As unemployment in the USA soars, and evil corporations export factories and jobs as if their heads were on fire and abandoning America was the only way to douse the flames, there is good news! New Balance still makes 25% of its shoes here! Wow! What a fabulously patriotic company!
Here is CNBC doing its part to keep the masses quiescent until all the jobs are sent to China and India. (Note: this video did not work in FireFox, but did in MSIE.) At the end of the interview, Michelle Caruso Cabrera does her imitation of a tough reporter and asks New Balance’s CEO why they don’t make all the shoes here if they can do it for about the same cost. He just says, “blah, blah, blah.”
Here is New Balance’s propaganda film. What is fascinating about this video is the music: it sounds just like the music you would hear in horror movie. The subliminal message from Corporate America to the American People is clear: stay in line and we will let you make a few shoes; cause trouble, and we will shut down your stupid little town by shipping your last factory to China.
Ah yes, Michelle Caruso-Cabrera and her talking points…
Everybody knows why she works for CNBC.
US manufactures can’t make goods here at the same cost. Higher wages, corporate taxes (the biggest deal-breaker), retirement and medical benefits all all up to an inflated product price.
True, some foreign cars and limited other products are manufactured here in the US by foreigns but it’s all a PR theme. So, take the shoe manufacturer that makes some of its product in the US: it is a smallish percentage – not enough to impact the enormous benefit from overseas manufacturing.
I’m not wanting to put salt on a wound because I am happy some companies are doing “something” in this area regardless of the reason. It just points out that the dis-incentives built within our economic society prevents any meaningful US production of goods until that situation changes.
What will it take to make that change? Something drastic, no doubt. Similar to needing to have 100 deaths at an intersection before a traffic light is installed.
I recall the news many years ago about a clothes iron manufacturing plant somewhere in New England. GE closed the plant and released 150 employees, not because it wasn’t making a profit, but because GE could make more profit by moving the operations to an Asian country.
Intel did the same thing around 10 years ago. When the CEO at that time was asked why they were moving overseas, he said it was due to the high corporate taxes. Everyone munches off these companies like leaches: local, county, state and federales want their piece of the action. It isn’t enough that these companies are expanding the economy and increasing revenues for all of these governments – they want the profits, too.
Now what do they get?
To get a view of how a country does manufacturing incentives correctly, take a look at Taiwan.
George,
http://market-ticker.org/
Karl writes off and on about The Fair Tax, and it is mentioned again in the link. It makes sense to me on so many levels. Besides the benefits listed by Mr. Denninger, it would also free up more time for all Americans and corporations struggling to manage our tax code and file accurate returns, leaving us more hours for productive work. We need radical change. Now is our chance. Write/call/fax representatives, educate others about what we know and see and show them how to get their voices heard, etc. We need to stand up and redirect our country before we lose what others have shed blood and given their lives to provide us.
No chance for the Fair Tax, it makes way too much sense. Political elite will never allow it to take hold. But why? Why should it matter how we raise our revenues? I still have not figured out the answer to that. Suffice it to say – that almost 50% of Americans pay little or no income/payroll/estate taxes – their income less available deductions is too low or they scam the system as under-reporters/nonfilers. And the rich benefit from low rates for cap gains and dividends and muni interest exemptions. So the people getting stuck are the higher wager earners that are the most productive of society. So, with a majority of the population “happy” with the taxes they aren’t paying or avoiding, how does a politician calling for a “fair” tax on this “happy” majority get elected? Can the answer really be that simple?
JG,
I too believe this is an opportunity for positive change. Mr. Obama may be seeing it too with his billions of budget cuts throughout the federal government.
We can only hope.
Randall,
Yes, it is hard to believe anything logical will prevail. After all, the biggest BS’er wins the election.
Russia went through this process many years ago with a flat-tax. Guess what? Their revenues INCREASED, more people paid their fair share and they are much better off for it today.
Change is traumatic. The House doesn’t want to give up any type of revenue and they don’t want to reduce government. The only way there will ever be relief is by a reduction in government, the largest employer in the U.S.
No other tax strategy, except the current, will work as long as the federal government is the baloon sucking up all the air.
George,
The USA certainly needs to be made more business-friendly. But these free-trade policies were bought and paid for by Corporate America. They would have never passed a vote of the American people. Ross Perot was ridiculed for his “giant sucking sound” theory, but he is turning out to be right. Free trade among economic peers is beneficial. The jobs are not going to Japan, Canada, Germany, or the UK. They have similar labor costs. Would IBM fire thousands of American programmers to move the jobs to Canada? No, but they would to move them to India where they can cut costs by 90%.
I regard what Corporate America has done as treasonous, and I am astonished that Americans are just passively watching their unemployment rate (the U6) hit 16.5%. Where does the blowback kick in, if ever? 20% unemployment? 30%?
Matt