Some one please tell me I'm wrong.

[flamin lib]

Once upon a time America's economy was driven by manufacturing. We made things, big things, things that the rest of the world envied. The people who made these things earned good incomes and with the help of their union brothers and sisters lived a good life. They bought the wonderful things they made and further fed the economy.

Then, about thirty years ago, business discovered Free Trade and global markets. With the help of politicians Corporate America opened our borders to goods and services without the protective tariffs designed to make our workers competitive with the cheap and often child or forced labor available from developing countries.

Those wonderful things we used to make here began to be made elsewhere. The pressure on wages here to remain competitive with workers in third world countries drove incomes down and often income didn't keep up with inflation. For the first time in history a worker 35 years old would earn less than his father working in the same job.

These people who once drove innovation and our economy could no longer buy based on quality or brand loyalty; price became the sole factor in everything from school supplies to eggs and butter. Even more jobs were moved off shore to meet the new demands on price. Suppliers began to consolidate and to consolidate their suppliers. Mergers and acquisitions became the catch word in Corporate America. *As an example 70% of all pet food comes from one factory, Menu Foods, and 70% of their materials come form one supplier in China. Because of this we discovered that the expensive designer brand pet foods were exactly the same as the generic name discount brands. China doesn't have OSHA or FDA to oversee what comes off their production lines and because of this we discovered that Menu Foods' products killed our pets.

**Menu Foods' largest customer is Walmart. Walmart supplies 50% of all the pet food sold in America. Walmart puts downward pressure on pricing from Menu Foods which forces them to charge their smaller customers more which, in turn, makes them less competitive against Walmart in a market solely driven by price in an economy with falling incomes. This isn't only true for pet food but for most of the commodities we buy today.

Without manufacturing the American economy became driven by consumer spending which made up almost 70% of America's GDP in 2009. The American consumer, after years of declining wages and increasing debt is hit with the final injury and insult of the housing bubble and 10% unemployment. They had no money to spend. 73% of the GDP disappeared. America's economy collapsed and with it the rest of the world.

The ripple effect of lost wages extends to state governments that lost income from sales taxes and Social Security which will run a $41 billion deficit for the first time this year.

All this happened in an incredibly short time. It began with the Free Trade (ignoring Fair Trade) movement of the '80s and was fed by deregulation that lead to de facto monopolies in everything from dog food to banking and insurance all depending on consumer spending. It was and remains a house of cards and short of total apocalyptic collapse of society I see no real hope of short term change.

*CORNERED, the new monopoly capitalism; Barry Lynn, 2009

**IBID

[NightWatcher]

1. Globalism is as bad as Capitalism

The same way that Hyundai and Mercedes Benz shopped around the South to find the state that would give them the most perks and allow them to make the most profit, so to do corporations shop around, pitting the US up against Mexico, India, and China.

We'll never win when you put a competitive wage up against slave labor.

[flamin lib]

4. I've been trying to put together a lot of trends I've seen over the last

30 years. Retail sales is an example; the big ticket items are sold at cost so to make a profit all sorts of worthless add on sales are forced on the consumer by sales people who would starve without the snake oil. Chief among them is the "extended warranty".

Out sourcing of engineering design means that a four year EE degree can make more as the assistant manager of a dent-n-scratch appliance outlet than designing the things that once made America great.

Walmart moves into a small town and soon there is no other place to buy ANYTHING.

Every major outlet for eye glasses is owned by one Italian company; Eyemasters, Vision Expo, Sears Optical and Target eye care are all owned by Luxottica.

We are being asked to buy more with less money.

[Warpy]

2. In addition, the wonderful things we used to make aren't so wonderful

any more, thanks to piss poor craftsmanship and quality control in a lot of those shiny new factories using near slave labor.

Every ill facing this country can be traced to the 40 year war against US labor, aided and abetted by conservative government after conservative government backed by both parties.

Most people aren't spending now because they can't, we're in the end game of wealth concentration, wage depression, and job migration overseas. People like me aren't spending because most of the stuff we'd like to be able to spend on is garbage, not worth the money.

[NJ KID]

6. Some people believe

some people believe that the united States has now moved into the next big ecomomic movement away from the industrial revolution. The next revolution being a knowledge based revolution where knowledge and inovation are the driver of economic activity. In this revolution countries develop new technologies and these new technologies are the ecomomic driver.

If you were to accept this theory then America does not need to manufacture tanks because it can now develop technology that will blow up hundreds of tanks at once and this knowledge will lead to the devlopment of more inovations.

the draw back to america moving into this new knowledge based economic system is that those people that have a lower intelligence level will be lost

[Warpy]

8. And if our laser tank blower uppers don't work as advertised

and the war isn't over in a week, we're going to be in deep doo doo as our clothing, shoes, appliances, electronics, cars, and everything else we no longer make in sufficient quantity to replace domestically wear out and leaves us with nothing, not even a way to get food from the fields to market.

We no longer have sufficient industry to survive a big war, let alone win it.

