The Pending US Manufacturing Renaissance

Would anyone believe that the United States is on the verge of a manufacturing renaissance. Some people do and they make a compelling case for it.

Within the next five years, the United States is expected to experience a manufacturing renaissance as the wage gap with China shrinks and certain U.S. states become some of the cheapest locations for manufacturing in the developed world, according to a new analysis by The Boston Consulting Group. (BCG).

With Chinese wages rising at about 17 percent per year and the value of the yuan continuing to increase, the gap between U.S. and Chinese wages is narrowing rapidly. Meanwhile, flexible work rules and a host of government incentives are making many states—including Mississippi, South Carolina, and Alabama increasingly competitive as low-cost bases for supplying the U.S. market.

No we are not talking "green jobs" or other governmental flim flamery. We are talking basic industrial and consumer goods manufacturing that created this country's wealth. The study goes on to cite three manufacturers Caterpillar, NCR, and Wham-O-Inc that have recently made substantial investments in their manufacturing capacity or who have recently returned their manufacturing to the United States. Clearly new political leadership and a sane tax code are needed to maximize this opportunity. A Perry, Cain, or Bachmann administration would slash regulatory impediments to a bare minimum, reduce the corporate tax that make the US uncompetitive, and foster the development of cheap energy. Returning to one of my favorite subjects, there is this from the Wall Street Journal;

One of the overlooked consequences of the U.S. shale-gas revolution has been the multiplier impact that access to large quantities of cheap gas can have on the broader U.S. economy. Shale gas could lead to a revival of the American steel and chemicals industry, and of energy-intensive manufacturing. It may also push food prices lower, since natural gas provides 80% of the constituent of most modern fertilizer.

Keep the faith! Most of this country's problems are political not economic and we know how to fix that.