George Leong: The United States is currently not the top country in the world for business—wait, hold on; how can that be true? Isn’t America the most powerful nation in the world?
Well, according to Donald Trump, America is losing its business advantage amid a declining U.S. economy. In an interview with CNBC’s Piers Morgan last Thursday, Trump went on and blamed China, India, and Mexico for the country’s demise, saying American jobs have been stolen by these countries, thereby negatively impacting the U.S. economy.
While I agree with Trump that the loss of jobs in this country is a major issue, I wouldn’t go as far as to lay the blame 100% on these countries. Hey, the global economy is forever interconnected. All countries do what they can to move ahead. It’s no different with China, India, and Mexico. They have a major cost advantage in cheap labor and manufacturing space, so they take advantage of it. That’s just the basis of competitive advantage between countries.
Countries focus on their advantages, whether it’s labor, technology, or an easy business climate. For Trump to squarely lay the blame for the decline of the U.S. economy on just three countries is the easy way out.
Yes, it’s not relatively cheap to manufacture in the U.S. economy, as far as the labor costs and business incentives go, compared to the emerging markets, where you have people willing to work for $10.00 a day and in some of the worst working environments found. It’s not good, but that’s the reality.
With the massive and overdone quantitative easing by the Federal Reserve and the massive spending and mounting of the national debt, things must change; otherwise, investors could end up investing in an aging America and a soft U.S. economy that is seeing minimal growth.
In the annual report Economic Freedom of the World by Canadian-based Fraser Institute, good old America was ranked 17th in the world in economic freedom. (Source: “Canada Continues to Lead the United States in Economic Freedom While Hong Kong Again Tops Global Rankings,” The Fraser Institute, September 18, 2013.)