OT: possible replacement for manufacturing jobs

Special for TMT
As a follow-up on the hot-dog pushcart as a possible replacement of high tech jobs, we now have this example from LA.
http://news.yahoo.com/s/ap/20090515/ap_on_bi_ge/us_fea_food_twitter_trucks ;_ylt=AnwK4cPbjGrXqwk42RfFe5kjtBAF
Foodies flock to Twitter-savvy food trucks By SHAYA TAYEFE MOHAJER, Associated Press Writer Shaya Tayefe Mohajer, Associated Press Writer Fri May 15, 4:01 pm ET
LOS ANGELES For some foodies, Tweets lead to great eats.
Twitter recently became the communique of choice for the almost cultishly popular Kogi BBQ trucks, roving Korean-style taco vendors in Los Angeles that use the 140-character, cell phone-friendly missives to alert customers to their whereabouts and menu items.
And the trend is spreading to other wheel meals as more food trucks a fast-growing food <snip> Portland Twitter users, such as PDXfoodcarts, track the arrival of new trucks, which have exploded from just a few in 2006 to more than 170 this year, representing 24 national cuisines.
"OK, Poompui, a new Thai cart on 8th and Couch is PHENOMENAL," read a recent Tweet by PDXfoodcarts. "Like Thai food in Thailand. GO, JUST GO." <snip> -----
Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).
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http://news.yahoo.com/s/ap/20090515/ap_on_bi_ge/us_fea_food_twitter_trucks ;_ylt=AnwK4cPbjGrXqwk42RfFe5kjtBAF
Id say your post is ON topic, but truth is I cant understand it, but it could be the beer. So going from just the subject line, there is no replacement for manufacturing. Japan taught us that when they almost kicked our ass in the 40's. They are smaller than florida and yet built the largest warship the world has ever seen, as well as the most successful fighter plane of its time. I understand they even built an atomic bomb in the end but was a little too late. My point is without manufacturing, technology is useless. Manufacturing is in my book right up there with farming. It's renewable. And looking at history, he who can manufacture the best, rules the planet.
Besides, wev'e all sold stuff, wev'e all given advice, we've all made things nicer by painting, cutting lawns, etc... But there is no better feeling a man can have from growing or building something.
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wrote: <snip>

==========The key phrase is "value added."
In the aggregate, the big chunk of "value added" is manufacturing. While we in the United States have been on a credit binge over the last few years, dissipating our inheritance/patramony on bling-bling and gee-gaws, a significant number of people have been busy "cutting the golden goose open" for their own profit, liquidating the high value added options.
To be sure the first people to off-shore production and services made out like bandits, but this was a death sentence in the long run for manufacturing and all but the most basic services [IT, engineering, accounting -- going -- going -- gone], and even the services that can't be exported such as house cleaning and yard work are now frequently filled by undocumented/guest workers driving down those wages.
It is important that the people that are now un- or under- employed realize this has little or nothing to do with them personally.
They are still good people, even if they need a [better] job. In general they are no more responsible for their situation than were the people in the North Ridge earthquake or the Katrina hurricane. Indeed, in many ways they are *LESS* responsible, in that the people in the earthquakes and hurricanes had been advise of possible trouble, building codes were revised/implemented, and certain precautions were advised, including evacuation, while the people now being swept up in the current economic storms were specifically told that everything was OK, not to worry, ignore the alarmists, and SPEND THAT MONEY.
I can see two ways for manufacturing to make a comeback, neither of which will be good. First, the existing overseas suppliers can refuse to supply any more product, including spare/repair parts, except C.O.D. or even cash in advance, and they may even demand that some of their outstanding bills be paid down as part of the deal. Second, tariff and non-tarriff trade barriers can be implemented, possibly including high taxes on services to restrict imports to promote domestic manufacture/production. A combination of the two is also possible.
Good luck on the job search, and remember what the Godfather said as he snugged up the piano wire -- "its nothing personal, its just business."
Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).
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There is a third, and much better option George. China, for example, buys a lot of wood and scrap iron from the US but not much in the way of finished wood or metal products. They export those back to us and the dimwit solution is to restrict those imports to the US by taxing the goods on the way in. Well, we can't do that without starting a big trade war and everyone would lose, and they are already, if that happens.
There is no reason, no treaty, and no trade agreement that says we can't slap a 100% or more tax on raw materials that are exported.
JC
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On Sun, 17 May 2009 15:22:27 -0700, "John R. Carroll"
<snip>

