No one should want bad things to happen to the economy. I hope that all the gold bugs, silver bugs, pessimists, doom and gloom sayers, calamity howlers, et al, do not want the American economy to collapse or get into more trouble than its leaders have already gotten it into. I wish everyone well, and I really do hope that you readers of my screed do also. So, when we constantly hear the bombast coming from the boob tube’s analysts and sooth-sayers, who tell one and all, that the recovery is under way, I hope we wish they are correct. Unfortunately, we probably we sigh, and say to ourselves, “We’ve been hearing this for almost three years now, isn’t it enough?”
The absurd stock market’s going up, is no sign of recovery. It is a sign that the public, as in 100% of times past, is moronic, ill informed, and stupid. If this weren’t so, the facts in last week’s column about the huge increase in bank deposits, wouldn’t be true, and the Dow being over 9500 wouldn’t either. The banks are barely paying for deposits, and the stocks aren’t paying dividends. Both are terrible “investments,” if that term can indeed be used.
The real picture, which is indicative of “recovery,” is of a far different statistic. That statistic is unemployment, which the fed grossly under reports. Daily, more news broadcasts tell of hundreds, or thousands laid off. As I write this, on NPR this morning, the news spoke of New England’s Carrier Corporation, laying off 1200. Carrier builds respectable refrigeration units, is an old-line company, and has been in business for many decades. My Dad had a Carrier air conditioning system installed in his drug store when I was about 10, and that was a long time ago! Carrier, in this case, seems to build refrigeration units for those large containers one sees coming to American shores full, and returning empty. Carrier says they are moving their operation to China, where the stuff is needed. I am certain that in China, they also can obtain cheap labor, no government gobbledygook, taxes, regulations, and insurance costs continually going up, because workers who stub their toe, want to retire by suing the company. It happens all the time. Ask any doctor or insurance agent. Carrier’s layoffs are only the latest 1200, out of millions out of work.
A client of mine, who lives in Chicago, (Go Cubbies!) called me Monday, and took advantage of the dip in prices. We talked, and got on the subject of retirement. He retired from the Zenith Corporation a few years ago. Zenith used to make millions of TV’s, radios, and other electronics. Their factory covered acres, and employed 15,000, plus more thousands in other places in America. They now employ 200. All Zenith production now occurs elsewhere on the globe. Joe told me of the thousands of workers who streamed to and from the mighty factory every week, paychecks in hand, fulfilling the American dream. No more Zenith in Chicago. How about Zenith in Mexico, or the Orient?
Then there was a smaller plant in Arvin, Indiana. It was the largest employer in Johnson County, with 800 jobs. No more. Factory closed, and all out of work. Many of the laid off had worked in the plant since high school. The textile industry is gone from American shores, as well as electronics, cameras, furniture, and practically every single item one can think of. It is said that we produce but 39% of what we eat, and 16% of what we consume, other than food.
Then I have another client in Indiana, (lots of them) who wrote me this e-mail:
Don,
I wanted to give a little update on what is happening in the real world–as opposed to the federal fantasy reports that are issued to put the rose paint on piles of crap. Indiana-mainly hardworking, blue collar, thousands of hands on businesses, and I repeat, hardworking. Indianapolis lost an airline hub that employed thousands. So a few thousand got hurt, right? Wrong. A gun dealer that I have known for years, said the men from that place could be counted on for several thousand dollars a month in purchases. He hasn’t seen one of the regulars from there in almost a year now. How many gun dealers do you know that don’t miss $2,000-$3,000 in sales a month? He is still open, but inventory has been cut to the bone. He would like to sell, but not sure there is a buyer. I could list 10 other businesses that are like this, due to one closing..
Soon, in the same city, Chrysler will close its forging/casting plant. In the area of this plant, are dozens of mom & pop type stores, from smoke shops to butchers, to delis, to taverns.
I can count 6-8 backbone type employers locally, that have closed and moved either to Mexico, or just flat closed. The employees that once had benefits and a paycheck each week that paid for a nice truck and home, and kids in school, now have no checks, or have replaced the $15-$25 per hour check with whatever Wal Mart and Burger King pay. Try to feed 3 kids on what a Wal Mart greeter makes .
At the same time, in my own business, we just got a notice that the group health insurance plan will increase cost by about 30%. Not too bad? Well, the 30%, follows a 25%, and 33% increase in the previous 2 years. Now tell me, no matter how much you want to provide your long-time employees with health care, how long can you do it with these increases?
How about the Maytag plant in Galesburg, Illinois? Good article about it on Yahoo last week. Moving to Mexico, as I recall. While Maytag is costing around 1200 jobs, some economist said the fallout would be closer to 5,000-6,000 jobs. The heartland is being gutted. Maybe we can all get a job at Wally World. Out here in the real world, the government employment statistics appear to be BS.
We don’t hear much from the genius minds behind GATT, WTO, and NAFTA these days, do we? Remember when the idiots said the benefits would outweigh the costs in lost jobs? Wonder who will be left to tax?
– Bruce
How can a nation survive, when we owe more than anyone else, have an ever decreasing work force, import what we eat and use, and when welfare increases every day? The welfare ’experiment,’ begun by FDR over 70 years ago, has mushroomed into a nightmare which the best horror flick couldn’t duplicate. The welfare ’experiment,’ has caused the dollar to fall to about 2% of what it bought 70 years ago, with resulting salaries having to go through the roof, to stay even, and thereby making America unable to compete. Capped onto that, are continual demands for more and more wage increases, to cope with the inflation brought on by the welfare and printing more and more dollars. It is a chain of events that feeds on itself, and I know of no way to stop it or break the chain. I don’t, but wish I did.
No one wants America to fail, even though it already has, if one wants to be technically correct. If the dollar really crashes, it might be of some help by making us far more competitive than we are now. If the welfare-bureaucracy-regulations disease spreads quickly throughout the rest of the world, causing their currencies to debase, it might be of some help. High tariffs would offer protection, but where is the manufacturing might to make once again, what we consume? America used to be the envy of the world with its trolley cars, mostly made by St. Louis Car Co and J.G. Brill, in Philadelphia. Now, all that’s left of these once great manufacturers, are empty lots. The new light rail and subway cars come from off shore in Germany, Japan, or even Canada. Kodak used to make wonderful cameras, and Bulova made excellent watches. No more. Philco made millions of radios and TV sets. The trade mark “Philco,” stood for the Philadelphia Corporation. It is extinct, and the Rt. 60, Allegheny Ave trolley line in Philly, was torn up years ago, along with all the Philco buildings and other factories such as Stetson Hats, Disston Saws, and Botany 500 suits. Those Brill and St. Louis cars, hauled tens of thousands to work and home every day. All gone. Gotterdamerung. What other answers can there be, other than my usual protect yourself?