ManufactureThis would like to wish all our readers a Happy July 4th.  We’ll return with our regular content on Monday July 6, but on this Independence Day weekend we want to encourage everyone to ponder the importance of U.S. manufacturing.  Without a strong, secure, self-sufficient industrial base the United States would not have been able to survive and prosper for the past two centuries.  And that’s what independence is all about.

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The Early Shift will return next week.  Have a good 4th of July!

G.M. is headed to the bankruptcy court today to set the government approved restructuring plan in motion.

The outlook for the global economy improves and the dollar falls.  As the experts become more optimistic about the growth outlook for 2010, investors are starting to shift to higher-yield assets and once again direct the flows of capital into the emerging economies, judging that the risk is subsiding.

The prognosis for the U.S. housing market is not that rosy, however.  Even though the wave of foreclosures from the bad subprime deals has subsided a new wave of foreclosures brought on by high and increasing unemployment is forming.

This afternoon the U.S. International Trade Commission (ITC) voted in support of recommending that President Obama impose tariffs for three years on imports of Chinese tires that have been found to cause market disruption to the domestic tire industry.  The trade commission recommended the President impose tariffs of 55 percent ad valorem (the value of the item) in the first year, 45 percent in the second year and 35 percent in the third year, in addition to any other applicable tariffs.

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Climate change legislation heads to a vote in the House today…or tomorrow. Some good news: the bill contains border adjustment and allowances to prevent carbon leakage.

Senators get closer to an agreement on health care reform.

What do younger people do when the factory closes?  Go back to school.

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There is no rest for the. . .  Bank of America CEO Ken Lewis.  Mr. Lewis was called to testify on the Capitol Hill again today, this time before the House Committee on Oversight and Government Reform.  The bone of contention is BofA’s purchase of Merrill Lynch late last year, and the government bailout to the tune of $20 billion that was needed later to cover some surprising losses on Merrill’s balance sheet.  Mr. Lewis has been and continues to insist that the U.S. government applied a great deal of pressure to BofA’s management to accept the Merrill deal.  The House Committee will be calling former Treasury Secretary Paulson and the Fed Chairman Ben Bernanke to testify next.

U.S. stocks are on the move today buoyed by the increase in May retail sales and the fall in the initial weekly jobless claims to 601,000, the lowest level since January.  By mid-day trading, all U.S. major stock exchanges gained well over 1% in value, with S&P 500 advancing the farthest 1.73 percent, a seven-month high.

Of course, we have a long ways to go to recover from the recession.  By just one measure, household wealth, the U.S. economy lost $1.3 trillion in the first quarter of 2009, according to the Federal Reserve Flow of Funds report released today.

The Obama Administration is taking further steps to ensure that even after the U.S. economic activity returns to its pre-crisis levels it won’t be all business as usual for the American corporations.   The Administration is proposing new legislation that would increase the oversight of the executive pay at publicly traded firms by the companies’ shareholders and the SEC.

The Federal Reserve today said that the outlook for the U.S. economy is… well, less bad.  The Fed’s June Beige Book showed signs of improvement in some economic indicators, even as the economic conditions deteriorated further between mid-April and May.

One area where the picture is definitely not improving is trade.  U.S. April trade deficit has increased (yes, you read it right—increased!) even as the global demand for goods has continued to slow.  That is affecting the demand for U.S. goods worldwide, and the U.S. exports are falling.  However, China seems to be unaffected, as the U.S. continues to buy Chinese goods, increasing our trade deficit overall to $29.2 billion in April and with China specifically to $16.8 billion.

ManufactureThis has found a new blog that just launched, and we think you might find it interesting.  InfrastructureUSA has started The Infra Blog.  Their goal is to “dialogue about civil infrastructure — all infra areas, any topic and every viewpoint.”  Along those lines, they point out that “a recent national survey by Building America’s Future finds that ‘Fully 81% of Americans are prepared to pay 1% more in taxes to rebuild America’s infrastructure.’”

Earlier this year, ManufactureThis discussed the importance of infrastructure investment, both for creating new manufacturing jobs and for correcting an “infrastructure deficit” of antiquated and unsafe roads and bridges.  We welcome further discussion on the subject.

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A full-court press on health care reform legislation begins this week.  Meanwhile, congressional committees look at climate change allowance allocations  and the impact of auto industry restructuring.

The U.S. and China may face a new “cold war” over climate negotiations. 

China wants PC makers to help it censor and oppress. 

The New York Times looks inside the economic policy team of the Obama Administration. 

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Jobs report is out this morning.  Markets likely to rise on the news that job losses were 345,000 last month.  But here are some facts worth considering: 156,000 manufacturing job losses recorded last month with more auto-related layoffs ahead; 9.4% unemployment rate, the worst since 1983; and, the U-6 rate now stands at 16.4%. 

Is there a buyer for GM’s Saturn?  Meanwhile, the sale of GM’s Hummer to a Chinese firm may face some hurdles…in China.