==========Might be a little late.
from 2004 http://www.nytimes.com/2004/03/13/business/worldbusiness/13SCRA.html From 2007 http://www.slate.com/id/2173594 /
from Nov 2008 http://www.worldscrap.com/modules/news/article.php?aid 05 jan 20 2009 http://www.pbs.org/newshour/bb/business/jan-june09/usdollar_01-30.html mar 08 2009 http://www.syracuse.com/news/index.ssf/2009/03/scrap_metal_prices_crash_as_ec.html
Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).
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wrote:

http://www.syracuse.com/news/index.ssf/2009/03/scrap_metal_prices_crash_as_ec.html
I would say this would be the perfect time. Who'd complain? Certainly not the Chinese. Also, we put a tarrif on paper imports from China not long after the last domestic producer ended production. I've forgotten which kinds of finished paper was involved but it was delivered in giant rolls.
JC
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F. George McDuffee wrote:

An economy - ANY economy - runs on just three basics: Mining, agriculture, and manufacturing.
We the take things we need out of the earth. That's all we have. Mining is the business of finding and delivering inanimate things like oil, water, ores, etc. Agriculture involves live things like plants, animals, fish, etc. (Food animals are just indirect ways to get concentrated or pre-processed nutrition from plants. This often includes plants, like grass, that we can't eat directly.)
Manufacturing is how we transform the basics into useful form. That means everything from refining oil to butchering animals. It's also how we improve mining and agriculture. Drills for getting oil out of deep holes, ships for fishing, tractors for plowing the ground, and more and more. The three basics simultaneously serve and protect and enhance each other.
EVERYTHING humans do that isn't mining, agriculture, or manufacturing, is a service industry which can serve one of just two purposes. It can help mining, agriculture, and manufacturing become more efficient, more streamlined, or larger in scale, to promote better productivity overall, or it can serve individuals directly, providing convenience, comfort, or other things that we value in our lives that aren't directly related to producing what we need.
Banking and transportation are examples of the first kind of service. Medicine and art/entertainment are examples of the second.
The two kinds of services are fundamentally different. The first kind is productive service. A bank can collect small sums from many depositors, and can enable very large investments in any of the three basic productive activities. Transportation can bring each of us closer to the sources of things produced by the basics. That aids and enhances productivity.
The second kind of service is entirely a matter of consumption. We consume TV programs, fashionable clothing, or drugs and medical procedures, primarily for our own reasons, without regard for the overall survival of our species, or the overall health of our economy. We enrich ourselves individually by consuming; but we don't add anything to the total (necessary or optional) wealth that's available to be consumed.
If you want to know the health of any economy, just look at the amount of time, energy, effort, and esteem, that it invests in the various kinds of activities described above.
The US is seriously upside down, and can only have a bright future if it stops spending so much on the wrong things, and starts investing in the things that make the future possible.
KG
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Kirk Gordon wrote:

Exactly.
Simply speaking, if your not mining it growing it or making it, you're at the complete mercy of those who do.
--
Black Dragon

It is easier to write an incorrect program than understand a correct one.
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Perhaps, but it's a symbiotic relationship. You need both sides of the system - service and manufacturing - or you end up with a bartered economy. It's really a matter of finding the right balance. America is either going to develop institutional memories or it will fail.
JC
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On Mon, 18 May 2009 11:02:24 -0700, "John R. Carroll"

========Indeed, but the problem is that with the downsizing, right sizing, early retirements, yada-yada-yada, the institutions have been self administering a pre frontal lobotomy.
Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).
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My advice hasn't changed. Get a cat.
I'm going to send you sa handful of graphs to look at George. The US Loan Book, from Fed Data sources, is a couple of years old and I'll let you figure out why it's laughable. The others are fairly current and there isn't anything funny about them.
JC
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On Sat, 23 May 2009 13:38:21 -0700, "John R. Carroll"

=========Of all of the suggestions on this NG, the cat seems the most likely to produce a positive result.
I have downloaded the graphs. I have reviewed these, and I now have a "Don King" do [white and standing on end]
These graphs effectively show that if the FRB and other regulators were not aware of something strange occurring in the US economy, even if they were unable to identify the bubbles, it was only because they did not want to know.
It is clear from the capacity utilization chart that US manufacturing was [and is] going up in smoke, and this does not appear to include the capacity that was liquidated during this time period, so the total utilization should be even lower.
The M2 velocity charts for 1990-2000 should have been another "red flag."
Obama & Company may be correct when they claim the liquidation of GM/Chrysler may well trigger a depression. The problem being, it is not at all clear that pouring more billions of tax payer money into these zombies for bridge, debtor-in-possesion and exit financing, forgiving 40+ billion in loans, lending 12.5 billion to Ally [GMAC] Bank so the customers can be financed to buy the cars, etc. will have the slightest effect, given that the spun off suppliers such as Delphi and American Axle, in addition to the independent suppliers are already in chapter 11, and are starting to move into chapter 7 [liquidation]. http://www.reuters.com/article/innovationNews/idUSTRE54L3ML20090522 [Note that this does not include the FDIC and FRB capital (taxpayer money) injections] http://www.google.com/hostednews/afp/article/ALeqM5gU0l0urHkLxO_l4a3ahwcSTGV_WQ http://www.freep.com/article/20090523/BUSINESS01/905230438 For the existing Chrysler suppliers such a deal-- http://bloomberg.com/apps/news?pid 601087&sid=aINxgqHNCLUM&refer=home http://www.bloomberg.com/apps/news?pid 601209&sid=aZ4LY9smwZDQ
Where/when/how does it end?????
Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).
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wrote:

LOL
Oh well.

