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Reminiscences Of An American Industrial Nation - How In A Few Short Years America Lost Its Manufacturing Sector
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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amazon1966, you are of course 100% spot on. The American share of global output has remained constant, productivity has skyrocketed. No longer are 500 people needed to construct a single piece of equipment. Today they do with a quarter of the manpower and lots of automation. I am not sure how producivity gains are a bad thing.
I don't think people get it. This is not some situation that was caused by "banksters" or even the governments alone. Sorry, but there are no easy villains to point fingers at.
Americans are just too expensive.
That's horseshit. It isn't that American manufacturers can't make money. It's that they can't make obscene amounts of money by paying virtually zero for labor.
Let me ask you...how much experience do you have in manufacturing? I can answer it for you if you prefer as it's obvious.
THAT'S horseshit. American manufacturers are not in business to pay the hired help high wages. They're in business to make maximum profits, not become social services. If they can find lower cost workers in China - or wherever - and Americans want those cheap goods, so what?
exactly! and, the sooner 'consumers' stop thinking of themselves as such, and start thinking locally, the sooner a new day will dawn here.
+ $1.99
Kreditanshiesse
Your reasoning is a little narrow. Wages and capital are summed up and measured against value of production. That, my friend is productivity.
The fact that China directly and indirectly subsidizes manufacturing to maintain employment and keep the peasants from revolting, seems to escape your thinking process.
I ask you, what does it profit a country, if you gain cheap crap and lose all your core jobs ? I mean, why have a country ? Maybe just have Goldman sell America to the Chinese in an LBO. These idiots would sell the rope to their own Hangman.
Kayman
PS - if the cheapest wages is the objective, I guess you have no problem with slavery ?
"...if the cheapest wages is the objective, I guess you have no problem with slavery ?"
I have a problem with anyone trying to tell me how much I have to pay the hired help - when I can hire others for 1/4 the cost. I have a problem too with anyone trying to tell his or her fellow citizens who they can buy from.
Then you have... the situation we are in now.
Here is the thing (I am going to blaspheme, my junk shield is on...)
Large scale free markets never work. Ever. Truly free markets quickly develop monopolies and unhealthy power structures. Under a truly free market there is nothing wrong with me selling you poison and calling it food. Sure the market will soon run me out of business, but not before you are dead or very sick. I can then rename my business and do it again, and again... There is nothing to stop me, if I have the advantage and the ability, from running my competition out of business, as, it benefits me to do so.
There must be some regulation in the markets or they do not function well. Since the economy of a society determines what type of society you have, one must first decide what wants the society to be.
Most people that I know, including myself, want a society that has sustainable prosperity for the greatest number (with reward for hard work and innovation), that does not cause serious environmental degradation and provides opportunity for most people in that society to be productive members.
This means that business may need to pay their employees a certain wage, I personnally think wages should be directly linked to productivity, so that most people in the society have access to a decent life if they choose to work for it. Crime is almost exclusively poverty driven (though... look at the fuckin' bankers... they ain't poor, but they also have no consequences). If this means we should not allow cheap goods to be dumped into our economies by those who use slave labor, then so be it.
All societies must have rules to be societies. You just need to decide what type of society you want to live in. If you like the slave society... perhaps moving to China is a good transition for you.
++!!
I think you may be channeling Henry Ford. If everybody is a slave, there's no market to sell to.
You really don't get it. You advocate only one half of the free trade equation. Why don't you rail against environmental regulations? You don't want free trade. You like the ideal of exporting pollution, and near slave labor conditions so you can have your cheap shit, and clean water.
So Kreditanschiesse
Let's outsource Wall Street. I bet a few Chinese peasants could do the the work of the financial parasites we have.
I have a problem with those that have no concept of what a country is. Micro Myopia in spades.
Achtung !
Hey Kayman
"PS - if the cheapest wages is the objective, I guess you have no problem with slavery ?"
We already have something worse than slavery: It is called being a student. That is where you pay $50,000/year to work for nothing. Grad students and post docs work for their profs at slave wages. At least they just work for nothing and don't have to pay. Of course now most of our grad students and post docs are Taiwanese, Chinese, or Indian. Of course in public education, we have child slavery. Children are forced to perform drivel taught them. Children should not be taught in enforced slavery. They ought to have every right to turn away from public education, or at least their parents should, and not be forced to pay for it.
Unless we let labor go to market wage, there will always be wage arbitrage. The simple answer for the US is to inflate so that wages equal Chinese wages. Commodities must get more expensive, and the US needs to open up commodities to exploitation, and not let the EPA keep them in their treasure room.
Fewer and fewer can afford even the cheap goods--because they don't have jobs, that's what.
Bastiat adverse to the cheaper and cheaper?
How odd. Dead man talking.
Real capital has been severely devalued, and that's the root of the problem. An outfit like Citigroup, which owns practically nothing of any value, is worth hundreds of billions. Yet mines and productive assets, are somehow only "worth" very small fractions of that, even though, the engineering effort and scarcity associated with such assets are an order of magnitude greater.
Revalue real capital (*not* real estate -- which is a paper asset class!), and many of the problems would dissappear. Why the fuck should a banker make a few million dollars in bonus for flipping/creating paper, while engineers that create real things in the mining/manufacturing/science/technology realm basically be relegated to eating Krap Dinner?
Apple has to put nets around their manufacturing plants in China because the workers periodically throw themselves out the windows because they prefer death to their slave labor existence. How is the American worker to compete with that?
Don't you mean, "American bankers are too expensive"??
