Rebuilding New York’s industrial base

For years, the common wisdom has been that American industry is in an irreversible decline. As the reasoning went, our shrinking industrial base would be somehow magically replaced by “service industries” like insurance, finance, consumer retail and a big real estate boom.

Places like Long Island that saw thriving industries disappear would be oases of growth in the New Economy.

The problem with this theory is that it didn’t work out the way economists predicted. First, many of the jobs in the new economy paid a lot less than the old ones, and had fewer benefits, like health insurance. In many cases, unions took over and stifled growth.

Second, when the real estate bubble burst, construction lagged, the service industry shed jobs, and the continuing decline in U.S. manufacturing only made matters worse.

Long Island wasn’t hit as badly as other parts of the country, but we’ve certainly taken our lumps in these hard times. As many of you remember, Grumman Aircraft, the bastion of Long Island’s manufacturing base, headquartered in Bethpage for almost 60 years, made aircraft and airplane parts.

It was Long Island’s largest employer during the Cold War. During my years in the Senate, I fought hard to keep the jobs at Grumman, but the reality was that during the mid-’90s, when the federal defense budget was cut, the jobs disappeared because the need was no longer there.

It’s time for policymakers to stop with the nonsensical idea that the U.S. can thrive as a post-industrial nation. A healthy economy requires broad diversity. The need for strong industries, strong agriculture, strong financial institutions and a stronger commitment of government to policies that foster economic growth, rather than retarding it, is still prominent in our society.

One of the reasons that other nations like Germany have weathered the Great Recession with less stress than the U.S. is precisely because they have economies that are more broadly diversified, where industrial output, even in perilous times, has played a role in dampening joblessness.