Gavin,
You get it.
Waxing nostalgically about the golden-age of manufacturing and wishing it would come back, or even more ill-advised, taking steps to bring it back won't really do anything for this country. That will fail.
Advancements in other countries have made them viable, more cost-effective providers of manufacturing. Wishing it were different, or trying to make that reality different is a losing battle. Let's assume that the living wage in China is 1/10th what it is here in the US. If that is accurate (and again, let's assume it is), that means that the #1 cost component of manufacturing, that being labor costs, can be reduced tremendously simply by offshoring manufacturing to China. It's simple math. Manufacturing has been moved to more cost-effective places on this globe for decades, and we Americans have enjoyed a relative lowering in the cost of durable goods (on average) decade after decade because of it.
You are right. Just like we once dominated in farming, then industry, now is the time to dominate in the next great thing.
You are also right in considering that educaton plays a part in the next great thing.
The next great thing is knowledge working. It's innovation. It's in becoming the country that invents, and leads, in knowledge and know-how.
There was a time when we were looked to for just these things. That time hasn't totally escaped us.
Don't despair. If you are one of those that doesn't want to be an engineer, or a scientist, or some other type of a knowledge worker, there will still be work for you in the service industry, in those manufacturing jobs that will remain (they will always be here, especially for niche, new products that aren't yet ready for offshoring), or in running your own business.
Frankly, I for one wouldn't want to work in a job that can be done by an unskilled, relatively uneducated person in an emerging country. I wouldn't be able to sleep at night, always in fear for my job.
The future can be bright. It starts with parents. It starts with parents working with their children to teach them that their education is an investment, and like any investment it requires a return. You get out of life what you put into it. If you want to work little and live comfortably, with little higher education, you can do that, but you will have to understand and define exactly what "comfortable" means, and you might have to live in an area of the country where you can afford to live the way you want to live. That area of the country and that job you have to take might not fit exactly into your desires. Oh well. With higher education, more skills, willingness to take on more risks, and be more mobile, and less selective come more options.
Too many people, especially the last few generations (tail end of the baby boomers and since), want to have their cake and eat it too. They want a good job, that pays well, affords them all the things they ever wanted, without delays in their purchasing, and they want that from the age of 18 or 22 years old until they retire...and they want to retire at 58 or 62. Well, folks, that's all simply unrealistic...for most anyway.
When it comes to making money (and at a certain point that is a big deal...the main deal) it is about making yourself valuable, finding a valuable product or service you can work at a company to produce or as your own boss in deliver. For some, that requires higher education. For others, it does not. But regardless, it most often requires hard work (education, sweat equity, whatever), and it requires taking chances, and making compromises....and often requires delaying the things you want and think you need until the right time.
There was a time in this country when the American Car was a valued product with pretty high margins. That time is gone, at least for most cars. Now, for the average car, the margins are lower and the competition stiff. Assuming one can make the same relative living today that they did 30 or 40 years ago while working in the auto industry is simply unrealistic.
There is a reason we still use the term "gold rush" in business today. People make money during a gold rush. But there comes a time when the rush is over. The american auto industry had its gold rush. It lastest longer than most. It's over.
TJR