Yesterday, the Wall Street Journal had an article about how President Obama had met with business leaders and had since issued a mandate to his staff that they develop a bill that would in effect reduce government regulations on businesses.
Finally someone is talking about something that will actually help this economy. America has been reducing its manufacturing base since the mid 90s when Wal-Mart was first allowed to use Chinese manufacturers for their products. As a result of Wal-Mart's cheaper prices, the rest of America followed suit and we have since exported most of our manufacturing jobs to Asia. In 2000, manufacturing represented 28% of our Gross Domestic Product. In 2010, it only represented 12%. While we are still the largest manufacturing country in the world, you can see that we have reduced our manufacturing considerably.
And manufacturing is the primary job creation tool we have. Even our past unemployment reports that have been coming in somewhat positive, are not showing an increase in manufacturing jobs. Instead most of the jobs created were in the food service industry. These aren't the high quality jobs we are looking for and mostly represents a very large underemployment sector. People who can't find the jobs they need end up waiting on tables instead. Yes, they are employed but not in the right place.
If we were to include underemployment in our statistics, the unemployment rate would be more like 17% (according to John Williams, the economist at Shadowstats.com).
America can no longer be the world's consumer. We've run out of money and are quickly running out of credit. Plus America is getting older. The next wave of baby boomers has reached retirement age and will be retiring soon. Retirees very simply spend less money. While our kids are getting older, there aren't as many of them as there are of baby boomers that will retire. America simply does not have the money to spend.
That means for America to get back on its feet, it must sell its goods to someone else besides Americans. Unfortunately, we don't manufacture as much anymore, as it has mostly been sent overseas. If we can bring manufacturing back to America, we can make products here, and then sell them overseas to those countries that have the money (China, Asia, etc.). This will create actual jobs.
Nothing else we can do will create jobs. The government can print money all they want (and call it stimulating the economy) and distribute it to people to spend, but all that will do is cause prices to be higher. It won't create jobs in spite of what they think.
It appears they may have figured this out. President Obama wanted to know why businesses weren't hiring in spite of good earnings. So he invited some business leaders to the White House. They explained it to him. Low wages aren't the only advantage China and Asia have on us. They also have low taxes and low regulations. The regulations in America are what is killing American industry. Back in September the Intel CEO, made a public comment about how he could build their new plant in Asia for $1 billion less than he could in the United States. And he blamed it all on regulations.
So President Obama appears to have finally listened. We'll see if he actually follows through. His mandate was to find a balance between safety and environment regulations without cutting off business development. That is much easier said than done. There will have to be sacrifices in both safety and the environment for
this to succeed. I'm doubtful, but I'm at least happy that they are talking about the right solution to our unemployment problem.
I have been very critical of President Obama in the past (he isn't alone and I certainly haven't limited my criticism to Democrats) so when he does actually do something right, I want to praise him for it.
This is the first step in the right direction. It may be too little too late, but at least we now have some hope. Let's see if they can actually take the second step, which requires action, or is this just going to be another political talkspeak?