Can you imagine how much more productive and efficient the economy would be if we didn't have to keep those GS assholes in their Armani suits, leather-lined office suites downtown, and pay them millions of dollars in bonuses?
The leeches need to go.
Nope. Simple as that: American wages, social welfare, costs, overregulation, taxes, licensing, minimum wages, payroll deductions, insurance requirements & god-knows-what-else are too high.
The "banksters"? Someone freely pays them. Maybe its their customers, somewhere, maybe its the taxpayer...hope it's not you. But it has nothing to do with high American labour costs.
Who's gonna buy a made-in-USA TV produced with labour costing $30/hour+benefits+pensions+taxes+regulatory costs?
Sorry, I forgot to include the cost of paying all those assholes in government and the public service.
Kreditanschiesse
And where is China going to sell that TV if Americans have no jobs.
The biggest subsidy of all, is Americans purchasing short term Chinese shit with long term debt.
And, yes, the biggest Welfare Bums of all, exist in the Criminal Banking Class. Without the ongoing subsidies from the Fed and the Treasury, these Criminal Fucks would be wallowing in their own feces and eating their own puke.
ACHTUNG meine dumbkoff.
Millions of Americans whine about "banksters" and obscene bonuses but have accounts (or a mortgage) with either Citi, Bank of America, Wells Fargo, or JPMorgan Chase. These are the same people buying Chinese made junk at Walmart. They are the majority of Americans.
+13 trillion. The classic nimby syndrome wrung big.
Dick Head
Let the rest of us know where you can buy American made products. Oh, yeah. Wally World doesn't sell American made products.
I wonder if there was a wise man in China who figured out the way to bring down America was by observing nature & what happens to mighty wild bears when you start feeding them. The bears start losing interest in hunting for wild food because it's much easier to eat the free food. Over time the bears lose more & more of their hunting skills. Eventually the once mighty bears have lost all of their hunting skills and have become completely dependent on the free food. One fine day the free food is suddenly cut off. The bears are then in deep shit when they have to go out into the wild to survive on their own.
America has become fat, dumb, & happy. It's productive capacity has fallen off the cliff, & when China pulls the plug, it's game over. Maybe all of that money that China has invested in the US over the past 30 years was an investment in bringing down the empire without firing a shot. They think generations at a time, we think about when's the next episode of American Idol.
Most people confuse competitors with enemies. Why would China want to "bring us down" since we are one of their best customers? What China wants to take its place as an equal, or near-equal to the US in terms of wealth and influence.
China's in the game to win, not to be our friends. Its delusional to thhink overwise.
Today's China is 1920's Japan.
The future Pearl Harbor will be Taiwan. But this time America will abandon the fight.
China gets stronger, America gets weaker.
America and Western Europe will be China's best customer in the same way your local drug dealer is your best friend. Happy, smiley face. Pandas. Wow ! Let's make nice...
China's "equal" will be to redress perceived wrongs.
You show me a democratic China and I will begin to believe some of your bullshit.
Funny. Democracy is just a gang label.
Just like that, China looking to right wrongs exclude it from the label democracy.
Reads like South Africa scam when they were told that if there were to pursue justice on past Apartheid members, they would not be called a democracy by others.
As to China seeking to right wrongs, maybe, maybe not. My belief is they are not after that. They would prefer to decouple from the rest of the world and live their chinese way.
Indians, on the contrary, are much more eager of settling scores. Which is quite funny in the end because they were already granted the label "democracy"
Duplicity, duplicity...
Anybody realize that US manufacturing OUTPUT (adj for inflation) has nearly tripled since 1970?
Perhaps there's been some substitution of capital for labor going on while the **unskilled** mfg jobs are going to countries with lower wages? Maybe the US government has something to do with this with regards to taxes, rules and regs?
Last I heard, the US is still the largest manufacturer in the world.
If a Toyota with 5% domestic content is "assembled" here in the U.S. it is called a 100% U.S. manufactured vehicle. The Feds lie with statistics. Also, the definition of manufacturing has changed in the last ten years to include: assembling burgers, stuffing tacos, packing peaches, chopping meat, preparing food, stocking shelves etc. If you don't believe me read this:
The manufacturing sector is part of the goods-producing industries supersector group.
The Manufacturing sector comprises establishments engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products.
Establishments in the Manufacturing sector are often described as plants, factories, or mills and characteristically use power-driven machines and materials-handling equipment. However, establishments that transform materials or substances into new products by hand or in the worker's home and those engaged in selling to the general public products made on the same premises from which they are sold, such as bakeries, candy stores, and custom tailors, may also be included in this sector. Manufacturing establishments may process materials or may contract with other establishments to process their materials for them. Both types of establishments are included in manufacturing.
North American Industry Classification System
Ref: http://www.bls.gov/iag/tgs/iag31-33.htm
Oppressed in Ca
1. The only real yardstick would be manufacturing measured against GDP and the rest of the world. I can assure you it has declined.
2. Unskilled ??? There are many unaccredited people who are incredibly skilled.
3. If, as you propose, it is simply a matter of substitution of capital for labor, then I guess moving all those U.S. plants and unpaidfor U.S. technology to China, was a mistake ??
HUH, what ???!!!!
End free trade and globalism. Bring back the protective tarrif and rebuild the infrastructure and America will recover in a few years. We are going into neo-feudalism otherwise.
Smoot-Hawley it worked the first time, oh wait...
We don't need Smoot - Hawley. We need balanced trade.
Death to Chinese Mercantilism.
