(530) 467-5690 Chris@TeachU.com

What’s the outlook for the rest of this year? Next year? Beyond? Will the economy contract further or enter a real recovery period?

The answer to these questions may be up to us.

I believe we are approaching a tipping point, not in a Malcolm Gladwell sense where sufficient momentum is reached to push mass in a particular direction, but rather as reaching the sharp edge of a wedge.

Simply, once we reach this edge we can tip in one of two directions.

We might fail by waiting for the government to solve our economic problems. The huge weight of the national debt could tip us into deeper recession, even long term depression.

Or, we might tip in the opposite direction. There could be an awakening of American business to the fact that goods can be produced in the U.S. cheaper than abroad. Making goods at home has benefits we’ve forgotten. Henry Ford knew that paying higher wages to his workers produced car buyers as well as cars.

American manufacturers might wake up to the hidden costs of overseas manufacturing and shift production to the U.S. or at least our own hemisphere.

Many companies are taking the near shore manufacturing option by locating in Mexico. This is good for the U.S. though not as good as “Made in USA”. An affluent southern neighbor is good for us. A prosperous Mexico would save the U.S. billions in security expenses and widen a market for our goods.

Here are the forces pushing toward the return to American manufacturing.
Rising energy costs: It’s not so cheap to move goods from China to the U.S. as it was.
Rising labor costs in China: The Chinese worker wants more and will get more.
Rising value of Yuan: As China’s currency appreciates, the cost of China’s exports rise.
Rising domestic demand for Made in USA: Americans want to buy American made goods.
Rising animosity toward China: Many Americans resent China’s new prosperity while we struggle at home.
Rising common sense of manufacturers: Many manufacturers are evaluating the possibility of coming home on the sheer value of cost and quality control.

If consumers would put their money where their mouth is and actually agree to pay a little more for American made goods, and, if manufacturers could let go of greed long enough to harvest the benefits of manufacturing both a product and a consumer base, we could tip into a long period of prosperity.

This means a couple years of hard work by all of us. It means investment must be made in domestic production by private enterprise. It means we look neither to Wall Street not the government for the answers but we, business leaders must do it ourselves. We can.

I have several clients who make their products in the US. They are doing just fine. I greatly admire those clients because they never considered manufacturing abroad. Thank you.

So what’s it going to be? Wait for the government to fix the problems and tip into depression? Or, start making things here as we should and thus tip into long term prosperity and security.

By way of observation, I’m disappointed in fellow conservatives who blame Obama for not doing enough to ‘create jobs’. Until we understand that the creation of jobs is in our hands not the government’s, the stagnation will continue.

Which way will we tip?

Chris Reich
TeachU.com