Jobs, Jobs and Cars
NY Times Op-Ed: January 27, 2012
Mitch Daniels, the former Bush budget director who is
President Obama's State of the Union address. His
performance was, well, boring. But he did say something
thought-provoking -- and I mean that in the worst way.
For Mr. Daniels tried to wrap his party in the mantle
of the late Steve Jobs, whom he portrayed as a great
job creator -- which is one thing that Jobs definitely
wasn't. And if we ask why Apple has created so few
American jobs, we get an insight into what is wrong
with the ideology dominating much of our politics.
Mr. Daniels first berated the president for his
"constant disparagement of people in business," which
happens to be a complete fabrication. Mr. Obama has
never done anything of the sort. He went on: "The late
Steve Jobs -- what a fitting name he had -- created
more of them than all those stimulus dollars the
president borrowed and blew."
Clearly, Mr. Daniels doesn't have much of a future in
the humor business. But, more to the point, anyone who
reads The New York Times knows that his assertion about
job creation was completely false: Apple employs very
few people in this country.
A big report in The Times last Sunday laid out the
facts. Although Apple is now
corporation as measured by market value, it employs
only 43,000 people in the
many as General Motors employed when it was the largest
Apple does, however, indirectly employ around 700,000
people in its various suppliers. Unfortunately, almost
none of those people are in
Why does Apple manufacture abroad, and especially in
fact that so much of the supply chain is already there.
A former Apple executive explained: "You need a
thousand rubber gaskets? That's the factory next door.
You need a million screws? That factory is a block
This is familiar territory to students of economic
geography: the advantages of industrial clusters -- in
which producers, specialized suppliers, and workers
huddle together to their mutual benefit -- have been a
running theme since the 19th century.
And Chinese manufacturing isn't the only conspicuous
example of these advantages in the modern world.
workers who cost, on average, $44 an hour -- much more
than the average cost of American workers. And this
success has a lot to do with the support its small and
medium-sized companies -- the famed Mittelstand --
provide to each other via shared suppliers and the
maintenance of a skilled work force.
The point is that successful companies -- or, at any
rate, companies that make a large contribution to a
nation's economy -- don't exist in isolation.
Prosperity depends on the synergy between companies, on
the cluster, not the individual entrepreneur.
But the current Republican worldview has no room for
such considerations. From the G.O.P.'s perspective,
it's all about the heroic entrepreneur, the John Galt,
I mean Steve Jobs-type "job creator" who showers
benefits on the rest of us and who must, of course, be
rewarded with tax rates lower than those paid by many
And this vision helps explain why Republicans were so
furiously opposed to the single most successful policy
initiative of recent years: the auto industry bailout.
The case for this bailout -- which Mr. Daniels has
denounced as "crony capitalism" -- rested crucially on
the notion that the survival of any one firm in the
industry depended on the survival of the broader
industry "ecology" created by the cluster of producers
and suppliers in
G.M. and Chrysler had been allowed to go under, they
would probably have taken much of the supply chain with
them -- and Ford would have gone the same way.
Fortunately, the Obama administration didn't let that
happen, and the unemployment rate in
hit 14.1 percent as the bailout was going into effect,
is now down to a still-terrible-but-much-better 9.3
percent. And the details aside, much of Mr. Obama's
State of the Union address can be read as an attempt to
apply the lessons of that success more broadly.
So we should be grateful to Mr. Daniels for his remarks
Tuesday. He got his facts wrong, but he did,
unintentionally, manage to highlight an important
philosophical difference between the parties. One side
believes that economies succeed solely thanks to heroic
entrepreneurs; the other has nothing against
entrepreneurs, but believes that entrepreneurs need a
supportive environment, and that sometimes government
has to help create or sustain that supportive
And the view that it takes more than business heroes is
the one that fits the facts.