Welcome To Detroit, City Of The Future - Hope You Enjoy Your Tour
http://www.liveleak.com/view?i=21d_1294215623
Truly a brilliant plan by the nation's military strategists. Now when a military adversary looks at a map of the country for industrial targets there are none to be found! Just chalk up the off-shoring-of-all-the-middle-class-jobs thingy to unintended consequences!
You see, there is a generation of people who grew up under constant fear of being instantly incinerated by the atomic bomb. The natural response was to move as many of the targets elsewhere. Now should a opponent seek to destroy the nation's industrial power they'll end up targeting China, et al.
Hey Milt
Now there's a novel idea. The bombers arrive and there's only Walmart, some fast food joints and government buildings left.
Thanks for the uplifting message.
Bush bragged that every billion in sales overseas was worth 20,000 jobs in the United States. As soon as we started running huge deficits you never heard another word out of the Whitehouse. A $500B deficit means 10,000,000 jobs. Gee, that perfectly corresponds to the loss of jobs in the U.S. today. Good thing we're about to sign a trade deal with Korea.
Do something? Before we do something it would be wise to find a reason that manufacturing jobs are leaving in the first place. When blogs like the one quoted are honest about the reasons and can take a stance as to a solution then I will take that as a metric that "we" are ready to do "something."
Without the U.S. government granting China free access to the American consumer market, no American jobs would have been lost.
There is no greater return on investment than buying an American Political Whore.
GE announces more China development deals
1. Fairfield-based General Electric Co., plans to invest $500 million in research and development in China, mostly in new medical facilities, in the next three years, according to are report in China Daily. The plan is part of a $2 billion investment in China through 2012.
2. Chinese planes will soon be looking at new engines, courtesy of General Electric
3. GE breaks wind in China!
And GE pays zippity-fuckin-dooda in taxes....
And the bill for saving GE's ass will be sent to you shortly.
Okay it's late and I had a drink to relax but I will commit for the first time. First, I am a part owner in a metalworking manufacturing company. Second, 2009 was awful. But 2008 was great and Q4 2010 was also pretty good. Q4 2010 was up about 40% over Q4 2009. We sell to dirt guys (CAT/Deereu), automotive, aerospace and other industries.
The deal is that you have to have a great product and great service. USA auto companies missed this point and millions lost their jobs. They lost their jobs because of the end product not because of some cheap Chinese product.
Manufacturing is still quite strong - among those who are focused on value added - among the others, the deserve to go out of business.
Costikyan
There is truth in what you say as far as the U.S. auto companies go, but I wouldn't extend that position to the rest of American manufacturing.
Some great American Brands are now destroyed by manufacturing in China. Quality and Standards cannot be learned overnight by the newly arrived Chinese farmer/factory worker.
Here's a cute one for you guys. It turns out that a lot of our domestic manufacturing is actually foreign owned and controlled. Here are some numbers (http://www.bls.gov/iag/tgs/iag31-33.htm):
FOREIGN OWNERSHIP OF SELECTED U.S. INDUSTRIES Industry Percentage Foreign Owned Sound recording industries 97% Commodity contracts dealing and brokerage 79% Motion picture and sound recording industries 75% Metal ore mining 65% Motion picture and video industries 64% Wineries and distilleries 64% Database, directory, and other publishers 63% Book publishers 63% Cement, concrete, lime, and gypsum product 62% Engine, turbine and power transmission equipment 57% Rubber product 53% Nonmetallic mineral product manufacturing 53% Plastics and rubber products manufacturing 52% Plastics product 51% Other insurance related activities 51% Boiler, tank, and shipping container 50% Glass and glass product 48% Coal mining 48% Sugar and confectionery product 48% Nonmetallic mineral mining and quarrying 47% Advertising and related services 41% Pharmaceutical and medicine 40% Clay, refractory, and other nonmetallic mineral products 40% Securities brokerage 38% Other general purpose machinery 37% Audio and video equipment mfg and reproducing magnetic and optical media 36% Support activities for mining 36% Soap, cleaning compound, and toilet preparation 32% Chemical manufacturing 30% Industrial machinery 30% Securities, commodity contracts, and other financial investments and related activities 30% Other food 29% Motor vehicles and parts 29% Machinery manufacturing 28% Other electrical equipment and component 28% Securities and commodity exchanges and other financial investment activities 27% Architectural, engineering, and related services 26% Credit card issuing and other consumer credit 26% Petroleum refineries (including integrated) 25% Navigational, measuring, electromedical, and control instruments 25% Petroleum and coal products manufacturing 25% Transportation equipment manufacturing 25% Commercial and service industry machinery 25% Basic chemical 24% Investment banking and securities dealing 24% Semiconductor and other electronic component 23% Paint, coating, and adhesive. 22% Printing and related support activities 21% Chemical product and preparation 20% Iron, steel mills, and steel products 20% Agriculture, construction, and mining machinery 20% Publishing industries 20% Medical equipment and supplies 20%Now there's an eye-opener. Not much else to know here.
This is the most important discussion I have yet to her on TV about jobs. TV overlords won't allow it.
TV talking heads think we are too stupid to think about the category and types of jobs that need to be created.
Ross Perot was 100% correct and nobody wants to talk about how we fix this problem.
God bless James Stockdale, James drove the Mensa highway.
A couple of interesting points -
Conext
Service sector - 76.5% GDP, 77% of employed
Manufacturing - 22% GDP, 14% of US employed (construction, mining, manufacturing)
Ag - 1.5% of GDP, 1.4% of employed (Ag, fishing, forestry, etc.)
