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Welcome to the Michael Jackson Economy
Those of you counting on getting your old assembly line job back in Detroit can forget it.
The recent eight year forecast published by the Bureau of Labor Statistics shows that 4.19 million jobs will be gained in the US in professional and business services, followed by 4 million health care and social assistance jobs, while 1.2 million will be lost in manufacturing. This is great news for website designers, Internet entrepreneurs, registered nurses, and masseuses in California, but grim tidings for traditional metal bashers in the rust belt manufacturing states like Michigan, Indiana, and Ohio.
I’m so old now that I am no longer asked for a driver’s license to get into a night club. Instead, they ask for a carbon dating. The real challenge for we aged career advisors is that probably half of these new service jobs haven’t even been invented yet, and if they can be described, it is only in a cheesy science fiction paperback with a half dressed blond on the front cover. After all, who heard of a webmaster, a cell phone contract sales person, or a blogger 40 years ago? Where are all these jobs going to? You guessed it, China, and other lower waged, upstream manufacturing countries like Vietnam, where the Middle Kingdom is increasingly subcontracting its own offshoring.
These forecasts may be optimistic, because they assume that Americans can continue to claw their way up the value chain in the global economy, and not get stuck along the way, as the Japanese did in the nineties. The US desperately needs no less than 27 million new jobs to soak up natural population and immigration growth and get us back to a traditional 5% unemployment rate. The only way that is going to happen is for America to invent something new and big, and fast. Personal computers achieved this during the eighties, and the Internet did the trick in the nineties. The fact that we’ve done diddly squat since 2000 but create a giant paper chase explains why job growth since then has been zero, real wage growth has been negative, and American standards of living are falling.
Alternative energy and biotechnology are two possible drivers for a new economy. Unfortunately, the last administration did everything it could to stymie progress in both these fields, coddling big oil so China could steal a lead in several alternative technologies, and starving stem cell researchers of Federal cash, ceding the lead there to others. While the current crop of politicians extol the virtues of education, the reality is that we are dumbing down our public education system. How do we invent the next “new” thing, while shrinking the University of California’s budget by 20% two years in a row? If my local high school can’t afford new computers, how is it going to feed Silicon Valley with computer literate work force? The US has a “Michael Jackson” economy. It’s still living like a rock star, but hasn’t had a hit in 20 years.
China can have all the $20 a day jobs it wants. But if it accelerates its move up the value chain, as it clearly aspires to do, then America is in for even harder times. I’ll be hoping for the best, but preparing for the worst. How do you say “unemployment check” in Mandarin?
For more iconoclastic and out of consensus analysis, please visit www.madhedgefundtrader.com .
China is like sooo last week...We have countries to invade guys..all the sudden Yemen is crawling with "terrorists"!Be scared...wave a flag..hell but some war bonds..but whatever you do..dont mind the man behind the curtain..nothing to see here move along..Dancing with the stars is on and Fox news is ready to tell you why we should spread "democracy" all over the world...get your prioritues straight,,sheeesh
At the rate we're spreading democracy,soon we won't have any left here.
"At the rate we're spreading democracy,soon we won't have any left here."
Well... if the Dems are able to jam through an illegal alien amnesty next year (as I fear they will) then you can stamp "Paid" on American Democracy as we've known it and as the Founders envisioned it.
BILL
The solution is simple: stop importing from China/India. China/India will collapse, jobs will be back, along with wealth.
Unfortunately the establishment (read: the bankers) won't consider it because it won't help them steal from taxpayers.
Is it possible for us to just outsource our politicians? It would be hard to do any worse than the current crop and I'm sure they'd be happy to take 1/10th the current wages.
_AgeOfReason_
seems I cannot post Chinese characters here, but "unemployment cheque" in Mandarin is pronounced: "shi-ye zhi-piao"
by the way, China now has the world's fastest train:
http://www.smh.com.au/travel/travel-news/china-unveils-worlds-fastest-train-20091229-li9x.html
and there are plenty of similar looking trains at the Beijing railway station.
Game Over!
