America’s Soul

It is not the low cost of labor that drove away America’s Soul, but the high cost of liberalism.  The regulations.  The laws.  The taxes and tariffs.  The union strangleholds.

If you analyze the costs of all a manufacturing business incurs, labor costs aren’t that big of a portion.  And businesses are starting to realize it, too.  The poor quality and the long term costs of businesses from off-shoring are actually starting to drive businesses to un-off-shore their manufacturing base.  For example, if a company builds a factory in China, they do not actually own the factory.  China owns it, even though the company still must pay property taxes.  So if a company wants to leave China, they literally have to leave everything behind.  The poor quality, bad customer relations and poor business models is starting to be bad for business.

This “Off-shoring” of business and the transfer of the economy from a Manufacturing base to a Service industry is **NOT** inevitable.  Nor is it healthy.  No country can survive it.  It is no coincidence that the country is on the down swing going from popped economic bubble to popped economic bubble to popped economic bubble.  And it is no coincidence that every pop swings the country lower, and every pop comes with higher real inflation.  It is no coincidence that even though unemployment rate is down, so is the Labor Force Participation rate.  It is no coincidence that with the departure of America’s Soul, that all of this is the new normal.

No country can survive the departure of manufacturing base.  As discussed in previous posts, Manufacturing creates Wealth.  Services can trade for this wealth, but they cannot create it.

If tomorrow every single Democrat were voted out of office, and replaced by a Republican, the country’s soul would still not be saved.  This country can only be saved by the return of Manufacturing.  This will bring back jobs and wealth.  It will bring back prosperity and innovation.  It will even make those in the service industry wealthy.  A rising tide lifts all ships.

We are at the tipping point.  The car is resting on the edge of the cliff slowly, very slowly falling off.  Doing nothing will be disastrous.  If we want to save this republic, we need to drop everything to get manufacturing back.  We can do things like fire every single person in the EPA and sell the building.  Or fire 95% of the IRS and institute a single, low flat tax rate.  Or institute equal tariffs and import policies against other countries.  Or all of these ideas, and more.

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