GE CEO Jeff Immelt has a column in today's FT: "Over the past few decades, many in business and government bet that the US could transform itself from an innovative, export-orientated powerhouse to an economy based on services and consumption." This was theological error, and now "We must make a serious national commitment to improve our manufacturing infrastructure and increase exports."
Watching this gives one whiplash: First, because GE was a leader in the trend, ruthlessly re-inventing itself as a finance company, and, second, only yesterday the WSJ said that GE wanted to sell its appliance and lighting businesses but was stuck with them.
Well, the prodigal son and all that, so Immelt makes a good point. The idea that the US can do the thinking and collect most of the money while Asians do the work is not now and never was realistic. Hollow out the US manufacturing base and over the not-too-long term, the thinking will go overseas as well. An electronics manufacturer in Asia can integrate into design more effectively than a US design firm can develop manufacturing capacity, and if design is where the money is, it will happen.
On the down side, part of the GE story is that the company is up to its eyeballs in the green energy and health care industries, which are toxic mixtures of crony capitalism and venture socialism. So it would be nice to see GE decide that it has had enough of toxic assets and bubbles and get even more fundamentalist by embracing the religion of free markets, which represents a much more effective approach to both these issues than the track we are on.