EB,
The point that you raise about manufacturing should probably go into a new thread, but...here's my 2 cents.
There is, in the large scheme of things (the huge size of the economy), relatively very little the govt can do to rebuild the manufacturing base, especially in these times of globalization (cheap labor overseas). What can Americans build where the ultimate costs could compete with Chinese labor, who work for a fraction of the money?
The Conserv/Repub approach is to cut taxes with the implicit assumption that the funds will be re-invested and strengthen industry resulting in more jobs. But we saw that during the Bush years, there was ZERO manufacturing increase (despite the Bushites counting McDonald's burgers as manufacturing. SERIOUSLY!) AND ZERO job growth WITH tax cuts, so that is not a panacea. I guess, ultimately they would propose NO taxes on corporations and none on investments. But these days, those untaxed monies will easily (and possibly, even preferably) find their way overseas into more lucrative investments, or to hide assets from the IRS - or to buy non-productive items, like gold, silver.
The Obama approach re: manufacturing is to select certain kinds of mostly-energy related industries and give incentives to businesses to do R&D and produce long-lasting batteries, wind turbines, etc. The idea being that if the US can get a lead (or catch up; China makes more wind turbines than anyone) in these technologies, then US companies have a better chance to keep some of the manufacturing jobs and income (and tax base) at home. Of course, while it seems like a reasonable approach, there is no guarantee this will work either. The other important benefit of alternative energy sources is to decrease dependence on foreign oil, which retains dollars in the US to pay for domestically produced energy.
