The U.S. is one of the largest manufacturers in the world -- even bigger than the combined European Union. We produce aircraft, machinery, construction equipment, cars, and lots of other things that you rarely hear about because you can't buy them in your local Wal-Mart. Automation has had a far bigger impact on those job losses than "offshoring."
Seriously, I don’t get it. 70000 factories were offshored. How is this helping?
That is simply incorrect. In many cases they were just closed because they were functionally obsolete. We just had a major manufacturer of specialized plastics announce that's closing down its plant in a town not far from me. It's a devastating loss for the local economy of that town.
They're not leaving to go to China. They're consolidating five different plants around the country into one massive new plant down in Texas or Louisiana that they just constructed at a cost of about $1.8 billion. So you have one manufacturing facility replacing five facilities, and the new one alone will produce more plastic products than the five other ones combined.
Are you saying there are no problems with business existing in this country?
Not at all. I agree with you 100% that businesses in this country face a lot of challenges. I just recognize that tariffs aren't going to solve them.
I drive around and see plazas with lease signs in 1/3 of their windows. They’ve been like that for years. Were are the businesses moving in to those locations.
I've seen some very interesting figures about commercial real estate in this country over the last 60-70 years. One real estate consultant I occasionally work with produced a report for one of my clients in which he documented this problem over time. Basically, the U.S. had a pretty consistent ratio of commercial floor area relative to population from the 1940s up until the 1980s. There was something like 8-10 feet of retail space in the U.S. for every person who lived here.
In the 1980s this number began to escalate rapidly, and by the mid 2000s it was somewhere around 23 square feet. In other words, this country went on a retail construction binge that flooded the market with more commercial space than we ever really needed. When you see all those vacancies in those shopping centers, you're seeing signs of a real estate market that is simply returning to normal.
Thanks for that. Food for thought.