to those supporting manufacturing.
8) Vastly simplify the regulations required to open and run a manufacturing plant here.
9) Do not mandate that manufacturers provide health insurance to their employees. Health insurance mandates are another penalty for hiring here and a good reason to open a new plant abroad.
10) Postpone for at least a decade acting on the emotions around the proposed cap & trade legislation. This legislation alone would take out another third of our manufacturing plants.
11) Change the tax incentive that makes the first $70,000 that Americans earn overseas tax free (there may still be overseas income tax). We don’t want to encourage Americans to work overseas any longer. They are welcome to do so, but what is the economic reason for the folks back home subsidizing it?
12) Change our immigration laws and put manufacturing entrepreneurs and professionals at the top of the list. Today an uneducated family member of someone already here usually gets priority. At the same time we put major limitations on engineers immigrating here and foreign graduating engineers staying here. This is nuts.
13) Stop subsidizing windmills and solar plants in this country. They either drive up the cost of electricity for our manufacturing plants or result in higher taxes. When the economics are right, then let's install them without subsidies.

Jeffrey Immelt, CEO of General Electric summed up the situation when he said: “We have become a pathetic exporter… we have to become an industrial powerhouse again but you don’t do this when government and entrepreneurs are not in synch.”