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Reminiscences Of An American Industrial Nation - How In A Few Short Years America Lost Its Manufacturing Sector

Tyler Durden's picture




 

Some time ago, there was a lengthy debate as to why anyone even cares
about the manufacturing ISM number. After all America is now by and far a
service economy. Obviously, that debate ended in a stalemate.
Nonetheless, the sad truth is that with each passing year America is losing ever more of its once dominant industrial advantage, and with
the chief export being "financial innovation", should the world
experience another risk flare up it is very likely that the world will
enforce an embargo on any future US "imports" and the country's current
account deficit will drop to a level from which there is no recovery. So
for those who are still not convinced of just how serious the
deterioration is, The Economic Collapse blog has compiled this handy list of 19 fact that demonstrate the deindustrialization of America in all its glory.

#1 The United States has lost approximately 42,400 factories since 2001. 

#2 Dell Inc., one of America’s largest manufacturers
of computers, has announced plans to dramatically expand its operations
in China with an investment of over $100 billion over the next decade.

#3 Dell has announced that it will be closing its
last large U.S. manufacturing facility in Winston-Salem, North
Carolina in November.  Approximately 900 jobs will be lost.

#4 In 2008, 1.2 billion cellphones were sold worldwide.  So how many of them were manufactured inside the United States?  Zero.

#5 According to a new study conducted by the
Economic Policy Institute, if the U.S. trade deficit with China
continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone.

#6 As of the end of July, the U.S. trade deficit with China had risen 18 percent compared to the same time period a year ago.

#7 The United States has lost a total of about 5.5 million manufacturing jobs since October 2000.

#8 According to Tax Notes,
between 1999 and 2008 employment at the foreign affiliates of U.S.
parent companies increased an astounding 30 percent to 10.1 million.
During that exact same time period, U.S. employment at American
multinational corporations declined 8 percent to 21.1 million.

#9 In 1959, manufacturing represented 28 percent of U.S. economic output.  In 2008, it represented 11.5 percent.

#10 Ford Motor Company recently announced the closure of a factory that produces the Ford Ranger in
St. Paul, Minnesota. Approximately 750 good paying middle class jobs
are going to be lost because making Ford Rangers in Minnesota does not
fit in with Ford's new "global" manufacturing strategy.

#11 As of the end of 2009, less than 12 million Americans worked in manufacturing.  The last time less than 12 million Americans were employed in manufacturing was in 1941.

#12 In the United States today, consumption accounts for 70 percent of GDP. Of this 70 percent, over half is spent on services.

#13 The United States has lost a whopping 32 percent of its manufacturing jobs since the year 2000.

#14 In 2001, the United States ranked fourth in the world in per capita broadband Internet use.  Today it ranks 15th.

#15 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.

#16 Printed circuit boards are used in tens of thousands of different products.  Asia now produces 84 percent of them worldwide.

#17 The United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States.

#18 One prominent economist is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040.

#19 The U.S. Census Bureau says that 43.6 million
Americans are now living in poverty and according to them that is the
highest number of poor Americans in the 51 years that records have been kept.

The conclusion:

So how many tens of thousands more factories do we need to lose before we do something about it?

How many millions more Americans are going to become unemployed
before we all admit that we have a very, very serious problem on our
hands?

How many more trillions of dollars are going to leave the country
before we realize that we are losing wealth at a pace that is killing
our economy?

How many once great manufacturing cities are going to become rotting
war zones like Detroit before we understand that we are committing
national economic suicide?

The deindustrialization of America is a national crisis.  It needs to be treated like one.

If you disagree with this article, I have a direct challenge for
you.  If anyone can explain how a deindustrialized America has any kind
of viable economic future, please do so below in the comments section.

America is in deep, deep trouble folks.  It is time to wake up.

 

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Thu, 01/06/2011 - 20:27 | 854490 Bastiat
Bastiat's picture

Service economy, new paradigm, none of this old school stuff counts, duh.  I mean how pre-postindustrial can you get?

Thu, 01/06/2011 - 20:30 | 854506 Dr. Porkchop
Dr. Porkchop's picture

If it's lucky, America will have a Paradigms to rub together in a few years.

Thu, 01/06/2011 - 20:56 | 854572 Dont Taze Me Bro
Dont Taze Me Bro's picture

Whats also important is to know where these new paradigms came from.

The trend towards dismantling the economies of the Western world started in the 80s, which is around the same time the voodoo economic theories of Milton Friedman was put into practice. When our economy finally collapses, (and hopefully by then the ruling elite will be out of power) a more balanced and accurate postmortem analysis would be conducted, and the findings of that report will most likely indentify Friedman as the god father and the architect of our demises.

Thu, 01/06/2011 - 21:33 | 854699 chet
chet's picture

Quite the trick huh?  Come out with a bunch of think-tank nonsense to support the "trickle-down" theory to justify cutting taxes and regulation.  Then when the plutocrats start vacuuming up all the capital in the country (as planned), they turn around and invest it overseas instead of here.

Thu, 01/06/2011 - 22:39 | 854868 masterinchancery
masterinchancery's picture

FAILING to cut taxes and regulation, or to break the grip of the public unions who are miseducating our children, has led to this pass.  A huge copper mine in AZ(200 million tons/yr) can't operate because the EPA has postponed the EIS 4 times, and doesn't know when it will get around to finishing it, after which there will still be much litigation.  Money goes where there is opportunity--not where Bureaucrats and lawyers are vacuuming up the extortion money.

Fri, 01/07/2011 - 01:58 | 855201 Freddie
Freddie's picture

Thank you.  Where do these idiots come from who think cutting individuals taxes is a bad idea.  Regulation, taxes, environmental laws up the ying yang, lawsuits, unions, drunken lazy workers in some cases and mega corporation whores like Obama's pals at GE drove manufacturing out.   I love these jerks who never ran a company, never met a payroll, never stayed at the office late at night doing some shitty govt form to insure thugs with "the state" did not fine you or arrest you because you forgot that form or did not pay that tax while your employees are at home. Plus most of the employees could gove a shit that you work like a dog to make sure they have a job along with your own job.

Fri, 01/07/2011 - 03:40 | 855325 strannick
strannick's picture

Yeah, unions definately did their part in thwarting the American Dream. Between them and the Banks, I guess all that's left is Ron Paul and a few farmers in North Dakota

Fri, 01/07/2011 - 12:06 | 856280 zaknick
zaknick's picture

Unions and the great depression were what created the middle class moron.ñ Look up the history of what bosses used to get away with before unions ignorant troll.

Fri, 01/07/2011 - 11:54 | 856235 GreenSideUp
GreenSideUp's picture

+1

Thu, 01/06/2011 - 23:06 | 854921 poor fella
poor fella's picture

Since we are reminiscing, this classic from 2004 features The Bernank before most remember him getting into the fray.

Outsourcing actually creates U.S. jobs, study finds

http://moneycentral.msn.com/content/invest/extra/P79592.asp

We only need to give it time, the turnaround is right around the next half decade or so. The Bernank is all about jobs you know - force feeding profits to W$ is just an unwanted side affect.

Fri, 01/07/2011 - 01:07 | 855122 caconhma
caconhma's picture

America is in a deep trouble.

America ruling elite is not American any more. Almost half of the White House staffers have a duel citizenship. The president and the Congress are Wall-Street and foreign banking oligarchy puppets. They do not serve America and its people.

They do not give a shit about America and its people. Their goal is to steal as much money as they can.

They perverted American Law, morality, and educational system. America became a nation of brainwashed fools and imbeciles.

Only Americans believing in America first, hard work, and honesty can save this once great country. But first, America must purge itself and punish people responsible for looting our country. People must forget about entitlements and star leaving productive lives.

