Letters to the Editor
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What's in it? Depends on what you've got
... it's also easy to understand how citizens of Ohio could be looking at a 250-point rise in the Dow (an hour before markets closed on Friday,) based largely on American multinational overseas sales, and wondering, what's in it for me?
Part of what's going on is the advantage of a weak dollar to domestic manufacturing. American bulldozers are great machines, and you can get them for cheap right now if you're ... basically anyone else in the world aside from an American.
So if you're one of those people in the US who makes their living assembling — or manufacturing, if there's anyone left who still does it — bulldozer machine parts or the like, then it's modestly good news for you, whether or not you live in Ohio.
But in the long term that's a dead-end line of thinking. Hoping for the US to develop an economic relationship with the rest of the world that's akin to those of industrializing third-world nations and banana republics isn't really an encouraging vision (except maybe for those who would end up being the tin-pot dictators and mirror-shaded commandantes under such an arrangement).
What we all should be asking, whether we're in Palo Alto or Akron, is how to equip ourselves to better function in an economy where design is paramount. Survival in a design economy requires education — with breadth, not just specialization — and a competitive economic sector unencumbered by monopoly, political patronage, and corruption.
Americans enjoy neither at the moment, and might do well to think about why and what to do about it.
Otherwise ... you know. We were colonies once before. I'm sure the Old World would be happy to take us back.
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Just a breather
It's pretty clear that very large amounts of "raw" products like Intel's microprocessors are sent abroad for repackaging into consumer goods that get shoved back into our own country. This is probably not true of items like earth movers (Caterpillar), information (Google), or computer systems and services (IBM). As such, one has to look at each of these on a case-by-case basis for whether or not they are long-term sustainable for the company in question.
However, for the majority of Americans, this is not particularly good news either way. The recession will still hit local businesses, regardless of large company's overseas fortunes. And the jobs - now overseas - that are servicing much of these ostensibly American company's overseas growth are not coming back or adding in any meaningful way to the normal person's prospects.
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there is a currency deflator
If you are an American company and you bring foreign earned wealth back to the US you gain a benefit from a weak dollar. You also happen to get some tax breaks.
Also, if IBM is hiring in Brazil, India and China it's because of costs there.
For Caterpillar, some estimate that HALF of all heavy construction equipment is currently in the Arab Gulf States being utilized in massive construction projects that result from the largest transfer of wealth from the western states to the OPEC states, EVER, in the history of the world.
So.....I guess that's good.