Thursday, January 30, 2014

HONDA LEADING THE WAY WITH U.S. MANUFACTURING & RECESSION BUSTING IDEA

HONDA LEADING THE WAY WITH U.S. MANUFACTURING & RECESSION BUSTING IDEA

I just got the inspiration for a 2 for 1 blog on this with another article of interest today. They both link together nicely as you will see with a manufacturing theme. The first deals with Honda making some U.S. history! 


We just talked about this yesterday, the resurgence of U.S. manufacturing, with the important news about Walmart. And now this. Honda became the first foreign company to export more cars built in the U.S. than it imported from its own country. The numbers are pretty substantial too, exporting 108,705 vehicles and importing 88,537 from Japan. What at first seemed like a whisper out there to increase U.S. manufacturing is now very audible and getting louder quickly. It seems like momentum is building, and more and more companies are joining in, taking their production home from elsewhere in the world. That takes a lot of money, and this was no different. $2.7 billion was spent over the past 3 years to expand Honda’s manufacturing operations in the U.S. They say that they are looking to eventually build all the component and all vehicles here, so they plan on expanding even further. Other foreign car companies are also ramping up their U.S. manufacturing, but not as much as Honda. 

Now to the 2nd article. I bypassed the State of the Union address because it is just too obvious. Obama said he will continue the batter against inequality even if he has to go it alone, where he has extremely limited options. No, this article holds much more promise for all of us, because there is something new here (actually old but no one has mentioned it is a long time at least that I have seen) that must be seriously looked at. The article compares the recession of today to the last one of this magnitude in 1935.

Back then, the Gov’t. created the Emergency Relief Appropriation Act of 1935, which gave birth to the Works Progress Administration. That pumped $13 billion into the economy to create public jobs, which in turn employed 8.5 million people over an 8 year span. This kind of Gov’t. involvement these days is almost universally shunned by both parties but it shouldn’t be. Despite looking back at how something similar did not work in the 70’s with Jimmy Carter with the Comprehensive Employment and Training Act, Lawrence Katz has a good idea (the old one). Since he works at Harvard, and was formerly the chief labor economist in the Clinton administration, he is very smart. He thinks that we should put people to work on building national infrastructure and things like cleaning parks. He says the infrastructure projects are long overdue and that by doing this you could really make a dent in the long term unemployed. The money that is being spent on unemployment would instead be investments that would reduce the U.S. debt. This is what they did in 1935 and they accomplished plenty: half a million miles of highways were built, 100,000 bridges and 100,000 public buildings. The other option is exactly what is happening now, Gov’t is trying to spur lending with stimulus money. The detractors of that strategy (Republicans) favor cutting back Gov’t spending and letting the economy fend for itself. It is clear that neither of these are working so maybe it is time for history to repeat itself again here. This is the first I have heard of this and it seems like it makes a lot of sense. I really hope someone important reads it and realizes that some efforts should be made in this direction. Talk about increasing U.S. manufacturing! What do you think??

Honda makes history as car exports from U.S. beat imports from Japan


Confronting Old Problem May Require a New Deal

http://www.nytimes.com/2014/01/29/business/economy/confronting-old-problem-may-require-a-new-deal.html?_r=0





Orin Rosenfeld
President
Rosenfeld Realty Advisors
9858 Glades Rd. Suite 209
Boca Raton, FL 33434

Phone: 561-756-1665


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