Japan-World Trends [English] The author of this blog will answer to your questions and comments. And this is the only place in the world where you can engage in free discussion with people from English, Japanese, Chinese and Russian speaking areas.


August 20, 2011

More production and not contraction will benefit ordinary people in the US

It seems that the controversy in the U.S.has come back to the days of the debate between Jefferson and Hamilton. But as a Japanese, who have been thriving on manufacturing, I want to say that if the U.S. regains its once robust manufacturing, most problems will be solved.

The wage level in China has substantially risen. China is losing its advantage as export base, instead it is becoming a major importer. Things consumed in the U.S. had better be manufactured in the U.S., as far as comparable cost warrants.

Now German and Japanese firms are poised to increase their production in the U.S. and adjacent countries. For example Volkswagen of Germany has augmented the capacity of its factory in Chattanooga, Tennessee (see http://www.volkswagengroupamerica.com/chattanooga/), Nissan and Honda are planning more production in Mexico.

A politicized dichotomic discussion on economy harms everybody. One needs both Jefferson (production) and Hamilton (money supply). If production is healty, and the volume of the money supply is commensurate to the volume of commodity and service, then everything should be OK.

A mere contraction of the government will mostly hit the poor and the minorities, and will lead to a further and bottomless contraction. We, the allies of the U.S., need help of a sound and balanced U.S., and it is neither Jefferson nor Hamilton.


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