MichaelZZ

Capacity's Comeback Strongly Indicates Recession's End

I have glanced at a number of comments and the one that stuck out was Mike of NYC's, 09/17/09 ! 08:49am. (re-printed, following my comments)
He was spot on.
I am sure there were many others that offered good information, but his pragmatism leaped off the page.

We cannot solve a problem until and unless we understand the cause of the problem. This is so basic, it should be viewed as being redundant. I am being redundant because it appears that our "leadership" (collectively) does not understand the root cause of our economic malaise.

ROOT CAUSE: Greed. Pervasive greed.

I will address two critical macro subsets of this greed:
1) The massive shift of wealth from the middle class to the ultra wealthy (top 1/10th of 1%) during these past 27-28 years. The beginning was enabled by the March 30, 1981 event regarding John Hinckley. Prior to the attempt upon the life of President Reagan, his tax cuts were absolutely DOA.
The coup de grace was delivered by President Bush’s tax legislations of 2001 – 2003. The largest (2001) was set up by Alan Greenspan’s testimony before Congress in 2000; he appeared to be extremely concerned as to what we, this Nation, would do once the national debt was repaid; would the government begin to buy up common stocks, et cetera.

2) The massive shift of manufacturing to offshore sites.
As Mike from NYC pointed out, when we purchase items manufactured offshore, most of the energies go offshore, i.e., those energies are not recycled within our economy, thus do not produce the jobs that would be produced if those energies remained within our economy.

There are pragmatic solutions to both of the above.
Those interested can e-mail me @ [e-mail]

mz 09/17/09

The following are Mike from NYC’s comments:

·
o Mike from NYC:
o Comments (25)
o Follow
"Notice on the graph that the recovery in CU after the last two recessions was much more gradual than it was in earlier recessions. This mirrors the prolonged “jobless recoveries” we had following those downturns. I suspect the same thing will happen this time around.

Note that we never fully recovered in terms of CU during the last economic expansion, and that the peak was not that much higher than the worst we saw during the 1990 recession. Still, it is nice to be headed in the right direction."

I read the responses and NO ONE has mentioned the outsourcing of industrial production, especially that of consumer products, to China and elsewhere.

The USA will never see the rise in CU as we did in years gone by prior to about the mid 90s when American companies exited the USA and marched to China and other low wage countries. When Americans go shopping, if and when the recession ends (that is, the 'real world' recession not just numbers or that on Wall Street), they won't be putting Americans to work other than in sales jobs. Buy a TV, an air conditioner, a pair of pants, a power tool, and it won't put one American factory worker to work. It won't cause the expansion or renovation of factories putting architects, engineers, construction workers, machine manufacturers and everything else that makes a factory tick, back to work.

There is a 'price' to be paid for all the cheap products we buy as there is no free ride and we will witness the full blown effects of the American companies rush into cheap wage countries. We witnessed it during the last recovery, and it will be worse during this recovery - a JOBLESS recovery.

All of you people can recite theory after theory, point to your data and charts and the historicals, but you miss the big picture - common sense and the realization that things have changed far too rapidly during the past 15 years in the USA and it hasn't yet been accounted for in the data.

Maybe I'm the one who is crazy, but so far every prediction I made has come true - that the Dot Com craze was BS pushed by Wall Street, as well as the 'get rich through real estate' bubble pushed by Wall Street and such geniuses as Trump (who by the way is at it again). Flip this house!

Why work to get rich when Wall Street can do it for you - isn't that their premise?