Just the body armor example: this is work for the government, i.e., an
overhead cost on the private sector economy.
A manufactured good has three cost components: Labor, Materials, and
Materials are generally about of equal cost worldwide due to
containerized shipping, i.e., The World is Flat. (yes I know this is
not ABSOLUTELY true)
Overhead costs on US industries are OUT OF CONTROL. Chiefly as a
result of having to support the absolutely reckless spending of a
public servant class that thinks there is an absolutely endless supply
of money that the US taxpayer can give them. The US taxpayer is beyond
tapped out. The national debt has each individual in this country over
$100,000 in the hole. (Family of 4 = $400,000.) The productive sectors
of the economy (except farming and mining) have largely left for
China, which leaves the taxpayer little possibility of ever covering
his portion of the debt.
To compete with the Chinese, any private sector manufacturer is
compelled to force LABOR rates down to parity with the Chinese. This
will render the taxpayer's chances of ever covering his portion of the
national debt to: Zero Possibility.
And to finance the current budget deficits, the US government must
borrow from others. Except that with the Fed having set the interest
rate to near zero % (and T-Bill rates to follow suit) no one will lend
the US government any money.
Get ready for the gears of government to come grinding to a screeching
halt. Just like a giant crash on your milling machine.
In short, the damage is already done, nearly irreversible, and will
render the dollar a laughingstock as a medium of exchange.
Only a world war will allow for a cancellation or rearrangement to the
terms of this debt.....and no doubt some a trying to instigate one.
Unfortunately, world wars aren't what they used to be. Now they can
turn the entire planet to ashes. But a new Phoenix will arise from
those ashes. A new world that will have learned its lessons . A
New World Order.
Also unfortunately, the vast majority of what the money changer elite
setting this New World Order up view as the subhuman "untermenchen"
(the worthless eaters) are all going to be killed off in the process.
So sorry if you don't happen to be one of the elite who have their
undergound bunkers all prepared and stocked up for the long haul.
Well, yeah, defense is a cost of doing business -- and of avoiding being
someone else's colonist. AND...there is a cost offset. Body armor saves some
money on body bags and funerals.
It sure isn't, especially in cases like China, where the low-level
commodities aren't traded on the world market and they have a huge cost
advantage because of lower embedded labor costs throughout their entire
Our taxes, overall, are the third-lowest in the developed world. So it isn't
a competitive issue for us.
Well, not quite. As of today, $34,758 and change. Whoops! It just went up
Manufacturing volume in the US keeps climbing, except for the setbacks in
recessions. In net terms, it hasn't left the US.
Here's durable goods, for example -- the hard stuff:
...or, if that doesn't work, try this:
The answer is not to compete with the Chinese head-to-head. That's a losing
proposition. Make better stuff, or include value-added services; find a
Duh...they just sold out a $30 billion T-bill issue a few weeks ago at 0%
interest. So far, no problems.
Well, if you believe that, you ought to sell your machine tools cheap, while
the getting is good. What do you have that you want to sell?
Didn't we discuss this once before? The answer now is the same as it was
then, which is, the other option is just to inflate ourselves out of debt.
I don't, so I won't get long-term use out of machine tools, if you're right.
So I'm buying accordingly. Again, what do you have to sell?
Yes, true. Also true: the US pays a disproportionate amount of the
costs involved in keeping the world's shipping lanes open, protecting
our "allies", etc. A disporportionate overhead cost, and all done on
borrowing money at interest.
There's always the exception to the rule. The Asian tigers have been
notorious for using closed systems like that and being exceptions to
Because we have been running our government on credit and have been
able to borrow massive amounts of money....a factor which is now
probably coming to an end as our creditworthiness is coming into
What nobody realizes yet is that the banker bailout bill has probably
tacked another 8 to 10 trillion dollars onto the national debt. See,
they put secrecy clauses into that bill, which was passed under threat
of the imposition of martial law by the White House/Paulson. Bloomberg
has attempted to sue the Fed under the FOIA to determine how much
money has been used and where it went and was told that is
confidential info by the Fed. Ron Paul agrees with the 8-10 trillion
We have just been victimized by the largest flim-flam scam in the
history of money changing. When the actual numbers start settling into
the American conciousness and they realize how ripped off they got
under GW Bush and his merry band of pirates, there is going to be hell
The factories around here are nearly all laying people off. The
numbers may say one thing, but the Big Three were all up in Washington
with pretty grim forecasts for the future.
