With the global supply issue and the potential for a new Cold War in Europe, a lot of American companies are rethinking the wisdom of offshore production and globalization in general.
The good news is that can and probably will bring back a lot of manufacturing jobs, but those companies will need to pay a decent wage to both obtain and then retain skilled labor.
That will mean higher costs for products and that will be vilified as higher inflation. Unfortunately inflation isn’t well understood by most folks and is mostly regarded as a four letter word, especially by companies having to pay better wages.
The point that is missed is that when people in the US are making more money, people in the US have more money to buy US made products. When you keep money in a local community or in a single country, it turns over multiple times and drives the economy far more effectively than spending labor costs offshore and then sending profits offshore, or parking them in investor’s accounts.
What will get in the way of this move back to US based production will be decreased corporate profits in the short term, and reduced dividends for investors in the short term. We are all about the next quarterly profit statement and share value in the US and it’s an attitude that ruined companies like McDonnel Douglas, Boeing, Winchester and Remington. Our derivative income economy is a rathole we’ve been sliding down for the last 3 decades and it hasn’t been working in our national interest.
So keep an open mind.
Remember that as we try to make our economy great again that period of time when things *were* great was the mid 1950’s when the administration implemented high corporate tax rates. It worked as an incentive for corporations to reinvest profits in R&D, skilled labor retention and benefits and improved production capacity and capability, rather than paying high taxes on those profits.
Those rates fell in the 1980s with the idea that lower taxes would allow higher profits to “trickle down”, ignoring the fact it was high taxes that made it trickle down in the first place.
Most importantly as companies move toward bringing production back to the US, remember that we’ve got to make those efforts successful by buying American products, even if they cost a bit more. In the mid and long term, we’ll be much better off and much less dependent on foreign countries and world events.
