Jobs, Jobs, Jobs

The end of the week seemed to be a public relations coup for the Obama administration. They exalted in the employment figures which indicated that payrolls rose by 162,000 workers. And all the paundits were saying how the employment numbers grew by the most in 3 years. All this seems to indicate that the recession is over and happy days are here again.

http://www.bloomberg.com/apps/news?pid=20601010&sid=aDCWdea8_JO0

But in my view there is no silver lining, the US continues to live off printing money. This is indicated by the trade deficit numbers. Consider the deficit numbers in January. There was a deficit of $37.3B. As we have preached in the past, the US must become more self sufficient in manufactured goods. While the US struggles to blame China for currency manipulation, there is no effort to try to deal with increasing manufacturing in the US itself. This is akin to blaming the drug supplier for the demand of the drug user. Irrespective of whatever monetary policies the Chinese chose to follow, the US should encourage in every way possible the return of manufacturing items back to the US. The US must relearn to make shoes, shirts, hats,etc.

And while it is necessary not to begrudge anyone getting a job, it is also important to understand that the more money the government throws into the system, the more likely it is that some if not most of that money will leave the US. Thus incentives like federal-back infrastructure jobs (not to mention the current increase of census workers) hire people (a good thing), pay them so that they can spend money on imported necessities. So the government creates more money only to see that money (or a good portion of it) leave its shores. Again this is not sustainable.

So the bottm line, solving the recession or making the US a strong economic (viable) country is NOT about more jobs, it is about creating an environment so that manufacturing companies are more likely to build in the US. Once that is done, the jobs will come!

"The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Departmentof Commerce, announced today that total January exports of $142.7 billion and imports of$180.0 billion resulted in a goods and services deficit of $37.3 billion, down from $39.9billion in December, revised. January exports were $0.5 billion less than December exportsof $143.2 billion. January imports were $3.1 billion less than December imports of $183.1billion."

http://www.bea.gov/newsreleases/international/trade/tradnewsrelease.htm