Fri, 01/07/2011 - 02:06 | 855212 Lord Koos
Lord Koos's picture

It's been a very long time since the children of the rich fought in wars.

Fri, 01/07/2011 - 05:48 | 855400 DFCtomm
DFCtomm's picture

This wasn't done solely by Democrats or Repuclians, and it wasn't done by design. The destruction of U.S. manufacturing is a result of the two parties pursuing their ideologies with no regard for the nation. The Democrats worked to ensure the most inhospitable business environment, while Republicans worked to ensure the door to offshoring forever remained open.

 

Democrats slavishly pursued regulation, and taxation, while in the name of free trade Republicans religously resisted any type of protectionism. We haven't practiced free trade.  We've practiced reverse protectionism. We've handicapped ourselves while forcing none of these handicaps upon our primary competitior. We financed a foot race and then tied our legs together.

Thu, 01/06/2011 - 21:45 | 854740 New_Meat
New_Meat's picture

you trolls gotta add EPA, ACLU, Environmental Pollution Agency, "minimum wage", the whole regulatory establishment, then, well, when the courts say "OK to drill in the gulf", the current administration says "no way".

Well, you're in the realm of the qwm where you get your handle:

http://www.youtube.com/watch?v=6bVa6jn4rpE

did I say qwm?

- Ned

 

Thu, 01/06/2011 - 22:49 | 854889 three chord sloth
three chord sloth's picture

Sorry, but the truth is in the post WWII era, manufacturing employment in the US has been steadily declining since 1953, when it peaked at 33% of non-farm jobs. Now it is at about 9%. Friedman and friends didn't help things, but they sure didn't start them either.

http://www.businessinsider.com/chart-of-the-day-manufacturing-employment...

Fri, 01/07/2011 - 06:37 | 855420 AnAnonymous
AnAnonymous's picture

Sorry, but the truth is in the post WWII era, manufacturing employment in the US has been steadily declining since 1953,

 

Of ocurse, it has.

Lets take a look at the US society.

In the US, there are environments for people according to their revenues. There are environments for elite, environments for CEOs, environments for white collar workers, environments for blue collar workers, environments for destitute etc A society of peers.

What is  happening today on a world scale is no different from what  happened on the US local scale. The US model is spread to the world.

After the 1950s, the US started to grow exponentially richer as they turned to access the whole world resources with no restrictions.

That new inflow of resources helped to better the US general environment, a trend that, coupled with the US model, could but end with outsourcing.

As the US citizens invested on the quality of their environment, it has grown to one of the finest in the world, excluding de facto certain activities to be performed on it.

Wages are connected with the quality of the general environment. Upping the environment to deliver running water has to show on the wages bill as this new option has to be maintained.

In the US, a  distortion between wages, work output and the quality  of the environment has been growing since those days.

Adding more and more conveniencies to the life standards, conveniencies that show up on the wage bill while the work output grew not fast enough.

 

Today, the picture is plain: many places in the world offer the right general environment to host industrial activities with the adequate conveniences level.

The US industrial worker has to be paid more because of the quality of the environment while the work output is similar if not inferior to world counterparts. Can not work.

 

The US has been pressing their model on the world and have kept  being successful at it. Outsourcing low level jobs was desired and a success. Now remain mid level jobs, the next round in the scheme. Wont be as easy though.

Thu, 01/06/2011 - 22:01 | 854773 Michael
Michael's picture

When they talk about creating jobs bla bla, they make sure not to mention the types of jobs that can actually be created.

Since 2001, military weapons manufacturing jobs rose by125%, at the same time consumer goods manufacturing dropped by 40%. 

As the economy collapses the military manufacturing will go bye bye and the decimation of the manufacturing base will be complete.

The only way to get manufacturing jobs back to the US is to default on the national debt, at which time the rest of the world will cut us off.

We will then have no choice but to make our own shit in our own country again.

I say default on the national debt as soon as possible.

Thu, 01/06/2011 - 23:26 | 854974 Hubbs
Hubbs's picture

We have ourselves so glued to this tarbaby that what were once off the wall solutions may have to get revisited:

Protectionism and tariffs to block foreign imports? same end result as a default-but would also screw up the rest of the world, possibly cause mass exodus of big corporations who would become victims of retaliation. But hey, Japan did it after WWII-encouraged/protected many industries domestically to encourage domestic competition, which in turn strengthend those industires to the point that when unleashed on the rest of the world they could kick everyones' butts. To get such a domestic startup again would require strict anti-trust enforcement, so the Carnegies, Fords, and the like (yeah they were monopolies at one time but at least they did produce things of value-cars, steel, oil) couldn't build critical mass-enough to influence to commandeer the politicians.

 

Remember decades ago how whenever we bought something that fell apart and was cheap, we would snicker "Made in Japan", but by the 80's suddenly the Japanese cars were better quality? Now we buy Japanese stuff for quality, although I suspect a lot that is being outsourced now days. Some of the same attitude persists with Chinese goods, but that too has been changing.

 

In the meantime, if I can't produce or don't have a productive skill, then I should at least make some effort at being self sufficient which means getting back on the farm. Otherwise, I see the military being transformed into a meals on wheels food delivery service for the masses.

 

Thu, 01/06/2011 - 23:47 | 855010 steve2241
steve2241's picture

"The only way to get manufacturing jobs back to the US is to default on the national debt, at which time the rest of the world will cut us off." ----------------- Import tariffs; make it uneconomic to manufacture off-shore. Less drastic than default! OT - Donald Trump has announced his candidacy for President of the United States. He has shunned the Democrats and Republicans, choosing instead to run with the Rents Are Too Damn High! party.

Thu, 01/06/2011 - 23:12 | 854934 Rider
Rider's picture

WTF needs factories if you can print all the money and pimp the rest of the world?

Fuck everyone who cannot print dollars. Yes fuck'em harder

They will never fight back this is the ethernal status quo.

 

Fri, 01/07/2011 - 00:31 | 855059 TBT or not TBT
TBT or not TBT's picture

It is the ongoing short term plan, in any case.

Fri, 01/07/2011 - 03:47 | 855334 bigelkhorn
bigelkhorn's picture

Alot of people think we are doomed, but there are still great ways to make money. Even while the economy is collapsing around us.

I subscribe to the guy from australia and his FFT economic newsletter at http://www.forecastfortomorrow.com  that guy has called many big events before they have happend, including the stock market crash in 2008 and the current financial collapse of the US. (currently happening) I found him from a friend last year, and he has some important work.

His oil calls are insane, and I have been making good money with them. He is well worth a look, if you want to keep two steps ahead of the sheeple out there.

I am worried about my financial future. Is anyone else nervous out there?

Fri, 01/07/2011 - 11:06 | 856044 Star Warrior
Star Warrior's picture

Nervious? I´m Scared Shitless!!!

Thu, 01/06/2011 - 20:28 | 854495 Theta_Burn
Theta_Burn's picture

Oh Say Can You See.....

Thu, 01/06/2011 - 20:29 | 854499 Sutton
Sutton's picture

"We'll all do each other's laundry."

Congressman James Trafficant

Thu, 01/06/2011 - 20:31 | 854509 Jake3463
Jake3463's picture

I've heard stories from the old Bethlehem Steel plants that as management was telling them out of date their equipment were, crates were being moved into ship the equipment to China.

 

The elite of the babyboomers gutted the country and sold it to the cheapest bidder.

Thu, 01/06/2011 - 21:10 | 854614 Lord Koos
Lord Koos's picture

Blame the boomers = lame.  Much was decided by much older people... boomers were in their 30s in 1980

Thu, 01/06/2011 - 21:18 | 854648 Boilermaker
Boilermaker's picture

Sorry, but it is the baby boomer generation that sold us out.  It's just a fact.