The Michael Jackson economy? Appropriate comparison! Started out as a gifted, sound, consistent enterprise---only to degenerate into a eccentric, horrifying hedonistic freak of nature.
I'm at the tail end of the Boomer generation, and I must declare that from what I have seen of GenX, Y, Z---well, they are utterly worthless. They are mirror reflections of their selfish, lazy parents...only more distorted and selfish.
There is NO next "big thing"! An "Information" based economy has turned out to be folly. This last decade was predicated on providing capital for business/industry regardless of value or the ability to pay the debt off. We are now witnessing the results of this foolishness. To sustain a society, we need employment that generates profit and is capable of paying for government that provides coherent leadership. In the last 30 years, that government has allowed off-shoring of work, incurred insurmountable debt, and encouraged a collective entitlement mindset--while salvaging the corrupt institutions whose actions have put our future in peril.
Even if it were possible to unplug young America from it's I-Pod/X-box/Guitar Hero/Rap "music"/facebook/I-phone anti-social cocoon and provide them with a top shelf educational system--there will likely too few employment oppurtunites ahead to secure any return on that kind of investment.
the problem is not the immaturity, of the younger generation, but the corruption of the older.
"The problem is not the immaturity, of the younger generation, but the corruption of the older."
Well... yes... to an extent. But it's beyond that.
At the risk of being labeled a misogynist, allow me to note that as a 47 year old man it's been my observation that the mothers of my generation and succeeding generations have... umm... lost their frigg'n minds in terms of fearing that if Jr. or Little Sweetpea was out of their sight or control for one moment (when not under "establishment" adult supervision - say school or other adult organized group activities) that all life on earth will be at risk of destruction.
Hey... half the dads are just as bad, but it's the moms and the "mom networks" that tend - from my experience - to push the paranoia, micromanagement, and coddling to absurd and frankly destructive limits.
Far too many parents today part neurotic and overprotective while on the other hand part schizo and willing to simply "believe" that their little darling is studying at the library instead of attending Thursday night's drug and alcohol fueled orgy.
(Lucky frigg'n kids!) (*GRIN*)
(P.S. - Say "NO!" to drugs; "yes" to alcohol!)
Now... where was I...???
Oh, yeah... kids being raised (at least here in the NY suburbs) without experiencing the self-reliant joys of childhood I did.
Anyway... not allowing our children to grow up during the time they SHOULD be growing up... that's the problem. Oh, sure, as touched upon (half in jest) up above, kids today are far more "advanced" than my generation in terms of sex, drugs, "adult behavior" as such, but they're faking it; it's a pale imitation and that's why when they're cut loose for real to attend away colleges many simply (figuratively) "blow themselves up" and throw themselves off track to a degree that if they ever do recover it's not for years and many never really do recover. (See the "child" of 35 living with mommy and daddy.)
Anyway... enough rambling. In short, yeah... I agree with you, Delacroix... we've (collectively speaking) done some job on "our" kids.
BILL
....Michael Jackson is dead.
You might be even more accurate about our non-economy than you thought.
1) The need is the mother all invention. 2) Familiarity breeds contempt. The two most essential phenomena in econo-politics.
You want invention? Make them starve for it. There is no construction without destruction.
You want status quo? Feed them. When they puke in the end, the need will present itself.
Schumpeter
"Alternative energy and biotechnology are two possible drivers"
Possible, but not probable. For biotech we need a product that nearly every business or household will use. And we need it fast. Alternative energy, only if the product provided costs less than what we now have, otherwise we are all poorer. Artificially raising prices with carbon controls doesn't count.
We have met the enemy and he is us. We have become our own worst enemy, consumed by ineffectiveness and expressive only of schemes that have no rhyme or reason to them. We suffer the death of a thousand cuts because we cannot find the will to turn off the machine.
The average american would not last a week without electricity, natural gas, oil or coal. Look at the store shelves, they are already looking empty. Look at the jobless, supported only by government largess which will begin to run out in the winter, when discontent is rampant, but cold keeps the protestors off the streets.
