I hope that you will forgive me for being vague in this post, but because of my position to know certain things I cannot be more specific, lest risk getting into trouble.
Starting on the first of May, it has, for reasons unclear to me, become taboo to utilize off-shore resources. The shift put a wrench in some current plans and has caused some delays; but the word from sourcing is more US resources or jump through a multitude of hoops to get what needs to be done completed with resources from off shore.
If one considers that money incentivizes many things, perhaps something has changed in the tax code of which I am presently unaware. However, I work for a company that is not only very frugal, but also the holder of some major government contracts; and the shift might just come down to matter of survival. There is a strong possibility that the politicians frown on conducting business with foreign resources that have an American façade.
It is either too soon or simply beyond me to tell if this is part of a trend. I am aware the General Electric has brought some manufacturing back to the US as a selling point for consumer durable goods. My new GE dishwasher, for example, was assembled in the US. It still has the sticker on it that says “Proudly made in the USA;” I got it for a reasonable price. Apple is also bringing some manufacturing back, having committed to producing some models of the Mac in the US. Interestingly enough, there was a story on Bloomberg.com yesterday about the Defense Department approving iPhones for military use.
As an aside, I think it would be a great idea to for the government buy Apple technology for managing monetary policy, replacing the archaic FOMC with a technological brain that has no discretion because reasonable monetary policy isn’t a choice, but a necessity for both political and financial stability. But perhaps that is a topic for another day.
PS: I disagree somewhat with Scott Sumner on the point of ECB easing with a scheme for buying securities that are backed by business loans; and I disagree not on the point of credit allocation, with which I do agree, but rather on the point of the political situation involved.
Draghi is no FDR, and that kind of power is not vested in the ECB. He is facing an uphill battle with entrenched political forces; and sometimes the expedient way out is to find some way to appease those forces, or to override them with a plan that would garner public support. While I wish that Draghi could get support for “proper” easing, i.e. buying government securities on the open market, it does not appear to me to be politically possible in the time frame that would afford the people in the eurozone much needed relief.
I, therefore, reluctantly support the plan with the caveat that it is used to manage NGDP growth expectations in the proper direction. We must defeat the idea of inflation targeting. We must get to a point that it dies a lonely death and is buried in the very same unmarked grave right along with history’s other profoundly disastrous lies, lest it reemerge to shatter some other generation’s dreams. It destroyed mine, and I do not wish that to happen to my son.