Thu, 01/06/2011 - 21:26 | 854669 Dr. Sandi
Dr. Sandi's picture

Divide and conquer. Keep buying those tickets, sucker.

Thu, 01/06/2011 - 22:40 | 854869 Id fight Gandhi
Id fight Gandhi's picture

They did. But theyll be the ones drooling in nursing homes and forgotten by their chilldren. Any wealth they may have made will be snatched up and pissed away by their kids that hate them for ignoring them and putting stuff and token jobs ahead of them.

Thu, 01/06/2011 - 22:50 | 854894 RockyRacoon
RockyRacoon's picture

Sorry, but it is the baby boomer generation that sold us out.  It's just a fact.

Right.  And look what we got for it.   Social security on the brink, and whiners like you who are looking for someone to blame.   Grow up, get a pair, go to work, and take care of yourself and yours.  If you and I don't go into this battle together we are flat-assed doomed.

Thu, 01/06/2011 - 23:28 | 854980 lynnybee
lynnybee's picture

Is Robert Rubin a baby boomer? Larry Summers? Greenspan? direct your blame their way please. most of us baby boomers were too busy working & raising children to bring down the world !

Fri, 01/07/2011 - 03:49 | 855335 strannick
strannick's picture

You mean busy snorting coke in your pinstripe suits while planning your next LBO

Fri, 01/07/2011 - 00:01 | 855025 Bastiat
Bastiat's picture

Boomers sold us out?  What about Lyndon Johnson? Robert MacNamara?  The "Military Industrial Complex" a phrase coined by Dwight Eisenhower in the 50s--obviously another boomer creation.  Did the boomers start or continue the Vietnam fucking war and the Great (Bankrupt) Society?  The two things pushed us into Nixons default?  The 100s of thousands of boomers who weren't killed came back from Vietman to a busted economy, and an inflated and debauched currency. Though they were in their early 20s, it was clearly all their doing, eh? 

Did the boomers start Vietnam or end it?  How many of your generation have been killed or injured protesting the illegal invasion of Iraq?  Just curious--and why haven't you fixed everything?

"Just a fact"  Bullshit. 

 

Fri, 01/07/2011 - 01:44 | 855175 Misstrial
Misstrial's picture

double post

Fri, 01/07/2011 - 01:46 | 855176 Misstrial
Misstrial's picture

Well if you're going to bring up the death thing, let's discuss the 30 Million American GenX'ers and Millennials aborted by Boomers from 1972 through 1990.

And then, in order to satisfy drug addicted Boomers, at least 30 thousand Mexicans have been killed as a result of the cartel drug war during the last four years. 

As you may recall, it was the Boomer generation that espoused recreational drug use through popular music lyrics, rock concerts, and peer culture. They are the ones who are the primary proponents of marijuana legalization here in California.

~Misstrial

 

Fri, 01/07/2011 - 11:23 | 856091 Bastiat
Bastiat's picture

Almost all boomers parents were cigarette addicts and many were alchoholics and heavy drinkers -- a postl-WWII norm -- watch a 50s movie sometime.  Kids in the 60s were prescribed benzidrine for weight problems (my sister included).  Most drug addiction is not attributable to "boomers" but to the permanent underclass institutionalized and funded by Johnson's Great Society.  The coke snorting amoral boomer banksters of the 80s were hired and empowered by whom? 

And who declared the "War on Drugs" which institutionalized the Mexican drug cartels in exactly the way that prohibition did organized crime.  Was that a boomer?

Finally, it is completely fallacious "reasoning" to cut off the great concatenation of cause and effect at some arbitrary point and declare: "people born from this day forward are responsible!"  Think about it.

Fri, 01/07/2011 - 10:24 | 855870 Dick Buttkiss
Dick Buttkiss's picture

Yes, let's blame one generation or another of the people, who have never ruled shit in this country, all being victims of "Hamilton's Curse" . . .

http://mises.org/store/Hamiltons-Curse-P534.aspx

. . . and the larger fact that the very granting of licenses to steal lies at the root of all our problems:

 

Fri, 01/07/2011 - 11:21 | 856087 Star Warrior
Star Warrior's picture

 

+1000

Thu, 01/06/2011 - 23:52 | 855009 living on the edge
living on the edge's picture

LK,

The steel mill equipment shipped to China in the 80's were either old obsolete mills, equipment from bankrupt companies, or part of the downsizing that occurred to the steel industry at that time.

Blame should be focused on the following: the downsizing of the automobiles, excessive EPA regulations, excessive union contracts and competitive pressure from foreign producers. (You can thank Mr. Volcker for the latter).

Fri, 01/07/2011 - 02:13 | 855222 Lord Koos
Lord Koos's picture

"Downsizing the automobiles"  You mean the reason Toyota kicked everyone's ass was because they were building bigger cars?

Fri, 01/07/2011 - 08:47 | 855536 living on the edge
living on the edge's picture

Smaller cars equals less steel capacity utilization.

Fri, 01/07/2011 - 02:17 | 855227 Freddie
Freddie's picture

Nucor with mini mills and non-union workers is doing alright in the steel business.

Fri, 01/07/2011 - 08:40 | 855530 living on the edge
living on the edge's picture

Nucor is an example of how America can innovate and recover from a once lost industry sector.

Thu, 01/06/2011 - 23:25 | 854967 living on the edge
living on the edge's picture

Jake,

I can't speak specifically about Bethlehem Steel but I did see old outdated equipment from US Steel, LTV Steel and others bought by the Chinese. The Chinese refurbished and updated the equipment in warehouses located in the Pittsburgh area. When completed the equipment was crated and shipped to China.

The Chinese successfully competed with the world class steel mills of the world with these refurbished rolling and finishing mills.

Fri, 01/07/2011 - 06:18 | 855411 fredquimby
fredquimby's picture

Exactly the same happened with MG cars in the UK. They went bankrupt as a Chinese "buyer" pulled out, then another Chinese firm stepped in, bought it, loaded up the production line and shipped it to the homeland.

Now the Chinese sell MG cars to the English!!! How Fooked is that?! I guess the really fooked up thing is that the stupid English are actually buying these cars knowing what happened 5 years ago!!

http://news.bbc.co.uk/2/hi/business/6497959.stm

From Wiki:

"The MG marque passed, along with the Rover marque to the MG Rover group in May 2000, when BMW 'broke up' the Rover Group. This arrangement saw the return of MG badges on sportier Rover-based cars, and a revised MG F model, known as the MG TF, launched in 2002. However, all production ceased in April 2005 when MG Rover went into administration.

The assets of MG Rover were bought by Chinese carmaker Nanjing Automobile in July 2005 who themselves were bought by SAIC in December 2007.[1]

In 2007 production of the MG TF roadster and MG 7 large sports saloon (derived from the previous Rover 75/MG ZT model) started in China.[2] Assembly of MG TFs for the European market, from Chinese built complete knock down (CKD) kits, was started by NAC MG UK at Longbridge in August 2008."

Incidentally, SAIC was the Chinese company that pulled out with their massive bid at the last minute and it was that massive loss of potential future support that finally tipped MG into bankruptcy and forced a MASSIVELY reduced sale price as the company was now bankrupt....

This is the first time I have heard that SAIC then bought Nanjing (who were the supposed "white knights"...who came in after bankruptcy to save the day)....more like "We will bankrupt MG, then get another branch to come in and pick up what we would have bought for £250,000,000 for £10 Mwahahahaha"

Good business if you can get it, but to be fair, a national bloody scandal, and all we got out of it was a million pound inquiry, thousands of job losses and more Chinese made goods coming to the UK....Result!!

