As U.S. stumbles, companies invest in consumer growth overseas

The L.A. Times reports:

Many major U.S. companies are making big plans to expand overseas even as some of them announce new layoffs at home, and there's a chilling reason why: They're beginning to give up on the American consumer as a source of future growth.

For years, U.S. companies went off shore to get cheaper labor and lower manufacturing costs for products to be sold to Americans. Now, as the nation's economy stalls and personal incomes stagnate, they see consumers in Asia and Latin America as offering brighter prospects for future sales and profits.

In effect, as many corporate executives look ahead, the United States has a diminishing place in their thinking.

The nation's tax laws reinforce the pattern. American companies have piled up mountains of profits overseas, but they must pay very high taxes if they bring the money home. So instead of investing back home, they are more apt to put the money into overseas expansion, adding jobs there.

Money flows where it can get the best return. Something Chicago-style politicians really don't care about.