We must think outside the box, prepare for any eventuality or contingency. We must pass along our knowledge to those willing to learn, so that it is not forgotten. We must become jack and jills of all trades and masters of none to survive. We must yell stop the presses and embrace a new age of frugality. We must be willing to stand up and tell the truth, instead of what someone wants to hear.
Life will find a way. We must be ready for its siren call. When the energy fails, we will have no choice but to rely on one another. Pray that we are strong enough to accept the challenge.
Aahh... may I assume you've recently read "One Second After" by William R. Forstchen?
(If not... I highly recommend it!)
Yep. I'm sure no whacked out wannabee Montana militiaman, but at 47 I'm seriously considering checking out NRA weapons training classes and getting myself some... umm... "in hand insurance" should the shit ever really hit the fan.
Hmm... how pissed off might the Chinese get if we were to default or (even more than recently) attempt to monetize our way out of debt repayment?
In the present environment what might happen if - God forbid - we or Israel felt the need to "take out" Iran's nuclear weapons infrastructure (or as much as possible)?
My bet is that China takes back Taiwan while Obama is President. Imagine how the dominoes might fall from that scenario?!
Hell... imagine if terrorists strike the homeland to a degree even approaching the worst years of "The Troubles" in Ireland and how IRA terrorism effected England.
Oh... and if you want less "novelized" scenarios... what's going to happen when stagflation hits this summer - specially if the inflation component of the stagflation heads in the direction of "hyper?"
Or... energy. Oil. Transportation and infrastructure as well as heating, cooling, and general private and commercial electricity needs. From what I know our energy grid isn't exactly the Pharaoh's grain storage facilities stocked to last through a seven year famine! (In other words, our national energy infrastructure is straining NOW and had it not been for the recession parts of the U.S. might this very day be facing routine planned brown-outs in order to juggle supply and demand.)
Anyway... I'd say right now we have more to worry about than our folks and grandfolks did back during the Cuban Missile Crisis.
If (when?) the shit hits the fan... the American population of this, the early 21st century, AIN'T in a position to handle it well.
BILL
"While the current crop of politicians extol the virtues of education, the reality is that we are dumbing down our public education system. How do we invent the next “new” thing, while shrinking the University of California’s budget by 20% two years in a row? If my local high school can’t afford new computers, how is it going to feed Silicon Valley with computer literate work force?"
A few points:
1) It's not lack of financial resources which have led to the dumbing down of American educational standards, rather, it's... er... the "experts," the "educrats," deliberately choosing to lessen standards and refocus teaching towards progressive social policy values as opposed to the pursuit of rigorous academic achievement.
2) As to the UC budget... well... tell ya what... I have no doubt that given carte blanche I could cut that budget by 20% and along with that, by redirecting an additional 20% of the existing budget from present set priorities to new priorities I could improve academic standards and qualitative output.
(Oh... so as not to appear an egomaniac... replace my "leadership" of such an experiment with that of Charles Murray.) (*WINK*)
3) Aahh... computers in high school. NEW computers! Surely THAT will... er... "fix" your local high school.
Sorry, MadHedgeFundTrader, before I jump on the bandwagon of "new toys" for the kids, I'd like to know exactly how the existing IT is being used and furthermore I'd like to look over the syllabi and lesson plans of each and every course/teacher there in your local high school.
BILL
Yes, the ETS figures reveal that graduate students in education are by far the dumbest bunch on the planet. Your education money, especially in cities, is buying PC rubbish and kids who graduate, if they do graduate, often functionally illiterate and innumerate.
At the higher education level, productivity is minimal and the population of administrators has multiplied like rats in a garbage dump. You could halve the cost by forcing all faculty to teach 2 courses and firing half the administrators.
" productivity is minimal and the population of administrators has multiplied like rats in a garbage dump"
+10 Recruit these administrators to fill government jobs in CA, NJ, and Washington, DC.
Welcome to ROME.
recruit these administrators, to sort recyclables, at the garbage dump.
Sweet Sun! NJ, the capital of the absentee civil servant job. And now to boot, NJ has the archtypical Roman governor in a man that never seems to miss a meal. In fact he probably eats 5 or 6 of them a day.