I just saw this too:

March 2009:

"The car firm recently dropped the Chinese element from its company name, changing from NAC - Nanjing Automobile Corporation - to MG Motor UK."

Give it a year and no one will even know it's Chinese owned...

 

Fri, 01/07/2011 - 08:52 | 855542 living on the edge
living on the edge's picture

Exactly, what a shame. By the way I had two MGB's over the years and loved the car. I wish I still had one.

Thu, 01/06/2011 - 20:35 | 854511 Jerry Maguire
Jerry Maguire's picture

We could get out of this.  We need:

1) an across the board debt cancellation; and

2) a furious baby boom; and

3) return to the gold standard.

That'll fix it right quick.

http://strikelawyer.wordpress.com

 

Thu, 01/06/2011 - 21:15 | 854634 bunkermeatheadp...
bunkermeatheadprogeny's picture

Working on it, 3 kids in the last 6 years.

Thu, 01/06/2011 - 21:35 | 854702 hambone
hambone's picture

JM,

1) an across the board debt cancellation;

That isn't just a debt cancellation, it's also a benefit cancellation

2) a furious baby boom;

Way off base here (if you're serious) as the paradigm of ever growing markets is dead.  Countries, corporations need to learn how to work harder to take market share (better mouse trap) than ever more mice.

3) return to the gold standard.

1 out of three ain't bad...in baseball :)

Thu, 01/06/2011 - 23:47 | 855008 Jerry Maguire
Jerry Maguire's picture

WRT #1, true enough, but it's the price we're going to have to pay.  When so much of the debt can't be paid and won't be, the only alternative is playing favorites:  some debts get canceled and others do not.  If it isn't across the board it will just be the politically connected whose debts are canceled.  In fact this has happened already:  the banks are let off the hook but the homeowner is not.

WRT #2, half serious.  I'm not suggesting breeding out of control forever, but a significant uptick in fecundity would provide a lot of benefits present and future.  After a time we could revert to today's very low fecundity, and probably would.  In any case, this is very unlikely to happen, although it easily could if people could get past the novelty of the idea.

WRT #3, glad you agree!

http://strikelawyer.wordpress.com

Fri, 01/07/2011 - 02:39 | 855264 hambone
hambone's picture

Yeah, I actually agree w/ you on #1 as well

Thu, 01/06/2011 - 21:46 | 854744 New_Meat
New_Meat's picture

I'm kinda' in favor of #2.

But of course, it would require a serious program

practice...practice...practice.

then, well we'd need a partner.

- Ned

Thu, 01/06/2011 - 22:09 | 854793 Michael
Michael's picture

Universal Bankruptcy Act of 2011.

Bring it on.

Fri, 01/07/2011 - 03:11 | 855297 glenlloyd
glenlloyd's picture

Screw your debt cancellation, either pay it back or default and declare bankruptcy. I haven't played by the rules for the last 20 years to let a bunch of schmoes load up on shit and then decide to change the rules.

Thu, 01/06/2011 - 20:36 | 854514 celticgold
celticgold's picture

 yeah , ok , but you dont take Financial Engineering into account. The USA leads the world in this industry by a staggering 14 trillion % . Beat THAT!

Thu, 01/06/2011 - 20:35 | 854519 Dixie Normous
Dixie Normous's picture

Nothing new here.  The book The Deindustrialization of America was written in 1984.

http://www.amazon.com/Deindustrialization-America-Barry-Bluestone/dp/046...

Thu, 01/06/2011 - 21:12 | 854620 Lord Koos
Thu, 01/06/2011 - 20:36 | 854522 rich_maverick
rich_maverick's picture

Reminds me of the UK back in the beginning 1990s.  I did a cross-University research gig with an engineering University in London.  It was sad.  All the Electrical Engineers were doing their schooling and had a goal of becoming bank tellers, as that is where the jobs and money was.  I was shocked at the lost opportunities due to the fact that the talent was there, but not the employment opportunities.  The UK was first to de-industrialize and become mostly "service oriented".  Now, the US is following in the UK's path.  So, the future looks like this:

UK: Financial center for the world

US: Military center for the world

All other industries: move to China...

Thu, 01/06/2011 - 21:33 | 854700 pitz
pitz's picture

Yup.  Most of my EE class (2002) is unemployed even to this day, unless they got into flipping houses, or other worthless (yet high paying) ventures.  A total catastrophe given the amount that engineers contribute to productivity.

Thu, 01/06/2011 - 21:37 | 854711 Kayman
Kayman's picture

There will be no Financial Center without a  Military Center, and there is no Military Center without a manufacturing base.

I know of no country in history that so meekly gave its industrial profit base to its military and economic competitor under the guise of "cheaper Chinese products is like a raise for the working man".

What working man ?

The only reason this country is on its knees, is that criminals hold the levers of power.  

Thu, 01/06/2011 - 22:44 | 854877 Richard Head
Richard Head's picture

No one is putting a gun to anyone's head in the aisles of Walmart.  Americans need to look in the mirror.  How much junk do we really need to live comfortably? 

Fri, 01/07/2011 - 02:22 | 855234 Freddie
Freddie's picture

Well Americans are doing with their cable and sat TV service. The elites control and manipulate the masses through TV.  Until the public yanks the plug out o fthe wall then nothing will change.  Americans traded their freedom for crap on TV, ball games and other crap.  TV is just constant lies like CNBC and fawning over Obama.

Thu, 01/06/2011 - 20:41 | 854533 rich_maverick
rich_maverick's picture

Reminds me of the UK back in the beginning 1990s.  I did a cross-University research gig with an engineering University in London.  It was sad.  All the Electrical Engineers were doing their schooling and had a goal of becoming bank tellers, as that is where the jobs and money was.  I was shocked at the lost opportunities due to the fact that the talent was there, but not the employment opportunities.  The UK was first to de-industrialize and become mostly "service oriented".  Now, the US is following in the UK's path.  So, the future looks like this:

UK: Financial center for the world

US: Military center for the world

All other industries: move to China...

Thu, 01/06/2011 - 20:51 | 854552 gorillaonyourback
gorillaonyourback's picture

its quite disgusting, but our bankster overlords want to devalue the dollar to shit so we as americans can work for 5 dollars a day.  free trade brought us this, we're just going down to meet the rest of the of the worlds peons quality of life.  only way i see to change is start a massive protectionist policy, a massive educational investment( AT THE FUCKIN EXPENSE OF OUR MILITARY, they takin way to much of the pie) and pick specific technological advantages we still have and invest into(if we have any left).  FUCK OUR FOUNDING FATHERS WOULD BE SO DISAPPOINTED.  oh least i forget, open season on banksters shoot em where you can

Thu, 01/06/2011 - 22:30 | 854846 midtowng
midtowng's picture

Both political parties want to expand free trade agreements with 3rd world countries. We are still moving in the wrong direction.

Thu, 01/06/2011 - 23:43 | 855003 StychoKiller
StychoKiller's picture

[quote]

Lotta poor man make a five dollar bill
Keep him happy all the time
Some other fellow making nothing at all
And you can hear him cryin...

"Can I go buddy
Can I go down
Take your shift at the mine?"

Gotta get down to the Cumberland mine
That's where I mainly spend my time
Make good money/five dollars a day
Made any more I might move away -

Lotta poor man got the Cumberland Blues
He can't win for losin
Lotta poor man got to walk the line
Just to pay his union dues

[/quote] -- Cumberland Blues, Grateful Dead

Fri, 01/07/2011 - 06:00 | 855404 Snidley Whipsnae
Snidley Whipsnae's picture

"only way i see to change is start a massive protectionist policy"

A massive protectionist policy? Not a bad idea if the US was not importing 2/3rds of the oil consumed in the US every day.

