Straight (and correct) talk from GE’s CEO, Jeff Immelt:

The world’s largest economy can no longer count on consumer spending to drive demand, nor can it rely on Wall Street financial wizardry if it wants its population to continue to enjoy a high standard of living, the head of the largest U.S. conglomerate said.

“We should clear away any arrogance, false assumptions, or a sense that things will be ‘OK’ just because we are America,” Immelt told the Detroit Economic Club. “Our competitive edge has slipped away and this has hit the middle class hard.”

The U.S. should work to have manufacturing represent about 20 percent of employment, more than double its current level, he said.

Not about to happen under current management, unfortunately. The carbon tax legislation passed by the House last week is estimated (by the Congressional Budget Office)  to cost the average household about $1,600 annually. This is equivalent to a 50% increase in Federal income tax. In addition, it will force many manufacturing and processing facilities to close as they will no longer be economically viable. And of course, then there is the health care “reform,” which apparently is only going to increase the cost of healthcare by $1 trillion over 10 years. With health care already running more than 50% higher as a proportion of GDP than any other developed country? They need to submit these proposals to Suze Orman’s “Can I afford it” show. They will be DENIED.

People seem to be amazed that the personal savings rate is shooting up – of course it is, people cannot borrow anymore to fund their everyday lifestyle. The sad thing is that the government is apparently intent on spending every penny that households save, and then some. This means that the potentially beneficial effects of savings are completely lost. Instead of being invested in plant and equipment to rebuild the shattered manufacturing sector, as Jeff Immelt recommends, the money is being used to keep bureaucrats in their plush lifestyles. For a while, anyway.