Wednesday, December 16, 2009

A particularly irksome happening

This is just my opinion -- doesn't have to be yours. I'm not trying to persuade people of anything. But....

The stark truth is that this country's economy will never recover until we rebuild our manufacturing base and improve our international trade imbalances. The economy will never recover by creating more service sector jobs and fast food clerks and retail sales people. We have to make something of value to sell, at home and abroad, to create long-lasting economic recovery. In another post somewhere in this blog I talked about our nation's farmers having a choice between growing food and growing corn and soybeans for overseas manufacturing needs. They can make a lot more money by growing corn and soybeans and thus providing for their families. Next summer when you are driving out and about, notice what the overwhelming majority of crops are. The result is what I discovered last week at the grocery. I bought some Birdseye frozen sugar snap peas that were grown in CHINA. I've seen peaches from Chile, and numerous foods from Mexico. About 90% of our cut flowers come from either South America or Europe. How in the world can a farmer grow roses in Peru, fly them to the U.S., and distribute them cheaper than we can from just down the highway? Beats me.

I KNOW before I wade into this next subject, over half the people reading this will take offense and be defensive and cite all sorts of prejudices and outdated opinions. A good place to start rebuilding the manufacturing base is to buy automobiles from Ford or GM or Chrysler. Yes, all auto assembly plants hire American workers and provide a decent wage, same as the Big 3. Yes, one can say they are American made. But the profits from those offshore manufacturing companies go straight back to Japan, China, Korea, or wherever. Profits from the Big 3 STAY at home and are then SPENT at home. According to a recent study published in Time magazine, Toyota imports 51% of its component parts from overseas, Honda imports 42%, and the Big 3, 22%. That amounts to MILLIONS of dollars going straight back to the OLD country.

For years, Japan has imposed import taxes on American made automobiles so that, for example, a Chevy Impala that costs $20k in the U.S. costs the equivalent of $30k dollars in Japan. Needless to say, the market for American automobiles in Japan is very limited. Plus the Japanese government for years has subsidized their auto makers with low interest loans and economic assistance and currency rate manipulation (run by many of the same executives that were admirals and generals in their armed forces when they so sneakily attacked Pearl Harbor and killed thousands of American young people. Then after four years of horrific loss of American lives, we went in and rebuilt their factories, their economy, gave them a new Constitution that has been successful ever since and have agreed to provide military protection to them from any other country so that they have NO expense to maintain any sort of armed military force. But all that's another story...)

Remember the recent "Cash for Clunkers" program here in America? It was a huge success. Just over half the new cars purchased through that program were Asian. Our government said, "Get rid of those old gas guzzlers and do your part to restore America to greatness - lower your gas bills, reduce harmful emissions, be GREEN."  It was a huge success. So much so that Japan has NOW instituted almost the identical program in Japan.  'Wanna guess the difference? You cannot use the program to buy American made cars. Only new Japanese cars.

Most people today probably still harbor resentment about those old days when all they heard about was a GM worker making $25 an hour installing two screws in every assembly. They think all American cars are made by lazy, illiterate slobs. "The American auto industry is inefficient, bloated and impaled upon its own spear. Now take the Japanese, for example, they are smart, industrious, dedicated, polite little people." What a wonderful thing it would be if we could send our foreign car aficionados to live in Japan for a time.

OK, I had my say... The even larger problem is that because my generation and the younger one has never known really hard times, we cannot believe what is at stake here. We are that proverbial flock of sheep being herded straight to the slaughterhouse. Who is going to eat all that lamb and mutton? Of course, if you think leveling the world's standard of living is a good idea, continue on your path and we will be even with Mexico, Ethiopia, China, Japan, and all the others. American's choice.... 




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