With TPP in the process of being ratified and the American presidential race well under way, focus has again returned to the war for manufacturing (and manufacturing jobs) and its future in America. Boston Consulting Group released a remarkable survey a few weeks ago, which can be viewed here (pdf), here (slideshare) or here (scribd). It's worth posting the executive summary here to see its significance:
Key takeaways from BCG's fourth annual survey of U.S.-based manufacturing executives
1) Interest in reshoring production to the U.S. remains strong, and the percentage of companies actively moving operations back to the U.S. continues to increase
Interesting. Lest readers think that my posts on China reflect American triumphalism, here's a bit of balance with a video from the FT expressing concern that the US is headed for recession. Behold, the bear case:
To all the doubters who triumphantly declared that Saudi Arabia's gambit to destroy the American fracking industry would succeed, FT Alphaville shows why fracking remains resilient. In one word, the answer is: productivity. The tale can be told in just three charts:
The number of oil rigs has collapsed as the inefficient drilling operations went bankrupt:
Oil output continued to increase as productive oil wells with low operating costs expanded operations, and costs were cut at other wells to bring them back into a profitable operating environment:
China’s economic slowdown and Beijing’s fumbling policy response have battered U.S. markets recently. But a slower-growing China, over the long haul, could be a plus for the U.S. in several ways.
On the economic side, a China slowdown would keep a lid on consumer prices as weak demand in China would depress the price of commodities such as copper, oil and steel used in cars, electronics and other consumer favorites, economists say.
I would be lying if I didn’t admit that Brad DeLong and his fellow traveler Paul Krugman didn’t send me into a rage with their inane and insane proposals. But it’s still worthwhile to mention this article, because it represents all of the incompetence that has held the United States back, and merely adds one more obstacle to overcome (the unstoppable left-wing urge to intervene and meddle) on the road to recovery. One of the best and most depressing books I read in recent years was Amity Shlaes’ The Forgotten Man. Unlike DeLong’s broken study of the Great Depression, Shlaes’ research shows how FDR’s unpredictable and constant meddling with the economy inexorably crushed the recovery and extended the Great Depression. How many times must it be said? Businesses require stability! Stop the madness! </rant off>