[EstimatedProphet]

19. So in this new knowledge-based economic system, you will be lost.

[NoNothing]

3. You're wrong, somewhat

The U.S. still manufactures a hell of a lot - much more, in fact, than we did at any point thirty years ago or more. However, manufacturing now (1) requires far fewer jobs - especially low-skill jobs; and (2) is a much smaller part of the U.S. economy.

[pampango]

14. Manufacturing is a smaller part of every advanced economy than it used to be.

As you say, we manufacture more than ever, but used less labor going it, as do Canada, Japan and Europe.

[louis-t]

5. I will only disagree with one point in this article.

Other than importing Chinese workers to build the railroad system, the beginnings of free trade and global markets came in the mid sixties in manufacturing of small machines. The exploitation of cheap labor from other countries started with Japan after WWII. Once wages started going up there, it was on to Taiwan (ROC), then S. Korea, before the current Chinese takeover.
Off topic a little, does anyone think that Wal-Mart, with it's 'scorched earth, destroy all competition' business plan will still have low prices when they are the only retailer left in the US?

[1955doubledie]

10. I think we all know the answer to your last question

Once Wal-Mart undercut the prices of the grocery stores in my area, putting most of them out of business...Wal-Mart's prices on grocery items went way up, until they were even higher than the other stores' prices would have been.

They're like locusts.

[MedicalAdmin]

18. Walmart should be eliminated as should all it's founders and big investors.

The represent a clear and present danger to the security of the USA. As such we should terminate them.


When Walmart gains market dominence (and monopolies as they have in so many rural areas) the prices are disturbingly high and much higher than areas without the monopoly. And that is only comparing Walmart prices to other Walmarts.

I would vote in favor or an open hunting season on any major walmart investor or founder. I know folks who would donate free taxidermy work so you could mount and stuff yourself a Walton.


Rant over.

[flamin lib]

20. Tread lightly there, fella' . . . nt

[EXneoCON]

7. I cannot understand, for the life of me...

...why this message is, firstly, so hard for the majority of American workers to understand, and, secondly, why this message isn't being broadcast over every radio, television and internet connection in the nation. What are the Democratic politicians so afraid of? Can't they see Republican Lite is no better for their (re-)election chances than this too-true statement of facts?! Might as well call an elephant an elephant...(sigh)

Oh, and K&R.

[flamin lib]

13. Because it's complicated and difficult to make connections between

things that seem so divergent. Ya' can't fit it on a bumper sticker.

[Junkdrawer]

9. Heavy Manufacturing was mortally wounded in the 50s...

it lingered until the late 70s...

When more money can be made in foreign and financial investments, capital is withdrawn from manufacturing. Starved of reinvestment, it takes a while before industry dies - and much longer than that before the full effects of its death are felt.

[Spike89]

11. You're wrong, but not totally

We're making plenty, but high technology has dramatically lessened the need and value of labor. Sure, there are a lot of other factors in play (globalization, poor social policies, etc) but the fact is that the only reason corporations are able to ship jobs to low-wage countries is because it simply doesn't require the skilled labor it used to. "Slave" labor works if you need nothing but a strong back, fast hands, etc. If experience and skill is needed, you'll need more educated/skilled workers and then they've got some power and it is difficult to oppress and exploit them.
We'll never be successful at putting the genie back in the bottle. We're in a transition phase where labor is not as important in the manufacturing phase. Eventually of course, we'll see true "black box" manufacturing for more and more items. There will be an economy, it just won't be based on people's sweat.

[flamin lib]

12. Yeah, but

it's not just manual labor, it's R&D, it's IT, it's customer service.

The Genie may not entirely not go back in the bottle, but if tax policies don't reward off-shoring and even the playing field by forcing off shore companies to meet our labor and environmental standards not to mention safe content of food stuffs it would go a long way.

[blueworld]

16. True to a point, but don't forget regulations

The mega-corps need strong backs & fast hands without regard for environmental regulation, labor safety laws, hourly limits etc.

[pansypoo53219]

15. most of our economy is based on financial services(whatever tha means).

we are just moving money around and most of it going to CEOs + wall street. i recommend kevin philips 2006 book-american theocracy-pt 1 +3 to everybody. we are spain in the 1600's unless we find the new whale oil.

profit is not the only thing.

[Spike89]

17. Yup, and there is no product (whale oil) to come

Manufacturing will never again be as important as it once was as an economic engine. I am not sure what replaces a manufacturing economy, and of course, it won't totally go away for a long time. However, the reality is that we're well past the point where human labor is the limiting factor in how much we can produce. In other words, we can make more cars, TVs, dishwashers, etc. than we need without coming close to running out of people to produce those items. Even food production isn't limited by labor.
The utopian in me wants to believe that after we go through the turmoil that comes from the end of the industrial age, we'll be forced to reconfigure and revalue what humans are worth. In other words, perhaps the arts, sciences, philosophy and other "information age products" will become our currency and most "things" will have little value. I am pretty sure that it won't matter someday soon where the factory is, because there won't be people working there.