In this month’s Publisher’s Page, we first share some of the highlights that NAM (National Association of Manufacturers) provided in a recent policy statement on COVID-19.
Coming out of the crisis, this will beg the question: should we consider policy to make US manufacturing less dependent on the weakest link in these supply chains, pandemic or otherwise?
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The Wall Street Journal, however, takes the other side of the argument. Authored by Phil Gramm, former Chairman of the Senate Banking Committee, and John Early, former assistant commissioner at the BLS, the article, The Truth About Income Inequality, The Census Fails to Account for Taxes and Most Welfare Payments, suggests that the latest census data “portrays the top quintile [top 20%] of households as having almost 17 times as much income as the bottom quintile.”
We recently saw a documentary on Netflix that we think should be required watching for all Surplus Record readers. The movie, American Factory, traces the aftermath of a small manufacturing town in Ohio following the closure of a General Motors facility to the acquisition and retooling of the factory by a Chinese automotive glass manufacturer.
While the latest tariff waves and currency devaluation rumbles have captured the U.S. and China headlines of late – as the overall situation appears to continue to deteriorate, perhaps for the better, perhaps for the worse – what we find just as fascinating and as important to understand China’s ambitions is its continued crackdown on the last vestiges of Democracy in Hong Kong, occurring this summer.
For the first time in nearly three years, the PMI (manufacturing index) registered in negative territory, declining to 49.1 for August 2019. This represents a decline of 2.1 points (or percentage points as ISM reports) from the July report. For those not familiar with the ISM indexes, manufacturing (PMI) and non-manufacturing, a number above 50 indicates economic growth within the sector, whereas a number under 50 indicates contraction.
But while Trump aims his campaign rhetoric toward trade, immigration and the economy are well known – a post-partisan mix of populism, domestic empowerment and flexing US muscle on the national stage where it has not been flexed before, at least not in a similar way – Democrats appear to be largely focused more on social issues as opposed to economic issues.
And from a business and management perspective, we would argue it is precisely why the management tracks in industrial firms such as GE which recruit entirely from MBA programs, rather than the ranks of skilled operators and plant managers, have failed the shareholders of these companies.
According to the ISM findings, the average price of goods raised to customers was 6.8%. However, only 30% of respondents thought that tariffs had “caused delays and disruptions in the supply chain.”b The numbers raise the question: How are manufacturers effectively managing through the tariff environment? Companies are generally pursuing a range of strategies.