You may have read, about a testy exchange between Obama and Steve Jobs, in the later's biography. In the biography, it was said, that Jobs and Obama "sparred" over Apple's lack of manufacturing in America.

Well, the NY Times broke a story Sunday, that expounded on the testy exchange. Obama asked Jobs about bringing back manufacturing to America. Jobs said "they are not coming back". And that was it.

American high technology manufacturing is an oxymoron. High technology manufacturing requires adaptable manufacturing and supply chains that are incredibly short. If you wan't to make a automobile; you can do it in America. That is because an automobile's manufacturing, supply chains and assembly; only change once a year. But competitive, high technology innovators, requires downstream supply chains that can adapt lightning fast. What looks competitive last month; looks archaic a month later.

The tale of iPhone manufacturing is telling. There are whole dormitory towns in China; that locate high technology supplies, manufacturing and assemblies within a campus. When the iPhone, at the last minute, had to go out with a glass display; the call went out to China. Within days; a Chinese dormitory town, started cutting the glass, re-hualed assembly and started pumping out millions of iPhones. They could do it, in part, because all of their labor was "inventoried" into dormitories. The cost of labor is not the point. The central availability of labor was critical. Once a new specification came out, for building the iPhone, their workers labored 12 hours a day, six days a week, to make it happen.

The only American equivalent of something like that, is early 20th century manufacturing towns. You may have heard of a resort in Wisconsin. It is called Kohler. Yes the same name, as the water appliance company. Well, the resort; it's rooms, it's dining facilities and it's landmass, were once used as a dormitory, like the Chinese high tech dormitories. Men worked for a wage, and their living expenses were covered.

Was Kohler right or wrong 100 years ago. There is no right or wrong - or moralism - in business. But I can tell you, it befit the times and immigrants were happy to work there. These immigrant's children benefited, by the money coming back to them.

Why, I am bringing this up? Lets say, someone's great grandfather worked at Kohler. Then someone's grandfather was able to work for the post office. Then someone's father was able to have middle class trade job. And someone now, reading this, has a college degree. And their children are coming out of college. Who would man high technology dormitories, even if we built them? 

High technology manufacturing is different from innovation. Innovation begets the need for manufacturing; not the other way around. Innovation and their unique value creators earn all of the money. High technology manufacturing work force must be hungry enough to put up with what is takes; to fulfill hyper competition between innovators. There is business in fulfillment; but not a lot of money in it. Two different things.

If you wanted to bring high technology manufacturing to America; you would need a drastically different immigrant policy. You not only, would need immigrants, who would be willing to live in dormitories; but you would need enough manufacturing engineers to run these centers. The U.S. does not have enough of both. As to the former, they are similar jobs that go wanting today, with less commitment than a "dormitory", because there are too many people, five-times generationally removed from working in Kohler. As to the latter, we don't do "engineers". That is a problem, if you don't have a drastically different immigration policy.

I continue to believe, that we need a "smart immigration" policy. I believe that we have the landmass, to support turning every "smart immigrant" that matriculates from our universities; into guaranteed citizens. I believe that the policy should err on the side of "smart", as in innovators. Innovators who pay taxes. Innovators who will increase demand for housing to help stabilize price. Innovators that hire people.

I don't advocate, mollifying people's questions like " how do we bring American high tech manufacturing back" ? The answer of course, is we can. But if the goal is to increase median income; then the goal should be to increase "smart" innovation and unique value creation per capita. That can only be done through education reform and a "smart immigration" policy.