Trump offering a new social contract -- and industrial policy

American Thinker ^ | 12/03/2016 | Thomas Lifson

[MaxistheBest]

The scope of the vision of America presented by President-elect Trump yesterday is breathtaking. .... He is rewriting the social contract binding Americans, and challenging trade and industrial policy orthodoxy head-on.

Charles Krauthammer of Fox News now gets ...

“These conservatives have to accept the fact that you have to sacrifice economic efficiency accept for equity. If you don’t you’re going to lose the country. And in the end it’s worth it to create social peace. That’s what the model is here.”

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.... the United States must maintain a manufacturing sector. The shift of manufacturing to low wage countries is not a law of nature, not an inevitability, and not a path that America will take in the future. We cannot abandon the regions of our country that have devoted themselves to manufacturing.

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There are many factors that affect the attractiveness of such strategies to companies.

The cost of capital

Depending on the cost of capital, investment decisions change. There is well over a trillion dollars in corporate wealth sequestered from the American economy by our highest-in-the-world corporate profits tax that will be enthusiastically repatriated under the new tax regime being promised.

Regulatory obstacles

rump has promised sweeping reform, and yesterday emphasize how he had learned from executives at Carrier that regulations ere even more expensive than the wage differential, in costing out the option of the Monterrey factory versus investing in next-gen manufacturing in the USA.

[GOPJ]

What? What? Are you saying if we went to war with Iran - - and China was backing Iran - - that we might not be able to get tank parts? Or car parts or machines parts? Oh no, you can’t be saying that... /s

[usconservative]

He has not mentioned the national security dimension of such a policy, but it is obvious to all but a few theorists that you cannot maintain a strong nation if you depend on others to do your manufacturing.

You're bringing up an excellent point that's lost on many on both sides of the political aisle. Case in point: during the second invasion of Iraq in 2003, Norway refused to sell the United States key components to our "smart bomb" guidance systems because they disagreed with Bush's policy and the invasion.

We had to hurriedly source those components within the United States and ramp up manufacturing quickly to regain our smart bomb capabilities.

Without manufacturing, a nation simply cannot defend itself.

[factoryrat]

Of course they wouldn’t, they have never been exposed to that kind of environment. I’ve done work in foundries, that have long since closed down. My kids have never even seen that kind of industrial infrastructure, because it was torn down, and all of the equipment packed up and sold to china over two decades ago.

[central_va]

Offshoring is due to the huge differences in wages around the world. Regs and taxes are the fig leaf to get “Conservatives” on board the screwing of America.

[central_va]

Free men in a free market inside the USA is a good thing. Globally not so much, not possible really. So get off your high horse.