US manufacturing has been falling as a % of US GDP (23% in '78 to 13% in '08) while maintaining the % of global GDP (25% in '78 to 23% in '08). China and the US had roughly the same % of world manufacturing in '08 (17.7% to 17.3%) but the US manufacturing accounted for 23% of world GDP while Chinese exports accounted for 7%. US did this with 1/10th the employs than China (12 million'ish vs. 115million in China). Also, China is already seeing the change coming from higher wages, more automation, more replacement of people by technology. The info I have shows China peaked out with manufacturing jobs in '95 at 126 million and has been sliding since.
Totally agree America needs to make more things here but this will not resolve the unemployment issue...but it will surely help put a dent in the trade deficit.
All of this brings up a real basic question - if 1.5% of the population can produce all the US raw food, and such a similar small % is "needed" for replacing the "needs" of America - what are the other 30%, 40%, 60% doing??? Why is we feel compelled to work more when it's obvious most of what we are doing isn't neccessary?
Crazy idea but why don't we work less, have more people do the work, and consume less as individuals and a nation? Do we hate the places we live so much we need to spend thousands to take trips round the world? Do we "need" or are we happier because we have a newer higher horsepower car?
I guess what I'm saying is the birth rate is coming down closer to flat all the time, we generally have all the houses, cars, stuff we need for the next 5, 10, maybe 20yrs. We can replace as needed but what are we so afraid of??? Why can't we let the Ponzi go? We have all the energy we need in America to exist happily, all the food, nearly all the raw materials. So why can't we let the Ponzi go and live simpler and happily ever after? Why are the billionaires all being allowed to become trillionaires? What purpose does this serve?
Time to reasess our paradigms - maybe it's time we stop trying to spend money we don't have for crap we don't need and work too many hours that should be spent w/ family instead?
Obviously I've written this completely unmedicated and lost my mind...I'll head home and liquor up til it all makes sense again.
+1000
We only need to work about 10 hours a week to fulfill our dream homes, cars and meals. This is thanks to automation. Unfortunately we have to work 50-60 hour weeks to satisfy the huge and greedy government. The average American works till August for the government and the government wants more.
hambone
Great Idea- work less. But who will pay the debt ? The Bernank is bound and determined that you will pay Goldman's bonuses. Plus interest.
"All of this brings up a real basic question - if 1.5% of the population can produce all the US raw food, and such a similar small % is "needed" for replacing the "needs" of America - what are the other 30%, 40%, 60% doing??? Why is we feel compelled to work more when it's obvious most of what we are doing isn't neccessary? "
Awesome! I have wondered the same most of my adult life.
Imagine if you will that American congressmen, our president, demanded that a min of 5%, 10%, 15% of product for all companies who do biz in US be made in the US? Imagine we allow companies to pick and choose what makes most sense but raise duties on those not following through?
This won't fix unemployment or our trade deficit but will mean new factories, new vendors, new support, new supply chains, American frickin ingenuity. This would be a meager first step to begin preparing for a world where oil prices, rising labor costs, inflation no longer justify centralized global production. But good lord we need at least some baby steps.
Why as a nation wouldn't we mandate that if you want to sell to America, some of the product must be made here? Are our politicians so afraid what China or Japan would do? The trade wars that would break out? What, China might stop buying T's? Think we're already there. Or do they fear the corporations? Remember (as Trav pointed out) increased margins and earnings for corporations almost never result in lower prices for US consumers...just higher profits for companies to then be utilized to further offshore more non-value jobs. This is a death spiral and no country can run such a ridiculous trade deficit for long.
Imagine if we took the first steps to rekindle the boilers.
Basically, it's always about getting back to the basics.
The US needs one, ONE, shining success story, where something super high-quality, reasonably high tech and.....here is the big catch.....actually good for people... to start making something of a comeback.
And no, choppers (like the fancy bikes) don't cut it.
American manufacturing, for what it is worth, is almost entirely in the military space (at least in dollar volume, think Boeing, United Technologies, Lockheed...etc.). That has got to be a curse, if killing machines are all you make?
ORI
http://aadivaahan.wordpress.com
I agree with the post for the most part, but there are other factors. While no cell-phones are manufactured in the US, the bulk of the component chips are designed here. Manufacturing is increasingly automated, and is adding a lessor part of the total value of a product. Devaluing the dollar until US manufacturing costs drop below China's is a losing strategy, even if we succeed we lose.
Manufacturing in the US is sought out in some industries. Some security and medical product manufacturers will not accept components made outside of the US or Germany. There are customers in China who will not accept Chinese-made products. The parts of manufacturing that support higher wages can be captured here if the US acts intelligently, granted there's not much sign of that on the horizon.
Sound currency and free men could turn this around from where the ball lies now. High value-add manufacturing and increasingly customized maufacturing, manufacturing as a service - they can thrive here. The oligarchy of the Fed & TBTF Mega-banks must die first. They suck out all the capital.
Donutboy
If you keep up that clear-headed, cogent, intelligent thinking- you will NEVER be President.
Thanks.
Kayman
“Working men, keeping faith with the sacred tradition of Jefferson and Jackson…being independent producers, exploiting no one’s labor but their own, were engaged (in the late 1800s) in mortal combat with the banks and monopolies and middlemen, who, unproductive themselves, grew fat and powerful on the labor of others.” Albert Fried, Except To Walk Free.
Déjà vu.
Workingmen--you and I--are individually weak, and only become powerful and independent,self-reliant producers when banded together for self-defense.
The conditions that fostered the labor movement in the 1860s and onward arose from the greed of the money monopoly and its government and academic sycophants setting the price of labor. Unions rose, and through greed and corruption and collusion with corporate bosses in the 20th Century, fell.