And what are we exporting in trade for the oil? Some agricultural output plus lots of worthless fiat paper...In addition, we are providing military protection for the big oil producers that supply the US with that oil.

Erecting and maintaing trade barriers is not as simple as it sounds...Although, I believe that some trade barriers with China would help restore some US manufacturing. Selective trade barriers, iow.

Thu, 01/06/2011 - 20:51 | 854553 Kyron95131
Kyron95131's picture

this is an easy concept to understand and i seriously have no clue why the average critical thinking citizen of the United States doesn't understand.

the corperatocracy exists to for the good of furthering the corperatoctracy.

it does this through Automation and Intermediation

corporations are prolly the most efficient invention of killing ourselves in the modern age. the ability to extract profit for the sake of profit from society and do it without any real liability is the mechanism in which this world will end. they in turn are in debt to the banking industry.

everything else is just symptom of the problem.

and its too late to stop it, unless civil war breaks out. in which case the system will pay us to fight against ourselves to stop it.

lol

just like its done in the past

Thu, 01/06/2011 - 21:56 | 854755 New_Meat
New_Meat's picture

child, do you know where wages come from?  How real wages are generated?

Your essay will be greatly appreciated.

Looking forward to an "A" performance.

- Ned

[ED: I'd ask you to distinguish "your wages" from "the source of your wages".  Inquiring minds wish to understand your brilliance.  Please please all of ZH.]

Thu, 01/06/2011 - 22:11 | 854798 Kyron95131
Kyron95131's picture

i do know where wages come from, how they are derived, and so forth

i mean, i could explain my perspective on said topic, but yes it would be an essay i assure you :)

i can give you the brief (and generously abreaviated version) by saying wages are an agreement of exchange of time on half of the employee for compensation in fiscal form from the employer. wage base usually depending upon what the employee see's as being needed to subsist A.K.A cost of living (food, housing, health etc.. etc..)

Thu, 01/06/2011 - 20:50 | 854554 gorillaonyourback
gorillaonyourback's picture

its quite disgusting, but our bankster overlords want to devalue the dollar to shit so we as americans can work for 5 dollars a day.  free trade brought us this, we're just going down to meet the rest of the of the worlds peons quality of life.  only way i see to change is start a massive protectionist policy, a massive educational investment( AT THE FUCKIN EXPENSE OF OUR MILITARY, they takin way to much of the pie) and pick specific technological advantages we still have and invest into(if we have any left).  FUCK OUR FOUNDING FATHERS WOULD BE SO DISAPPOINTED.  oh least i forget, open season on banksters shoot em where you can

Thu, 01/06/2011 - 20:51 | 854559 spank-of-america
spank-of-america's picture

Meanwhile the sheeple & meida celebrate a bum with a radio voice getting job offers.

 

Hey kids, hard work doesn't get u job offers, but doing drugs, holding up a sign & living on the streets for 20 years does!!!

Thu, 01/06/2011 - 21:09 | 854606 Lord Koos
Lord Koos's picture

If you don't think being homeless and living on the street is hard work, try it sometime.  Nobody volunteers for that.

Thu, 01/06/2011 - 22:46 | 854882 Richard Head
Richard Head's picture

Plenty of people volunteer for it every day.  There is tons of help available.  A lot of the homeless don't want to use it.

Thu, 01/06/2011 - 23:45 | 855006 StychoKiller
StychoKiller's picture

Given the level(s) of taxation, can you blame'em?

Thu, 01/06/2011 - 20:53 | 854564 Mad Mad Woman
Mad Mad Woman's picture

What Obama needs to do is to formulate a National Manufacturing Policy. America needs to be making things again, on a large scale. We need a infrastructure repair program that will go hand in hand with the manufacturing policy. We need to be working on alternative energies projects, and much more.

Thu, 01/06/2011 - 22:06 | 854785 Twindrives
Twindrives's picture

Obama needs to go manage a housing project in Chicago.  His wife Aunt Esther can clean the toilets.

Thu, 01/06/2011 - 22:17 | 854819 New_Meat
New_Meat's picture

His Auntie Zietunie is living comfortably in a Boston Housing Project, with her EBT card intact and her housing well established.

My/our tax money at work.

don'cha know.

http://en.wikipedia.org/wiki/Zeituni_Onyango

to be gentle, but, well, after she came here, well, the system took advantage of me:

http://www.cbsnews.com/8301-503544_162-20017043-503544.html

- Ned

 

Thu, 01/06/2011 - 22:07 | 854787 Twindrives
Twindrives's picture

Obama, what a joke!

Thu, 01/06/2011 - 22:10 | 854800 New_Meat
New_Meat's picture

dudette: didn't you hear about the "shovel ready projects" that were, well, right there?

and didn't you hear about Our Dear President's saying "well, there are no shovel ready projects"?

Let's help you with this information desert:

http://www.youtube.com/watch?v=MheOUhDumqs

dang, trolls all over the site tonight.

- Ned

Fri, 01/07/2011 - 02:26 | 855240 Printfaster
Printfaster's picture

"shovel ready project?"

The only shovel ready project that I can think of, belongs to the grave digger.

 

Fri, 01/07/2011 - 06:06 | 855406 Snidley Whipsnae
Snidley Whipsnae's picture

Obama and his cohort bureaucrats are the problem, not the solution.

Too much government, owned by the FIRE sector, is strangling all of the US Economy except the FIRE (finance, insurance, and real estate) sectors.

Seldom does a problem solve itself.

Thu, 01/06/2011 - 20:54 | 854565 SloSquez
SloSquez's picture

I'll make a call...and I don't make calls.  This will be the push back.  We must start supporting our own economy.  Whatever the cost, the whoring day's are nearly over no matter what Soros has to say.

Thu, 01/06/2011 - 21:16 | 854642 Boilermaker
Boilermaker's picture

I'm sure I'll get slaughtered, but the Big 3 are making significant market share gains (finally).  The golden boy, Toyota, is finally losing it's toe hold.  The new threat is the Koreans.

Autos and airplanes are basically the only significant manufacturing sectors we have left.  To a smaller degree, raw materials is somewhat alive.

Textiles, electronics, furniture, plastics, et al are probably forever gone.

Thu, 01/06/2011 - 22:19 | 854823 SloSquez
SloSquez's picture

Must add defense.  I don't like the big three because I think they are stuck in the union mentality.  Our country must innovate and therefore lead.  The big three are stuck in the unionized 2008 mentality.  Only when you start to give a S$?T about the product and not what you are to personally gain, will anything change.  IMHO.

Fri, 01/07/2011 - 01:25 | 855154 Terminus C
Terminus C's picture

Since when does anyone give a shit "about the product"?  People do things because it is advantageous to them.  Seriously, you talk smack about the unions who, needless to say, are far from perfect, and then you go all communist and say people should work for the joy of working and the pride of "doing a good job".

 

Thu, 01/06/2011 - 22:49 | 854890 Richard Head
Richard Head's picture

I would buy a Ford if it weren't for the UAW assholes.  GM and Chrysler - not now, not ever.

Fri, 01/07/2011 - 01:26 | 855157 Terminus C
Terminus C's picture

Yet the management of said companies earn million dollar bonuses for running thir corporations into the ground.  I am not seeking to absolve unions, but surely there is more than one reason for these company's issues.

