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Web Letter

This entire article is built on a sad misconception. I have been following for decades the great growth of US manufacturing. But it goes like this:

One plant opened, replacing a WWII era facility. The production level and amount is similar, in this case, bolts and related items, but instead of having 5,000 workers, it has a lot of computerized equipment and 350 employees.

A heavy manufacturer of engineering equipment more than doubled its capacity, but uses only about one-quarter as many workers.

Two checkers in a supermarket can handle more items and customers than a group of eight used to. The difference is scanning barcodes and computerized inventory. I have read that the employment needed to make a ton of steel is only one/tenth as much labor as it took in 1955.

The actual 2007 dollar volume of US manufacturing was approximately 2.7 times as much as it was in 1980. But the relative value in the market of such items as computer services has grown much faster, making a relative decline only.

Please, do not try to pretend that American manufacturing has declined since the 1970s. Far, far from it.

This is exactly the same pattern seen when American agriculture went from 90 percent of all jobs down to around 1 percent, while total production grew many times in value.

John D. Froelich

Upper Darby , PA

Jul 2 2009 - 3:42am

Web Letter

There is no recovery without jobs! Sixty to 70 percent of Western economies are dependent on consumer spending. We are not talking about Veblen's conspicuous consumption by the wealthy but ordinary consumption by ordinary people buying essential goods and maybe a few toys for pleasure. Without good wages that produce disposable incomes there is no market!

The purpose of globalization and "free trade" is to drive down wages. American multinationals went to China and points south for cheap labor. These idiots do not see that the high wages formerly enjoyed by American workers are the American market. We are fast reaching the point where Western markets will not be profitable and we will not be able to afford the cheapest goods.

The collapsing Western markets are forcing China to turn to internal development to maintain "harmony" among their millions of unemployed that were dependent on foreign trade. China has billions of people. If they are well paid, they will leave the former Western markets in the dust heap of history. Japan is facing the same problem of unemployment with a population that is dependent on trade.

Trade-dependent relationships and underdevelopment of Western markets are the major reasons for this depression. The antics of Wall Street were only the trigger for the systemic failure of globalization.

If you want to fix the American economy, you have to look at how it was built. Alexander Hamilton's "Report on manufactures" is available on the web. It is the blueprint that built our industrial base. Tariffs are about internal development, and have nothing to do with neomerchantilism.

Pervis James Casey

Riverside, CA

Jun 26 2009 - 3:04pm

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