The End of Outsourcing?

After years of building what they hoped would boost profits by enhancing overseas operations, many U.S. manufacturers have become disillusioned by the lack of return on investment they had anticipated. Instead of finding cost-saving benefits overseas through outsourcing, they are finding headaches, which have spurred a growing number of American companies to head home and build upon the sturdy and sure bedrock of American stability and predictability. This trend has come to be known as “nearsourcing.” It has been defined in professional publications as “producing products closer to where they are ultimately sold” or “the practice of getting work done or services performed in neighboring countries rather than in your own country.” Jimmy Alyea, writing for Supply Chain Analysis, provides... Read More

The United States of California

If you want to see where the country is headed under the Obama administration, look at California: a state in deep financial trouble that will collapse under its own weight if it does not wean itself off debt, excessive taxes and paralyzing regulations. The same forces that are hurling California toward insolvency are beginning to affect the rest of the country. I recently acquired a manufacturing company in the Sacramento area that is an incredible company with an incredible legacy and workforce. Every time I visit, I relish interacting with the people and the area’s majestic beauty. But there is a feeling of uneasiness bubbling under the surface. Outwardly, everything looks fine, but underneath, people in California are very concerned because of years of mismanagement. Their state will... Read More

When It Isn’t Good to be Number One

America loves to be number one. But now we have the dubious distinction of being number one in a category that nobody wants: we have the highest corporate tax rate in the world. The result is that the U.S. tax code continues to drive American employers to outsource jobs overseas. Since 2001, Japan had levied the highest combined corporate tax rate among the Organization for Economic Cooperation and Development (OECD) countries at 39.5 percent. They recently lowered their rate to 38.01 percent, which according to a study by the Tax Foundation puts Japan’s rate below America’s combined federal and state rate of 39.2 percent — the highest in the world. What does this mean for America’s job picture? Our job creators have fewer financial resources to work with as they struggle to hire more... Read More

Obama Declares War on Coal and Jobs

If there was a commodity that brings $16 billion to the American economy through exports and directly and indirectly employs around 1.5 million American workers, this would be a commodity that would naturally be supported by everyone. That commodity is coal — which is not supported by at least one group: the Obama administration, which has literally declared war on the American coal industry, and the jobs that come with it. Last week the Obama administration proposed new measures that will force new electricity generation plants to cut CO2 emissions by 50 per cent and also mandate investment in unaffordable technologies to bury carbon emissions underground. The new proposals would also set the stage for existing coal burning plants to come under the same arrogant EPA mandate whereby compliance... Read More

Compromised Secrets Compromise Job Creation

Secrets are a trust between individuals and groups. They play a role in security and building sustainable relationships. But when secrets are compromised, trust is the victim. There have been two recent situations where secrets are being compromised — both of which will compromise job creation. The first surrounds the supposed secret deliberations by the Supreme Court over Obamacare. The cost of implementation and compliance with a government controlled healthcare system will be staggering. The estimates escalate each time another layer of regulation is peeled back. Ultimately, this heavy burden will be passed on to American businesses in the form of higher insurance premiums and taxes. The consequence is that companies are not hiring new employees and will start reducing staff to afford... Read More

Bernanke Is Addicted to Morphine Economics

Last week, Richard Fisher, the president of the Dallas Federal Reserve and a member of the central bank’s policy-making committee, compared Wall Street’s addiction to the Fed’s economic policy as “monetary morphine.” I coined a version of that term more than three years ago because it aptly describes how the Federal government is handling the economy. Ben Bernanke, current chairman of the Federal Reserve, is the “morphine dealer” as he continues to promote his “accommodative monetary policies,” which keeps interest rates extremely low. The outcome is that banks, companies, and Wall Street investors can borrow cash at no cost and put it in investment vehicles that return interest. This easy money is addictive and unless Fed policies change, it will be nearly impossible to wean... Read More

When Patents Are Stolen, so Are American Jobs

Ideas build nations. Great minds fueled the economies of nations as far back as the ancient Egyptians. Yet, after only a bit more than 200 years, America has become the world’s innovation leader. Small and medium-sized American companies generate the overwhelming percentage of this creativity, filing 13 more patents per employee than large corporations do. Meanwhile, the core copyright industries alone (not including the broader sector) lead all major industry sectors in U.S. exports and have grown three times faster than the overall economy in the past 20 years. Core copyright industries are those that create copyrighted works as their primary product, including motion pictures, music, software and publishing. Our intellectual property (IP) is in demand everywhere around the globe. Unfortunately,... Read More

Traditional Donor Base Lukewarm on Obama Re-election

If you’re looking for proof that President Barack Obama has lost his luster with his voter base, two of his traditional big donors – labor unions and Hollywood — are taking a tentative look at supporting the Democratic Party with big money. While the AFL-CIO will certainly support Obama and Democrats, they are not generating the kind of money that Democratic presidential candidates are used to receiving. And they certainly are not as enthusiastic as they were in 2008, when unions gave $400 million to Obama and congressional Democrats. Last year, labor political action committees gave federal Democratic candidates and committees $21 million. But this was 20 percent from the same period in the 2008 election cycle, according to a Chicago Tribune story Consider the irony that Obama faces.... Read More

Obama Counting on Rising Oil Prices to Fuel His Green Movement

Talking about oil prices is like moving through an avalanche zone. One loud outcry and the whole thing collapses. That’s what has happened with our saber rattling over Iran. Gasoline prices are rapidly rising attributed to uncertainty about Iran and the loss of Iranian oil supplies to the world market or a blockade of the Strait of Hormuz, through which 17 million barrels of oil, or about 20 percent of total world production, flow each day. Already, the national average price of regular unleaded gasoline today is $3.76, an 8-cent increase from last week. According to AAA, Florida’s average of $3.79 and Georgia’s average of $3.70 both increased 5 cents from last week. Tennessee’s average price of $3.59 rose 3 cents from last week. Yes, Iran poses a problem for the U.S. on many fronts,... Read More

Manufacturing Needs to be Remanufactured

Nationwide, an estimated 600,000 manufacturing jobs are going unfilled, according to a survey published last year by Deloitte and The Manufacturing Institute. The survey found 5 percent of current manufacturing jobs are unfilled due to lack of qualified candidates, 67 percent of manufacturers have a moderate to severe shortage of qualified workers, and 56 percent expect the shortage to increase in the next three to five years as older workers retire. Most of these unfilled jobs are in the skilled production category — positions such as machinists, operators, craft workers, logistics managers and technicians. How did the U.S. manufacturing industry – historically and currently the worldwide leader in manufacturing — lose its mojo? (Yes, the United States is the largest manufacturing country... Read More