Manufacturing returning? True or wishful thinking?


http://finance.fortune.cnn.com/2011/06/29/the-secret-role-of-energy-in-bringing-u-s-jobs-back/

There are several opinions in Fortune essentially saying the same thing: That manufacturing is returning to the U.S. from China and they cite different examples with names of companies, like the one making popsicle sticks returning not to the United States but to Canada.

Keep in mind not all outsourcing goes to China.

On the other side, just yesterday if I remember well, I posted about the new San Fran-Oakland Bay bridge being built in sections in China, the Chinese corporation chosen over American builders.

My opinion is that small companies may return for a number of reasons but the large corporations are staying put overseas for as long as their earnings are tax-sheltered abroad.

Here in New Jersey, we can not touch those earnings except when they are paid to the share-holders. Thus, if I am elected governor of N.J. in 2013, when Washington grants the next tax holiday and those foreign earnings are paid to investors, we will be waiting.

China offers a much greater market with almost 1.5 billion people eager to live better and consume more while the American consumer is exhausted. The Chinese government just initiated its great push to increase internal consumption and controlling inflation at the same time.

Despite all the opinions about China being in fiscal trouble, they are in much less trouble than anyone else. China is a communist country and it can do things to manage its economy that are not possible anywhere else.

If manufacturing is truly returning, some of the tax measures I advocate for may need revision. Nation’s realities may be different from New Jersey’s. Jobs may be returning to the south and not to the garden state. But, I believe that the trend will not change between now and the end of 2013. That is, an overall net loss of American industrial jobs to outsourcing for the next foreseeable future.

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