Thu, 01/06/2011 - 21:04 | 854587 johnnymustardseed
johnnymustardseed's picture

Since 2002 42,000 factories have shut down in the United States. Nobody gave a shit!! It has now come home to roost. Got to have that cheap shit from China! Either we become isolationists or we accept a lower of standard of living. Paying 5 dollars a day to compete with the Chinese will bring a serious shit storm from entitled Americans for sure

Thu, 01/06/2011 - 21:14 | 854633 Boilermaker
Boilermaker's picture

+1

Everyone dismissed manufacturing until they realized it's the core of a healthy economy.  You have to have a healthy host to allow the parasites to thrive also.  What's moreover true is that the manufacturing execs in the US provided the technology and know-how to the Chinese.  They still suck at quality and are generally far less sophisticated than the US / EU / Japan.  But, the execs at the US (and EU) multinationals have completely sold out the workers and their home communities.

Thu, 01/06/2011 - 21:04 | 854590 Mad Mad Woman
Mad Mad Woman's picture

And another thing, or two.......we need to do like the Germans do....restrict imports. Follow the German model. AND.....forget NAFTA, and all the other bogus trade pacts, they're killing us.

 And...I like Jerry Maguire's one idea......forgive all debt for the American people. That means no more mortgage, car loan, education loan paymts. That alone would really give the economy a HUGE kickstart. Tell Bernanke no more QE's & use that money instead for the debt forgiveness. It would be cheaper to do the debt forgiveness than to do more QE, which aren't really working anyway.

Thu, 01/06/2011 - 21:12 | 854618 Boilermaker
Boilermaker's picture

Germany doesn't restrict imports.  I'm there constantly and have worked with them for 11 years and am married to a German.  You have no fucking idea what you are talking about.  Furthermore, the idealistic view of Germany is shit.  Thier taxes are absolutely crippling and they have per capita public debt that exceeds ours.  Please, give the Germany love-fest a break.

Fri, 01/07/2011 - 06:43 | 855426 DFCtomm
DFCtomm's picture

There is no VAT disparity?

Thu, 01/06/2011 - 22:15 | 854812 Twindrives
Twindrives's picture

Those contrails are really affecting you aren't they?  

Thu, 01/06/2011 - 22:58 | 854910 three chord sloth
three chord sloth's picture

Germany is losing manufacturing jobs just like the US.

In 1991, Germany manufacturing employment was over 29% of the labor force. Now it is down to under 19%... and accelerating. The German model is not the answer.

http://www.spiegel.de/international/germany/0,1518,737554,00.html

Fri, 01/07/2011 - 11:50 | 856225 Star Warrior
Star Warrior's picture

Try to rememember tha Gernmany integrated 18 Million people from the former East Germany who´s manufacturing base became worthless over night, IF you increase the labour force by 25% off course manufacturing as a percent drops. Just got back for Germany, stills looks like a model to be copied to me

Thu, 01/06/2011 - 21:06 | 854594 Lord Koos
Lord Koos's picture

I highly recommend this website for a visual aid on this topic: http://detroityes.com/home.htm

Thu, 01/06/2011 - 21:07 | 854596 ptolemy_newit
ptolemy_newit's picture

Apple is creating economic terror an plays a major role in the monthly trade imbalances.

Guess who the others are?

 

 

 

 

Thu, 01/06/2011 - 21:15 | 854637 Lord Koos
Lord Koos's picture

If the iphone was made in the US it would cost around $800.

Thu, 01/06/2011 - 21:21 | 854657 Boilermaker
Boilermaker's picture

No, it would not.  It would have a 40% profit margin instead of 400%.  That's the problem.  Nobody wants to be greedy with a good profit.  They want to be gluttons and have an astronomical profit.  The executives must have their enormous bonuses and salaries.

Thu, 01/06/2011 - 21:48 | 854746 Kayman
Kayman's picture

$800 ??

Absolute Horseshit.  Let's see some product costing on your conjecture.

And what would happen if China, like the U.S. and other Western countries, paid for the pollution, OSHA, pensions, employers portion of payroll taxes, property taxes, fees and permits. The list is endless where China subsidizes its industry with impunity.

By the way, the iPhone is the modern day HulaHoop.  A toy in phones clothing.

Thu, 01/06/2011 - 21:08 | 854599 Instant Karma
Instant Karma's picture

A few actions might reverse this trend:

1. Eliminate the minimum wage

2. Ban unions

3. Limit unemployment benefits

4. Require work for social assistance

5. Limit social assistance

6. Apple, for example, has become a tech giant. Yet, they make everything in China. There you go.

Thu, 01/06/2011 - 21:08 | 854608 Boilermaker
Boilermaker's picture

Wow, you really have a choke hold on the issue and the solution.  I suspect you have no experience in manufacturing.

Thu, 01/06/2011 - 21:24 | 854667 Instant Karma
Instant Karma's picture

I know that it's a hell of a lot cheaper to make things in China. And one reason is the high cost of labor in the USA. Go ask Apple.

Thu, 01/06/2011 - 21:28 | 854673 Boilermaker
Boilermaker's picture

OK, I'll go ask Apple <roll eyes>

Thu, 01/06/2011 - 23:29 | 854976 low_frequency_trader
low_frequency_trader's picture

Damn right, IK! If U.S. workers had the same work ethic as those Chinese guys at Apple's favorite contract manufacturer Foxconn (well, except for the slackers who committed suicide), what a beautiful country we would be!

Thu, 01/06/2011 - 21:18 | 854647 Lord Koos
Lord Koos's picture

In case you haven't noticed, the minimum wage has already been eliminated -- it's called outsourcing.  Since you advocate banning unions, why don't we return to child labor and 7-day, 80 hour work weeks?

Thu, 01/06/2011 - 21:24 | 854662 Instant Karma
Instant Karma's picture

They do that in China. I'm merely suggusting we Americans make our adult working age population price competitive with other labor forces. As the article indicates, the alternative is no manufacturing jobs. 

Thu, 01/06/2011 - 21:31 | 854692 Boilermaker
Boilermaker's picture

China....china...china....china...china....china...

Fri, 01/07/2011 - 01:35 | 855170 Terminus C
Terminus C's picture

I am afraid your understanding of socio-economics is limited.  You could do all of these things and you will allow slave labour back into the country.  You advocate those things because you likely have no fear of ever having to work under such conditions.  You are likely educated and have access to skills most Americans do not.

I am not advocating paying people more than they are "worth" (eg. Walley World greeters should not be making $20/hour) but the exploitation that would occur in this country would resemble the late 1800's early 1900's.  These were NOT the golden age that many here so nostalgically gaze back upon.  Read a history of the Industrial Revolution and you will see a society with ALL that you desire.

 

Fri, 01/07/2011 - 11:11 | 856059 MachoMan
MachoMan's picture

The only way that happens is if wellfare is eliminated.  If wellfare is eliminated, then the concept and scope of every government in the united states will be a mere whisper of their former selves.  If governments collapse, we will have price discovery and wages will return to these levels anyway.

The minimum wage is essentially an idiot tax for those people willing to trade money for a sense of self worth, through a laughably menial position...  applaudable to some degree in a more perfect world, but at this juncture simply contributes to perpetuating the corporateocracy.  The people willing to really, really work for minimum wage will have no problem on the backside of the financial collapse where their work will likely be more rewarded...  they're just shooting themselves in the feet.

Fri, 01/07/2011 - 04:27 | 855355 GoinFawr
GoinFawr's picture

I think JL just rolled over in his grave...

Fri, 01/07/2011 - 06:18 | 855410 AnAnonymous
AnAnonymous's picture

Most propositions here are stupid.

Wages are connected with the general environment quality. The better the quality, the higher the wage needs to be to allow life in such an environment.

Lets imagine that US citizens working 18 hours per day, 7 days per week, 365 days per year. On ten dollars per day.

Ten dollars per day is enough to buy supportive meals. Lets ban the stupid laws on vagrancy so that these US citizens can sleep rough on the streets.

