âThe United States, it is said, has lost its manufacturing base.â
âWe no longer produce anything. We import all our goods from China.â
âChina is a manufacturing giant and America is a dying economy.â
These are myths.
The fact is that The US produces 20% of the world's manufactured goods. It is the number one manufacturer in the world. China produces 12%. That's right we produce almost twice what China does...
To say that we no longer produce anything is absurd. And yet, you hear it all the time. The US leads the world in production. Japan, China, Canada, Mexico, and Europe, fall far behind the US, in that order.
The Carlisle Company's CEO was interviewed on CNBC last week. Carlisle has chosen to close its tire manufacturing plant in China and bring all of its American employees back home. He was asked "why"? The reason he gave was that US workers are more productive than the Chinese. "They produce a better product and are less expensive than Chinese workers".
How is this possible? The average Chinese worker makes 300 dollars per year! The answer according to Carlisle is that the US worker is more educated, therefore, more productive. With the proper use of new machinery and technology Americans produce more per man hour than any other worker in the world including the Chinese. They also produce a better quality product according to Carlisle. And quality is how you gain and keep your market. And then there's the Chinese government to deal with. The bureaucracy is a nightmare and is time consuming and expensive in terms of lost productivity.
When all was said and done, he said, the experiment to open up in China failed. This is only one example of why America is so competitive - less bureaucracy, better tools, and higher education. One can only wonder how much the US would be capable of exporting if allowed to. The only reason we constantly run trade deficits is that we consume more than we produce. But we still export in total dollar amounts about the same as China. We just don't export more than we import from China, or Europe, or Japan for that matter. The reason? Because those governments are protectionist and will not allow their citizens to buy American goods without permission.
If we had free trade in the world, there is no doubt that American exports would soar and we would lead all nations in exports and be a surplus nation. The fact is, when it comes to manufacturing nobody does it better. After all, it is America where most new products originate from. America innovated its way out of the agricultural economy by creating the manufacturing economy. And we innovated our way out of the manufacturing economy and into the new high-tech economy we enjoy today. America is the Fountainhead of innovation in the world and has been for over two hundred years.
