President Obama’s State of the Union address last night made one thing clear: the financial sector has been a pretty severe disappointment to the American economy. The President said, “No bailouts, no handouts, no cop-outs,” aimed, in part, at banks.
The president praised companies like General Motors and Master Lock as examples of the country’s potential. So, memo received: Manufacturing is going to get us out of the economic hole the banks dug for us.
To do that, the president promised incentives to bring manufacturing jobs back home from places like China.
But is that enough to replace the profits we’ve lost? Just a couple years ago, financial companies accounted for one-third of all American corporate profits.
Peter Morici teaches economics at the University of Maryland. He couldn’t agree with President Obama more: “We cannot succeed as an economy without a strong manufacturing base.” While Wall Street has made a lot of money, Morici says, “It’s nothing compared to the wealth generated by labs that come out of manufacturing.”
Morici adds that the U.S. does have a few companies big enough to drive job creation on these shores: Ford, Intel and Apple, to name a few. If the president can entice companies to build things in the U.S. again, Morici says it’s a natural that “high-paying jobs” will follow.