Even with these harsh conditions, US citizens will not be competitive with a work force that live on the same $10 per day and thanks to them, can live and sleep under a roof, can ambition to marry etc...

The trouble is elsewhere and can be summed up like this:

The US as a general environment, no longer supports industrial activities.

Fri, 01/07/2011 - 10:24 | 855866 BostonTettierOwner
BostonTettierOwner's picture

You forgot to add 1 more paragraph:

1. forced utilization of non-productive workforce ( paying pensions and providing healthcare is very expensive you know)

Cut your austrian school , libertarian bullshit

Thu, 01/06/2011 - 21:08 | 854602 Boilermaker
Boilermaker's picture

I work in manufacturing...

I live in Metro Detroit...

I work in Automotive...

I am the Unicorn.

Thu, 01/06/2011 - 21:27 | 854672 Instant Karma
Instant Karma's picture

Enjoy your job while it lasts. It won't.

Thu, 01/06/2011 - 21:40 | 854680 Boilermaker
Boilermaker's picture

Ok, I sure will.  You don't mind if I dismiss you since you don't know shit from applebutter, right?

Fri, 01/07/2011 - 01:37 | 855174 Slewburger
Slewburger's picture

I have to say, for someone named Instant Karma you're an ass. I hope somebody steals your bike seat.

Fri, 01/07/2011 - 04:27 | 855356 GoinFawr
GoinFawr's picture

...and leaves the post.

Fri, 01/07/2011 - 06:16 | 855409 Snidley Whipsnae
Snidley Whipsnae's picture

I suggest that you read Howard Zinn's "A People's History of the United States"

It remains the best selling history of the US ever written. If you have not read it I see no reason for you to comment on labor, politics, war, corporations, et al. In other words if you havent read it you don't know what the hell you are babbling about.

Thu, 01/06/2011 - 21:11 | 854613 spank-of-america
spank-of-america's picture

GIANT SUCKING SOUND!!!

Thu, 01/06/2011 - 23:03 | 854918 RockyRacoon
RockyRacoon's picture

Ross Perot is still making those eye-watering charts!

He was seen as a kook, sorta like the Pauls.  Just wait...

Perot Charts » Charting Government Fiscal Irresponsibility
Thu, 01/06/2011 - 23:51 | 855015 Dapper Dan
Dapper Dan's picture

Speaking of sound, most, if not all, of these comments are in the liner notes of Bruce Springsteen albums. or C/D's if your after class of "85" Tyler, where is the spellcheck option?

Thu, 01/06/2011 - 21:11 | 854622 Everybodys All ...
Everybodys All American's picture

It's either going to take a revolution of thought or by force to change the direction of this country. The oligarchs have sold out the middle class clearly and worse yet many in this country are too complacent and stupid to know it is by plan.

Thu, 01/06/2011 - 21:12 | 854627 Rainman
Rainman's picture

The wreckage of American industry really began with the Far East steel dumping in the 70s. As a younger man, I remember having a 2-martini lunch with the CFO at U.S Steel in Pittsburgh when he flew into a protectionist rage over the dumping of cheap steel. That was normal in those days...the martinis, that is.

Long story short, his projection based on experience is precisely what we are seeing today. U.S Labor rate compression across the board. Now try unwinding 40 years of USG ambivalence on this subject. Good luck.

Thu, 01/06/2011 - 21:25 | 854668 Boilermaker
Boilermaker's picture

I can tell you that the Chinese dump the products that my employer makes.  They sell them for less that our raw material costs.  There is pending anti-dumping action on the matter and the EU already took action with an ~ 70% tarrif (afterwhich China took the same action against the EU, which means shit since they weren't buying anything either).

They are dumping products.  That's a fact.

Thu, 01/06/2011 - 21:33 | 854694 Rainman
Rainman's picture

I have a friend in the collision repair business who goes moot when I ask him if his replacement parts for USA brand autos are stock and made in the USA. I already knew the answer anyway.

Thu, 01/06/2011 - 21:38 | 854717 Boilermaker
Boilermaker's picture

It's about 60% (roughly) on Big 3 autos and even less, of course, on foreign autos.  It should and could be more.  But that would require the US actually defending it's manufacturing base and reviving it.  I assure you that the Koreans and Chinese do so as well as the Brazilians.

Thu, 01/06/2011 - 22:41 | 854870 Diogenes
Diogenes's picture

I used to work in the auto repair business. Twenty years ago we got in a late model Dodge truck for repair. The owner insisted on genuine Dodge parts, which is his right.

A new door arrived from the Dodge dealer and the steel was clearly marked "made in Japan".

This was on an American made vehicle. Many of your so called domestic cars today are actually made overseas. The American made ones use a lot of imported parts and materials.

Fri, 01/07/2011 - 01:24 | 855155 pitz
pitz's picture

I hit a deer with my vehicle last year, insurance wrote it off, so I went to the junkyard to pull parts and fix it.  Turns out a previous insurance repair was done on my car, and all the repair parts were, "made in Taiwan".  The parts I pulled from the junkyard were all "made in USA", and trust me, they were significantly more robust. 

 

 

Thu, 01/06/2011 - 21:28 | 854675 Lord Koos
Lord Koos's picture

It's not just the jobs... these corporations who outsource manufacturing have damaged our national security. In WWII the US prevailed because they were able to out-manufacture the Germans.   If there was a large conventional war today against a standing army, we couldn't manufacture our way out of a paper bag.  I read recently that the US can't manufacture enough bullets to supply American police departments, so that they must import the ammo.  BTW, one reason foreign steel was cheaper was because Japan and other built modern plants from scratch, while American plants resisted making the necessary investments in newer technology.

 

 

Thu, 01/06/2011 - 21:55 | 854759 Kayman
Kayman's picture

Americans subsidized the rebuilding of Japan and Germany through the Marshall Plan, helping to put themselves at a competitive disadvantage.

Thu, 01/06/2011 - 22:45 | 854881 Diogenes
Diogenes's picture

While foreign governments were subsidising their industries American unions and politicians were hammering theirs.

Am I the only one who remembers how Kennedy savaged the steel industry, called them sons of bitches and forced a rollback in steel prices? The steel companies stayed in business but their profit margins were cut to the bone and they had no choice but to cut back on things like new plant investment.

Fri, 01/07/2011 - 06:25 | 855413 Snidley Whipsnae
Snidley Whipsnae's picture

It started prior to the seventies. It started when the US Gov allowed the Japanese to dump TVs in the US in the sixties...consequently, there are no TV sets made in America anymore.

Thu, 01/06/2011 - 21:16 | 854638 Kreditanstalt
Kreditanstalt's picture

The answer to this is LOWER LIVING STANDARDS.  Lower wages, a cheaper dollar, smaller houses, one car per family, fewer luxuries, hard work. 

There is no other realistic alternative; America has to be competitive on PRICE with the rest of the world.  Consumption by Americans far, far outstrips their meagre productivity already.

The socialists and close-the-borders types here want to prohibit imports.  They want to regulate and regulate to prevent outsourcing.  The want to stop all immigration with big government armies of border guards.

But you tell me: what would that do to stateside PRICES?  And job creation? Entrepreneurial  initiative?  And thus living standards?

Get ready for smaller houses, higher debt levels, raging price inflation, thinking twice about long-distance phone calls and cooking at home.  Saving money to buy things.  Eating leftovers for dinner and patching clothes...

But it's all good.

 

Thu, 01/06/2011 - 21:31 | 854687 Dr. Sandi
Dr. Sandi's picture

Get ready for smaller houses, higher debt levels, raging price inflation, thinking twice about long-distance phone calls and cooking at home.  Saving money to buy things.  Eating leftovers for dinner and patching clothes...

