It is absolutely astonishing to me that all we hear out of Washington D.C. and the current Administration is that we need “Jobs, Jobs, Jobs” to get this country going again. Yet, all that is done is a fine job of crony capitalism as we continue to bailout the very entities that are primarily responsible for the current blight of the economy that has been fostering for the last 30 years.
Today, however, took the cake as I listened to Stuart Varney, and the co-host on Fox News, talk about how economically great it was for California to have their new San Francisco-Oakland Bay Bridge manufactured in China. Yes, California would save millions of dollars on the actual manufacturing of the bridge, however, how much did they lose in economic prosperity for a state that is sorely in need of increased economic activity and tax revenues.
According to an article in the NY Times there are “hundreds of Chinese laborers” completing work on the bridge. I am sure there were hundreds of competent laborers in California that would have loved to have the job. More importantly, the materials, tools, parts, engineering, electrical, etc. would have created hundreds of more jobs in California. In turn, this would have given those individuals wages to spend which would have created demand on businesses to produce and hire. Oh, and don’t forget the state income taxes, sales taxes, etc. that would have been generated by the wages that were earned and the consumption from those earnings.
It isn’t just California either. In New York, Chinese companies have won contracts to refurbish the Alexander Hamilton Bridge, build a new Metro-North train platform near Yankee Stadium, etc. Yes, some American labor will be needed to install the projects but my point is that if you want to create “jobs, jobs, jobs” in America we need to bring the production and manufacturing jobs back to America.
As we stated in our recent article “Financial Profits Reduce Economic Prosperity” the real growth in the U.S. economy comes from manufacturing and production as they are the biggest multipliers of spending in the economy. Financial engineering and government spending have very little, if any, multiplier through the economy which is why over the last 30 years as we have migrated away from the “blue collar” work that built America to its economic peak to an economy based on finance and service our economic strength and prosperity has weakened.
This bridge in California is a $7.2 Billion structure and is one of the most expensive structures ever built. California officials saved $400 million by having it built in China. Union labor is primarily to blame for driving up the costs which is why organized labor must be de-organized in America if we are going to start effectively competing and bringing manufacturing back to the states. However, even with that $400 million is savings; California most likely gave away more than that in potential economic prosperity.
Oh yes, remember those “Build America” bonds that were issued to start rebuilding America. Well, California decided not to apply for federal funding for the project because the “Buy America” provisos would probably have required purchasing more expensive steel and fabrication from United States manufacturers. Those manufacturers need the work, would have created more jobs and created more income and have created tax revenue for the government.
However, here was the key “WAKE UP AMERICA” statement in the article: “I don’t think the U.S. fabrication industry could put a project like this together,” Brian A. Petersen, project director for the American Bridge/Fluor Enterprises joint venture, said in a telephone interview. “Most U.S. companies don’t have these types of warehouses, equipment or the cash flow. The Chinese load the ships, and it’s their ships that deliver to our piers.”
Seriously, you mean in America we can’t put together the capital, cash flow or find the facilities to build a bridge. We can’t justify building in America because the cost of using U.S. manufacturers is just expensive. If that is REALLY the case, and it is, America is in a LOT more trouble than I originally believed. It is time for us to get our head out of sand and realize that if we don’t start effectively competing to bring back the basis of which drives and builds an economy, soon we will be little more than a shadow of our former greatness. Wake up America.