I don't think keeping them alive will prevent anything but the sums involved are relatively trivial so it's worth the psych value.

I've sent you a private response George. I wouldn't post anyhing like that publicly. I also have another couple of charts you'll want to see, or maybe not, and I'll send them momentarily.
Bond yields trending up under present conditions only make sense in a narrow set of circumstances. I hope somebody has started working on a plan B that doesn't include debt.
I think the answer to "when" is probably in the neighborhood of between three to nine months tops, unless there is a rabbit hidden in a hat I don't know about. That I wouldn't know is entirely possible. What is less likely is that anyone has a hat that big out of plain sight.
JC
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On Sat, 23 May 2009 21:48:03 -0500, F. George McDuffee

We are already IN a depression. Long past a recession.
Now its up to Obama and Co to try to keep us out of a 4-11 yr long depression....Part Deux.
Frankly...I dont believe that they can or will do it.
Gunner
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On Sun, 24 May 2009 10:36:51 -0700, Gunner Asch

==========While we are in a very serious recession, it does not yet appear we are in a depression, but read on. The collapse of one or more major governmental units such as California, Michigan, or New York could well be the trigger for this however, because of the huge bond and pension obligations these units represent.
From the available information, it appears that the situation is much as it was in 1931-1933 in that the effects of the bursting of the domestic [US] stock and real estate bubbles, while very dangerous, have been largely contained, albeit at great taxpayer cost and extensive governmental intrusion.
Unfortunately, the major risk now appears that a similar bubble collapse is accelerating in the other countries, which is beyond any control of the US government, but which is likely to have great US domestic impact, as these are our export markets and major debtors for some of our largest financial institutions.
The multi-bubble collapse in Europe is likely to be particularly sharp in that the countries involved, with few exceptions, have eliminated their national currency and adopted the Euro. While this greatly helped international trade in the good times, it also eliminated one of the major tools used by central banks, the ability to increase/decrease the amount of money in circulation.
One contributing factor is the large number of regulatory authorities for banking and financial services, and the proliferation of unregulated/uncontrolled "off-shore" banking, e.g. Iceland. While it may seem incredible, the degree of leverage in these institutions, and the amount of "off-the-books" SPEs/Conduits is even higher than that in the US.
A second contributing factor is that much of the real estate speculation appears to have been concentrated in only a few countries, such as Spain, with the result that they are suffering the full brunt of the real estate collapse, with unemployment nearing 20%.
A third factor is the wide proliferation of low interest loans in hard currencies such as Euros or Swiss Francs in many of the middle European countries. These were particularly attractive as the interest rates were much lower than loans in the national currencies, but with the steep drop in their economic activity and exchange rates, the payments have become unsustainable. These non performing loans appear to represent very significant amounts of "assets" for many major European banks, very similar to our sub-prime, alt-a and commercial real estate securitized loans.
Everything considered, you appear to be correct.
The Obama administration appears to mean well, but the forces with which they are contending appear to be on the order of a magnitude 8 earthquake or Katrina hurricane. Some preventative/ameolerative measures could have been take such as earthquake resistant building codes and evacuation plans, but once the ground starts to shake or the winds start to howl, it's too late, and the only thing that can be done is to come in later after the earthquake or flood, identify and bury the dead, and provide emergency aid for the survivors. Hopefully, lessons will be learned and applied to limit the damage in the next disaster, but this never seems to happen.
Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).
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On Sun, 24 May 2009 13:49:03 -0500, F. George McDuffee

You are forgetting what happens on June 1st with the auto industry.
Another 5 million unemployed.......
Gunner
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On Sun, 24 May 2009 12:39:42 -0700, Gunner Asch