Thanks Bill!
Bullseye on #1. Also if you continue to gradually lower standards you "maintain" increasing job performance numbers, get raises and retire at 55 on 80% salary.
Meanwhile kids can't tell you what continent Bolivia is located on.
geography, is only a small part , to me the more serious problem, is a deficiency in math, and reading comprehension. we are conditioned to accept a level of innacurracy, and flaw, as if its par for the course, and inevitable. It is not inevitable, it is laziness.
Sounds like a fiat currency...
+1 "Michael Jackson, haven't-had-a-hit-in-20-years" economy. Hilarious.
New jobs come from raising standards.
Globalisation (in its current form) is a race to the bottom.
Example : you create law that states that all water used by business will be returned to the eco-system drinking water clean. First reaction from so-called capitalists : too expensive, can't compete.
On the other hand, so-called capitalists are more than happy to remind you that "nothing is free - unless you can get away with stealing it". (In business terms the expression is this : if you can't go to jail for it then don't worry about it.)
The problem : How to impose tariffs on other countries that are more than happy to poison all the water and people in their countries for a couple of fast bucks?
My thinking is this : reverse tariffs. What is a reverse-tarif? You impose an import duty on products coming from countries with lower standards. You give the money to companies in your own country to hire people in your own country and buy products from your own country. However, the other (foreign) country/company will receive the products and services so that their standards are raised.
You impose a tariff so that you can raise your standards. You use the money from the tarif to create demand for products and services in your own country that raise standards. But you don't keep the money. You invest into raising the standards of your business partners (as long as they are not enemies of your country!)
It might sound weird at first sight but it is the only way to turn globalisation into a race to the top without losing the infrastructure and jobs in your own country.
Or would you rather just lower environmental, educational and medical standards to the level of a poor third-world country? Without reverse-tarifs, all countries will become toxic and miserable basins of slaves and their masters.
If the USA can raise standards and enforce them at the border then everybody will benefit.
Just my opinion
Namke von Federlein
Alternative energy and biotechnology are two possible drivers for a new economy. Unfortunately, the last administration did everything it could to stymie progress in both these fields, coddling big oil so China could steal a lead in several alternative technologies, and starving stem cell researchers of Federal cash, ceding the lead there to others.
I had a conspiracy-laden awakening about the stymieing of stem cell research. All of our recent biotechnology advances have been based upon treating diseases, not curing them. Stem cell research actually work at curing maladies. Can you imagine the insulin producing industries that would have to cut down production (lose profits) if a suitable cure for insufficient insulin production was developed. Maybe this is why the justification for not federally funding stem cell research was so visceral, so emotionally based (tied in with abortions). Too many companies are making their humongous profits from treating diseases, and will do anything to keep that from changing.
chlorine, flouride, preservatives, vaccinations ,cigarettes, theres pretty big business promoting the conditions, that then get treated. p.s. I think I read somewhere, that over 60% of adults in china smoke cigarettes.
Enough with the love for the despots in China, thankyouverymuch.
Quite the problem trying to figure out what to do with all those surplus people. Eventually this will resolve itself naturally without any groundbreaking new technology. The boomers will start to die off after sucking the life out of the productive part of the economy, reproductive rates will remain low because no one will be able to support large families, and immigration will shift to emigration once the motivation to come here diminishes. Problem solved.
poverty has never stopped the third worlders from increasing there numbers. Large families aid the old and supply cheap labor. The boomers are victims of a global banking cartel , people who were raised to believe in foolish ideas like the Peace Corp.
Boomers ARE the global banking cartel.
BOOM.
3rd worlders flooding into Amerika are a symptom of our disease....
like germs flooding into a wound.
The host WILL be destroyed by god & Blankfein
Everything being said about the U.S. economy recovering is a bold-face lie. Nothing has really changed from last January. Corporations and banks are back to their same old bad behaviors that caused the meltdown - namely giving people or business credit knowing full well they can not repay the funds. Buy a car, a house with little or nothing down and don't worry about incomes or employment stability. This continued close-your-eyes attitude will only forestall the coming depression by a few months. And when it comes, there will be nothing anyone can do to save us from it.