Again, today, as in 1860, the individual craftsman, artisan and professional faces a money monopoly setting the rate for his labor. Labor costs too high: move the plant to Mexico. Engineers getting too expensive for Steve Jobs and Bill Gates: get thousands from China to drive the rate down.
American workers—the producers-- must win back their political power from the amassed power of the Fed working in close alliance with government to favor only the money elite and the favored insiders (bankers, multinationals, and unionized public employees…), shielding non-producing capital and imposing the burden of government on the wealth-producing individual.
Ultimately, if successful, this alliance will reduce workingmen everywhere to a state of practical servitude.
The American miracle is by definition : individual achievement in a free society. This form of government was not a money-powered oligarchy. Every man’s opportunity was to be protected by the entire society, guaranteed by statute. Inventing a successful instrument or process was a road to wealth; frugality was an avenue to security; moral business practices expanded one’s connections and financial success.
But that’s over now. The U.S. Congress is no longer an arena of representative government for individual citizens. Powerful forces have their way with politicians and corporations, and yes, over unorganized citizens.
The rise of capital backed with political monopoly in the early1900s gave rise to a legitimate labor movement at a time when only an organized effort would protect workingmen. (Workers not unionized also benefited from labor’s collective bargaining.)
It’s interesting to take a dramatic quotation from William H. Sylvis, the moving force behind the National Labor Union of craftsmen in 1864, and substitute his terms of “labor” with today’s individual workers and taxpayers and “capital” with the domination of Fed international investment bankers such as JPMorgan and Goldman Sachs:
“We find capitalists every watchful of their interests—ever ready to make everything bend to their desires; then why should not laborers be equality watchful of their interests…equally ready to take advantage of every circumstance to secure good wages and social elevation?”
Sylvis explained that labor was individually weak and became powerful only when banded together.
“Capital is jealous of control or even remonstrance, and will often object to the interference of labor, even would such an interference be beneficial to its own interests…
“Capital is haughty, proud and insolent and spurns with contempt the remonstrances of the oppressed, the respectful entreaties of the defrauded…”
It is difficult not to imagine Barney Frank cutting off a statement by Congressman Ron Paul without imagining the haughty arrogance of the financial power behind him…
And it is not difficult to picture the plight of the working craftsman, say an engineer, in a high-cost city commuting to work every day on rising fuel costs and a declining home value while paying off a banker-induced bubble mortgage on reduced wages and inflated non-discretionary prices--orchestrated by Fed-powered entities bargaining for the cheapest possible source of labor with corrupt and communist countries--without picturing what it was like for a grime-faced coal miner in 1900 taking whatever salary and benefits the owners of the mine thought fit to give him.
As always, America’s choice is slavocracy or freedom.
J.R.
Greetings, Kayman. Hands down, you’re the greatest!
JR
I'm busy paddling the old canoe and cannot get onto ZH as much as I would like.
Sometimes, I run out of glycerine pills and have to stay off ZH for extended periods.
I am so glad to see you are still with us and I am always delighted to read your enlightening thoughts.
All the best
Kayman
ps. enough with the compliments- I'm going to have to junk you for that !
JR, do we live in a society of free choice or not? Can I employ who I want and offer the lowest wage I can get away with, commensurate with good work being done? Am I free to buy or to source goods from anywhere on the planet, or not? Do you or do you not believe in the efficient free market? Because you sure seem to like government regulation...
It's CAPITAL, real unencumbered, debt-free capital that is in short supply. It can and should charge what it wants. Labour, on the other hand, is everywhere in massive overabundance: it tries mightily to get government protection - in the form of labour union recognition, labour laws, prevailing wage laws, Davis-Bacon, minimum wages - from the free market.
Capital needs no protection, and gets no help. Capital is a lean, mean tiger compared to flabby, coddled and overpaid western labour forces.
Perhaps if you were an owner of capital instead of a socialist worker you'd change your tune...
Kreditaschiesse
The only free market capitalism you will ever see is in your Econ 101 textbook.
All major markets in America are either monopolies, monoposonies, oligopolies or cartels, formal and informal.
Your laissez-faire world is at the end of your Hookah.
And I am indeed an owner of capital and an employer. If you offer cheap wages; you get what you pay for.
It is output over input. Cheap wages per se, doesn't mean shit.
Achtung !
This just does not make sense?
http://theopeningrange.blogspot.com/
We've been devolving into serious crony capitalism for a long time. The current attitude of policy makers is hostile to business. Businesses and jobs have been run off by a thousand cuts of central planning.
We need a business friendly recruitment approach, serious tort reform (loser pays) on all levels, a level playing field, low flat tax, more foreign college grads instead of the fruit pickers, and a serious pro-energy (drill baby) all of the above policy.
For starters.
American companies have been dead for some time, in terms of manufacturing. With all the red tape(guvment), as well as an artificially low chinese currency, you need about a billion dollars to manufacture something.
I feel the day of the worldwide citizen is upon us, and while it is not the preferred paradigm, it is what has to be accepted, depending on what you want to do. If you sit back and vote or wait for some politician to make things better, then I feel sorry for you, cause hopium is not going to cut it.
Lawyers. Fraudulent lawsuits. Killing small businesses. I heard that a call center in Miami had 23 people (out of 300) payroll on legal disability claims. 17 Fell out of their chairs while on the phone. Friendly doctor claims back injury. We need tort reform now. Laywers that file fraudulent suits should pay something out of their own (or firm's) pockets. If I had a gun with only two bullets, and was staring down at Hitler, Hussein, and a lawyer, I would shoot the lawyer twice.
