This is a good point (and a great story - particularly if they hired and trained people for the positions from the local area) - but how realistic do you think it is to expect people to start new manufacturing here in the United States?
There are market forces that can't be overcome - like the steel industry has faced. Ultimately a gov't can only invest in creating new industries and position the country as a leader. Technology should be where we excel. But there's a lot of resistence in investing in areas such as green technology as well as medical.
American manufacturing is gone. There is no incentive to manufacture here. The world gets smaller, and it's easy to ship goods from Asia (or soon, Africa) to Europe and the US. American workers demand and require certain benefits and a certain salary. In a country like China, where there are no unions or a 3rd world country where the standard of living is lower, it's much cheaper to run a factory. We need to be more flexible on corporate visas, it's ridiculously hard for a foreign company to do work here- that's one way we can open up jobs.
I read a little post back in 2010 about how so many ignorant "articles" state this as if it is coherent. In fact, one Google search later, and I've found it! Bob Higgs ftw. Consumption Spending Is 70 Percent of GDP — So What? Spoiler The reason I tell everyone to not delve deeply into economics is because once you become well-read on it, you will find yourself constantly smashing your head against a wall as you will daily run into the kind of garbage written in this CS Monitor article. I mean, the average person doesn't attempt to critique quantom physics precisely because they don't know anything about it. So why does this same person feel fit to critique basic economics when they know nothing about it? I don't get it. As one economist put it: "It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance." This CS Monitor author ought to be fired. As for "rebuilding the economy"... Try to contruct an economy in your mind. Start with "Crusoe economics" on trade, specialization, property, etc. and just stay logically consistent (ie, realize that economic laws do not disappear [via the mystical money multiplier, for example] and cannot be beaten [via monetary expansion, for example] once the economy grows past a certain point) and it should become pretty clear how large nation's economy should work. ^The above run-on sentence is worded horribly and as such is unreadable. Sorry about that... but not sorry enough to re-word it.
investment takes tax dollars. There is no way around it. Private industry isn't willing to take the risks necessary to create new fields. They aren't going to build a highway system with the gov't involved. They don't do space exploration without gov't taking a role. Corn-based fuels - gov't. A lot of medical research has to be gov't funded. The list goes on and on. And yes it takes tax dollars. And yes, often times these projects will fail - like Solyndra. Gov't should be funding small businesses and more. I have taken out an SBA loan for my small business. I haven't spent a penny of it though, but I took it out and plan to as soon as business activity picks up a bit more. But a grant would definitely spur me to do more now and take a bit more risk - that is pay people to start building products. Instead we give tax breaks to the rich. This isn't going to do much for the country. People have to wake up and realize cutting taxes for people who have tons of money doesn't move the country forward - it does the opposite because it puts the federal gov't in debt. And to see what cutting gov't spending does, look at the number of jobs lost since the recession hit. 1 million gov't jobs gone due to cutbacks in local and state spending. That's the big issue we're talking about. We need the rich to invest in this country, but they have no incentive to take risks right now. Getting VC dollars is nearly impossible. The rich don't take risks for the most part. You know who takes risks? entreprenuers are usually middle class. Help the middle class, ease their pain, and innovation will come back just from that. But yes, it does take tax dollars. As an entreprenuer corporate tax rates and capital tax rates don't mean anything to me. I never show a profit. Cutting taxes doesn't help. I need access to capital and the gov't has to play the role because the investment community is scared as hell right now to invest.
Having gone to Wharton and worked on Wall Street in forecasting models for the valuation of CMO's, I think I know a bit on economics. Not saying I'm an expert, but seriously, if you think the health care law is discouraging private investment you are just reading conservative talking points. The fact is that if everyone is insurance, the ROI on any drug goes up, not down, since there are now more people who can attain that drug. Everyone from medical device manufactures to drug companies benefit - which is where investment occurs. The insurance industry was against it because it would hurt their margins...until Obama put the mandate in - a Republican idea - to ensure they get their slice. At this point in time, the risk isn't Obamacare - it's that Obamacare gets partially overturned and you have a big fat mess on your hands. Our economy is consumer spending based. That is a fact. As consumer spending goes, so does employment. The real trickle down is from consumer spending, not from the rich, and not from private investment. Private investment occurs only when market conditions are right - when there is gold in the mine so to speak. When people aren't spending, no one wants to introduce a new product. Advertisers don't want to spend. Companies don't want to hire because sales will be low. Do you think profits are a result of private equity or a result of consumer spending? Where does the money for investment come from? Magically appears? No, it comes from individuals who have profited off of consumer spending. Our economy consists of consumer spending and gov't spending. The two are not independent. If you think this is not the case, you need to take econ 101.
I disagree to that statement because I work within the health insurance industry. Only in 2010 were small business owners (companies of ~200 employees or less) being delivered rate increases of anywhere from 20 to 45%. Corporations negotiate better rates and less volatile rate increases because of the leverage of their larger employee count so industry trends may look similar from the outside. Anyway, just an important issue to not overlook related to your original post. Health insurance premiums have been an issue cutting into the middle class for the last 10 years per the article. That's irrefutable. Our recent 'attempt' to fix this system was not a fix. It just further guaranteed that even more money would be funneled out of the middle class to the corporate healthcare giants and their shareholders.
The economy doesn't need to be re-built because this thread says so. Everything's fine. http://bbs.clutchfans.net/showthread.php?t=215483
Rate increases are smaller for people: http://www.foxbusiness.com/personal-finance/2012/06/07/health-care-reform-holds-premiums-in-check/ i don't see any 45% YOY increases. but in Mass, the rate increases for individuals and small businesses as been 1.2% the last 3 qtrs. I'd say that if Obamacare is anything like Romneycare, which is supposedly is, then that's a very good sign. So actually the AHA looks like it will indeed help to control costs for both small biz and individuals as advertised. I'm actually now becoming more of a fan of it!
I'd be all for pouring a trillion (with a crazy low interest rate) in repairing the infrastructure like roads, ports, canals, dams, emergency and redundant services . I'd even blow up teachers unions and school system bureaucracies. I think that point is past though, as the public is stimulus weary and there's a sizably vocal voter group that is against "government growth" even if it doesn't match inflation nor the non-discretionary excesses of the prior administration. The last recession is hitting blue collar men harder in industries that are adjusting through automation and higher skilled labor. A big works stimulus package would only be a stopgap for the ongoing reality, a reality poorer states steadfastly deny out of ignorance and celebrated mediocrity..."the good ol days". There are several domestic issues that can improve. Regardless, globalization is continually trimming waste and excess, a buffer or bottom line, that benefitted us for the last 50 years. It's the same reason Nixon got us off the gold system and the same reason the US rewrote Bretton Woods. Economic policies in the 90s created a game of musical chairs with shifting bubbles that obscured the rust belt and gave newfound hope in technology and innovation. And now we are where we are, slowly realizing that other nations have arisen "out of nowhere" (Brazil, China, India) and their potential influences in their regions and global economy. As an American, do you fight this trend of a less unipolar world when you've known all your life that you're were gifted in living in the most wealthiest and powerful nation in the world? As a globalist, there might be some comfort that there is growing normalization in wealth outside the West, except that it shatters any notion of stability or predictability. Global economics is a pretty interesting thing. Environmentalism is right up there as well.
