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Stimulus must be based on “buy American” formula!

24 Jan

Unless the Obama trillion dollar stimulus packages include provisions to rebuild a United States PRODUCT based economy, it will fail.

 

The new plan could not work unless it is based around the utilization of US products, such as steel, cement, in the road and bridges rejuvenation phase; US developed software, and computers using American made products for IT work, and so on.

 

The stimulus plan, at the risk of upsetting some of the US trading partners, must be designed around a “buy America” clause to ensure that its impact is not just a band aide for cancer.

Humility is a pre-requisite for the globally lagging US economy to catch up:

10 Jan

The United State officialdom, the private sector, and politicians, MUST own up to the fact that its economy is lagging behind its global competitors!

The United States MUST realize that it is in a catch-up mode, and that it is not the industrial leader that it once was, except perhaps in the highly limited area of weapon development and manufacturing.   

No one would argue with the fact that for a national economy to be a competitive player in the Twenty-first Century global economy, it must generate competitive, desirable, and sellable products.

Since in 2008/9 the United States is lagging behind the global community in making viable commercial products, it is time that Americans accept the fact that our designers, products, and workers, are not necessarily the best in the world.

As long as America, including government, members of the private section, and politician, continue to insist that America is best and therefore does not need to improve, catch-up and surpass global competition, the United States will remain behind and fall further back of competition.

For those who question America’s inferior state as a maker and supplier of products, just view a few facts.

In the last few decades the United States fell behind in a number of areas that it once dominated, some, but not all, include:

Computer hardware

Shipbuilding

Steel production

Appliance and other electrical and electronic production

Clothing

Shoes

Chemical

Medicine

Automotive

There are many other areas in which the United States once was a clear leader, and is now an “also-run,” or a follower A case in point where foreign producers caught up is the aircraft industry.

The reasons that the United States fell behind are many, not the least of them is arrogance that kept the United States from realizing that it has no monopoly on brains, and that others can catch and surpass it. Another significant reason is greed; United States companies elected to sacrifice long-term leadership by going to countries with low labor costs to enhance short-term profitability.

The message to President-elect Obama is that, at the risk of loosing popularity, he must inform industry that it must catch up with others who are indeed not inferior, and perhaps even superior. We need to admit that the United States must play catch-up so that it can become a viable product economy.

As part of any economic plan MUST include provision to aid US industry become an effective product generator.  

 

US Lagging in civilian-product competitiveness; it must be fixed!

9 Jan

US Lagging in civilian-product competitiveness, while its edge in weaponry must be only shared with a small fraternity of close allies. NASA and DoD with astronomical budgets lead the planet in their areas of interest, but since these areas cannot be used to generate hard currency, the United States must come up with alternative means for generating globally competitive products.

A service economy where one element of the economy serves another, but no one produces good that can be sold and put money into the economy, will not survive. The automobile bailout may allow for one or two automakers survive and yield products. Problems with the automobile industry go beyond domestic competition; no US automaker has been able to produce cars that can be sold in large quantities overseas.

The other small help to the product part of the economy can be described by the dreaded word “protectionism.” Obama’s simulation package can be designed not to allow anything by domestic products to be used in stimulus package. Such an approach could help the steel, chemical, and related producers of actual products, but US protectionism will likely bring about foreign retaliation.

A word to the President-elect: You must get your economic team to do whatever is possible to get the US economy to return to being primarily a global product economy.

Obama’s Productless Economic Plan is Doomed!

9 Jan

Obama’strillion (and it WILL be a TRILLION) economic recovery package is very impressive, but it will not help reconstruct a product economy. A service economy will not survive in the Twnty-first Century global marketplace.

In the Twenty-first Century, an economy that does not produce globally competitive products, cannot survive. As things stand, the United States produce very little that is sell-able globally. Perhaps the only area in which the United States has an unchallenged a product edge, weapons, it is restricted from exploiting freely. 

In the last thirty or so years, the United States forfeited its edge in the production of many leading edhe products. More importantly, the US generally gave up the ability to produce components required for building hitech products.  Not only did the US give up its edge, it gave up the ability to compete in the area of volume production.

The United States started to sell services, and since services are only sell-able when the either have product to service, or people who produce products and require services. The United States sold financial services, and then its own financial system broke down. The United States sold information Technology, but lost its edge there because it forfeited its product edge. The United States did maintain and actually enhanced it ability to produce advance weaponry, but this is an area that it can only share, and exploit its potential with very few nations.

The Obama economic stimulus plan deals with rebuilding the country infrastructure, and spending taxpayers’ money to employ taxpayers so that they are able take advantage of the improved infrastructure, and pay some small amount of money back into the US treasury. Short-term wise, an infusion may help relieve the pressure, but unless the US economy yield products that in turn will generate hard income.

Unless such segments of the United States economy as the automotive industry, the macine-tool industry, or the steel industry, can be turned around and become globally competitive, economic recovery for the United States may not be coming as soon as President-elect Obama may wish the public to believe.

There may be a small part of the President-elect stimulus package that may help the product segment of the economy. Should the package require that ALL components used in the infrastructure fix are made in the USA. Doing so Will offer a significant boost to the economy, but it will also likely cause global suppliers to shut out US products from their markets.

The President-elect must revisit his economic plan and make sue it is not a banaide, when an opertastion is actually required.

Obama’s “infrastructure” infusion; DOA without product strategy!

24 Dec

Obama’s Recovery: The danger of product-less society!

 

In the early 1990’s, to very smart American, one Democrat, the other Republican, founded a group they called the Concord Coalition. The late Paul Ethemios Tsongas, a brilliant Democrat, and Warren Rudman, a standout lawyer and politician from Massachusetts, felt that the United States economy is moving on a track leading to long-term disaster.

 

Paul Tsongas who at one time attempted to run for President, was extremely concerned about a very fundamental phenomena that by its nature could destroy an economic system. Tsongas and members of his coalition insisted that models of the industrial revolution were a sound foundation for a sustaining economy, but that when the phenomena of an industrial product economy is switched to a service-economy; catastrophic results should be anticipated.

 

Since the 1990’s when the United States started to lose significant manufacturing jobs to Far Eastern countries, many slow-down, and minor recession occurred. However, the catastrophe that the late Paul Tsongas spoke of appears to have begun during the waning months of President George W. Bush Presidency.

 

Since the backbone of America’s industrial economy its automobile business, the recent decline of auto industry fortunes is a clear signal that the United States economy may be suffering from issues that Paul Tsongas discussed some two decades earlier.

 

President-elect Barak Obama is proposing an economic stimulus package that will yield three million jobs, and infuse money into an ailing economy. The plan proposed by the Obama people is an essential step to stop the present economy to hemorrhage and become an actual depression. The Obama plan is also important as part of maintaining an acceptable quality of life for the American people. The plan deals with fixes to the Nation’s infrastructure, an essential and overdue undertaking.

 

Some of the problems with the Obama plan have to do with the fact that it will not yield products. The Obama plan would be based on people serving other people. The plan, rather than to generate sellable commodities that are needed to fuel an economy in today global environment, is designed to improve quality of life, not to generate income generating products.

 

Since the Obama plan would inject some trillion dollars into the economy, one may look for some product-generating fall out. The three million new employees are likely buy cars, appliances, and houses, all items that are required for a successful industrial economy.

 

Many question remain. The trillion dollars of taxpayer’s money will have to come from some credible source; what is that source? How will the money be repaid?

 

If President-elect Obama is serious about fixing the ailing economy, a production recovery element of an economic plan must be developed in parallel with the infra structure infusion, or the present declined will continue and become worse.