When American factories close and the jobs go overseas or are lost to foreign competition, the common denominator – or more accurately, the general assumption – behind the exodus seems to be the cost of labor. In quite a few cases this may be the primary reason, but in the whole scheme of things it is only but a piece of the puzzle. When a variety of factors are looked at as a whole, the United States is a very expensive place for commodity manufacturers and even some high-tech manufacturers to do business.

Structural costs primarily based upon regulation and taxation are the true story of America’s competitive disadvantage. Economists and pundits alike have been citing for years a statistic that indicates the non-labor cost of production in the United States is 22% higher than that of its major trading partners. As large as that factor may appear to be, it is actually growing at an unprecedented rate, which accounts for the almost continuous loss of blue-collar American jobs. A study released earlier this Fall by the National Association of Manufacturers indicates the disadvantage has grown to 32%.

By any level of understanding 32% is a frightening value. What makes it even more so is the fact that the last time such a cost study was done was 2003. So, in only three short years our cost differential has grown by 45%. Much like a vicious bacteria it grows unabated and kills the very essence of America’s soul.

Quickly and rashly many will point the finger at our trading partners and declare unfair trade practices or corrupt governance within their borders. This is hardly the case. The study brought into consideration our nine largest trading partners who are Canada, Mexico, Japan, China, Germany, the UK, South Korea, Taiwan, and France. Of those, only China (and maybe Mexico) shows any significant evidence of dirty trade practices or state-subsidized "capitalism". Rather, the blame behind our weaknesses needs to be placed squarely upon the shoulders of America’s Big Government and those who empower it. The USA has no one to blame but ourselves.

The study finds that the highest burden was by far corporate tax rates and this factor alone accounted for over one third of the growth in our competitive disadvantage. Basically, while other nations decreased their tax rates to improve competitiveness, we increased ours. Such is the outcome when a society such as ours values pork barrel spending and almost demands it through our actions.

Another key driver of our nation’s ill health is the high cost of natural gas and its impact on energy, plastics, and utilities. Just ten years ago natural gas was a competitive advantage for the US…gas costs were 30% lower than those of our trading partners. But, a major swing has occurred and our costs are only 0.7% better than that of the same partners. The inability of our nation to extract more gas domestically or to develop alternative fuels is rapidly killing what was our edge.

This weakening of America is a perfect indicator of why the changing landscape of national politics could be a good thing. One would think that with Republicans in power for 12 years taxes and regulations would have decreased significantly and, if anything, our disadvantage would have decreased in size. After all, the Republicans typically position themselves as low-tax, small government, pro-business capitalists. They have instead proved to be charlatans over the past decade, exerting the very Big Government practices that they always say their mortal enemies the Democrats are guilty of. The Republicans failed us and broke the promises that define their party.

That being said, in some strange way that defies standard political/economic logic, the new Democratic regime may be the political entity that saves America from economic ruin.

In the best case scenario the Democrats could be that "something different" we need to ignite change. With Democrats in control – something we have not known in this era of the burgeoning global economy – our nation may be able to reign in the great costs that have hurt our population and our economy.

In the worst case scenario, the Democrats will be no better than the Republicans and will be guilty of their Big Government stereotype. If that’s the case, America’s competitive disadvantage will continue to grow and one day soon we will lose our position as the world’s preeminent power.