Tuesday, October 18, 2011

U.S. not "trying that hard" on exports according to GE's Immelt - Balance of Trade and economic weakness

Reuters recently ran an interview with GE's CEO Immelt in which he laid out a case that the U.S. economy is weak because the U.S. is not trying hard enough to raise exports.  The basic idea is that it's other countries who are building actual products for export, and that the countries who export actual products are the ones earning revenue.  The U.S. manufacturing has been weakened by decades of globalization moving what used to be U.S. manufacturing to other countries.  I'm sure that General Electric has done their share of offshoring and moving manufacturing overseas, so this is a bit like the pot calling the kettle black.

"We're not trying that hard," Immelt told a Thomson Reuters Newsmaker event in New York on Monday. "We haven't really tried as hard as we can to compete, educate and sell our products around the world, and I think we can do better."

Immelt is a CEO of a major corporation, a life-long Republican, and a top advisor to the Obama Administration on Jobs and the Economy.  Hence what he has to say carries some weight.  He's also part of the 1% right?

The nation's economic malaise, now in its third year, has left many Americans angry and frustrated, Immelt said, and people in power need to empathize.  "Unemployment is 9.1 percent. Underemployment is much higher than that, particularly among young people that don't have a college degree," Immelt said. "It is natural to assume that people are angry, and I think we have to be empathetic and understand that people are not feeling great."

Immelt offers a poorly stated plan for a solution to this:  "The only way to solve this specific problem is growth," Immelt said. "If unemployment comes down, people will feel better. If unemployment goes up, people will feel worse, no matter what goes on Wall Street."

Ah.. if only it were that simple.  Growth!  Right!

Uh.. the reason the U.S. manufacturing is weak is because of offshoring production into a globalized economy.  Sorry, Immelt, but I think your suggestions deserve to be ridiculed.

See:

U.S. not "trying that hard" on exports: GE's Immelt