Sunday, November 16, 2008

More Bad News

Reading the Sunday paper this morning, we learn:

Japan has officially entered a recession.

Small businesses are being crippled because banks have shut off new loans and lines of credit.

This decade is shaping up to be the worst decade ever for American stocks, lower than they were 10 years ago. The year over year return is actually worse than it was even from '29-'39.

"Manufacturing helps cushion against crash", and "Retool our economy now, experts say". Regions like Arizona are more prone to extremes of boom and bust, because of its industries related to population growth, and lack of manufacturing. Obviously, that can be said for the whole US economy as well.

Indeed, manufacturing is the root of most economic wealth. We need to re-industrialize America, the sooner the better, providing tax incentives for domestic companies, and excise penalties for imports.

Job growth in wealth creating industries (construction, manufacturing, trade, transportation/utilities) is negative. The only job growth is in non-wealth producing jobs: education and health services, leisure and hospitality, and government. This is the profile of a dying economy.

Protectionism gets a bad name from wealthy class, who stand to make money by undercutting American jobs and wages. But now the chickens have come home to roost. American wealth and productive capacity has been gutted by internationalists for the last 20 years at least, and now we are all paying for it.

We must never let this happen again.

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