=======While this is a possibility, an economic collapse is far less likely today that it would have been in the 1970s/1980s.
Many of the jobs that will be/have been lost as the result of an automotive bankruptcy and even liquidation are no longer located in the US as these have been out sourced as have the vendors [and those jobs] for components, tooling, etc.
The economic threat from the Detroit chapter 11 and then chapter 7 appears to be way overblown, in that much, even most of the damage has already been inflicted. The pension/medical funds are gone, the vendors are getting stiffed on their accounts payable [such a deal -- 50 cents on the dollar if they will keep supplying parts], and the bond holders/secured creditors are taking it in the shorts big time.
The US government is about to forgive the c. 40 billion in "loans" the taxpayer's were conned into pouring down these rat holes, with additional billions to be dumped in as debtor-in-possession loans, bankruptcy exit financing loans, green product development, etc. The taxpayer's are even providing additional funding for the Ally [former GMAC] Bank for 7.5 billion, so there will be EZ financing available to buy the cars that *MAY* be produced after b/k.
It appears that the GM and Chrysler executives are still "legends in their own minds" as well as being lost in the 60s, however this is not justification for believing their BS.
Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).
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On Sun, 24 May 2009 17:12:50 -0500, F. George McDuffee

The current debt load is 1.4 trillion dollars. In a year....it will be 4 trillion.
And?
Gunner
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On Sun, 24 May 2009 16:44:02 -0700, Gunner Asch

http://www.bloomberg.com/apps/news?pid 601100&sid=aXvogfC1VANo&refer=germany
May 25 (Bloomberg) -- German Economy Minister Karl-Theodor zu Guttenberg said an orderly insolvency for General Motors Corp.s Opel unit may be the preferred option because none of the three bidders would take on enough risks.
An orderly insolvency would be the better solution and could open possibilities for Opels future because current bids dont sufficiently limit the risks of wasting taxpayers money, Guttenberg said yesterday, according to his spokesman Steffen Moritz. An insolvency doesnt mean the end of the company and is something we want to avoid, he said.
The comments are fanning a debate within Chancellor Angela Merkels coalition after the minister told Bloomberg News in a May 23 interview that he wasnt persuaded by offers from Italys Fiat SpA, Canadian car-parts maker Magna International Inc. and financial investor RHJ International SA. GM, preparing for a probable June 1 bankruptcy, is selling a majority stake in its European operations, including the Vauxhall brand in the U.K.
<snip>
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On Sun, 24 May 2009 16:44:02 -0700, Gunner Asch
<snip>

==========Other countries such as the UK and Japan have operated with debt levels at or near their GDP.
In the US the GDP is currently estimated at about 14 trillion, so there is still room for *SOME* maneuver, but bear in mind that increasing amounts of the reported GDP appear to be "spondulicks," not coin of the realm.
What there is no room/money/time for, is "more of the same only better," and "business as usual." The economic contraction is also putting severe stress on the states and local governments, e.g. California.
In all fairness, their debts and other obligations should be added to the Federal Deficit to get an accurate picture of the situation. When this is done, there is a considerable jump, but the total is still far short 100% of GDP, which seems to be the historical tipping point at which the ship rolls over, ala Argentina.
The direct hires although on lay-off are collecting SUB [supplementary unemployment benefits] pay, so that while there income is down, so are their expenses. The supplier's employees are generally not so lucky.
There appears to be enough money in the Federal kitty to fund GM and Chrysler for the next 6 to 9 months, possibly a little more, through the end of 2009. The unknown is what effect the supplier bankruptcies and the CDS [credit default swaps] on the GM/Chrysler debt, with much of this written by AIG will have. It won't be good.
What must be done is the immediate implementation of large numbers of high value added activities generating real money, both internally and even more importantly from exports. Historically, this has been manufacturing.
IMNSHO, it is on this point that the Obama automotive rescue plan fails in that far from being a high value added activity, it appears that nearly all domestic automotive and automotive manufacturing related activities are largely money losers, i.e. are *NEGATIVE* value added operations, albeit large employers. In other words, in order to generate 100$, it is necessary to spend 125$.
Thus the more of the existing domestic auto industry that is "saved," the greater the losses generated, and the more money required to keep the game going.
While there is always a possibility of a major European bank/brokerage, at the level of a Lehman, going down in flames, it appears that the big crunch will occur at the end of the year when the federal money is exhausted and Congress refuses to appropriate anymore. Indeed, if our creditors just stop buying, but not cashing in their existing T-bills, this may produce a situation where there simply is no more money available.
FYI http://www.drudgereport.com/flashocs.htm In a sobering holiday interview with C-SPAN, President Obama boldly told Americans: "We are out of money."
C-SPAN host Steve Scully broke from a meek Washington press corps with probing questions for the new president.
SCULLY: You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?
==>OBAMA: Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we've made on health care so far. This is a consequence of the crisis that we've seen and in fact our failure to make some good decisions on health care over the last several decades.<So we've got a short-term problem, which is we had to spend a lot of money to salvage our financial system, we had to deal with the auto companies, a huge recession which drains tax revenue at the same time it's putting more pressure on governments to provide unemployment insurance or make sure that food stamps are available for people who have been laid off.
<snip>
Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).
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