But it's all good.

Wow, apparently I'm already living in the future.

 

Thu, 01/06/2011 - 22:47 | 854887 Diogenes
Diogenes's picture

Sounds like what was considered hard times in the seventies, and a normal life before 1950.

Fri, 01/07/2011 - 10:59 | 856001 GreenSideUp
GreenSideUp's picture

Haha, me too.

Thu, 01/06/2011 - 21:40 | 854723 Lord Koos
Lord Koos's picture

I've already been on that page for years... except for the higher debt levels.  I agree that it's going to be back-to-basics for most Americans.

You left out one thing though -- there is going to be a LOT more poverty, more failing infrastructure, more crime, and many very useful government services going away.  


Thu, 01/06/2011 - 21:51 | 854753 Kreditanstalt
Kreditanstalt's picture

I agree. Also ever-greater income disparities.  I was just noting that middle-class deleveraging hasn't happened yet; debt levels remain as high as ever...

Thu, 01/06/2011 - 22:00 | 854771 Kayman
Kayman's picture

America could be nearly self sufficient. America does not NEED a single piece of crap from China.

America could negotiate 2-way trade between select countries.

FREE TRADE is bullshit- never existed, never will. Why call it trade with China- America and all other countries are China's dumping ground. Period.

Countries do not have friends, only interests (thanks Henry).

We don't need to "close the borders" but we can certainly negotiate better deals, since without the (newly wounded) American consumer, China would immediately fail.

Fri, 01/07/2011 - 09:28 | 855599 AnAnonymous
AnAnonymous's picture

The answer to this is LOWER LIVING STANDARDS.  Lower wages, a cheaper dollar, smaller houses, one car per family, fewer luxuries, hard work. 

There is no other realistic alternative

 

It is not a realistic alternative.

Sizing down on a project like the US can not be done.

Lowering down  standards of life, just like rising them up is not the result of a decree. It is the result of acts.

The realistic option is that the US will keep upping the standards of life and that people who can no longer afford to live in the US will be shown the door.

It is funny that the US people think of wage arbitration in their favour when they fought for the option to be removed from the table.

Thu, 01/06/2011 - 21:19 | 854652 pitz
pitz's picture

A decade of engineering grads are mostly unemployed.  H1-B's are preferred over Americans.  Its a catastrophe.  Our best and brightest are sitting on couches doing nothing, while used house salesmen (realtors), and paper salesmen (bankers) are making insane amounts of money.

Burn the 'system' and start it all over, motherfuckers.

Fri, 01/07/2011 - 01:39 | 855177 poor fella
poor fella's picture

But Gates swears we need the help....  and more young adults need to go into engineering and computer science. Too bad for him most will not work for minimum wage (soon though, because working at all has its benefits).

Earthlings might as well cut to the chase and agree on a world-wide minimum wage of 4 dollars US / hour and call it accomplished... One day when the 'winning' family is having a meal in their gold-diamond-encrusted-ivory-tower surrounded by motion-detecting organism vaporizors and there's nothing else worth having - WHAT'S THE fCKING POINT? The only poetry is what you write, the only paintings are what you create - the rest of us will be trying to buy oxygen, water, and space.

Channeling my inner Philip K. Dick.

Fri, 01/07/2011 - 20:25 | 857903 pitz
pitz's picture

Bill Gates is full of shit.  Microsoft receives hundreds of thousands of resumes from America's top computer scientists, and only gives the time of day to an extremely small fraction of them. 

Thu, 01/06/2011 - 21:21 | 854656 JR
JR's picture

The point of Jim Willie’s December 29, 2010 article, Asset Speculation and Capital Destruction, The Cost of 0% Money,” in his own words is to “expose the most glaring blind spots of USEconomic and USBanking, a mindboggling failure that has delivered the United States of America to the doorstep of the Third World. The sins committed are almost precisely what Banana Republics have done, and faced ruin.”

Said Willie: “With artificially low rates comes complete destruction of capital formation, as economic laws have all been commandeered.  The outcome features a shortage of everything valuable and a climax of central planning to manage the destruction. 

“Witness the stream of nationalized failures, whether financial firms or critical industrial firms.  Now General Motors (Govt Motors) produces an electric car twice the price of Toyota, rotten fruit.  Witness the Home Buyer Tax Credit which has ended.  The USFed as central bank has a bloated ruined balance sheet.  The last remaining question for the august USFed is whether they will declare bankruptcy and liquidate, since their net value is between minus $700 billion and $1.2 trillion, OR whether they will attempt to purchase the remaining few $trillion of home loans from Fannie Mae and take property title to 30% to 35% of American homes.  That would serve as a Fascist Manifesto of collectivism in a sense.

“The tragedy is that the USEconomy has chronically suffered from an absence of capital investment.  Some analysts point to a prohibitive US corporate tax structure…  [T}he Jackass submits, the more pressing and acute problem is the 0% usury rate.  It is common between the US and European Union, which faces a fracture.  The United States shipped most of its factories to China, in an abandonment of capital structures and their legitimate wealth engines.  The US economists applauded the move, calling it a Low Cost Solution. It was in fact a ruinous movement, one that replaced the wealth engines with debt burdens.

“The climax is coming, with a higher cost structure across the USEconomy, and shortages where prices are kept down artificially. US businesses see little prospect in capital investment, at least not within the United States.  They sit on cash, and see little usage for it.  So they speculate with it, a contradiction that capitalism exists in the US at all.  In the next chapter, future price inflation will be called economic growth, the next travesty!

Look for an increase in empty sections of supermarket shelves for food, and gasoline stations shut down.  It will be an end symptom.  Look for a collapse of Municipal Bonds, as the states and cities are in a late stage of implosion.  The impact of the semi-permanent housing bear market has local impact.  Even banks have far less money in ATMS, a signal of the supply chain being interrupted…

“The desperate response has been to throw 0% money into the system, primarily the big US banks, $trillions of worthless money, and expecting to produce a remedy…

"Rob Kirby summed it up: ‘It is like taking 100 gallons of water into the desert and pouring it into the sand to promote growth.  Nothing happens, nothing grows, and people die of thirst…’”

Thu, 01/06/2011 - 21:22 | 854660 amazon1966
amazon1966's picture

From Wikipedia: It's not sourced, and I don't have time, but it sounds correct to me. The answer is automation.

The U.S. produces approximately 21% of the world's manufacturing output, a number which has remained unchanged for the last 40 years. The job loss during this continual volume growth is explained by record breaking productivity gains. In addition, growth in telecommunications, pharmaceuticals, aircraft, heavy machinery and other industries along with declines in low end, low skill industries such as clothing, toys, and other simple manufacturing have resulted in U.S. jobs being more highly skilled and better paying.

Thu, 01/06/2011 - 21:33 | 854695 Instant Karma
Instant Karma's picture

No doubt 2 computers and an automated assembly line can do what 40 workers used to do. But like the article said, there were 1.2 billion cell phones sold last year, and the USA made none of them. TVs too. Most people can't do better than a high school diploma and a factory job. They haven't the brains or the academic motivation. For them, manufacturing used to be a ticket to a decent life. Now, that ticket is public aid. Disability. Lawsuits. Selling drugs.

Thu, 01/06/2011 - 22:12 | 854804 Kayman
Kayman's picture

Well thank you Amazon 1966

So... American Manufacturing companies, led by GE (Six Sigma Jack Welcher) and Retail Giants (Chinese Wall Mart) did not OUTSOURCE American jobs to China.  It was only  productivity gains that caused lost Middle Class jobs.

China is booming, America is dying, and the problem is American productivity.

Geez, thanks for clearing that misconception up for me.

Kayman

Greetings JR

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