When the people that make the "laws" and defend the laws have no integrity and only have loyalty to there own self interest, the lawful becomes unjust. There is no accountability, but to themselves. Democracy is founded on the defense of justice. It's the very core of freedom. We as slaves are confronted with the effects of causality and debate with fuzzy logic "what happened".
Double Tap!
http://www.youtube.com/watch?v=PapZO7NXB3Q
Manufacturing flees America...America becomes impoverished!
Already predicted...
http://video.google.com/videoplay?docid=5064665078176641728#
"If anyone can explain how a deindustrialized America has any kind of viable economic future, please do so below in the comments section."
Tyler. There is a solution! But there needs to be a massive co-ordination of national resources - investment in R&D and buy-in from universities. And protection of intellectual copyright from foreign copying.
Nanotechnology.
This is the manufacturing technology revolution of the 2020s and 2030s. Who cares if China grabs 80% of the world's top-down metal-bashing industry when the new molecular assembly bottom-up paradigm makes the 80% obsolete.
check out http://www.foresight.org/roadmaps/Nanotech_Roadmap_2007_main.pdf at www.foresight.org
This is where the United States needs to pile its chips and rebuild its previous world-beating manufacturing capability.
These free trade agreements have pretty much benefited nobody except the people who pushed them. It isn't just America who has suffered. I know plenty of towns in Canada that have become hollowed out shells over the years because of the loss of decent manufacturing jobs. What replaces them? Walmart and Call Centers for 10 bucks an hour.
I always wondered what those people did for a living that were buying up all those 250,000 dollar and up subdivision shit boxes. Now I know. I am a 57 year old carpenter with a high school education and always embraced the philosophy "Make hay while the sunshines(debt free since 2003, and since, saving 40% of my weekly $900 to $1,000 dollar net pay.)" I have enjoyed reading this site's many interesting and educational articles and member replies for the last 3/4 of a year. And as one who lives in a big city suburb whose housing stock experienced major demographic change the last 15 years(70% of our high school students now traditionally fail the state high school exam,) I can only say what I see from where I live(pop.100,000 ): We are fucked, all the way up to the bottom feeders of the upper class. I would like to be the first to dub the new economic era "Trickle up poverty" I now have 5 years of competitive pistol shooting under my belt( it's a gas), I suggest you cake eaters may want to consider your future as one of us. It's gettin' ugly out here! Prepare yourselves, now. Don't be ashamed, I'm sure my pension, annuity, IRA-Roth, and credit union savings accounts will all be wiped out too. We will learn to live in peaceful co-existence. Or, one of you people could start the ripple that turned into a wave that started this once great nation back up the road from whence we came. Ah, when I drink I think I can write. My apologies
Classical,
You write better than the average college grad and think much better. Thanks for you thoughts and Cheers.
Methinks your comments show the ripple has already begun. Congratulations as the first to dub the new economic era "Trickle up poverty"— a good dubbing for Bernanke’s Orwellian “recovery.”
I look forward to your future posts.
So, how many here would like to go back to factory work instead of sitting at keyboard in front of screens?
Does it pay actual money? My computer's money tray function seems to have stopped working.
The key word is "here". Maybe the ZH crowd wouldn't like to do factory work but a whole lot of other people would.
By the way, I completely blame the District of Criminals for this. We have been regulated and legislated to death. No wonder no one wants to manufacture anything here.
I was at Trader Joe's tonight. The workers supposedly make decent wages. The prices are reasonable, the products are good and the service is excellent. I'm guessing they make money?
I used to make frequent lunchtime excursions to their Ontario Ave. store in Chgo. Their 2lb.70% dark chocolate bars were very reasonably priced and nutritionally satisfying, as well.
I'm surprised no one here has brought up the oft-discussed Chinese "hard landing". Michael Dell's shiny new Chinese factory will not be all that productive with 25% annual food inflation or growth slowing to 5% and subsequent political instability. Ditto Foxconn, Ford, et al.
Well, so 42k factories closed since 2001, huh?
Can anyone point me to where prices DECLINED as a result? I mean, during this whole outsourcing effort I haven't noticed prices having gone down at ONE POINT EVER.
I certainly HAVE noticed massively INCREASED profits for corporations and concomitant massive increases in executive payscales....it's enough to make you scratch your head at where the money actually went.
I hear nonstop bullshit about how union people are overpaid or how the minimum wage is too high or we should all go work in sweatshops, or how without outsourcing all of our products would be twice as expensive (same bullshit with the illegal crop pickers). But, then I must look at price tags and I've seen them continue to go UP as outsourcing has continued.
This is REALITY. Outsourcing made EXECUTIVES rich. It did not save any of US any money. I've used this example previously...I have one of the last DiLonghi radiators made in Italy. The next year, they moved production to China, probably realizing a HUGE decrease in labor costs. So imagine my surprise when the pricetag was the same as previously.
Anyone who says protectionism is bad is a fucking moron, plain and simple. ALL of the other economies are using protectionism wantonly. And we get shit like NAFTA, whose purpose was to facilitate labor arbitrage for the benefit of EXECUTIVES as well as to streamline drug money laundering.
WE have not realized a gain from outsourcing, the EXECUTIVE CLASS HAS. We pay the same fuckin money for a chinese-made Dell as a US-made one. My kids have stuffed animals made in china and the US - same price. The only difference is in how much profitability the corporation selling the products realizes and consequently how much its executives bonus themselves for a "job well done."
I once asked a salesman in men's clothes at Marshall Fields the same question. Why do these dress shirts cost 140.00 a copy when they are made in Costa Rica? He didn't provide me with a reasonable explanation.
