Sassen Koob correctly identifies changes that occurred in the context of metropolitan area employment patterns in the United States during the 1980s. Sassen Koob incorrectly attributed such changes to an economic evolution within the context of the free market concept. To read Sassen Koob's assessment, one would conclude that manufacturing is a disappearing phenomenon and that the "production and export of advanced services" is now the essence of economic structure and purpose. Applying the above assumptions, it is a relatively easy leap of faith for Sassen Koob to conclude that Los Angeles is the prototype of the new economy, while New York is dying because it is tied too strongly to the old economy.
There are three major flaws in the Sassen Koob argument. First, Sassen Koob essentially restricted her analysis to event occurring in the American economy, while acknowledging that economics is now essentially global but ignoring international economic developments. Second, Sassen Koob failed to address the critical reason underlying the decline of traditional manufacturing in the United States New York, Los Angeles, or anywhere else. Third, Sassen Koob relied primarily on data reflecting the events in a single decade for conclusions applicable to a far longer period.
Manufacturing has not declined in the global context, nor has the consumption of manufactured goods declined in the United States. Manufacturing has declined in the United States because American corporations, abetted by the Reagan and Bush Administrations, has transferred manufacturing operations out of
the country. Through this strategy, American corporations hope to increase profits by reducing labor costs. In turn, they, and their political allies, hope that the high paying financial and other service workers will buy their imported products. The number of high paying service jobs, however, it not likely to ever number as many as the lost good payi...