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What's the administration's specific aim in bailing out GM? I'll give you my theory later.

For now, though, some background. First and most broadly, it doesn't make sense for America to try to maintain or enlarge manufacturing as a portion of the economy. Even if the U.S. were to seal its borders and bar any manufactured goods from coming in from abroad -- something I don't recommend -- we'd still be losing manufacturing jobs. That's mainly because of technology.

When we think of manufacturing jobs, we tend to imagine old-time assembly lines populated by millions of blue-collar workers who had well-paying jobs with good benefits. But that picture no longer describes most manufacturing. I recently toured a U.S. factory containing two employees and 400 computerized robots. The two live people sat in front of computer screens and instructed the robots. In a few years this factory won't have a single employee on site, except for an occasional visiting technician who repairs and upgrades the robots.

Factory jobs are vanishing all over the world. Even China is losing them. The Chinese are doing more manufacturing than ever, but they're also becoming far more efficient at it. They've shuttered most of the old state-run factories. Their new factories are chock full of automated and computerized machines. As a result, they don't need as many manufacturing workers as before.

Economists at Alliance Capital Management took a look at employment trends in 20 large economies and found that between 1995 and 2002 -- before the asset bubble and subsequent bust -- 22 million manufacturing jobs disappeared. The U.S. wasn't even the biggest loser. We lost about 11 percent of our manufacturing jobs in that period, but the Japanese lost 16 percent of theirs. Even developing nations lost factory jobs: Brazil suffered a 20 percent decline, and China had a 15 percent drop.

What happened to manufacturing? In two words, higher productivity. As productivity rises, employment falls because fewer people are needed. In this, manufacturing is following the same trend as agriculture. A century ago, almost 30 percent of adult Americans worked on a farm. Nowadays, fewer than 5 percent do. That doesn't mean the U.S. failed at agriculture. Quite the opposite. American agriculture is a huge success story. America can generate far larger crops than a century ago with far fewer people. New technologies, more efficient machines, new methods of fertilizing, better systems of crop rotation, and efficiencies of large scale have all made farming much more productive.

Manufacturing is analogous. In America and elsewhere around the world, it's a success. Since 1995, even as manufacturing employment has dropped around the world, global industrial output has risen more than 30 percent.

More after the jump.

--Robert Reich

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Say you're a Harvard professor and you decide to dabble a bit in politics. You decide to move back to Canada in hopes of becoming prime minister. Shouldn't be that hard. Before you go, you tell the school paper that if things don't work out, you'll probably return to Boston and pick up where you left off.

That would appear to have been Michael Ignatieff's plan, but things might not work out the way he was hoping. Harvard is going through some tough times. According to Boston magazine, its endowment, onces a porcine $37 billion, is down about $11 billion due to some unfortunate investment setbacks. And since it's not making any money, Harvard has to withdraw about $1.4 billion from capital to cover its operating costs, which would normally have been paid for out of profits. Which leaves a relatively paltry $24 billion left in the fund.

Not bad by most standards, but Harvard is used to big-time spending, without worrying much about where the money comes from. (Hey, that reminds me of a federal political party here in Canada. No wonder Ignatieff felt at home with the Liberals!)  It has big expenses, and $24 bil isn't going to cover them. In fact, says the magazine:

 While Harvard officials are doing their public-face best to downplay the problem, the numbers don't lie, and this economic crunch will leave the school a profoundly changed place. Harvard will have to become smaller and academically more modest, and as it does it will chafe at having grand plans without the resources to fund them. For the first time in decades, it will worry about merely paying its bills. The university will have to decide: If it is no longer so rich that it doesn't have to make choices, what does it really value? What are its priorities? It won't be a comfortable debate.

"We are in trouble," says one Crimson professor. In the aftermath of deep and damaging cuts, "there is a real chance that Harvard will no longer be considered the best there is."

Uh-oh. If things take a wrong turn in Ottawa, the Liberal leader might have to reconsider Plan B. It's just possible the old school won't be waiting with open arms, or without an open chequebook anyway. Maybe he'll have to stick around Ottawa longer. Maybe he'll have to teach at a Canadian university. Oh, the shame. Hey, maybe that's why he's so eager to make it easier to collect EI.

Kelly McParland
National Post

If you’ve been following the nomination of Sonia Sotomayor to the Supreme Court, the term “reverse-racist” has undoubtedly appeared in a story you’ve read. Rush Limbaugh branded Sotomayor a ‘reverse-racist’ on his radio show, while Newt Gingrich labeled her a racist when he posted a statement on his Twitter account.

Some right wing groups claim that Sotomayor is a judicial activist who will bend the law based on her own personal views.

Wendy Long of The Judicial Confirmation Network, a conservative-leaning organization involved with judicial nominations, sent a letter to Senators yesterday outlining these concerns:

“Judge Sotomayor challenges the belief that the law needs to be knowable and predictable . . .” 

Long accused Sotomayor of embracing judicial activism, and claims that “when judges drive such change, based not on the written Constitution and laws enacted by the people, judges use their own sense of personal "justice," based on their own experiences, personal views, feelings, and backgrounds.”

Sadly, the facts get in the way of Long’s argument. Take, for instance, Sotomayor’s ruling in the case of Pappas v. Giuliani. In short, the case involved Thomas Pappas, an employee of the New York City Police Department, who was fired for mailing racially offensive, anonymous letters to organizations that had solicited him for donations.

A reverse-racist, judicial activist, such as Sotomayor, must have ruled in favor of the city, claiming that Thomas violated the rights of others through his offensive remarks, right?

Wrong. It turns out that Judge Sotomayor did exactly what Wendy Long would have wanted?"she made her ruling based “on the written Constitution and laws enacted by the people.” Citing the NYCLU’s briefing on the case, Sotomayor and her Second Circuit panel concluded that: 

“The reduced free-speech protections accorded to public-employee speech related to the workplace also extended to private and anonymous speech by employees that took place away from the workplace and that was unrelated to the workplace” 

 Rather than let her personal beliefs get in the way of her ruling, Sotomayor upheld one of America's oldest laws by defending a bigot’s right to be a bigot.