Made in the USA
We hear our friends say, "The US doesn't make anything here anymore!"
But we do. Last Thursday, the Commerce Department announced that as a percentage (39%) of the growth in our Gross Domestic Product (5.9% in 4Q2009), goods exported from the US hit a thirteen-year high in 4Q2009. But wait! That's not the good news, which is that the US is still - far and away - the number one manufacturer in the world, producing more than 20% of global output in 2009. China was number two at 12%, Japan was number three at 10%, Germany was number four at 7%, and no other country contributed more than 4% of global manufacturing output. (All data from "Made in America", LPL Weekly Market Commentary by Jeffrey Kleintop dated March 15, 2010)
Just look at what we produce. While China produces toys and Japan produces cameras, the US produces and exports technical and machine tools, medical equipment, computer software, pharmaceuticals, commercial airplanes, defense products, satellites, and myriad other high-value-per-unit products.
Let others have their cheap labor. These high-value-per unit products tell us that our most important comparative advantages are a prodigious pool of intellectual talent and an ocean of invested capital - each the result of two hundred years under a (relatively free) capitalist system. Our comparative advantages are not easily duplicated. I believe our greatest threats are not overseas sweat shops and call centers, but restrictions of free trade and government-enforced price controls. Sorry; I do digress.
Old Europe and Japan are stuck in the muck of semi-socialism, as fourth quarter annualized Gross Domestic Product was less than 1%. Will they ever learn? More than 50% of US exports go to emerging markets. Yes, China is an emerging market, but so are Brazil and India. Those are among the many countries we sell to that are experiencing high economic growth rates. We do want prosperous customers, do we not? (All data from "Made in America", LPL Weekly Market Commentary by Jeffrey Kleintop, CFA dated March 15, 2010)
Here is the best news for investors: The S&P 500 companies derive more than 40% of their revenue from global markets. ("Made in America", LPL Weekly Market Commentary by Jeffrey Kleintop, CFA date March 15, 2010) According to LPL Research, American business sectors with the highest rate of export-driven sales are - not surprisingly - Information Technology, Industrials, Materials, and Energy.
Despite Europe's problems and our own currently high unemployment rate, The Global Capitalist Revolution is still growing - and in the long run - I feel it cannot be stopped. In my opinion, American manufacturing will remain an important contributor to worldwide economic progress and rising living standards for American workers.
It looks like this week - or next - we'll know if the President's signature proposal to "transform America" will become law. I haven't said much about this issue, because the debate has long since left the bounds of reason. Nevertheless, the time has come for me to say something - or forever bite my tongue and pen.
I am opposed to the health care bill currently before Congress. Moreover, if I could, I would repeal every piece of health insurance legislation going back to 1941. Why?
Why is individual insurance so expensive? Why are so many Americans - over half the population, including more than 90 percent of the privately insured - chained to their employer for health insurance?
Government policy has favored employer-based insurance since WWII. Coercive labor union legislation (think "Cadillac Plan" exemptions) and employer tax breaks, never extended to individuals purchasing insurance on their own, have distorted the health insurance market. It is, in fact, a gross distortion of language to call it a "market". Employer-based plans now outnumber individual plans ten to one - and who gets to choose their own plan? Why? Or more accurately, why not? (All data from http://blog.aynrandcenter.org/government-health-care-in-america-part-1/)
Health insurance in America is typically comprehensive, intended to cover almost any medical expense, including routine care. This is like using car insurance to pay for tune-ups and oil changes. This, too, is the result of government policy. Why?
The government has already imposed more than 2,100 mandates dictating who insurance must cover and what services it must pay for. Are we that stupid? (My granddaughter says I can't say "stupid", but she's never tried to buy health insurance.)
Why do the President and Congressional leaders want to impose another 2700+ pages of legislation with untold new bureaucracies, their regulations, and more tens of thousands of purse-snatching busybodies wielding the power of life and death over people they can never know?
Enough already! The last question answers itself--and all the others, too. But really, are we that stupid?
Michel Grandin was ten years old when he saw the plane go down on June 10, 1944. It had been strafing a German convoy, when the pilot apparently misjudged the height of an approaching tree line - one of those infamous and ancient hedgerows of Normandy.
Michel's father forbade him to run to the crash site, though he, a local carpenter, and the village priest did so. While these French patriots waited in the nearby woods, German soldiers policed the scene of the crash, taking the pilot's identification and a few pieces of the wreckage of ConJon IV, a magnificent, scarlet-nosed P-51 aircraft. Later that night, Michel's father and the priest recovered and took care of the pilot's body, prepared a casket, and held a private funeral service. They buried Conrad J - the only name they knew to give him - in their church cemetery.
Katherine Henderson was born in 1923. She graduated from the most beautiful high school in the nation (according to Life Magazine) in 1940. She married Conrad John Netting, III in 1943. Within a year of the wedding, Katherine was a widow. Her only child, Conrad Netting, IV was born in San Antonio, Texas just one month after his father died in France.
That's about all I can write through damp eyes. You'll have to read Delayed Legacy* by Conrad John Netting, IV - and I sincerely hope you will. In it you will meet the most generous and elegant people of Saint-Michel-des-Andaines, and of San Antonio, Texas, too.
*Delayed Legacy, Conrad John Netting, IV, Maverick Publishing, San Antonio, 2005.
Emily Mae Stelter