Because that's what the market will pay. Marshall Fields is not a charity, in the business of providing the lowest price possible to the public. They are in business to maximize profits for the business owners, the investors and the shareholders. Period.
Uh, this was back in the middle 90's. Those fucking shirts weren't worth 14.00. I may not have a doctor's degree but I know when someone is full of shit. Apparently you shop the labels. I got news for you, it doesn't make a dumpy looking body look more professional or elegant. Why are you people so superficial?
@kreditanstalt, My last post didn't address your point. I don't have the exact wage scale of the average Costa Rican seamster or seamstress, but I seem to recall a figure from an article I read way back when that quoted 2.00 dollars a day in pay. I am not unaware of what goes on around me and the changes I witness on a semi-yearly basis. My point to the salesman was: I thought that outsourcing of American labor was supposed to lower the cost of our clothes. It didn't. Take Levi's for an example, while their prices have not shot up like the high end phony labels, they sacrificed quality(lesser thread count?) to hold down their price and reaping some benefit from foreign factories.
of course it didn't. I was just in Colombia. I went to a higher end clothing store and saw shit made in china next to the same shirt made in Colombia for the EXACT SAME PRICE.
There was no benefit to US for this outsourcing, so WE should all band together like we did when we unionized and fuck the executive class in the ass, take their goddamned money and divide it up just like unions did.
That's WHY executive payscales used to resemble something reasonable.
and before some moron comes in here with their phony laissez-faire stupidity, corporations BUY political power to faciliate themselves, so why shouldn't those opposed to corporate acts buy or use political power too?
Corporations use power to buy and divide up what is not theirs, getting taxes in their favor, eminent domain, favorable laws, regulatory treatment, slaps on the wrist for completely destroying the entire financial industry, committing rampant fraud, etc.
So don't lecture me on fucking the morality of what some might call STEALING. Unions merely outfoxed capitalists at their own game.
I always felt proud when I learned any new job and did it well. I didn't worry about the compensation because I had no bills and lived under my parents roof. Why do we remain a superficial society when we are blessed with this internet and its vast stores of wisdom and knowledge?
You're in socialist dreamland...
Companies can pay their executives whatever they can get past the shareholders. They can charge whatever the market will bear, and SHOULD. If you don't wish to pay $140 for a pair of jeans, don't. Set up a competing business as some kind of social charity and sell them at cost; see if you can get ahead in life doing that.
trav7777, you and the preceding commenter make it sound like profit is a dirty word. Nobody is in business to provide the market with low-profit products...it would be insane.
You are a retard apologist for a plutocrat class.
The government can TAX those executives whatever they can get past the citizenry.
It's all profit, ain't it? If I can DO IT, to "get ahead," I should.
That includes using the government to appropriate all the wealth of the plutocrats. And yours too, just for failing to be able to see analogies.
There is no longer any shareholder control of corporations. Otherwise there would be DIVIDENDS instead of all the profits going to MANAGEMENT.
By the way, don't put words in my fucking mouth like "profits" are a dirty word; that's horseshit. Executives conspiring to STEAL PROFITS is the system WE HAVE NOW.
And people like you with your asinine laissez faire nonsense come in and DEFEND IT. If corporations can buy political cover so that the executives who run them can maximize their own bottom line, even at the expense of a SOCIETY at large, then FUCK THEM.
We should have our military and State department stop providing their protection.
In your world, the capitalists are the good guys and labor is the fodder. Meanwhile you drive on all these socialist roads and post bullshit tripe to me on a socialist internet. GFY
Huh? Profits don't go to owners/shareholders. they go to executives.
WE as a country are shareholders too, and it is in our interest to maximize our national profit, then.
Anyone can play this game. So, we should prevent executives from doing what they do. Right?
Trav,
I've work for both leading sportswear international corporations - I can attest I have watched many products move from one more expensive production location to a less expensive location...and you are 99.9% correct that the lower labor, duty, material prices almost never resulted in a price reduction. Sometimes meant you get more doodads and gizmos on the product for the same price but always meant higher margins for the company.
And these are the same companies that are still outsourcing non-value added jobs and value add jobs alike to vendors in Asia...more and more jobs leaving that aren't coming back.
I'd agree a little protectionism, a little national interest instead of corporatism would be a very nice step forward. You want to sell here, you'll make xx% of your product here...is it really so crazy that as a nation we'd mandate 10%, 20% of products be made in America (not NAFTA)??? Corporations could pick those products that are least labor intensive, best for automation but at least then we'd start to rebuild a factory base, the suppliers and vendors and all the infrastructure around this.
Plus, much easier for companies to expand from something than from nothing...rising oil prices, rising labor prices overseas, rising duty and insurance...I know for a fact there are now products that could be made here, particularly for fast turn low labor products...is there not a single member of congress that knows a fucking thing about business??? Amazing how owned these fuckers are.
Wrong. No, we shouldn't interfere. It's solely the business of the company, the execs and the shareholders. The public have no capital invested in private business...profits can go to whoever the company decides.
"The public have[sic] no capital invested in private business"
you are a fucking moron. period.
profit for profits' sake is filthy, what'd you just read the fountainhead or what? jeesus, fuck all shareholders, fuck corporate pigs, and especially burn all the executives. got it? you want to read something try smith instead then try again with that shit. that you can't grasp the inherent stupidity of the race to the bottom in the name of your precious stinking profits proves to me how much more fucked up shit has to get to shake your head out of your selfish ass. who died and appointed profits the end all be all of life? who made the rule that externalizing costs and privatizing profits gives you the shareholder/executive/corporation the right to rape everyone and everything else so you can hit that fucking penny eps? who told you to get on some bullshit mythical high horse called "my right to profit" and stuff it down everyone else's thorat? you ain't special and you sure as hell ain't smarter than the average bear. get over yourself.
