Friday, November 18, 2011

A great sector

An amazing statement has appeared.  Here is the statement:

"We don't have a tax problem, we have a revenue problem.

We've told American workers they're not valuable anymore, that it's better to do it overseas than it is right here.  That's wrong.  We need to reinvest in people, reinvest in manufacturing.  That's how we're going to turn our economy around."

Statement made by Mr. Ed Schultz, of MSNBC.
Statement appeared in "The New Yorker" magazine, October 31, 2011, page 35

Comment by Ed Farkas:
I could write 10,000 words and not say it better than Mr. Schultz.  There is censorship in effect aimed at preventing people from saying what Mr. Schultz has said.  So it is apparent that the censorship is breaking down.  Obviously Mr. Schultz and MSNBC are not afraid to make the above statement.   This is the first time I have seen a public figure make a statement similar to the statement made by Mr. Schultz.

Further commentary by Ed Farkas:

Here in the United States we have a great manufacturing sector.

But, we have a manufactured goods trade deficit of over $500 billion per year with all foreign countries.

The meaning of "manufactured goods trade deficit" is that we are sending a net amount of over $500 billion per year to foreign countries to buy manufactured goods that we don't have the capacity to manufacture for ourselves here at home.  Part of this money pays foreign workers to do our manufacturing for us.

(Why don't we have the manufacturing capacity?  Because we voluntarily and on our own initiative shut down our capacity and laid off our workers!)

There are hidden costs associated with sending $500 billion per year out of our country.  For example, a foreign expenditure is a much greater burden on a national economy, in comparison with a domestic expenditure.

The above amount is equal to over $1500 per year for each man, woman, and child in USA.  This is real physical wealth going out of our country, never to be seen again.

Another hidden cost is that $500 billion per year could support millions of Americans working in manufacturing, including wages, factory equipment, and overhead.  Instead, these Americans are unemployed, in despair, unable to properly support their families, standing in line at unemployment and welfare offices.

So all in all it is completely insane to be sending $500 billion per year to foreign countries.

50 years of history

American companies started sending manufacturing jobs to foreign countries in the early 1960s.  I was there. I remember hearing about S_____ Company sending jobs overseas.  It was the first time I had heard of this step being taken. I knew immediately that the result would be disaster, and I have been proven correct!  (Unfortunately!)

I had just graduated from college.  I did not major in economics.  However I took enough courses in economics to have some understanding of the importance of manufacturing to any economy, and the predictable result of not having an adequate level of manufacturing.

Fast forward to today

Now I am saying that the only way to save the American economy, and the only way to solve our massive unemployment problem, is to get our manufacturing jobs back from overseas.

But today there are many politically correct people running around.  People are telling me I should not use the words “get our manufacturing jobs back from overseas”.  People are telling me that this wording implies that we are stealing the jobs.

In response I say that it is perfectly permissible to say “get our jobs back from overseas”.  Very stupidly and short-sightedly we sent our jobs overseas, of our own volition and on our own initiative.  So why can’t we say we made a huge mistake and now we want our jobs back?

However, I am flexible!  I can change!  I will change my wording.  Here is the new wording:

We have to re-create domestic manufacturing of thousands of consumer, commercial and industrial items, and reduce or end importation of these items.


Now I have heard the most complete nonsense, since the last complete nonsense I heard.
There was a news item in Canadian Press, November 16, 2011.  How Canadian Press got this story or found it interesting I do not know.

According to this news item, the U.S. government had or possibly still has a program of giving money to American companies to help them get going in doing business in China.

The Republicans are currently blaming President Obama for this situation.  However the fact is that this program started when the Republicans were in control of Senate and House.

But in trading blame back and forth, our “leaders” are missing the real point.  Instead of giving money to help American companies get going in China, we should be giving money to help American companies get manufacturing going in USA!

The money came from the American government agency that handles foreign aid.  The total budget of this agency is $20 billion per year.  Now here is an agency that should be shut down!  I am sure Republicans and Democrats can agree on this one.

If nothing else, here is another foreign expenditure burden, placing an extra burden on our economy, as discussed above.


Here is a bit of good news.  There was a news item on November 17, 2011, stating that Chrysler will invest $1.7 billion in a manufacturing facility in Toledo, Ohio. The facility will employ 1100.

Is there understanding at Chrysler that Americans want to buy American-made products, and is Chrysler prepared to provide American-made products?

Maybe the answer to both questions is "yes"!

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