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In particular the ports in LA have seen a 8% drop in imports but a 24% increase in exports. In my own dealings I have noticed an increase in international business too (35% of our business is now international, where only around 25% was a year ago).
Also, the IRS just raised the "Domestic production deduction" to 7% this year, it is due to increase to 9% in two years. This is a pretty big deduction for business that make things in the US and that pay W-2 wages.
Hopefully the increased tax breaks and weak dollar will cause badly needed growth in manufacturing.
The US manufacturing base is not big enough to offset the rise in import prices, the recession in housing and construction, and the slowdown/recession in consumption.
But I certainly agree with your closing statement that hopefully the weak dollar and well-aimed fiscal policy will stimulate badly needed growth in manufacturing, from shoes and socks to high tech renewable energy and everything in between.
The US needs to revitalize and broaden its manufacturing base. If anything good comes out of the current downturn as a result of the recent suicidal monetary policy, this may be it.
But sooner or later, strong manufacturing also means restoring sound money (take Germany, for example). In the meantime, however, the initial stimulus may in fact need to come through fiscal policy.
People are insane if they think that US exports can compete with Chinese products. We are over-regulated by a bloated government, and have huge entitlements as a result of past progresses. The falling dollar is driving up commodity prices, which will make raw materials too expensive for manufacturers. Without a severe reduction in government, manufacturing cannot return to the US.
People are insane if they think that US exports can compete with Chinese products.
They can and they do. China's manufactures do well in particular areas, but not by any means in all of them. A lot of manufacturing is largely automated, there is little advantage of doing this sort of work in China (except maybe currency manipulation). Manufacturing that requires a lot of skill also doesn't do well in China. Skilled workers are hard to find in China and also require high pay. I think people get caught up on all the cheap plastic crap China makes and fail to look at the sophisticated products the US actually makes. The average Joe after all isn't going out purchasing industrial robots and things of that nature, they just see the cheap Chinese junk when they go to the mall.
They can and they do. China's manufactures do well in particular areas, but not by any means in all of them. A lot of manufacturing is largely automated, there is little advantage of doing this sort of work in China (except maybe currency manipulation). Manufacturing that requires a lot of skill also doesn't do well in China. Skilled workers are hard to find in China and also require high pay. I think people get caught up on all the cheap plastic crap China makes and fail to look at the sophisticated products the US actually makes. The average Joe after all isn't going out purchasing industrial robots and things of that nature, they just see the cheap Chinese junk when they go to the mall.
Quoted for great justice. Media activism would have us believe the US doesn't export anything anymore, which is flat out wrong. One must discern fact from fiction and fear-mongering in order to comprehend the trade issues we face.
We still export, Caterpillar is a good example. However, a weak dollar makes steel, copper and plastics more expensive and thus American business less competitive. I would prefer a stronger dollar, and less Government interference which would increase productivity and lower costs. Whether or not we export is irrelavant as we constantly run trade deficits. Many of our "exporters" are foreign owned. A weak dollar is always bad, and an excuse for a shoddy currency. Remember, our oil is payed for in dollars that are rapidly losing value. That imported resource is going to kill the economy as its relative value rises.
One bad area though is that we export commodity goods at a low rate and then turn around and import the finished goods from those commodities at a higher rate.
Nice theory, but in practice it is not as easy. In case you haven't seen the recent numbers. The trade deficit actually increased to 62.3 billion dollars from 59 billion despite the weak U.S. dollar. So, we are not getting the positives of the weak U.S. dollar and getting the negatives. I think the main reason is that the Chinese yuan is not allowed to be floated freely so, we are not getting the benefits. Either that, or the U.S. is not making as many products that the world wants as it used too.
Alot of what is being exported is food and commodities. The devaluation of the dollar makes our wheat and grains cheap for foreign buyers, and drives up food costs here. 50lbs of wheat has gone from $17 for 50lbs to almost $50. The increase in food prices is evedent for everyone to see, and it hurts us all. I don't see how a few companies being helped is a fair trade off.
The US manufacturing base is not big enough to offset the rise in import prices, the recession in housing and construction, and the slowdown/recession in consumption.
But I certainly agree with your closing statement that hopefully the weak dollar and well-aimed fiscal policy will stimulate badly needed growth in manufacturing, from shoes and socks to high tech renewable energy and everything in between.
The US needs to revitalize and broaden its manufacturing base. If anything good comes out of the current downturn as a result of the recent suicidal monetary policy, this may be it.
But sooner or later, strong manufacturing also means restoring sound money (take Germany, for example). In the meantime, however, the initial stimulus may in fact need to come through fiscal policy.
yep, what he said
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