Or to export Unionism so that manufacturing wages move towards parity
globally. The manufacturing economy went global, but the Union
movement didn't. The Unions completely missed the boat on this one. If
there is an ever increasing downward spiral in wage rates, there is
sure to be a most incredible deflation as demand for end items drops
Unfortunately, unionism will probably be opposed in China with
This buy is a direct result of policy making at the latest G8 meeting,
isn't it? Not a free market sale. In free market conditions I think US
T-Bills will find it MUCH rougher. It's an organized buy based, not on
T-Bill quality, but on policy decisions by friendly foreign
governments. And $30 billion is a drop in the bucket compared to what
is projected to be a $1.2 TRILLION dollar budget deficit for fiscal
year 2008. Trying to float 1.2 trillion in T-Bills paying close to
zero % interest is going to be a real wake-up slap in the face for the
idiots in Washington. Sorry, but that sale is a merely a rigged up
public relations stunt.
No one should sell any machinery they own. They might need it to make
The Chinese will be thrilled to be holding our now worthless paper
after such an inflation (which is already well under way). Maybe so
thrilled they just decide that, since they have been defrauded based
upon the worthless promises of the US to pay them in some fungable
currency, they will become more militarily agressive. Taiwan Straits
ring a bell? US treaty obligations with Taiwan. War with China? Oh
boy. They could raise a 200 million man army in a year or less. Any
such war would go nuclear for sure if it were to happen. No way the US
can go mano-a-mano with the Chinese.
No bunker here either. If I get incinerated in a nuke exchange, you
can come on over and have whatever you want....for FREE. Just be
careful of the stuff that's glowing. And be sure to watch for any
undead flesh eating Zombies that may be roaming around the property.
Much depends on how you define "manufacturing." The mass
production in the United States of durable such as cars,
appliances, etc. has declined, and the manufacture of consumer
products such as textiles, shoes, consumer electronics, etc. is
tanking where it still existed at all.
There are indeed some specialty manufacturing niches where
activity has increased, but these are not the traditional
manufacturing jobs employing large numbers of skilled and
semi-skilled people, but highly technical, generally *VERY*
capital intensive, operations employing few but generally well
[but not extravagantly] paid employees. Thus, while these
operations may significantly contribute to the GDP, they have
minimal influence on the unemployment rates and per capita earned
income, because of the low numbers [compared to the total
population] of people employed.
What this appears to be showing is that the old mass
production/mass employment economic model is no longer viable,
but that nothing else has been proposed/implemented to absorb the
now redundant workers with anything approaching a middle class
wage. The new knowledge based economy now appears to be a total
academic and political illusion with no justification in fact.
When you are attempting to operate a consumer economy it is
vital, even critical that a significant majority of the
population is able to earn a middle class wage so that they can
afford middle class consumption. Recent history and current
events demonstrates that excessive EZ-credit is no substitute for
an adequate, stable income, and indeed appears to make things
worse in the long run.
Thus it is vital that hallucinations such as the existence of a
US domestic knowledge based economy [where everybody makes a good
living designing each others' web sites] be scrapped and
something else proposed [based on hard, historical data/trends],
evaluated, implemented and tracked for results.
This is not the first time that the US [and indeed western
civilizations] have had to go through some sort of "agonizing
reappraisal" qua economic organization/structure but the
resolutions have always been difficult, time-consuming and
expensive. For example the US Civil War was as much about
resolving the increasingly sharp question whether "traditional
agriculture," or "manufacturing" was to be the dominant
socio-economic structure [think import tariffs], as anything
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).