American Elephants


“We Are Not Manufacturing Anything Anymore” And Other Fables of the Left. by The Elephant's Child

A common complaint bandied about is that we are not manufacturing anything any more, and there are no manufacturing jobs. But we should always check on ‘common complaints’ to see if they are actually true. The reality is a bit different. America is manufacturing more than ever. Mark J. Perry is the proprietor of the Carpe Diem blog at AEI, and a professor of economics and finance at the University of Michigan’s Flint campus.
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America is a very big and prosperous country — even in the slowest recovery since 1945. Obama liked to call it the worst recession since the Great Depression (blamed entirely on Bush) and he’s been talking up his recovery ever since, which has been the slowest since 1945. Obama clearly wants America to be a smaller influence in the world (stop being a bully) perhaps turn us into a gentle giant? An odd ambition for an America president. But during campaign season a frequent claim is that we don’t manufacture anything anymore.  Not so.
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Our manufacturing workers are more productive than ever before. Europeans worry more about vacation time and time off. Americans for the most part expect and like to be productive, and consider that to be the way to get ahead. They hate union rules which mean that you have to wait for someone from another union to replace the lightbulb, and support right-to-work laws.
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The real recession was short, ending in June 2009 — it’s the recovery that has been problematic. Keynesian economics doesn’t work. Neither does adding on hundreds of new regulations, new restrictions, higher corporate taxes, and ObamaCare.
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We are manufacturing more stuff, making more profit, and increasing productivity per worker— with fewer people. Jobs that are simple and repetitive are being replaced by robots. Manufacturing output has increased more than five-fold over the last 67 years — from $410 billion in 1947 to a record-setting level last year of $2.09 trillion. The number of manufacturing employees has steadily declined to a low in 2010 of 11.6 million workers to rebounding slightly to more than 12 million last year. Remember that the jobs replaced by robots were mostly those that the worker hated. Doing exactly the same thing every 8 hours can get poisonously boring, and building robots would be way more interesting.

The ability of the U.S manufacturing sector to produce increasing amounts of output with fewer workers is a sign of economic strength and vitality. Disruptive for displaced workers, of course — but it only happens because of new inventions and new processes with more opportunity involved. Automation is here to stay, and results in lower prices and a healthier economy. Robots don’t get hurt, have pensions, make mistakes or take vacations, and they don’t join unions.

The clever engineers who devise robots will devise more machines, which will also have to be manufactured. But manufacturing isn’t really the romantic idea of “working with your hands” anymore either. For that scroll down to the clever parody of “Artisanal Firewood

Donald Trump was grumbling the other day about having to buy televisions manufactured in South Korea and wondering why the US would defend a nation that sells such reasonably priced products. “I don’t think anybody makes television sets in the United States anymore. We don’t make anything anymore.” Let’s cut the talk about “bringing jobs back.” Bad idea.



The Business of Businesses is to Create Value by The Elephant's Child

Back in 2011, a Rasmussen survey taken on August 20 and 21st found that 64 percent of Americans actually believe that the most basic goal of businesses is “to create jobs for the overall economy.”  Only 25 percent of respondents understood that “the primary objective of a business is to create value for the shareholders.” In other words, to make a profit. The socialists among us have so demonized the word “profit” without any understanding, that people get confused.

We have a lot of people in this country currently unable to find a job, and a lot who are working at jobs for which they are overqualified. So jobs are a big concern. Jobs, however, are not created out of thin air, or wishful thinking, and businesses are not charities.

Business begins with an idea. Someone thinks he can make money with his idea. Unless he is independently wealthy, he must raise money to start. He has to sell his idea to people who will believe that his idea will create value. Those people will become shareholders, giving our idea man enough money to get a start, and he in turn, gives them shares or rights to future value.

With that financial backing he can hire people to do the jobs necessary to create the value promised to shareholders and continue to create value so they will continue to support him.  Investors will stick around only so long buoyed by hope for future profits. They expect to get their money back, with some more value thrown in to reward them for risking their money.

“Profit” is not a dirty word.  People have long been confused by the political left— academics and media people who simply do not understand the profit motive. A successful idea, well-implemented, can create many jobs, not only in their own offices, but in all the companies that supply a business: raw materials, shipping containers, computers, equipment, janitorial services, transportation, and so on; and the same increase happens in each of the suppliers’ businesses.  Free enterprise at work.

But a free market economy is always changing, growing, and there is ‘creative destruction’ too. Here are a couple of examples that will clarify it all. Though each short video could prompt another few essays.

The MSRP for a Tesla Model S — $106,200. Tax and license extra. But the EPA: 101 city/102 hwy (MPGe)




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