"...you are a fucking moron. period."
But at least I'm trying to keep my language civil. That's something, isn't it?
are you kiddin me? civil? live where I live....but...my apologies, in the face of proven stupidity I have a difficult time controlling myself at the typer...don't take it personally...alternatively, if you are insulted (you shouldn't give a rats ass, because it doesn't matter and this is me sharing wisdom with you so pay attention) there is always the junk button to make it sting a little less....
FU
Those companies can sell on their OWN ROADS, use their OWN ELECTRIC POWER, and their OWN INTERNET. Instead of availing themselves of all these socialist edifices.
I would agree with you if shareholders hadn't been STRIPPED of power by a revolving door between the political class and the executive class. Owners MUST force disgorgement of profits to OWNERS.
But until that happens, shareholders and the society at large must employ the SAME POLITICAL TOOLS as the executives have used to enrich themselves.
All corporations depend on their country and its infastructure to operate and profit. They are not islands unto themselves. Yes, the nation has an interest in a corporations profit.
Governments should provide clear laws and then get the hell out of the way.
And when businesses, including the self-proclaimed too big to fail, are insolvent then they should be liquidated.
Trickle up poverty, love it.
Trader Joes--- good store good products, educated people. You will find a Masters Degree or two on the floor of some stores. They treat their people well. Good combo.
No Worries. We will become just like the UK. They don't know how to make anything anymore either. They became a bunch of money manipulating doucebags, just like the US is becoming.
What's even more worrisome is that the US is also importing service professionals, like accountants, doctors, managers, from other countries.
The bottom line is that the American educational system is such a shit filled hoax, with idiotic parents still believing the system works for grade-A students (it doesn't), that no matter what, the cunts and assholes running the US educational system will still have their predatory way with the moronically blind families who still believe in the university system. What a waste of money. What a waste of time.
Until we start putting lawyers in jail for writing warning labels and closing every activity that might result in a broken finger nail, we are not going to have people who are capable of carpentry, masonry, tailoring, mechanics or whatever else. We will have a bunch of dumb asses who's primary motor skill is texting on a cellphone or jiggling a joystick on an Xbox. What a fucking loser of a country the US has become. It's embarrassing to see how politicians and liberals can fuck up something in such a short time. No manufacturing, no future. It's history. The top economic countries are the ones which are top in manufacturing. We're not. End of story.
Looks like the politcal expedience has found its way home. Is it time to hold accountable the past & present mal-managers, korrupticians, and so called special interests yet?
I'd give it another 70 years and I still doubt anything will happen. nothing is going to happen. you could broadcast zh, keiser and chapman all day everyday from now until 2100 and not one city would riot as long as the latest nikes are still coming out, lady gaga is producing beiber as the next snoop, lebron is still puffing chalk and cloned "angus" beef is 99cents a burger. and you all are worried about the education system? if you didn't know, it's not the teachers, it's not the students, it's the culture. when some kid sees timmay cheating his taxes, when everything at the top is a giant theft and a lie, what's the kid supposed to do? the kid's not stupid. where's the incentive for the kid when all around him there's rank greed and putrid corruption. no such thing as "corporate ethics", oxymoron, see, there is no fucking ethics or morality in this here cuntry[sic], just 1 rule: Kill!
maybe a little hyperbolic....didn't mean to ruin anyone's night/day...
I think the masterplan has the US economy working properly at a population of 100 million.
How are they going to achieve that I wonder.
Through a new wave of colonization, through a new wave of colonization.
I think of doom and gloom as a divertion.
From the start, I've been keeping tabs on pensioners. Because I suspected this segment to be the most attracted to relocation.
Living in a small condo in a wealthy environment where you can afford little but shop glasses licking because you hardly make the ends meet is nice but living in a large villa on the sea side where you can afford everything that is possible to get (even though much less than in the wealthy environment) might sound a much better deal to some.
Data show an increase of pensioners relocation to third world countries where they can afford the best. Reduction of pensions decided through austerity measures will enhance the phenomenum.
As Milton said, "Better to reign in Hell than to serve in Paradise"
New wave of colonization, locals killed by Westerners imbued with entitlement mind set, that is going to be the flavour of the next decades...
The antidote -- learn an instrument and sing with others.
Seriously. You will enjoy yourselves so much and will be overcome with joy and silliness. Suddenly buying chip stuff won't seem so compelling anymore. And you will become happier than you ever were. But, it takes effort and time to learn and sing. For some it comes easy, for me it took about 30,000 hours of practice.
This was once the way people enjoyed themselves. Stand around the piano and entertain each other. There were no DJs, amplified music, and only stars to worship.
Today, people are afraid to sing unless it is for some competition. Mostly one will be scorned as in "Don't quit your day job." You have all been "educated" to know that only those at the top should do these things. And with the advent of video, only the young and beautiful.
Well cast aside all this subservience to the message and start living an authentic life.
I could go on... but being on page three.. just pearls before digits.
I have gone the extra step to post today since some folks whose comments were basically correct were getting junked repeatedly.
If folks want to see who, why, how they abandoned and bankrupted the rest of us these fascist, drug trafficking, ethnic cleansing, self-appointed "elites" then read this
https://docs.google.com/document/d/184QQFdCAHRkFfqR1XeLc3sZXhdHuIxllYgLU...
Please start with "The Origins of the Overclass" by the murdered ex-mil intel Steve Kangas (link in doc).