Some niche manufacturers are doing OK

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 Overhead.

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. Dave

Dr. Zaius will defeat the Morlocks. Bananas will be the global currency in the NWO.

Best Regards Tom.

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 supply chain.

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 another dollar...d8-)

$139,034.88

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:

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 niche; etc.

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?

-- Ed Huntress

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 the rules.

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 question.

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 figure.

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 to pay.

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 off.

Unfortunately, unionism will probably be opposed in China with government bullets.

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 bombs. :)

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. Dave

---------- 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 else.

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).