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View Diary: "Competitiveness," Just Another Word For Nothing Left To Lose (288 comments)

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  •  Competitiveness has been willfully destroyed (10+ / 0-)

    I run a small manufacturing business. I have to compete with manufacturers who pay less than a dollar an hour for labor. Once we pushed the free trade button we destroyed competitiveness for US manufacturing. But we generated huge profits for importers.

    My rent is an order of magnitude higher than rents for small businesses in China. This reflects many factors. Most commercial real estate is owned by wealthy folks, and I'm talking big time wealth. They borrow money from the banks (your savings) and buy commercial real estate. Their entire game is to sign the business owner at the highest rent that the market will bear. We just went though a massive real estate bubble with "net,net,net" rents at astronomical costs per square foot. These rates are slow to come down, despite billions of square feet of unoccupied retail space. These costs reflect inflated building costs from the bubble and increased tax rates. Again the real estate bubble generated huge profits for banks and speculators, and now businesses pay the price.

    Energy is another issue. I've noticed that the cost of delivering energy is now about equal to the cost of the energy itself. In my area electricity generation is about $.07/kWh but the cost to me is $.13/kWh. In the Summer my gas bill is still high. That's for zero therms of gas, it's the fixed cost per month for delivery to a commercial building, and this is not cost averaging.

    Money is another issue. Go to a bank and ask them to loan you capital to expand your small business or build inventory. Good luck with that. I was using credit cards for a while, but they all got jacked up to 21% to 30% rates, after years at 7%. They made a lot more money off of me, but is the economy any better for it?

    If you want to restore competitiveness you've go to tax the relative inequality of wages for offshore manufacturing. Secondly, you've got to create a business infrastructure that supports manufacturing, and that includes rent, energy and capital. That would be at the expense of well-embedded interests, the real-estate moguls, the banks and the energy companies. I just don't see this happening in the US any time soon.

    Here's the point. As those who control resources, energy, buildings, money, get better and better at extracting wealth, our manufacturing environment becomes less and less competitive. Yet they report higher and higher profits. I am extremely skeptical that Obama's SOTU message of competitiveness will contain anything to address my concerns, but I'm hoping to be surprised.

    •  I hope so as well, but my cynical self says... (2+ / 0-)
      Recommended by:
      emal, The Wizard

      all this is for the re-election efforts for 2102, and not for American citizens (unless you count their "input" as only a vote for the contiuing state of quasi-Democracy).  

      Hey Boehner and the Republicans: WHERE ARE THOSE JOBS YOU PROMISED????

      by LamontCranston on Sun Jan 23, 2011 at 08:02:25 AM PST

      [ Parent ]

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