On the occasion of Pres. Obama's first 100 days in office, the U.S. Business & Industry Council has weighed in with their own status report, and for manufacturers, it's not looking good. The Council, which is most assuredly not a conservative-leaning organization (nor, for that matter, are they a liberal-leaning group, either; they seem to play it pretty much right down the middle, with their main bias being pro-manufacturing), calls Pres. Obama to task for what they view as his "almost complete neglect of the cascading crisis in domestic manufacturing, while his economic team focuses obsessively on the financial industry."
Kevin Kearns, president of the USBIC, has written an open letter to Pres. Obama, which you can read here. The best line in the letter, in my opinion, is this one:
"To date, your economic team's approach seems to be trillions for banks, but hardly a dime for manufacturing. You save wrong-doing financial houses from failure, but send good-faith, if sometimes poorly run, manufacturing companies into bankruptcy -- a formula for disaster."
As we pointed out in our pre-election coverage last fall, neither of the major candidates for U.S. President had much, if anything, to say about what they'd do to help the manufacturing industry recover, so it should hardly come as a surprise that, 100 days in, Pres. Obama has yet to address the topic. The more I observe the current Administration's attitude toward U.S. manufacturing, the more I keep hearing the lines of that famous song from The Who: "Meet the new boss, same as the old boss." So far, it looks like we were indeed fooled again.
USBIC is on my regular reading list. As you say they have a fair and balanced look at the issues affecting US based mfg.
Kearns and Tonelson are some of the very few voices speaking common sense and truth to power in the illuison of globaliztion and its devastating affects on US industry, national security and our std of living
__________________ Who ever heard of a skilled labor shortage that did not have a corresponding upward pressure on wages?
If the financial sector had collapsed, everything else would have gone with it in an instant. That is the basic fundamentals of why so much was committed to the banks.
without a productive mfg sector, no wealth is created
the financial sector merelyshifts wealth around - mostly up
or lately evaporates it into thin air
the list of economists grows almost daily from the right left, center and nobel laureates that we are going about this backawards - we need to be investing in the productive sector - you must produce your way out of recession - not borrow your way out
__________________ Who ever heard of a skilled labor shortage that did not have a corresponding upward pressure on wages?
Speaking of economists, here's what frequent IW contributor Peter Morici, Professor at the Smith School of Business, University of Maryland, and former Chief Economist at the United States International Trade Commission, has to say about the current situation:
"Investors would be foolish to purchase any common stock or bonds in a bank requiring additional capital if any uncertainty emerges about the bank’s ability to raise all the new capital from private sources. No one should want to own shares in a bank with even the prospect of partial government ownership.
"After seeing the Obama Administration’s helping hand at Bank of America, Citigroup, Chrysler and GM, an investor would have to be nuts to buy shares in a bank that requires more capital according to the government’s criteria, because private investors will likely end up with Washington as a partial and dominant shareholder too.
"At Chrysler and GM, President Obama is canceling the legitimate claims of private creditors, ignoring the clear requirements of bankruptcy law, and subverting private property rights without due process. Only a fool would buy common stock or bonds in a bank with even the prospects of partial government ownership.
"After President Obama's arbitrary treatment of private creditors at Chrysler and GM, I would just as soon take a beating from a prize fighter than buy stocks or bonds in a bank ordered to raise capital by the Obama stress tests."
"without a productive mfg sector, no wealth is created" also requires customers with money to spend.
If D.C. is committed to "spending our way out of a crisis," then most bang for the buck, politicaly as well as financially, would have been to have cut out the middle man (old banks), and "incentivize" in every possible way individual debt reduction in order to help individuals clean up their balance sheets and provide for longer-term economic growth. The current approach is passively forcing the issue on individual balance sheet "repair" but is actively keeping old banks in the game (who have now been chastised into more conservative lending practices) which is NOT going to quickly raise new capital nor ever could. We can see where this is getting us. Half the equation is being ignored. By contrast,the latter approach, i.e., raising new capital based upon individual deposits into new lending institutions, would get things moving again and in the right direction, if those new banks, in turn, were directed to focus their investments in productive wealth creation: manufacturing.
that is if you buy into Wall Street's propaganda without a productive mfg sector, no wealth is created...
It is not propaganda to note that if the financial sector fails then all other sectors will immediately fail. That is simply a principle of any monetary system. When financials fail, money immediately loses perceived value and all economic activity that is measured in money is correspondingly affected.
The issue of the U.S. foolishly promoting the business of money ahead of all other businesses is another matter aside from the basic fact I noted here.
Who ever heard of a skilled labor shortage that did not have a corresponding upward pressure on wages?
Great signature. That says it all.
And there can't be a skilled labor shortage when the industries that employ skilled labor are collapsing.
We certainly can survive without a "vibrant financial sector." But we can't survive without a vibrant productive sector. And we can't survive if we don't produce any real wealth.
The wizards of Wall Street have already sucked all the value out of our homes and retirements, now they are holding us taxpayers hostage - "if you don't shovel more money our way, we'll wreck the economy even more"
What more do these clowns want from us?
__________________ Who ever heard of a skilled labor shortage that did not have a corresponding upward pressure on wages?
The wizards of Wall Street have already sucked all the value out of our homes and retirements, now they are holding us taxpayers hostage - "if you don't shovel more money our way, we'll wreck the economy even more"
What more do these clowns want from us?
I do not deny the base and venal character the financial sector has developed. It is necessary to also note the indispensable nature of the financial sector. These are two different things and both must be acknowledged if the problems are to be dealt with.
Trillions for Banks, A Dime for Manufacturers
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