Arianna Huffington's Third World America 1

I started Arianna Huffington's Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream.  In my latest reading, Arianna argues that the decline of manufacturing jobs in the U.S. and their replacement with jobs in the service sector does not help the American economy.  First of all, manufacturing jobs have traditionally been the jobs that have put Americans into the middle-class and "kept them there" (page 20).  Second, it is the manufacturing sector that actually produces stuff.  How can we export goods that other countries can buy, when there is a decline in the U.S. in the kinds of jobs that produce those goods?  As Arianna says on page 21, the financial sector is "supposed to serve our economy, not become our economy."

Like Mitt Romney, Arianna Huffington is for increased productivity.  I doubt that Arianna would support Romney's technique of creative destruction to do so, however, for she tells heart-wrenching stories about people in the middle-class who have lost their jobs.  I wonder what she would say to the right-wing argument that unions, taxes, and regulations encourage American manufacturers to export their jobs to other countries.  If that is the case, I'm curious as to how the right-wing would expect for the U.S. to compete, period, since it would be scary if American workers were paid as low as workers in other countries, and cheap labor is a reason that other countries are attractive to companies looking for a place to set up shop.

At the same time, I vaguely recall reading in an economics book that it's not just cheap labor that makes a business competitive----it's also productivity, and that's why American companies have been fairly competitive in the past.  Is there a way for businesses to be productive with unions, taxes, regulations, and decent wages, and without creative destruction?