The "new normal" is about big government spending and punishing ALL types of business. This will get us back to third world status in no time! Save yourselves, the government won't!
China is forging ahead, especially in renewable energy, but don't kid yourselves for a second. The US remains the strongest economy in the world and that's why without a US recovery, you can kiss the global recovery goodbye. Stay long US stocks, US corporate bonds and the greenback. Mandarin lessons are not necessary at this stage of the game!
China is forging ahead, especially in cut-and-paste technology.
...and in efficient organ processing of dissidents.
Freedom kind of gets in the way when it comes to business in the Third World.
Come to think of it, it's being priced out of the First World too, see offshoring.
I'm all ready to start a few new businesses and employ a whole lot of people. I'm just not going to do it in the US. The labor force in the US is quite inferior in both education and work ethic to what I can find in Asia, there are not a bazillion lawyers waiting to sue me if I blink the wrong way, and I do not have to pay my taxes so as to fund Lloyd Blankfein's East Hampton estate or AIG's bonus pool or another unnecessary war.
Frankly, I can't see that the US has anything going for it now or in the future. Whatever it was or whatever it claimed to be no longer exists. Better to cut and run; other passports are pretty easy to get, and other countries have quite pleasant environments in which to raise children.
Then discover that the US military has found you and paid off the locals to repatriate you and your assets.
A drugged up facade? Yep, that's the U.S economy!
Of course US immigration policies are helping too. By making it harder for the best and brightest Chinese and Indian and ... students to come/stay it forces them to stay home and start companies there. Good for China and India (less brain drain) bad for the US as it will have to rely on the products of its own education system instead of leeching off the world. OOOPS
Hello, Mr. Fraudwha.
Blaming this on "education cuts" or the "last administration" is utterly clueless. The last administration was far friendlier to business startups than the present one; but what we desperately need is to create a reason for businesses to locate in the US. How about an Ireland level corporate tax? How about a public education system that actually educates in the 3 Rs, rather than providing PC indoctrination? How about limits on our business-destroying bureaucracies, starting with the EPA. How about not passing massive new taxes, as we are in the process of doing?
I am in business, and I refuse to risk money when only the government will benefit.
You are asking for businesses to be given divine right. No way.
Get business out of our government, but not to relocate out of our country.
you can't get business out of government without getting government out of business. Both are desirable, but the latter is critical, unless you really believe that hiring more government workers to interfere with production actually increases GDP.
The problem is that if you don't do both, you get the worst of China.
That means more junk, and more bad company towns; do I need to say more?
Huh? The only gov't entity more toothless than the EPA is the SEC... Oh, you made a couple billion last year raping the environment, well here's a $2 million fine. That'll learn 'em.
Good post. I work with small/medium size businesses all day long, and these poor guys are getting the shaft from every which direction:
1) Business unfriendly government
2) Business unfriendly laws
3) Business unfriendly taxes
4) All government money/assistance/bailouts going to large, inefficient, destructive, irresponsible, corrupt organizations.
Makes you ask yourself: why?
...and going to a Third World country that is more despotic, but has a smoother transaction(and even more corrupt) is any better?
Giving the shaft to the non-business folk (who are practical bystanders) by going offshore only paints the target on business larger. That's what you're encouraging when you try to spite the government and harm your own people.
Um, lobbying? We no sooner had that asshat try to immolate himself on that plane to Detroit and the lobbyists lit up the phones in Congress trying to sell .gov those ridiculous full-body scanners! Joe Lieberman immediately made headlines with his pronouncement that the US should buy more of the stupid ass things.
+1.
California spent itself into bankruptcy, and the solution is more spending on education? Presumably that would mean more taxation, driving business out as quickly as possibly. What does a working stiff being taxed at city, county, state, and federal level care about stem cell research? Biotech obviously hasn't solved California money problems.
If you think education is expensive, ...try ignorance.