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9/13/2012 4:25 PM
Manufacturing Renaissance- Hardly
Trade data out this week points to the serious problem for manufacturing and for the notion that there has been a manufacturing renaissance. I realize President Obama said the world is buying American products because they're the best, but he didn't say it's smarter and cheaper to make a lot of things overseas. President Obama also didn't mention he wants to punish the innovators, makers, and sellers of those great American products by hijacking their profits. Operatives for the administration are sending signals of plans to attack corporate profits generated abroad before they are repatriated in order to build a so-called infrastructure bank.
How to Create Jobs
Overall, S&P 500 companies got 46.1% of their sales outside the United States. That number is sure to soar as Asia, South American and the Middle East and Africa continue to grow. People in those nations love Pepsi and American machines that move large chunks of earth to fuel and build nations. The world loves American fast foods. Yum, parent company of Kentucky Fried Chicken, Pizza Hut and several other restaurants makes gobs of money in China and other nations. And the growth potential is mindboggling. Yum Brands points out this potential in its 2011 Annual Report:
58 Restaurants in America for every 1,000,000 people
2 Restaurants in Emerging Markets for every 1,000,000 people
That same report from YUM points out the growth potential everywhere, including growth Germany.
It's a lot easier to make soda in Africa and sell it locally, and it's easier to put components of giant Caterpillar machines together abroad. I've written about this before and still point out Caterpillar in the past year created 6,000 jobs in America and 6,000 outside America, even as 70% of its sales are foreign.
I'm saying it right here and now, the war on success is going to go after great American companies, just as it goes against great American businesses like beauty salons, plumbers and auto body shops. In the meantime, in spite of all the election campaign hype, America had 12,552,000 workers in manufacturing in January 2009, now down to 11,970,000. As for the stuff we are exporting abroad, the most successful is agricultural products. You can't replace great American crops with cheap labor, but unless we want American workers to earn the same salaries as Chinese workers, we have to find a better way to exploit the explosive growth of the planet.
Let American companies bring home $1,000,000,000,000 because $350,000,000,000 will go directly into job creation.
It's all quiet on the western front this morning as the market braces for the Federal Reserve and Ben Bernanke to unleash something magical. I can only hope he's better than the magician I hired for a big Easter bash at the house this year. The guy was so bad, I paid him for comic relief. The thing is, this guy while sloppy, was into the gig and really tired to put on a show. He just wasn't good. I could see all the tricks, and that erased the wow factor. Today, I have to wonder if what's up Bernanke's sleeve is something we've seen before. If there is no magic, there is no wow factor, and if there is no wow factor, will the street be content with comic relief?
In the Middle East, things look awful. Wall Street isn't paying attention, and the mainstream media thinks a statement that throws the Constitution under a bus isn't a big deal, but criticizing that statement is heresy. Four Americans dead, including a much loved ambassador, and Mitt Romney is the bad guy. It's an upside down world where another 382,000 people filing for initial jobless claims last week elicits yawns.
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